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Situational Analysis

Situational Analysis. Situational Analysis: Process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses. TOWS Matrix. Resource-Based Approach. Resource:

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Situational Analysis

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  1. Situational Analysis Situational Analysis: • Process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses. Chapter 5 Wheelen/Hunger

  2. TOWS Matrix Chapter 5 Wheelen/Hunger

  3. Resource-Based Approach Resource: An asset, competency, process, skill, or knowledge controlled by the corporation. Chapter 5 Wheelen/Hunger

  4. Competitive Strategy Industry Structure: • Fragmented Industry • Many small and medium-sized local companies compete for small shares of total market • Focus strategies predominate Chapter 5 Wheelen/Hunger

  5. Competitive Strategy Industry Structure: • Consolidated industry • Mature industry dominated by a few large companies • Cost Leadership or Differentiation predominate Chapter 5 Wheelen/Hunger

  6. Dimensions of Quality • Performance • Features • Reliability • Conformance • Durability • Serviceability • Aesthetics • Perceived Quality Dimensions Quality Chapter 5 Wheelen/Hunger

  7. Competitive Strategy Strategic rollup: • Quickly consolidate fragmented industry • Money from venture capital • Entrepreneur acquires hundreds of owner-operated firms • Creates large firm with economies of scale Chapter 5 Wheelen/Hunger

  8. Competitive Strategy Strategic rollup: • Differ from Conventional M&A’s • Large number of firms • Owner-operated firms • Goal to reinvent entire industry Chapter 5 Wheelen/Hunger

  9. 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 Chapter 5 Wheelen/Hunger

  10. Competitive Tactics 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 Chapter 5 Wheelen/Hunger

  11. Competitive Tactics Market Location Tactics: • Offensive Tactics • Frontal assault • Flanking maneuver • Bypass attack • Encirclement • Guerrilla warfare Chapter 5 Wheelen/Hunger

  12. Competitive Tactics Market Location Tactics: • Defensive Tactics • Raise structural barriers • Increase expected retaliation • Lower the inducement for attack Chapter 5 Wheelen/Hunger

  13. Cooperative Strategies Cooperative Strategies: • Collusion • Active cooperation of firms to reduce output and raise prices • Explicit • Tacit Chapter 5 Wheelen/Hunger

  14. Cooperative Strategies Cooperative Strategies: • Strategic Alliance: • Partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial. Chapter 5 Wheelen/Hunger

  15. Cooperative Strategies Obtain technology Access to markets Strategic Alliance Reduce financial risk Reduce political risk Achieve competitive advantage Chapter 5 Wheelen/Hunger

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