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Stage 1: The Input Stage
Stage 2: The Matching Stage
Stage 3: The Decision Stage
Strategy-Formulation Analytical Framework
3
External Factor EvaluationMatrix (EFE)
Competitive ProfileMatrix
Internal Factor EvaluationMatrix (IFE)
Stage 1:The Input Stage
Formulation Framework
4
• Provides basic input information for the matching and decision stage matrices
• Requires strategists to quantify subjectivity early in the process
• Good intuitive judgment always needed
Input Stage
5
SPACE Matrix
Stage 2:The Matching Stage
TOWS Matrix
BCG Matrix
IE Matrix
Grand Strategy Matrix
Formulation Framework
6
• Match between organization’s internal resources and skills and the opportunities and risks created by its external factors.
Matching Stage
7
Resultant StrategyKey External FactorKey Internal Factor
Develop a new employee benefits package=Strong union activity
(threat)+Poor employee morale
(weakness)
Develop new products for older adults=Decreasing numbers of
young adults (threat)+Strong R&D (strength)
Pursue horizontal integration by buying competitor's facilities
=Exit of two major foreign competitors form the industry (opportunity)
+Insufficient capacity (weakness)
Acquire Cellfone, Inc.=20% annual growth in the cell phone industry (opportunity)
+Excess working capacity (strength)
Matching Key Factors to Formulate Alternative Strategies
8
Formulation Framework
Quantitative Strategic Planning Matrix
(QSPM)
Stage 3:The Decision Stage
9
External Factor EvaluationMatrix (EFE)
Competitive ProfileMatrix
Internal Factor EvaluationMatrix (IFE)
Stage 1:The Input Stage
Formulation Framework
10
Prediction is very difficult, especially about the future.
-- Neils Bohr
The External Assessment
11
Purpose:
– Development of Finite List:• Opportunities• Threats to be avoided
Nature of External Audit
12
Five (5) broad categories:
1. Economic forces2. Social, cultural, demographic, &
environmental forces3. Political, governmental, and legal forces4. Technological factors5. Competitive forces
Key External Forces
13
Key External Forces
CompetitorsSuppliers
DistributorsCreditors
CustomersEmployees
CommunitiesManagers
StockholdersLabor Unions
Special Interest GroupsProductsServices
Opportunities&
Threats
Relationships Between Key External Forces and an Organization
14
Porter’s Five Forces Model of Industry Competition
Exhibit 2.4
Reprinted with the permission of The Free Press, a division of Simon & Schuster, Inc. from Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright © 1980, 1998 by The Free Press.
INDUSTRYCOMPETITORS
Rivalry AmongExisting Firms
POTENTIALENTRANTS
SUBSTITUTES
BUYERSSUPPLIERS
Threat of substitute products
or services
Bargaining powerof buyers
Threat ofnew entrants
Bargaining powerof suppliers
15
Five Forces Analysis of the Automotive Industry
Global Competitive Environment
Threat of Buyers
Threat of Suppliers
Threat of Substitutes
Threat of Market Entry
Automotive Industry
Threat of Rivalry
Train, public transport or other means of transportation
High barriers to entry High capital
requirements Contrived deterrence Cost disadvantages
Consolidation Single Sourcing Low level of total value added
Numerous potential customers Industry policy of rebates More demanding customers
Oligopolistic industry Overcapacity
Differentiation on basis of functional attributes only temporary
16
External Factor Evaluation MatrixExternal Factor Evaluation MatrixSummarize & evaluate:
CompetitivePoliticalCultural
TechnologicalEnvironmentalSocial
GovernmentalDemographicEconomic
Industry Analysis (EFE)
17
Menggambarkan keseluruhan opportunities dan threats yang ada untuk mengetahui seberapa besar
pengaruh dari setiap faktor tersebut terhadap institusi, respons institusi setiap faktor tersebut dan untuk
mengetahui nilai institusi terhadap keseluruhan faktor dibandingkan
dengan Institusi lain
External Factor Evaluation (EFE)
18
Five-Step process:
• List key external factors (10-20)Opportunities & threats
• Assign weight to each (0 to 1.0)Sum of all weights = 1.0
Industry Analysis (EFE)
19
Five-step process:• Assign 1-4 rating to each factor
• Firm’s current strategies response to the factor
• Multiply each factor’s weight by its rating• Produces a weighted score
Industry Analysis (EFE)
20
Five-step process:• Sum the weighted scores for each
Determines the total weighted score for the organization.
• Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5
Industry Analysis (EFE)
21
.201.20 Clinton Administration
.202.10 Bad media exposure from FDA
.102.05 Smokeless market SE region U.S.
.153.05 Production limits on tobacco
.202.10 Legislation against the tobacco industry
Threats.303.10 More social pressure to quit smoking
2.101.00TOTAL
.604.15 Pinkerton leader in discount market
.051.05 Astronomical Internet growth
.153.05 Increased demand
.151.15 Global markets untapped
Weightedscore
RatingWeightUST—Key External Factors
Opportunities
22
Faktor Eksternal Bobot Rating Nilai
Peluang (opportunities)
- Jumlah penduduk 0,12 3 0,36
- Bentuk negara yang geografis 0,10 3 0,30
- Perusahaan yang berbentuk Persero 0,08 4 0,32
- Jumlah SDM memadai 0,10 2 0,20
- Tersedianya sarana promosi 0,05 2 0,10
- Perkembangan teknologi 0,10 2 0,20
Ancaman (threats)
- Pesaing baru dan lama 0,10 2 0,20
- Munculnya produk substitusi 0,12 2 0,24
- Tuntutan terhadap mutu dan pelayanan 0,08 2 0,16
- Daya beli konsumen 0,05 1 0,05
- Kondisi SDM yang berorientasi kepada produk
0,10 2 0,20
Total 1 2,33
Tabel : Matriks EFE PT. Pos Indonesia
23
Total weighted score of 4.0 =Organization response is outstanding to threats & weaknesses
Total weighted score of 1.0 =Firm’s strategies not capitalizing on opportunities or avoiding threats
Industry Analysis (EFE)
24
Important
• Understanding of the factors used in the EFE Matrix is more important than the actual weights and ratings assigned.
Industry Analysis (EFE)
25
External Factor EvaluationMatrix (EFE)
Competitive ProfileMatrix
Internal Factor EvaluationMatrix (IFE)
Stage 1:The Input Stage
Formulation Framework
26
Great spirits have always encountered violent opposition from mediocre minds.
-- Albert Einstein
The Internal Assessment
27
All organizations –
• Strengths• Weaknesses
Nature of an Internal Audit
28
Basis for objectives & strategies:
– Internal strengths/weaknesses– External opportunities/threats– Clear statement of mission
Nature of an Internal Audit
29
Distinctive Competencies
• A firm’s strengths that cannot be easily matched or imitated by competitors
• Building competitive advantage involves taking advantage of distinctive competencies
• Strategies designed in part to improve on a firm’s weaknesses and turn to strengths
Key Internal Forces
30
• Parallels process of external audit• Gather & assimilate information from:
• Management• Marketing• Finance/accounting• Production/operations• Research & development• Management information systems
Internal Audit
31
Five basic activities –
– Planning– Organizing– Motivating– Staffing– Controlling
Functions of Management
32
Planning
Stage When Most ImportantFunction
Strategy Formulation
Organizing Strategy Implementation
Motivating Strategy Implementation
Staffing
Controlling
Strategy Implementation
Strategy Evaluation
Functions of Management
33
Planning
Forecasting
Establishing objectives
Devising strategies
Developing policies
Setting goals
Planning
34
Organizing
Organizational designJob specializationJob descriptionsJob specificationsSpan of control
Unity of commandCoordinationJob designJob analysis
Organizing
Organizational designJob specializationJob descriptionsJob specificationsSpan of control
Unity of commandCoordinationJob designJob analysis
Organizing
Organizational designJob specializationJob descriptions
Job specificationsSpan of control
Unity of commandCoordinationJob design
Job analysis
OrganizingOrganizing
35
Motivating
LeadershipCommunication
Work groupsJob enrichmentJob satisfactionNeeds fulfillmentOrganizational
changeMorale
Motivating
36
Staffing
Wage & salary adminEmployee benefits
InterviewingHiringFiring
TrainingManagement development
SafetyAffirmative action
EEOLabor relations
Career developmentDiscipline procedures
Staffing
37
Controlling
Quality controlFinancial control
Sales controlInventory controlExpense control
Analysis of variancesRewardsSanctions
Controlling
38
Process of defining, anticipating, creating, and fulfilling customers’ needs and wants for products and services
Marketing
39
1. Customer analysis2. Selling products/services3. Product and service planning4. Pricing5. Distribution6. Marketing research7. Opportunity analysis
Marketing
40
Customer analysis
Customer surveys
Consumer information
Market positioning strategies
Customer profiles
Market segmentation strategies
Marketing
41
Selling Products/services
Advertising
Sales
Promotion
Publicity
Sales force management
Customer relations
Dealer relations
Marketing
42
Product/service planning
Test marketing
Brand positioning
Devising warrantees
Packaging
Product features/options
Product style
Quality
Marketing
43
Pricing
Forward integration
Discounts
Credit terms
Condition of sale
Markups
Costs
Unit pricing
Marketing
44
Distribution
Warehousing
Channels
Coverage
Retail site locations
Sales territories
Inventory levels
Transportation
Marketing
45
Marketing research
Data collection
Data input
Data analysis
Support all business functions
Marketing
46
Opportunity Analysis
Assessing costs
Assessing benefits
Assessing risks
Cost/benefit/risk analysis
Marketing
47
• Determining financial strengths and weaknesses key to strategy formulation
• Investment decision (Capital budgeting)• Financing decision• Dividend decision
Finance/Accounting
48
Functions of Finance/Accounting –
1. Investment decision (Capital budgeting)2. Financing decision3. Dividend decision
Finance/Accounting
49
Liquidity ratios
Firm’s ability to meet its short-term obligations
Ratios
Current ratio
Quick (or acid-test)
ratio
Basic Financial Ratios
50
Leverage ratios
• Extent of debt financing
Ratios
Debt-to-total-assets
Debt-to-equity
Long-term debt-to-equity
Times-interest earned
Basic Financial Ratios
51
Activity ratios
• Effective use of firm’s resources
Ratios
Inventory-turnover
Fixed assets turnover
Total assets turnover
Accounts receivable turnover
Average collection period
Basic Financial Ratios
52
Profitability ratios
• Effectiveness shown by returns on sales and investment
Ratios
Gross profit margin
Operating profit margin
Net profit margin
Return on total assets (ROA)
Basic Financial Ratios
53
Profitability ratios(continued)
• Effectiveness shown by returns on sales and investment
Ratios
Return on stockholders’ equity (ROE)
Earnings per share
Price-earnings ratio
Basic Financial Ratios
54
Growth ratios
• Firm’s ability to maintain economic position
Ratios
Sales
Net income
Earnings per share
Dividends per share
Basic Financial Ratios
55
• Process• Capacity• Inventory• Workforce• Quality
Production/Operations
56
Process
Design of facility
Choice of technology
Facility layout
Process flow analysis
Facility location
Line balancing
Process control
Production/Operations
57
Capacity
Forecasting
Facilities planning
Aggregate planning
Scheduling
Capacity planning
Queuing analysis
Production/Operations
58
Inventory
Raw material
Work in process
Finished goods
Materials handling
Production/Operations
59
Workforce
Job design
Work measurement
Job enrichment
Work standards
Motivation techniques
Production/Operations
60
Quality
Quality control
Sampling
Testing
Quality assurance
Cost control
Production/Operations
61
• Development of new products before competition
• Improving product quality• Improving manufacturing processes to
reduce costs
Research and Development
62
R&D budgets
Financing as many projects as possible
Use percentage-of-sales method
Budgeting relative to competitors
Deciding how many successful new
products are needed
Research and Development
63
Purpose –– Improve performance of an enterprise by
improving the quality of managerial decisions.
Management Information Systems
64
Internal Analysis (IFE)
Menggambarkan keseluruhan strength dan weakness yang ada
untuk mengetahui seberapa besar pengaruh dari setiap faktor tersebut terhadap institusi, respons institusi
setiap faktor tersebut dan untuk mengetahui nilai institusi terhadap keseluruhan faktor dibandingkan
dengan Institusi lain
65
Five-Step Process:
• List key internal factors (10-20)Strengths & weaknesses
• Assign weight to each (0 to 1.0)Sum of all weights = 1.0
Internal Analysis (IFE)
66
Assign 1-4 rating to each factorFirm’s current strategies response to the
factor
• Multiply each factor’s weight by its ratingProduces a weighted score
Internal Analysis (IFE)
67
• Sum the weighted scores for eachDetermines the total weighted score for the
organization
Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5
Internal Analysis (IFE)
68
.153.05 Financial ratios
.153.05 Reputation as family-friendly
.204.05 Long-range planning
.153.05 Minimal comps provided
.153.05 Buffets at most facilities
.153.05 Strong management team
.604.15 Owns 1 mile on Las Vegas strip
.153.05 Increasing free cash flows
.404.10 Room occupancy rates over 95%
.204.05 Largest casino company in world
Weightedscore
RatingWeightMandalay Bay
Internal Strengths
Internal Analysis (IFE)
69
2.751.0TOTAL (including Strengths)
.101.10Recent loss of joint ventures
.101.10Laughlin properties
.102.05Family reputation, not high rollers
.102.05Little diversification
.051.05Most properties located in Las Vegas
Weightedscore
RatingWeightMandalay Bay
Internal Weaknesses
Internal Analysis (IFE)
70
Faktor Internal Bobot Rating Nilai
Kekuatan (strengths)
- Keragaman jenis jasa pengiriman 0,09 4 0,36
- Harga murah 0,10 4 0,40
- Jaringan pos yang sangat luas 0,10 3 0,30
- Sebaran lokasi pelayanan 0,10 3 0,30
- Kemudahan mencapai tempat pelayanan & pengiriman
0,11 3 0,33
Kelemahan (weaknesses)
- Ketepatan waktu pengiriman 0,11 1 0,11
- Kecepatan pengiriman 0,11 1 0,11
- Kecepatan pelayanan petugas 0,10 1 0,10
- Informasi biaya dan waktu pengiriman 0,09 2 0,18
- Kemudahan memperoleh info promosi dan iklan
0,09 2 0.18
Total 1 2,37
Tabel : Matriks IFE PT. Pos Indonesia
71
Diantara sejumlah strengths yang dimiliki suatu institusi dapat saja beberapa diantaranya merupakan distinctive competencies.
Untuk mengevaluasi apakah suatu strength adalah distinctive competency dapat digunakan metode Barney yaitu dengan konsep VRIO
Menentukan Distinctive CompetenciesMenentukan Distinctive Competencies
72
◆ Value : apakah faktor tersebut memberikan keunggulan kompetitif pada institusi ?
◆ Rareness : apakah pesaing tidak memiliki faktor tersebut ?
◆ Imitability : apakah tidak mudah untuk memiliki faktor tersebut ?
◆ Organization : apakah institusi memanfaatkan faktor tersebut secara maksimal ?
Jika jawab dari keempat : Ya
distinctive competency
VRIOVRIO
73
External Factor EvaluationMatrix (EFE)
Competitive ProfileMatrix
Internal Factor EvaluationMatrix (IFE)
Stage 1:The Input Stage
Formulation Framework
74
Competitive Profile Matrix
• Identifies firm’s major competitors and their strengths & weaknesses in relation to a sample firm’s strategic position
Industry Analysis (CPM)
75
(CPM) Procter Avon L’Oreal & Gamble
2.803.253.151.00Total
0.1530.2040.0510.05Market Share
0.4020.4020.8040.20Global Expansion
0.2020.4040.4040.10Customer Loyalty
0.4530.4530.6040.15Financial Position
0.3030.3030.4040.10Management
0.4040.3030.3030.10Price Competition
0.3030.4040.4040.10Product Quality
0.6030.8040.2010.20Advertising
ScoreRatingScoreRatingScoreRatingWeightCritical Success Factor
76
Competitive Profile Matrix
Nike Adidas Reebok
Critical Success Factors Weight RatingWeightedScore Rating
WeightedScore Rating
WeightedScore
Brand RecognitionMarket ShareFinancial StrengthR&DProduct QualityAdvertisingNumber of Retail OutletsProduct MixDepend on Suppliers forQuality
0.150.140.130.100.100.120.050.110.10
443434442
0.600.560.390.400.100.480.200.440.20
422233133
0.600.280.260.200.300.360.050.330.30
432334332
0.600.420.260.300.300.480.150.330.20
Total 1.00 3.37 2.68 3.04
77
SPACE Matrix
Stage 2:The Matching Stage
TOWS Matrix
BCG Matrix
IE Matrix
Grand Strategy Matrix
Formulation Framework
78
Whether it’s broke or not, fix it—make it better. Not just products, but the whole company if necessary.
-- Bill Saporito
Strategy Analysis & Choice
79
☛ Asumsi: Suatu strategi yang efektif akan memaksimalkan kekuatan (Strength) dan peluang (Opportunities), dan meminimalkan kelemahan (Weaknesses) dan ancaman ((Threat)
☛ Opportunities: Situasi penting dari faktor eksternal yang menguntungkan perusahaan. (perubahan teknologi, membaiknya hubungan pembeli & pemasok, dll)
☛ Threat: faktor internal yang tidak menguntungkan perusahaan. (masuknya pesaing baru, lambatnya pertumbuhan pasar, meningkatnya kekuatan pembeli & pemasok, dll)
☛ Strength: Kekuatan internal meliputi sumberdaya, keterampilan/ keunggulan lainnya relatif terhadap pesaing dan kebutuhan pasar yang dilayani/ ingin dilayani perusahaan. (sumber daya keuangan, citra, dll)
☛ Weaknesses: Kekurangan/ keterbatasan daam sumber daya, keterampilan dan kapabilitas yang menghambat kinerja perusahaan.
SWOT ANALYSIS
80
Dikemukakan oleh : Thomas L. Wheelen dan J. David HungerMenggunakan matrix untuk menghasilkan strategi alternatif dengan memanfaatkan EFE dan IFE
Langkah-Langkahnya :➲ Pada blok opportunities cantumkan sejumlah opportunities yang
diambil dari tabel EFE➲ Pada blok threats cantumkan sejumlah threats yang diambil dari
EFE➲ Pada blok strength, cantumkan sejumlah strength yang diambil
dari IFE➲ Pada blok weakness cantumkan sejumlah weakness yg diambil dari
IFE➲ Dapatkan sejumlah strategi-strategi yang mungkin untuk
perusahaan berdasarkan kombinasi dari 4 elemen tersebut
ANALISA SWOT (TOWS) MATRIX
81
TOWS Matrix
– Threats– Opportunities– Strengths– Weaknesses
Matching Stage
82
Develop four types of strategies
– Strengths-Opportunities (SO)– Weaknesses-Opportunities (WO)– Strengths-Threats (ST)– Weaknesses-Threats (WT)
TOWS Matrix
83
◆ Kuadran SO : posisi yang paling menguntungkan dimana institusi sedang melihat peluang-peluang dan memiliki kekuatan untuk meraihnya
◆ Kuadran ST : institusi dengan beberapa kekuatan yang dimilikinya sedang menghadapi ancaman dari luar. Institusi dapat menggunakan kekuatan untuk menciptakan peluang di masa yang akan datang
◆ Kuadran WO : institusi sedang melihat peluang tetapi mengalami kendala dalam meraihnya karena perusahaan memiliki kelemahan. Institusi harus dapat mengeliminir kekurangan-kekurangan supaya lebih efektif dalam meraih peluang
◆ Kuadran WT : posisi yang paling tidak menyenangkan dimana perusahaan sedang menghadapi ancaman dari luar bersamaan dengan posisinyapun sedang lemah. Institusi bertahan sambil mengkaji ulang keterlibatan institusi dalam pelayanan yang sedang terancam tersebut
Kuadran SO, ST, WO, WTKuadran SO, ST, WO, WT
84
◆ Strategi SO : strategi memanfaatkan peluang dengan mendayagunakan kekuatan internal
◆ Strategi ST : strategi untuk menghadapi atau menghidarkan ancaman dengan mendayagunakan kekuatan yang dimiliki
◆ Strategi WO : strategi untuk mengatasi kelemahan dengan cara memanfaatkan peluang yang ada
◆ Strategi WT : strategi yang meminimalkan kelemahan sambil mencegah ancaman yang ada di luar
STRATEGI SO, ST, WO, WT
85
SO Strategies
Use a firm’s internal
strengths to take advantage
of external opportunities
ThreatsOpportunitiesWeaknesses
Strengths(TOWS)
SO Strategies
86
WO Strategies
Improving internal
weaknesses by taking
advantage of external
opportunities
ThreatsOpportunitiesWeaknesses
Strengths(TOWS)
WO Strategies
87
ST Strategies
Using firm’s strengths to
avoid or reduce the impact of external threats.
ThreatsOpportunitiesWeaknesses
Strengths(TOWS)
ST Strategies
88
WT Strategies
Defensive tactics aimed at reducing
internal weaknesses and avoiding
environmental threats.
ThreatsOpportunitiesWeaknesses
Strengths(TOWS)
WT Strategies
89
Steps in developing the TOWS Matrix
1. List the firm’s key external opportunities2. List the firm’s key external threats3. List the firm’s key internal strengths4. List the firm’s key internal weaknesses
TOWS Matrix
90
Developing the TOWS Matrix
1. Match internal strengths with external opportunities and record the resultant SO Strategies
2. Match internal weaknesses with external opportunities and record the resultant WO Strategies
3. Match internal strengths with external threats and record the resultant ST Strategies
4. Match internal weaknesses with external threats and record the resultant WT Strategies
TOWS Matrix
91
WT Strategies
Minimize weaknesses and avoid threats
ST Strategies
Use strengths to avoid threats
Threats-T
List Threats
WO Strategies
Overcome weaknesses by taking advantage of
opportunities
SO Strategies
Use strengths to take advantage of opportunities
Opportunities-O
List Opportunities
Weaknesses-W
List Weaknesses
Strengths-S
List Strengths
Leave BlankTOWS Matrix
92
OPPORTUNITIES (O)List External
Opportinities Here
EXTERNALFACTORSINTERNALFACTORS
THREATS (T)List ExternalThreats Here
S-O StrategiesGenerate strategies
here that use Strenghts to take
adventage ofopportunities
S-T StrategiesGenerate strategies
here that use strenghts to avoid
threats
W-O StrategiesGenerate strategies
here that takeadventage of
opportunities byovercoming weaknesses
W-T StrategiesGenerate strategieshere that minimizeweaknesses andavoid threats
STRENGHTS (S)List Internal
Strenghts Here
WEAKNESSES (W)List Internal
Weaknesses Here
SWOT MATRIX
93
TOWS Matrix
Strengths Weaknesses 1. Customer satisfaction.
2. Copyright to one-click method.
3. Humanitarian efforts. 4. Strong Research &
Development. 5. Exclusive agreements
with Internet sites. 6. Ability to track
customer interests. 7. Formation of strategic
alliances with physical retailers.
1. Accumulated deficits. 2. Anticipates further losses. 3. Slowing growth, core
business, U.S. Books, Music, & Video.
4. Lawsuit with Barnes & Noble over patent for one-click method.
5. Class Action Suits filed with stockholders.
6. Doses not have a mission statement.
7. Financial position.
94
TOWS Matrix
Opportunities S-O Strategies W-O Strategies 1. Continuous increase of
internet users. 2. Increasing business to
consumer e-commerce. 3. U. S. Internet economy
projections 3.1 trillion by 2004.
4. Brick & Mortar companies lack technology expertise.
5. European on-line projections 3.1 trillion by 2004.
1. Expand European presence through strategic alliances with established online retailers or physical retailers (S1,O1,O2,O3,O5).
2. Refocus on core business by taking full advantage of e-books sales projection
(S1,S2,S6,O1,O2,O3).
1. Enter into more strategic agreements with U. S. physical retailers possibly Wal-mart (W2,W3,W7,O4,O5).
95
TOWS Matrix
Threats S-T Strategies W-T Strategies 1. Seasonality of internet
usage & revenue generation.
2. Economic downturn & global recession.
3. Low consumer confidence levels.
4. Competition. 5. Security/Privacy of
information concerns. 6. Internet Taxation. 7. Market valuation .
1. Establish direct order link with publishers/manufacturers (S5, T4).
2. Enhance attractiveness of platform (S1,S2,S4,S6,T4,T7).
3. Promote ease of use (S2,T4,T5).
1. Reduce fulfillment costs by reduction in number of fulfillment centers
(W1,W2,W3,W7,T1,T2,T3,T7).
96
SPACE Matrix
Stage 2:The Matching Stage
TOWS Matrix
BCG Matrix
IE Matrix
Grand Strategy Matrix
FORMULATION FRAMEWORK
97
SPACE Matrix•SPACE = The Strategic Position and ACtion Evaluation
•Dikemukakan oleh : R. Howe, R. Mason & K. Dickel
•Diadaptasi oleh : Fred R. David
•Menilai seluruh strategic factors
•Mengolah Ditampilkan pada sistem – koordinat 2 dimensi
98
Strategic Position and Action Evaluation Matrix
Four quadrant framework Determines appropriate strategies
Aggressive Conservative Defensive Competitive
SPACE Matrix
99
Two Internal Dimensions Financial Strength [FS] Competitive Advantage [CA]
Two External Dimensions Environmental Stability [ES] Industry Strength [IS]
SPACE Matrix
100
Overall Strategic position determined by:
– Financial Strength [FS]– Competitive Advantage [CA]– Environmental Stability [ES]– Industry Strength [IS]
SPACE Matrix
101
Developing the SPACE Matrix:
• EFE Matrix• IFE Matrix• Financial Strength• Competitive Advantage• Environmental Stability• Industry Strength
SPACE Matrix
102
• Select variables to define FS, CA, ES, & IS
• Assign numerical ranking from +1 (worst) to +6 (best) for FS and IS; Assign numerical ranking from –1 (best) to –6 (worst) for ES and CA.
• Compute average score for FS, CA, ES, & IS
SPACE Matrix
103
Environmental Stability (ES)
Technological changesRate of inflationDemand variabilityPrice range of competing productsBarriers to entryCompetitive pressurePrice elasticity of demand
Financial Strength (FS)
Return on investmentLeverageLiquidityWorking capitalCash flowEase of exit from marketRisk involved in business
External Strategic PositionInternal Strategic Position
SPACE Matrix
104
Industry Strength (IS)
Growth potentialProfit potentialFinancial stabilityTechnological know-howResource utilizationCapital intensifyEase of entry into marketProductivity, capacity utilization
Competitive Advantage CA
Market shareProduct qualityProduct life cycleCustomer loyaltyCompetition’s capacity utilizationTechnological know-howControl over suppliers & distributors
External Strategic PositionInternal Strategic Position
SPACE Matrix
105
FS+6
+1
+5+4+3
+2
-6
-5
-4
-3
-2
-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
ES
CA IS
Conservative Aggressive
Defensive Competitive
SPACE Matrix
106
SPACE Matrix : NIKE
INTERNAL STRATEGIC POSITION Financial strength +4 +1 best to +6 worst Y axis: 4 + (-3) = 1 Environmental stability -3 -6 worst to –1 best EXTERNAL STRATEGIC POSITION Competitive advantage -2 -6 unstable to –1 stable X axis: 3 + (-2) = 1 Industry strength +3 +1 best to +6 worst
Conservative FS Aggressive CA IS
Defensive ES Competitive
107
FS
Conservative Aggressive
CA IS
Defensive ES Competitive
SPACE Matrix : AMAZON
Y axis Financial strength +1 +1 worst to + 6 best Y axis: 1 + (-2) = -1 Environmental stability -2 -1 best to –6 worst X axis Industry strength 3 +1 worst to +6 best X axis: 3 + (-2) = 1 Competitive advantage -2 -1 best to -6 worst
108
-2,50 +0,59 +3,09
+2,75
+0,60
-2,15
Posisi StrategisSO
+ 0,59 ; + 0,60
Weakness Strength
Opportunities
Threats
Rata-Rata Opportunities= +33/12 = + 2,75
Rata-Rata Threats= -28/13 = - 2,15
Rata-Rata Strength= +34/11 = + 3,09
Rata-Rata Weakness= -15/6 = - -2,50
Koordinat X =+3,09 + (-2,50) = 0,59
Koordinat Y =+2,75 + (-2,15) = 0,60
109
Supports an Aggressive Strategy
Supports a Turn Oriented Strategy
Supports a Diversification Strategy
Supports a Difensive Strategy
OPPORTUNITIES
THREATS
WEAKNESSES STRENGTHS
SPACE MATRIX POSISI STRATEGIS PERUSAHAAN
110
SPACE Matrix
Stage 2:The Matching Stage
TOWS Matrix
BCG Matrix
IE Matrix
Grand Strategy Matrix
Formulation Framework
111
Boston Consulting Group Matrix
• Enhances multidivisional firms’ efforts to formulate strategies • Autonomous divisions (or profit centers) constitute the
business portfolio• Firm’s divisions may compete in different industries requiring
separate strategy• Graphically portrays differences among divisions • Focuses on market share position and industry growth rate• Manage business portfolio through relative market share
position and industry growth rate
BCG Matrix
112
DogsDogsIVIV
Cash CowsCash CowsIIIIII
Question MarksQuestion MarksII
StarsStarsIIII
Relative Market Share PositionHigh1.0
Medium.50
Low0.0
Indu
stry
Sal
es G
row
th R
ate High
+20
Low-20
Medium0
BCG Matrix
113
Kondisi Bisnis Perusahaan
Perusahaan dengan satu bisnis
Diversifikasi perusahaan yang berhubungan
Diversifikasi perusahaan yang tak ada hubungan
Bersaing sebagai satu bisnis Membagi kompetensi bisnis satu sama lain
Tiap unit bisnis otonom pada pasar yang berbeda-beda
Apple ComputerMcDonald’s Corp.WrigleyMaytagTexas AirFord Motor
P&GPhilip MorrisDow-CorningJohnson & JohnsonDu PontGilette
ITTRockwell GELTVTextronLitton
114
Pendekatan PortofolioPendekatan portofolio ditandai ciri berikut :
Menguji setiap bisnis perusahaan yang terpisah sebagai elemen portofolio dari total bisnis.
Suatu unit bisnis dalam portofolio perusahaan, pada derajat tertentu, adalah merupakan penghasil (generators) atau penerima (recipients) dari sumber-sumber (resources) perusahaan.
Pendekatan portofolio merupakan cara yang sederhana dan visual untuk mengidentifikasi dan mengevaluasi alternatif strategi guna dapat menghasilkan dan mengalokasikan sumber-sumber perusahaan (corporate resources)
115
• Matrix BCG ini dibentuk dari empat sel (Matriks 2 X 2) yang mengukur laju pertumbuhan pasar (market growth) pada sumbu vertikal, dan pangsa pasar relatif (relative market share) pada sumbu horizontal
• Didalam matriks BCG, setiap unit bisnis menempati salah satu dari kategori “tanda tanya” Question mark Star Cash cow Dogs
SUSUNAN MATRIKS BCG
116
• Matrixs BCG merupakan model yang sederhana dan paling banyak digunakan.
• Model ini berguna bagi top manager yang membawahi unit bisnis yang berbeda-beda (diversified forms), khususnya untuk mengalokasikan sumber-sumber (resources) dari satu unit ke unit bisnis lainnya.
• Matriks ini juga digunakan untuk memperkirakan posisi pasar suatu unit bisnis beberapa tahun ke depan bila tidak dilakukan perubahan kebijakan (policies) selama ini
MATRIKS BCG
117
Bentuk BCG Matrix
Relative Market Share
Star Question Mark
DogCash Cow
High
MarketGrowth
Low
WeakStrong
118
The Boston Consulting Group’s Growth-Share Matrix
20%-18%-16%-14%-12%-10%- 8%- 6%- 4%- 2%- 0M
arke
t Gro
wth
Rat
e
10x 4x 2x 1.5x 1x Relative Market Share
.5x .4x .3x .2x .1x
Dogs 87
3 ?Question marks? ?
21
Cash cows
6
Stars
5
4
119
Indikator Cash Flow Beberapa indikator berikut diperlukan dalam penyusunan matriks BCG:
Cash flow merupakan indikator kunci pada matriks BCG
Cash flow merepresentasikan kemampuan dari unit bisnis untuk membangun portofolio-nya
Cash flow dalam matriks BCG dapat dibagi atas: Pemakaian kas (cash use) karena pangsa pasar relatif (relative market
share) di sumbu horizontal Penerimaan kas (cash generated) karena pertumbuhan pasar (market
growth rate) di sumbu vertikal
Relative market share dapat dihitung dari ratio market share unit bisnis dengan market share pesaing tertinggi
Market growth atau pertumbuhan pada industri bersangkutan.
120
Asumsi Cash flow vs. posisi bisnis
Hubungan antara cash flow perusahaan dengan portofolio bisnisnya dapat terjadi berdasarkan beberapa asumsi :
Profit margin dan penerimaan kas (cash generation) makin besar dengan bertambahnya relative market share, akibat learning curve
Market growth membutuhkan uang tunai (cash used) guna membiayai modal kerja, penambahan kapasitas, dan investasi lainnya
Sebagian unit bisnis membutuhkan uang tunai lebih besar dari pendapatannya, sedang sebagian lain menghasilkan lebih besar dari yang digunakannya
Dalam portofolio perusahaan, cash flow keseluruhan perusahaan harus seimbang, yaitu antara kebutuhan tunai total dengan kemampuan unit-unit usaha dalam menghasilkan uang tunai ditambah pembiayaan dari luar.
121
Analisa Cash Flow
Relative Market Share
Star Question Mark
DogCash Cow
High
MarketGrowth
Low
WeakStrong
Cash generated +++ Cash use - - -
0
Cash generated + Cash use - - - - -
Cash generated +++Cash use - ++
Cash generated +Cash use - 0
122
4 Strategi Utama BCG Matrix
Build market share
Hold market share
Harvest
Divest
123
BCG Matrix:Karakteristik Kuadran
Relative Market Share
StarEarnings: high stable, growingCash flow: neutralStrategy: hold or invest for growth
Question MarkEarnings: low, unstable, growingCash flow: negativeStrategy: build market shareor harvest/divest
DogEarnings: low, unstableCash flow: neutral or negativeStrategy: harvest/divest
Cash CowEarnings: high stableCash flow: high stableStrategy: hold or add marketshare
30%
MarketGrowth
-10%
.110 1.0
124
Penggunaan Model : Simbol
Produc t APrevious
M arket S izeand Pos ition
B
M arketS hare
Produc t ATota lM arket
Produc t B M arketS maller but firmhas g reater s hare
125
Plotting Your SBU’s
Relative Market Share
Star Question Mark
DogCash Cow
30%
MarketGrowth
-10%.110 1.0
AB
C
A
C
B
126
Traditional SBU or Product Path
Relative Market Share
Star Question Mark
DogCash Cow
30%
MarketGrowth
-10%.110 1.0
12
23
4
127
MATRIKS BCG & BUSINESS LIFE CYCLE? ? ?Question mark
Berada pada kuadran 1, dimana relative market share-nya rendah (low), namun dengan market groqth rate yang tinggi (high)
Ini mengingat posisi market share yang rendah, menunjukkan cash generated yang rendah pula, dan cash use yang tinggi pada market growth yang tinggi.
Dalam kondisi bisnis “question mark” ini perusahaan harus memutuskan untuk memperkuat diri dengan strategi intensif (penetrasi pasar, pengembangan pasar, atau pengembangan produk) atau menjualnya bila pelaksanaan strategi terlalu mahal.
Misi yang dituntut dari anak perusahaan ini adalah membangun (build) market share. Dalam daur hidup bisnis,
posisi ini terletak pada masa perkenalan atau masa-masa awal bisnis (introduction) perusahaan
128
StarMATRIKS BCG & BUSINESS LIFE CYCLE
Berada pada kuadran II, menunjukkan baik relative market share dan market growth yang tinggi, serta menunjukkan cash generated maupun cash use yang tinggi pula.
Posisi star merupakan posisi dominan yang dikejar setiap perusahaan dan posisi yang paling kuat, namun harus dipertahankan dengan investasi yang memadai.
Hal tersebut dapat dilakukan dengan strategi integrasi, strategi intensif atau joint ventures, melalui integrasi ke hilir (forward), ke hulu (backward) atau ke pesaing (horizontal), serta melalui penetrasi pasar, pengembangan pasar, atau pengembangan produk dan joint ventures.
Misi yang perlu dilakukan adalah mempertahankan (hold) market share. Posisi “hold” sama dengan siklus pertumbuhan (growth) pada business life cycle.
129
Cash cowMATRIKS BCG & BUSINESS LIFE CYCLE
Berada pada kuadran III, yaitu dengan relative market share yang tinggi namun market growth-nya rendah.
Pada market share yang tinggi, biaya per unit cenderung rendah dan berarti menghasilkan laba yang tinggi.
Sebaliknya dengan market growth yang rendah, bisnis dalam keadaan menurun sehingga kurang di perlukan uang tunai untuk keperluan investasi.
Unit bisnis ini memiliki keuntungan dan cash flow yang tinggi
Misi yang di emban adalah memanen (harvest) keuntungan dan cash flow jangka pendek untuk membiayai bisnis anak perusahaan
yang lainnya, dengan pendapatan yang besar, namun dengan pertumbuhan yang rendah
130
Dog MATRIKS BCG & BUSINESS LIFE CYCLE
Berada pada kuadran IV, berada pada posisi yang lemah dan industri sudah tidak menarik.
Biasanya strategi yang baik adalah melakukan divestasi, kecuali masih ada kemungkinan memperbaikinya dengan biaya yang tidak terlalu mahal.
Misi yang dilakukan adalah melakukan (divest) bisnis tersebut. Disini perusahaan berada dalam keadaan
“declining” atau mengalami siklus menurun.
131
KUADRAN KATEGORI MISI DAUR HIDUP
I Question Mark (“?”) Build Introduction
II Stars Hold Growth
III Cash Cows Harvest Mature
IV Dogs Divest Decline
HUBUNGAN ANTARA KATEGORI BISNIS, MISI DAN DAUR HIDUP
132
Keuntungan MATRIKS BCG
Pendekatan yang sederhana pemakaiannya dan disajikan secara visual
Memudahkan penentuan portofolio bisnis dari divisi atau anak perusahaan
Merangsang minat dalam perencanaan strategi Mendorong perusahaan untuk melihat formulasi strategi sebagai
hubungan kerjasama antara unit-unit bisnis yang ada didalam perusahaan
Memperlihatkan bagaimana setiap unit perusahaan memiliki penerimaan dan penggunaan dana tunai (cash flow) yang berbeda-beda terhadap pencapaian tujuan perusahaan.
133
• Penggunaan tinggi dan rendah pada growth-share matriks untuk empat kategori, terlalu menyederhanakan masalah bisnis.
• Hubungan antara market share dengan profitabilitas tidak selalu linier karena market share unit bisnis yang rendah masih bisa mendapatkan keuntungan yang besar, bila di pasarkan pada “niche market”
• Tingkat perrumbuhan yang tinggi tidak selalu yang terbaik.• Matriks ini hanya memperhitungkan pesaing yang kuat
dengan mengabaikan pesaing-pesaing kecil yang sedang tumbuh dengan cepat.
• Market growth hanyalah salah satu saja dari faktor daya tarik industri (industry attractiveness) dan market share adalah juga salah satu dari posisi kompettif bisnis.
KELEMAHAN MATRIKS BCG
134
GE Multifactor Portfolio Matrix
Invest/Grow
Selectivity/earnings
Harvest /Divest
Business StrengthsBusiness Strengths
Indu
stry
Att
ract
iven
ess
Indu
stry
Att
ract
iven
ess
HighHigh
HighHigh
MediumMedium
MediumMedium
LowLow
LowLow
135
GE/McKinsey Matrix & Arah Strategis
Memposisikan berbagai divisi organisasi dalam 9-sel berdasarkan analisa SWOT dengan weighted scores (dari matriks EFE and IFE). Strategi yang dapat ditempuh, adalah:Grow and build (divisi pada sel 1, 2 or 4): market
penetration, market development, product development or backward, forward and horizontal integration.
Hold and maintain (divisi pada sel 3, 5, 7): market penetration or product development.
Harvest or divest (divisi pada cells 6, 8, 9): divest, liquidate, or retrench.
136
Earn/ 7Protect(hold)
Dominate/ 3Delay/divest
Earn/ 5 Protect(hold)
Invest/Grow 2Selectively
(build)
Invest/Grow 1Strongly(build)
Invest/Grow 4Selectively
(build)
Harvest/ 6divest
Harvest/ 8divest
Business Strengths In
dust
ry A
ttra
ctiv
enes
sHigh
High
Medium
Medium
Low
Low Harvest/ 9 divest
GE Multifactor Portfolio Matrix
137
ADL Portfolio Matrix
Industry Maturity (Attractiveness)
Com
petit
ive
Posi
tion
Embrionic
Dominant
Growing
Favorable
Mature
Weak Divest
Harvest
Hold
Niche
Improve
Selective
Invest
Aging
Tenable
Strong
Consolidate
Maintain
Liquidate
Selective
138
Penggunaan ADL Matrix
ADL Matrix adalah matriks yang dibuat oleh konsultan Arthur D. Little sebagai penyempurnaan dari GE/McKinsey Matrix
Perbedaannya:Pada ADL Matrix di-plotkan posisi daya saing (competitive position) perusahaan terhadap tahap-tahap siklus hidup (life cyclus dari produk, pasar, dan industri.
Penggunaan ketiga matriks dalam proses portofolio bisnis barangkali akan memberikan hasil yang lebih baik.
139
Illustrasi: Analisa Portofolio Internasional
Dominate/Divest/
Joint Venture
Selective Strategies
Invest/Grow
Competitive Strengths
Cou
ntry
Att
ract
iven
ess
High
High
Medium
Medium
Low
Low
Harvest/Divest/
Combine/License
Country’s Attractiveness:Market size,
Market rate of growth, Regulasi pemerintah,
Faktor ekonomi,Politik, dll.Product’s
Competitive Strength:
Market share,Product fit,
Contribution margin, Market support, dll.
140
SPACE Matrix
Stage 2:The Matching Stage
TOWS Matrix
BCG Matrix
IE Matrix
Grand Strategy Matrix
Formulation Framework
141
• Matriks Internal-External adalah salah satu alat yang dapat digunakan untuk memposisikan perusahaan kedalam matriks yang terdiri atas 9 sel, untuk menyusun strategi perusahaan/grand strategy.
• IE Matrix terdiri atas sumbu X yang menyatakan skor total dari IFE matrix (IFAS) dan sumbu Y yang menyatakan skor total EFE matrix (EFAS)
• Arti posisi internal pada sumbu X dan posisi eksternal pada sumbu Y adalah sebagai berikut :
POSISI INTERNAL POSISI INTERNAL POSISI INTERNALLEMAH RATA-RATA KUAT
POSISI EXTERNAL POSISI EXTERNAL POSISI EXTERNALRENDAH SEDANG TINGGI
POSISI PADA SUMBU X
POSISI PADA SUMBU Y
INTERNAL EXTERNAL (IE) MATRIX
142
POSISI I, II, IV• Posisi perusahaan yang menempati sel I, II & IV dapat digambarkan
sebagai GROW & BUILD. Strategi yang cocok untuk masing-masing posisi sel ini adalah : Intensive (market penetration, market development & product development) atau integration (backward integration, forward integration, horizontal integration)
POSISI III, V, VII• Posisi yang menempati sel III, V & VII dapat digambarkan sebagai HOLD &
MAINTAIN. Strategi yang cocok untuk masing-masing posisi sel ini adalah : Market penetration & product development.
POSISI VI, VIII, IX• Posisi perusahaan yang menempati sel VI, VIII & IX dapat menggunakan
strategi HARVEST or DIVESTITURE
9 SEL POSISI MATRIKS INTERNAL-EKSTERNAL
143
VII
IV
I
VIII
V
II
IX
VI
III
4,0 TINGGI
3,0
RATARATA
2,0
RENDAH
1,0
4,0 KUAT 3,0 RATA-RATA 2,0 LEMAH 1,0
SKOR TOTALEFE/EFAS
SKOR TOTAL IFE/IFAS
9 SEL POSISI MATRIKS INTERNAL-EKSTERNAL
144
IE MATRIX : AMAZON
The IFE Total Weighted Score Strong Average Weak 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99 High I II III 3.0 to 3.99
3 2
1
Medium IV V VI The EFE Total Weighted Score
2.0 to 2.99
Low VII VIII IX 1.0 to 1.99
Segments Revenue EFE IFE 1. U. S. Books, Music-Dom $1,700 million 2.5 1.9 2. Early-Stage Businesses and Other
683 million 3.5 2.5
3. International 381 million 3.6 2.5
145
SPACE Matrix
Stage 2:The Matching Stage
TOWS Matrix
BCG Matrix
IE Matrix
Grand Strategy Matrix
Formulation Framework
146
• Popular tool for formulating alternative strategies
• All organizations (or divisions) can be positioned in one of four quadrants
• Based on two evaluative dimensions:– Competitive position– Market growth
Grand Strategy Matrix
147
Quadrant IV1. Concentric diversification2. Horizontal diversification3. Conglomerate
diversification4. Joint ventures
Quadrant III1. Retrenchment2. Concentric diversification3. Horizontal diversification4. Conglomerate
diversification5. Liquidation
Quadrant I1. Market development2. Market penetration3. Product development4. Forward integration5. Backward integration6. Horizontal integration7. Concentric diversification
Quadrant II1. Market development2. Market penetration3. Product development4. Horizontal integration5. Divestiture6. Liquidation
RAPID MARKET GROWTH
SLOW MARKET GROWTH
WEAK COMPETITIVE
POSITION
STRONGCOMPETITIVE
POSITION
148
Quadrant I
• Excellent strategic position• Concentration on current markets and
products• Take risks aggressively when necessary
Grand Strategy Matrix
149
Quadrant II
• Evaluate present approach seriously• How to change to improve competitiveness• Rapid market growth requires intensive
strategy
Grand Strategy Matrix
150
Quadrant III
• Compete in slow-growth industries• Weak competitive position• Drastic changes quickly• Cost and asset reduction indicated
(retrenchment)
Grand Strategy Matrix
151
Quadrant IV
• Strong competitive position• Slow-growth industry• Diversification indicated to more promising
growth areas
Grand Strategy Matrix
152
Grand Strategy Matrix : Amazon
RAPID MARKET
GROWTH
Quadrant II Quadrant I Amazon
WEAK STRONG COMPETITIVE COMPETITIVE
POSITION POSITION
Quadrant III Quadrant IV SLOW MARKET
GROWTH
153
Quantitative Strategic Planning Matrix
(QSPM)
Stage 3:The Decision Stage
Formulation Framework
154
Quantitative Strategic Planning Matrix
• Only technique designed to determine the relative attractiveness of feasible alternative actions
QSPM
155
Quantitative Strategic Planning Matrix
• Tool for objective evaluation of alternative strategies
• Based on identified external and internal crucial success factors
• Requires good intuitive judgment
QSPM
156
Quantitative Strategic Planning Matrix
• List the firm’s key external opportunities & threats; list the firm’s key internal strengths and weaknesses
• Assign weights to each external and internal critical success factor
QSPM
157
Quantitative Strategic Planning Matrix
• Examine the Stage 2 (matching) matrices and identify alternative strategies that the organization should consider implementing
• Determine the Attractiveness Scores (AS)
QSPM
158
Quantitative Strategic Planning Matrix
• Compute the total Attractiveness Scores
• Compute the Sum Total Attractiveness Score
QSPM
159
Key Internal FactorsManagementMarketingFinance/AccountingProduction/OperationsResearch and DevelopmentComputer Information Systems
Strategy 3Strategy 2Strategy 1WeightKey External FactorsEconomyPolitical/Legal/GovernmentalSocial/Cultural/Demographic/EnvironmentalTechnologicalCompetitive
Strategic Alternatives
QSPM
160
QSPM Strategic Alternatives
Key Internal Factors Weight
Enter into strategic agreements
w/physical retailers
Expand European presence through strategic alliances
Strengths AS TAS AS TAS Customer satisfaction 0.10 4 0.40 2 0.20 Copyright to One-click online shopping 0.08 - - - - Humanitarian efforts 0.03 - - - - Strong Research & Development 0.09 - - - - Exclusive agreements with Internet sites (Associates) 0.01 2 0.02 4 0.04 Ability to track customized interests through customized home page
0.02 - - - -
Formation of strategic alliances 0.11 4 0.44 2 0.22 Agreement with AOL 0.09 3 0.27 2 0.18 Weaknesses Accumulated deficits/Anticipates further losses 0.11 1 0.11 2 0.22 Financial position 0.07 3 0.21 2 0.14 Slowing growth, core business-U.S. Books, & Music Video
0.08 2 0.16 4 0.32
Lawsuit with Barnes & Noble over patent to 1 click method
0.03 - - - -
Class action suits filed by stockholders 0.04 4 0.16 3 0.12 Does not have a mission statement 0.05 - - - - SUBTOTAL 1.00 1.77 1.44
161
Limitations:
• Requires intuitive judgments and educated assumptions
• Only as good as the prerequisite inputs
QSPM
162
Positives:
• Sets of strategies examined simultaneously or sequentially
• Requires the integration of pertinent external and internal factors in the decision-making process
QSPM
163
Culture:
• The set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm
Cultural Aspects of Strategy Choice
164
Culture:
• Successful strategies depend on degree of support from a firm’s culture
Cultural Aspects of Strategy Choice
165
Politics in organizations:
• Management hierarchy• Career aspirations• Allocation of scarce resources
Politics of Strategy Choice
166
Political tactics for strategists:
• Equifinality• Satisfying• Generalization• Focus on Higher-Order Issues• Provide Political Access on Important Issues
Politics of Strategy Choice
167
Duties and Responsibilities:
1. Control and oversight over management2. Adherence to legal prescriptions3. Consideration of stakeholder interests4. Advancement of stockholders’ rights
Role of A Board of Directors
168
This is the end of the PRESENTATION