• Alvin Toffler suggests that although managers may collect and analyse all

the data, they still have to question underlying assumptions and use their
best judgement.

• Many times, a decision has to be made by the strategist despite lack of

data indicating that one alternative is clearly superior to another
alternative.
Why Evaluation of
• In such cases, the strategic managers use innovative ways to organize the
Alternatives and Strategic data so that it better reveals its implications and thus, better informs
Choice Are Important? judgement and opinion.

• Data Organization may be accomplished by arranging information into

tables and strategic “thinking maps”.

• It is not so much the data itself that guides decision, rather the
organisation and presentation of the data informs judgement.
 • Fundamental to strategic management is the
need to change strategies over time.

• There are several analytical frameworks or

A Process For The maps that may be used to guide strategic
thinking concerning the appropriate strategic

Evaluation of The
alternatives .

• Contemplative strategic thinking to

Alternatives
understand the internal requirements and
external conditions of strategic alternatives
is essential to assure a coherent and
integrated strategy.
PROCESS FOR STRATEGY FORMULATION

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

Link Evaluate Evaluate Evaluate and Synthesize and

Strategy and Select and Select Select Identify
Adaptive Market Competitive Implications
with
Strategies Entry/Exit Strategies of Strategy
Situational Choices-
Strategies
Analysis Strategy Map
 Step-1
Link Strategy with Situational Analysis •Situational Analysis- external, service area competitor, and internal analysis, as well as the development of
the directional strategies- provide a critical foundation for the development of strategy.
•A final test of the strategic choices is then prepared in the form of a checklist.
Strategic Addresses an Draws•This
a checklist procedure
Fits withisMission,
a significantMoves
part ofthe
the strategic thinking
Achievesprocess
One orand helps to assure
consistency of analysis and action.
Alternative External Issue Competitive Values? Organization More Strategic
Advantage or Toward the Vision Goals?
Fixes a
Competitive
Disadvantage
Strategy 1 Yes Yes Yes Yes Yes
 
Strategy 2 Yes Yes Yes Yes Yes
 
Strategy 3 Yes Yes Yes Yes Yes
 
STEP- 2
Evaluate And Select Adaptive Strategies

•The evaluation of the adaptive strategies is an ongoing activity as new external forces emerge
and provide fresh opportunities or threaten the viability of the current strategy.
•For example, Academic Health Centers (AHCs), although able to maintain their unique research
focus for decades, have increasingly felt the pressures of change.
• Recently, the Association of Academic Health Centers (AAHC) identified 10 “disrupters” its
members must deal with in the future. These are:
Changing Market Forces, Consumer empowerment, disease patterns, entrepreneurism,
globalization, politics and policy, population demographics, science, societal needs and values,
and technology.
 1. SWOT Analysis- Strengths,
Weaknesses, Opportunities, and Threats
2. External/Internal Strategy Matrix
3. Product Life Cycle (PLC) Analysis
4. Boston Consulting Group (BCG)
Methods To Evaluate The Adaptive Strategies Portfolio Analysis
5. Extended Portfolio Matrix Analysis
6. Strategic Position and ACtion
Evaluation (SPACE)
7. Program Evaluation

Internal Analysis
Strengths Weaknesses
• •
• •
• •
Opportunities Threats
• •
• •
• •
External Analysis
SWOT Analysis
It is a systematic investigation to consider an organizations
internal and external issues and display them in a two-by-
two matrix.
It is easy to develop; however, it does not provide much
insight into what strategy decisions might result from the list
of SWOT.
SWOT analysis has no provision for prioritizing or
evaluating the internal strengths or weaknesses as being
competitively relevant.
As a result, SWOT analysis should only be used as an
initial overview of the organization’s situation.
 External Issues
Internal General Health Care Service Area
Advantages &
Disadvantages
Environmental
Issues
System Issues and
Competitive
External/Internal Strategy Matrix
Analysis
• Economy • Lack of • Increasing
continues to trained no. of
grow healthcare competitors • This approach utilizes the complete results of a comprehensive external and
workers internal analysis, better fosters strategic thinking concerning adaptive strategy
Long Term Strategies Strategies Strategies
alternatives.
Competitive • Product • Enhancemen • Penetration-
Advantages Development t- Increase Increase • The strategies developed by long-term matching competitive advantages with
• Brand Name - serving over training advertising the general issues, health care system, service area and competitive issues
65 years of represent the primary adaptive strategies of an organization.
age market

Short Term Strategies Strategies Strategies • The short-term competitive advantages may soon be duplicated, but these
Competitive • • • advantages must be sustained as long as possible.
Advantages • • •
• • • • • The long-term competitive disadvantages represent areas where internal fix-it
Long Term Strategies Strategies Strategies strategies will have to be addressed because other organizations provide a
Competitive • • • competitive advantage that is valuable to its stakeholders.
Disadvantages • • •
• • • • • The short-term competitive disadvantages are fixable but still represent a
significant impediment to success.
Short Term Strategies Strategies Strategies
Competitive • • •
Disadvantages • • •
• • • •
 Product Life Cycle Analysis

• It is typically a graphical representation, used to

develop strategy alternatives based on the principle
that all products/services progress through stages of -
introduction, growth, maturity, and decline.
• For example, in the medical technology industry
innovation is strongly influenced by product/service
life cycle stages.
• In evaluating product life cycles, the evolution of
service category sales and profits is tracked over
time.
Tracking the enrolment of Health Strategic choices for stages of the product life cycle
Maintenance Organizations (HMOs) Stage 1 Stage 2 Stage 3 Stage 4
Introduction Growth Maturity Decline
Market Market Market Divestiture
Development Development Development
Product Product Product Liquidation
Development Development Development
Penetration Penetration Harvesting
Vertical Integration Enhancement Unrelated
Diversification
Related Status Quo
Diversification
Retrenchment
Divestiture
Unrelated
Diversification

• There are two important questions for strategy formulation when using product life cycles: “In what stage of the life cycle are the
organizations products and services?” and “How long are the stages (and the life cycle itself) likely to last?”
• Products and services that management determines have lengthy stages (or a long PLC) will require dramatically different strategies from
those that management concludes have short stages or a short PLC.