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1. 3/20/2012 Carolyn Roper 1 Chapter 5 Strategy Formulation: Situation Analysis and Business Strategy
Anthony F. Chelte
Western New England College
2. 3/20/2012 Carolyn Roper 2 Situational Analysis Strategy formulation:
Strategic planning or long-range planning
Develops mission, objectives, strategies and policies
Process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses.
3. 3/20/2012 Carolyn Roper 3 Situational Analysis Niche:
A need in the marketplace that is currently unsatisfied.
Goal for the Corporation
Find a propitious niche
An extremely favorable niche
Unique market opportunity available for a limited time
4. 3/20/2012 Carolyn Roper 4 Situational Analysis SWOT analysis:
5. 3/20/2012 Carolyn Roper 5 TOWS Matrix
6. 3/20/2012 Carolyn Roper 6 Resource:
An asset, competency, process, skill, or knowledge controlled by the corporation.
Focuses on improving the competitive position of a companys or business units products or services within the specific industry or market segment that the firm serves.
7. 3/20/2012 Carolyn Roper 7 Porters Competitive Strategies Competitive Strategy:
Compete head to head in large market?
Focus on niche?
Generic Competitive Strategies:
Lower cost strategy
Design, produce, market more efficiently than competitors
Unique and superior value in terms of product quality, features, service
Determined by Competitive Scope
Breadth of the companys target market
8. 3/20/2012 Carolyn Roper 8 Porters Competitive Strategies Cost Leadership:
Low-cost competitive strategy
Aimed at broad mass market
Aggressive construction of efficient-scale facilities
Broad mass market
Unique product or service
Lower customer sensitivity to price
Low cost competitive strategy
Focus on particular buyer group or market
Seek cost advantage in target market
9. 3/20/2012 Carolyn Roper 9 Competitive Strategy Industry Structure:
Many small and medium-sized local companies compete for small shares of total market
Focus strategies predominate
Mature industry dominated by a few large companies
Cost Leadership or Differentiation predominate
10. 3/20/2012 Carolyn Roper 10 Dimensions of Quality
11. 3/20/2012 Carolyn Roper 11 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.
Market location tactics
First mover (pioneer)
Reputation as industry leader
Sets standards for subsequent products in the industry
Able to imitate technological advances of others
Keeps R&D costs down
Keeps risks down
12. 3/20/2012 Carolyn Roper 12 Competitive Tactics Market Location Tactics:
Market Location Tactics:
Raise structural barriers
Increase expected retaliation
Lower the inducement for attack
13. 3/20/2012 Carolyn Roper 13 Cooperative Strategies
Active cooperation of firms to reduce output and raise prices
Partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial.
14. 3/20/2012 Carolyn Roper 14 Cooperative Strategies
15. 3/20/2012 Carolyn Roper 15