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Process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses.
5 1 2 3 4 Strategic Factor Analysis Summary (SFAS) Strategic Factors (Select the most important opportunities/threats from EFAS, Table 3.4 and the most important strengths and weaknesses from IFAS, Table 4.2) Total Score Weight Rating Weighted Score Comments SHORT INTERMEDIATE LONG Duration 6
Strategic Factors (Select the most important opportunities/threats from EFAS, Table 3.4 and the most important strengths and weaknesses from IFAS, Table 4.2) S1 Quality Maytag culture (S) S3 Hoover’s international orientation (S) W3 Financial position (W) W4 Global positioning (W) O1 Economic integration of European Community (O) O2 Demographics favor quality (O) O5 Trend to super stores (O + T) T3 Whirlpool and Electrolux (T) T5 Japanese appliance companies (T) Total Score Weight Rating Weighted Score Comments 1.00 SHORT INTERMEDIATE LONG Duration 3.05 .10 .10 .10 .15 .10 .10 .10 .15 .10 Quality key to success Name recognition High debt Only in N.A., U.K., and Australia Acquisition of Hoover Maytag quality Weak in this channel Dominate industry Asian presence 5 3 2 2 4 5 2 3 2 .50 .30 .20 .30 .40 .50 .20 .45 .20 Strategic Factor Analysis Summary (SFAS): Maytag as Example X X X X X X X X X
Risks of Generic Competitive Strategies Risks of Cost Leadership Cost leadership is not sustained: • Competitors imitate. • Technology changes. • Other bases for cost leadership erode. Proximity in differentiation is lost. Cost focusers achieve even lower cost in segments. Risks of Differentiation Differentiation is not sustained: • Competitors imitate. • Bases for differentiation become less important to buyers. Cost proximity is lost. Differentiation focusers achieve even greater differentiation in segments. Risks of Focus The focus strategy is imitated: The target segment becomes structurally unattractive: • Structure erodes. • Demand disappears. Broadly targeted competitors overwhelm the segment: • The segment’s differences from other segments narrow. • The advantages of a broad line increase. New focusers subsegment the industry.
Partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial.
Cooperative Strategies Strategic Alliance Access to markets Achieve competitive advantage Obtain technology Reduce financial risk Reduce political risk
Continuum of Strategic Alliances Mutual Service Consortia Joint Venture Licensing Arrangement Weak and Distant Value-Chain Partnership Strong and Close Source: Suggested by R. M. Kanter, “Collaborative Advantage: The Art of Alliances,” Harvard Business Review (July-August 1994), pp. 96–108.