2. (c) Dr. Azhar Kazmi 2008 2
Learning objectives
Describe the process of strategic choice
Explore the tools and techniques for strategic analysis
Examine the subjective factors in strategic choice
Discuss the manner in which organisations handle
unforeseen environmental events through formulation
of contingency strategies
Itemise the contents of a typical strategic plan for an
organisation
Discuss the strategic plan preparation and content for
private and public sector organisations in India
3. (c) Dr. Azhar Kazmi 2008 3
Process of strategic choice
Focussing on strategic alternatives
Analysing the strategic alternatives
Evaluating the strategic alternatives
Choosing from among the strategic
alternatives
4. (c) Dr. Azhar Kazmi 2008 4
Gap analysis for focussing on
strategic alternatives
Time
T2
T1
Performance gap
Desired performance
Present
performance
Pe
rf
or
m
an
ce
5. (c) Dr. Azhar Kazmi 2008 5
Dynamic competitive positioning
Adapted from C.W.L. Hill & G.R. Jones: Strategic Management: An Integrated
Approach Boston: Houghton Mifflin, 2007, p. 164
6. (c) Dr. Azhar Kazmi 2008 6
Strategic analysis
Tools and techniques for strategic analysis
Corporate portfolio analysis
GE nine-cell matrix
Corporate parenting analysis
SWOT analysis
Experience curve analysis
Life cycle analysis
Industry analysis
Strategic groups analysis
Competitor analysis
7. (c) Dr. Azhar Kazmi 2008 7
General Electric nine-cell matrix
High
Medium
Low
Strong Average Weak
BUSINESS STRENGTH / COMPETITIVE POSITION
INDUSTRY
ATTRACTIVENESS
GREEN
YELLOW
RED
ZONE STRATEGIC
SIGNAL
INVEST /
EXPAND
SELECT /
EARN
HARVES
T /
DIVEST
8. (c) Dr. Azhar Kazmi 2008 8
Consolidated SWOT profile
--------------------------------------------------------------------------------------------------------
ETOP Sector impact SAP Impact factor
--------------------------------------------------------------------------------------------------------
Economic ↑
Market → Finance ↓
International ↓ Marketing →
Political → Operations ↑
Regulatory → Personnel →
Social ↑ Information management ↑
Supplier → General management ↑
Technology ↑
Up arrows indicate favourable impact; down arrows indicate unfavourable impact, while
horizontal arrows indicate a neutral impact.
9. (c) Dr. Azhar Kazmi 2008 9
Porter’s five forces model of
competition in an industry
Potential threats from
firms which make
substitute products or
services
Forces of competition
created by rivalry
Buyers’ bargaining power
Potential threat from entry
of new firms
Suppliers’ bargaining
power
10. (c) Dr. Azhar Kazmi 2008 10
Components of competitor analysis
Future goals of competitor
Current strategy of competitor
Key assumptions made by competitor
Capabilities of competitor
11. (c) Dr. Azhar Kazmi 2008 11
Subjective factors in strategic
choice
Considerations for governmental policies
Perception of critical success factors and
distinctive competencies
Commitment to past strategic actions
Strategist's decision styles and attitude to
risk
Internal political considerations
Timing and competitor considerations.
12. (c) Dr. Azhar Kazmi 2008 12
Contingency strategies
Contingency strategies are formulated in
advance to deal with uncertainties that are
a natural part of the business
The prospects of emergencies or disasters
The phenomenon of serendipity
A model of contingency planning consists of
three steps:
Identifying the contingent events
Establishing the trigger points
Developing and strategies and tactics
13. (c) Dr. Azhar Kazmi 2008 13
Strategic plan
A strategic plan (also called
corporate, group, or perspective
plan), is a document which provides
information regarding the different
elements of strategic management
and the manner in which an
organisation and its strategists
propose to put the strategies into
action.
14. (c) Dr. Azhar Kazmi 2008 14
Contents of a comprehensive
strategic plan
A clear statement of strategic intent covering the vision, mission,
business definition, goals and objectives.
Results of environmental appraisal, major opportunities and
threats, and critical success factors.
Results of organisational appraisal, major strengths and
weaknesses, and core competencies.
Strategies chosen and the assumptions under which those
strategies would be relevant.
Contingent strategies to be used under different conditions.
Strategic budget for the purpose of resource allocation for
implementing strategies and the schedule for implementation.
Proposed organisational structure and the major organisational
systems for strategy implementation including the top
functionaries and their role and responsibility
Functional strategies and the mode of their implementation
Measures to be used to evaluate performance and assess the
success of strategy implementation.