Strategic Group Maping

8/11/2019 Strategic Group Maping

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Key success factors of

environmental analysis

Factors that influence a companies ability to

compete successfully, dominate the market,

take competitive advantage in industry.

A key success factors can be:- Specific skill or talent

Competitive capabilities

Something a firm must do to satisfy customers


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Driving forces

Driving forces are the major underlying causes

of changing industry and competitive

condition.

Causes of driving Forces:- Product innovation

Technological change

Entry or exist of major firms Increasing globalization in industry

Regularity influences & government policy

changes

Changing in the lifestyle


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Strategic Group Mapping

According to porter, a strategic group is the

group of firms in an industry following the same

or similar strategy along the strategic

dimension. Companies in the same strategic group can

resemble one another in any of several ways:

Comparable product line breadthSell in the same price quality range

Emphasize the same distribution channel

Use essentially the same product attributes to

appeal to similar types of buyers


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Cont

Or offer buyers similar services and technical

assistance


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Value Chain Analysis

The primary analytical tool of strategic cost

analysis is a value chain identifying the separate

activities, functions, and business processes that

are performed in designing, producing, marketing,delivering and supporting a product or service

Value is the amount buyers desire to pay for what

a firm provides to them in the form of a

product/service/product-cum-service. Value chain analysis examines the areas of

advantages of low cost and disadvantages of high

costs.


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V LUE CH IN

=A value chain is a set of interlinked value

creating activities performed by an

organization

=A tool to dissect your organization into coreand supporting activities

=A holistic look at your organization and how

department work with other departments

=A way to prioritize resources & activities

based on your customer needs


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CONCEPT OF COMPANY VALUE CHA IN

Sales and

marketing

nbound

ogistics

operation Outbound

logistics

service Profit

margin

Product R&d, technology and systems development,

human resources management

General administration.

P

R

I

M

A

R

Y

A

C

T

I

V

I

T

Y

SUPPORTIVE ACTIVITY


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Swot analysis

Strengths

Weaknesses

Opportunities

Threats


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Conti..

SWOT analysis evolved during the 1960s atStanford Research Institute

It is a very important strategic planning

technique Perform to understand their internal and

external environments

through such an analysis organization can

know about the strength and weaknessesexisting within an organization andopportunities and threats operating in theenvironment so the effective strategy can be

formulated


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A typical SWOT matrix

STRENGTHS:-Favorable Location

Excellent distribution network

good management reputationEstablish R&D Center

ISO 9000 quality certificate

WEAKNESS:-Uncertain cash flow

Low worker commitment

Weak management informationsystem

OPPORTUNITY:-Favorable industry trend

Low technology option available

THREATS:-Unfavorable political Environment

Obstacle in licensing new business


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Tows matrix

Tows is another way of swot

Tows matrix is given by Weihrich

How the strengths and weaknesses

existing within an organization can be

matched with the opportunity and threat

operating in an environment so the

effective strategy can be formulated Strategy formulation matching tool.


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Conti..

Tows: threats, opportunities, weakness,

strengths.

WT strategy

WO strategy

ST strategy

SO strategy


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Factors Strengths

(Internal)

Weakness

(Internal)

External

opportunity

So strategy

Use strengthsto take

advantage of

opportunity

Wo strategy

take

advantages of

opportunity by

overcoming

weaknessExternal

threats

St strategy

strength to

avoid threat.

Wt strategy,

strategy that

minimize

weakness.

Tows matrix


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Evaluation techniques

Value chain analysis

Bench marking

Balance scorecard

Quantitative performance measure

Key factor rating


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Value chain Analysis

A companys value chain identifies the primary

activities that create value for customers and

the related support activities.

It is a primary analytical tool of strategic costanalysis.

Value chain helps the organization to improve

its capabilities to attain competitive advantageby using resources effectively.


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Benchmarking

Benchmarking is a tool that allows a company

to determine whether the manner in which it

performs particular functions and activities

represent industries best practice when bothcost and effectiveness are taken into account.


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Balanced score card

Balance score card method takes into

consideration four important key performance

measures.

Customer perspective Internal business perspective

Innovation and learning perspective

Financial perspective


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Quantitative Performance

measure

Quantitative performance measures involves

ratio analysis, ROI, etc used for comparing the

actual performance with the predetermined

standards.


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Key factor Rating

Those factors which have a significant impact

on the overall organization capability

Documents

Strategic Group Maping