STRATEGY FORMULATION

Business Research

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VG Orjalo 2

SWOT/TOWS Analysis

SWOT Analysis refers to the listing ofidentified stengths, weaknesses,

opportunities and threats resulting from

internal audit and external environmentassessment.

SWOT Analysis is done for the location-specific

suppliers, industry participants, buyers and

substitutes of the proposed businessproblem.

*SWOT Matrix

*Strategy Formulation(SO, ST, WO, WT)

This section ends with the formulation of strategies that match

the functional objectives listed in Chapter 1 of the study, using a visual

and text format.For example, a marketing study objective in Chapter 1 should be

shown as a marketstrategy in the S-O, S-T, W-O and W-

T listings in the matrix.

Primary data collection is necessary to

validate the secondary data collected from

the municipality or barangay where the

business establishment is located.

(David, 2005)

TOWS/SWOT Matrix• Identify and list opportunities (O) and

threats (T) from industry data• Identify and list weaknesses (W) and

strengths (S) threats from company data• Match opportunities to strengths and

weaknesses (S-O & W-O strategies)• Match threats to strengths and

weaknesses (S-T & O-T strategies)VG Orjalo 3

Strategies• Integration

• Intensive

• Diversification

• Defensive

• Michael Porter

• Forward, backward, horizontal & vertical

• Market penetration, market development, product development

• Concentric, horizontal & conglomerate

• Retrenchment, divestiture & liquidation

• Cost leadership, differentiation & focusVG Orjalo 4

Integration Strategies: Ownership or increased control

• ForwardGain ownership or increased control over distribution or retailers• BackwardSeek ownership or increased control of a firm’s suppliers

VG Orjalo 5

• HorizontalSeek ownership or increased control of a firm’s competitors

• VerticalExpand product or service coverage/offerings

Intensive Strategies: Efforts to improve competitive position

• Market penetration

• Market development

• Product development

• Increase market share for present products & services in present markets

• Introducing present products or services to new geographic areas

• Seeks increased sales by improving or modifying present products or services

VGO 6

Diversification Strategies: Adding and managing diverse business activities

• Concentric

• Horizontal

• Conglomerate

• Adding new but related products

• Adding new but unrelated products for present customers

• Adding new but unrelated products

VG Orjalo 7

Defensive Strategies: Subtracting from present business activities

• Retrenchment

• Divestiture

• Liquidation

• Cost and asset reduction to reverse declining sales and profits

• Selling a division or part of an organization

• Selling a company’s assets, in parts, for their tangible worth

VGO 8

Michael Porter’s Generic Strategies

• Cost leadership

• Differentiation

• Focus

• Forward, backward & horizontal integration

• Product flexibility, greater compatibility, lower cost, improved service, lesser maintenance, greater convenience or more features

• Market penetration & market development

VGO 9

Websites To Visit• www.boi.gov.ph• www.dti.gov. ph • www.neda.gov. ph • www.netmba.com• www.ncsb.gov.ph• Other related websites

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List of References

• Alsem, Karel Jan. (2007). Strategic Marketing: An Applied Perspective. Singapore: McGraw Hill

• David, Fred R. (2005). Strategic Management: An Integrated Approach,( 10th edition). Pearson Education South Asia Pte Ltd.

• Heizer, Jay and Render, Barry. (2006). An Introduction to Operations Management. Singapore: Pearson Education South Asia Pte. Ltd.

• League of Cities of the Philippines. (2008). Up-scaling Poverty Focused City Development Strategies. Makati: Cities Alliance.

• Moyer, R. Charles, McGuigan, James R. & Rao, Ramesh P.(2006). Contemporary Financial Management Fundamentals. Singapore: Thomson Learning Asia.

• Panopio, Isabel and Raymundo, Adelisa. (2004). Sociology: Focus on the Philippines. Quezon City: Ken, Inc.

• Saunders, Dr. Mark, Lewis, Philip & Thornhill, Dr. Adrian. (1997). Research Methods for Business Students. London: Pitman Publishing.

• Szuchman, Lenore T. (2005). Writing with Style: APA Style Made Easy, (3rd edition). Canada: Thomson Learning, Inc.

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