Swot analysis nd bcg matrix

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Swot analysis nd bcg matrix

  1. 1. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–1 Exhibit 5–6
  2. 2. Management by Objectives (MBO)  Management by Objectives Step 1. Set individual objectives and plans. Step 2. Give feedback and evaluate performance. Step 3. Reward according to performance.  Sources of MBO Failures  Lack of top management commitment and follow- through on MBO.  Employees’ negative beliefs about management’s sincerity in its efforts to include them in the decision-making process. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–2
  3. 3. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–3 Exhibit 5–10
  4. 4. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–4
  5. 5. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–5
  6. 6. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–6
  7. 7. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–7
  8. 8. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–8 Dimensions: Long-term industry attractiveness Business strength/Competitive position SBUs plotted as circles with area proportional to the size of the industry, & a sector within each circle representing the SBUs market share in its industry
  9. 9. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–9 Strong Average Weak H M L GE 9-Cell MatrixGE 9-Cell Matrix Business Strength/Competitive Position Long-Term Industry Attractiveness
  10. 10. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–10 SBUs in 3 upper left cells get top investment priority SBUs in 3 middle diagonal cells merit steady investment to maintain & protect their industry positions SBUs in 3 lower right cells are candidates for harvesting or divestiture
  11. 11. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–11 Advantages of G.E. 9-Cell MatrixAdvantages of G.E. 9-Cell Matrix Allows for intermediate rankings between high & low and between strong & weak Incorporates a wider variety of strategically relevant variables than the BCG matrix Stresses the channeling of corporate resources to SBUs with the greatest potential for competitive advantage & superior performance
  12. 12. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–12 Weaknesses of G.E. 9-Cell MatrixWeaknesses of G.E. 9-Cell Matrix Provides no guidance on specifics of SBU strategy Only suggests general strategic posture -- aggressive expansion, fortify-&-defend, or harvest/divest Doesn’t address the issue of strategic coordination across related SBUs Tends to obscure SBUs about to “take off” or “crash & burn” -- static, not dynamic
  13. 13. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–13 Life-Cycle Portfolio MatrixLife-Cycle Portfolio Matrix Dimensions: Industry stage in the life cycle SBU’s competitive position Area of each SBU circle is proportional to size of the industry; sectors denote SBU’s market share in its industry This matrix displays the distribution of the firm’s businesses across the various stages of industry evolution
  14. 14. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–14 Strong Average Weak SBUs Competitive Position Life-Cycle Portfolio MatrixLife-Cycle Portfolio Matrix Introduction Growth Early Maturity Late Maturity Decline Life- Cycle Stages
  15. 15. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–15 15 Strategy Formulation vs. Implementation • Strategy Formulation = stage of strategic management that involves planning and decision making that lead to the establishment of the organization’s goals and of a specific strategic plan • Strategy Implementation = stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes Experiential Exercise: Developing Strategy for a Small Business
  16. 16. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–16 16 Portfolio Strategy • Mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage BCG Matrix
  17. 17. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–17 17 Three Levels of Strategy in Organizations Corporate-Level Strategy: What business are we in? Corporation Business-Level Strategy: How do we compete? Textiles Unit Chemicals Unit Auto Parts Unit Functional-Level Strategy: How do we support the business-level strategy? Finance R&D Manufacturing Marketing

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