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.July H. Paul 21, 2015 Review Session Block 6: Strategy Formulation: Situation Analysis and Business Strategy 1 .July H. Paul 21, 2015 Block 6: Strategy Formulation and Business Strategy • • • • The SWOT analysis Review Mission, Vision and Objectives Generating Alternative Strategies Business Strategies 2 .July H. Paul 21, 2015 Situational Analysis Process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses 3 .July H. Paul 21, 2015 Strategic Factor Analysis Summary (SFAS): SHORT (Select the most important opportunities/threats from EFAS, Table 3.4 and the most important strengths and weaknesses from IFAS, Table 4.2) 1.00 Total Score Rating Comments LONG Weight Duration Weighted Score INTERMEDIATE Strategic Factors .July H. Paul 21, 2015 TOWS Matrix 5 .July H. Paul 21, 2015 Porter’s Competitive Strategies 6 .July H. Paul 21, 2015 “Stuck in the Middle” Stuck in the middle • No competitive advantage • Below-average performance Today’s thinking It is possible to combine low-cost and differentiation by creating an attractive value- for-money package for customers in a clearly specified segment 7 .July H. Paul 21, 2015 Competitive Tactics Tactic Specific operating plan detailing how a strategy is to be implemented in terms of when and where it is to be put into action • Timing tactics • Market location tactics 8 .July H. Paul 21, 2015 Timing Tactics First mover (pioneer) • Reputation as industry leader • High profits • Sets standards for subsequent products in the industry Late mover • Able to imitate technological advances of others • Keeps R&D costs down • Keeps risks down 9 .July H. Paul 21, 2015 Market Location Tactics Offensive Tactics • • • • • Frontal assault Flanking maneuver Bypass attack Encirclement Guerrilla warfare Defensive Tactics • Raise structural barriers • Increase expected retaliation • Lower the inducement for attack 10 .July H. Paul 21, 2015 Cooperative Strategies Collusion Active cooperation of firms to reduce output and raise prices: explicit or tacit Strategic Alliance Partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial 11 .July H. Paul 21, 2015 Strategic Alliances Obtain technology Access to markets Strategic Alliance Reduce financial risk Reduce political risk Achieve competitive advantage 12