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SWOT/TOWS Analysis McMillan Matrix. First Step. Assess your Organization Assess your Environment. What to See in Your Organization . The Men The Money The Machines The Methods. What to See in the Environment . Political issues and government policies
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First Step • Assess your Organization • Assess your Environment
What to See in Your Organization • The Men • The Money • The Machines • The Methods
What to See in the Environment • Political issues and government policies • Economic Trends and Changing Donor’s Preferences • Social and Cultural Trends • Technological Changes
SWOT • Factors affecting the organizations can be divided into four categories: • Internal Factors that can help the organization = Strengths • Internal Factors that can harm an organization = Weaknesses • External Factors that can help the organization = Opportunity • External Factors that can harm the organization = Threats
Now you know your organization and the environment it is working in, • Now how to use it!!! • Do a TOWS.
The WT Strategy (mini-min) • In general, the aim of the WT strategy is to minimize both weaknesses and threats. • An organization faced with external threats and internal weaknesses may indeed be in a precarious position. • In fact, such a firm may have to fight for its survival or may even have to choose liquidation. • But there are other choices. • For example, such a firm may prefer a merger, or may cut back its operations, with the intent of either overcoming the weaknesses or hoping that the threat will diminish over time (too often wishful thinking). • Whatever strategy is selected, the WT position is one that any firm will try to avoid.
The WO Strategy (mini-max) • The second strategy attempts to minimize the weaknesses and to maximize tile opportunities. • A company may identify opportunities ill the external environment but have organizational weaknesses which prevent the firm from taking advantage of an opportunity. For example, lack of Skills/technology in certain areas. • One possible strategy would be to acquire this Skills/technology through cooperation with a firm having competency in this field. • An alternative tactic would be to hire and train people with the required technical capabilities. • Of course, the firm also has the choice of doing nothing, thus leaving the opportunity to competitors.
The ST Strategy (maxi-min) • This strategy is based on the strengths of the organization that can deal with threats in the environment. The aim is to maximize the former while minimizing the latter. • This, however, does not mean that a strong organization can meet threats in the external environment head-on.
The SO Strategy (maxi-max) • Any company would like to be in a position where it can maximize both, strengths and opportunities. • Such an enterprise can lead from strengths, utilizing resources to take advantage • Successful enterprises, even if they temporarily use one of the three previously mentioned strategies, will attempt to get into a situation where they can work from strengths to take advantage of opportunities. • If they have weaknesses, they will strive to overcome them, making them strengths. If they face threats, they will cope with them so that they can focus on opportunities.
Macmillan Matrix • The matrix is based on the assumption that duplication of existing comparable services (unnecessary competition) among nonprofit organizations can fragment the limited resources available, leaving all providers too weak to increase the quality and cost-effectiveness of client services. • The matrix also assumes that trying to be all things to all people can result in mediocre or low-quality service; instead, nonprofits should focus on delivering higher-quality service in a more focused (and perhaps limited) way.
Macmillan Matrix • The Components of the matrix are: • Fit • Program Attractiveness • Alternative Coverage • Competitive Position
1- Fit • Fit is the degree to which a program “belongs” or fits within an organization. Criteria for “good fit” include: • Congruence with the purpose and mission of the organization; • Ability to draw on existing skills in the organization; and • Ability to share resources and coordinate activities with programs.
2- Program Attractiveness • Program attractiveness is the degree to which a program is attractive to the organization from an economic perspective, as an investment of current and future resources (i.e., whether the program easily attracts resources). • Any program that does not have high congruence with the organization’s purpose should be classified as unattractive. • No program should be classified as highly attractive unless it is ranked as attractive on a substantial majority of the criteria given on next slide.
High appeal to groups capable of providing current and future support • Stable funding • Market demand from a large client base • Appeal to volunteers • Measurable, reportable program results • Focus on prevention, rather than cure • Able to discontinue with relative ease, if necessary (i.e., low exit barriers) • Intended to promote the self-sufficiency or self-rehabilitation of client base
3- Coverage • Alternative coverage is the extent to which similar services are provided. • If there are no other large, or very few small, Comparable programs being provided in the • same region, the program is classified as “low coverage.” • Otherwise, the coverage is “high.”
4- Competitive Position • Competitive position is the degree to which the organization has a stronger capability and potential to deliver the program than other agencies – a combination of the organization’s effectiveness, quality, credibility, and market share or dominance. • Probably no program can be classified as being in a strong 3 competitive position unless it has some clear basis for declaring superiority over all competitors in that program category.
Criteria for a strong competitive position include: • Good location and logistical delivery system; • Large reservoir of client, community, or support group loyalty; • Past success securing, raising funds; • Superior track record (or (image) of service delivery; • Large market share of the target clientele currently served; • Better quality service and/or service delivery than competitors and a better price; • Superior skill at advocacy; • Superiority of technical and organizational skills needed for the program; • Superior ability to communicate to stakeholders.