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Waqas analysis

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To recommend suitable strategy for Craft Inc.

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Waqas analysis

  1. 1. IMSciences The Craft Food, INC. By: Waqas Ahmad MBA 1.5
  2. 2. The Craft Food Inc • The Craft Food Inc. is an international diversified (150 countries in the World) company dealing in the foods and dressing products. • The company currently consists of five operating segments Snacks, Beverages, Cheese, Grocery and Convenient meals. • Total Sales $42,201 Millions and net income is $1.95 Millions.
  3. 3. Harold Wallace • Founder, serves as Chairman and President of the Wallace Group, owns 45% of the outstanding stock. • Several years ago, Wallace and the Board embarked on a strategy of diversification into plastics and chemicals in order to decrease the company’s dependence on defense-related business. • Presently, the morale within The Wallace Group has deteriorated. • Wallace has hired Frances Rampar, a management consultant, to conduct a management survey into the problems facing The Wallace Group.
  4. 4. Internal and External Analysis
  5. 5. SWOT Analysis Strength Weaknesses Diversification Decreasing distinctive competence Latest technology Scarce technical personnel Well-integrated Leadership Good reputation Opportunities Threats Potential in market Competitors
  6. 6. Internal Strategic Factors Weight Rating Weighted Score Strengths  Diversification .10 3 .30  Good reputation .10 3 .30  Latest technology .20 4 .80  Well-integrated .10 4 .40  Favorable market niche in electronics .05 3 .15 Weaknesses  Decreasing distinctive competence .05 1 .05  Scarce technical personnel .10 2 .20  Heavy dependence on government contracts .10 2 .20  Unprofitable chemical division .10 2 .20  Leadership .10 1 .10 TOTAL SCORES 1.00 2.70 IFE Matrix
  7. 7. Interpretation (IFE) • The IFE total weighted score is 2.70 which is above the average score of 2.5, indicate that the company has strong internal position, which mean that the company has the ability to minimize his weakness and properly utilize their strength.
  8. 8. External Factor Evaluation (EFE) Matrix External Strategic Factors Weight Rating Weighted Score Opportunities  Potential in market .70 3 2.1 Threats  Competitors .30 3 .90 TOTAL SCORES 1.00 3.00
  9. 9. Interpretation (EFE) • The EFE total weighted score is 3.00 which is above the average score of 2.5, indicate that the company is responding in an outstanding way to existing opportunities and threats in its industry. In other words, the firm’s strategies effectively take advantage of existing opportunities and minimize the potential adverse effects of external threats.
  10. 10. Competitive Profile Matrix (CPM) • CPM is not applicable in this case study due to the insufficient information.
  11. 11. Problems
  12. 12. Minor Problems • The firm does not have a clear mission. • Company heavily dependent on defense-related business • Poor organizational design creates span of control problems and results in poor operations. • Unprofitable chemical division needs new management or it needs to be analyzed for sale to someone else.
  13. 13. Major Problem • Lace of Leadership Harold Wallace is found to be the major problems because: – Some of the employee stockholders made an attempt to force Wallace’s resignation. – Tremendous dissatisfaction among management and employees resulted from Wallace’s failure to delegate to subordinates and a lack of clear strategies or long term plans, goals, or objectives.
  14. 14. Alternative Strategies
  15. 15. TOWS Analysis or SWOT Matrix Strengths – S S1. Diversification S2. Good reputation S3. Latest technology S4. Well-integrated Weaknesses – W W1. Decreasing distinctive competence W2. Scarce technical personnel Opportunities – O O1. Potential in market S2O1 S3O1 W1O1 W2O1 Threats – T T1. Competitors S2T1 S3T1 S4T1 W1T1 W2T1
  16. 16. Interpretation (TOWS) • S2O1: Through product development they can increase there market shares (Product Development) • W1O1: If Wallace Group able to maintain their distinctive competence they can take advantage from market potential. (Market penetration) • S4T1: The Wallace Group has Well-integrated they are able to supply many of its own component parts and raw materials. (backward integration) • W1T1: If they introduce new product in the market they may able to avoid the threat of competitors. (Product development)
  17. 17. SPACE Matrix Financial Strength (FS)  Cash flow : 5  Liquidity : 4  Leverage : 3 Competitive Advantage (CA)  Market share : -2  Customer loyalty : -3  Control over suppliers & distributors : -3 Environmental Stability (ES)  Technological changes : -3  Competitive pressure : -3  Barriers to entry : -4 Industry Strength (IS)  Growth potential : 5  Profit potential : 3  Ease of entry into market : 2 Y axis: FS + ES 4 + (-3.33) = 0.67 X axis: IS + CA 3.33 + (-2.66) = 0.67
  18. 18. FS +6 +1 +5 +4 +3 +2 -6 -5 -4 -3 -2 -1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 ES CA IS Conservative Aggressive Defensive Competitive The company is in an excellent position to use its internal strengths to take advantage of external opportunities, overcome internal weaknesses, and avoid external threats. SPACE Matrix
  19. 19. BCG Matrix • The Boston Consulting Group (BCG) Matrix is not applicable in this case because the information require for BCG matrix in not available in the case study.
  20. 20. IE Matrix I II III IV V VI VII VIII IX 4.0 3.0 2.0 1.0 EFEWeightedScores IFE Weighted Scores 4.0 3.0 2.0 1.0 Hold and maintain stage, Market penetration and product development strategies are the appropriate strategies for this division.
  21. 21. Quadrant IV 1. Concentric diversification 2. Horizontal diversification 3. Conglomerate diversification 4. Joint ventures Quadrant III 1. Retrenchment 2. Concentric diversification 3. Horizontal diversification 4. Conglomerate diversification 5. Liquidation Quadrant I 1. Market development 2. Market penetration 3. Product development 4. Forward integration 5. Backward integration 6. Horizontal integration 7. Concentric diversification Quadrant II 1. Market development 2. Market penetration 3. Product development 4. Horizontal integration 5. Divestiture 6. Liquidation RAPID MARKET GROWTH SLOW MARKET GROWTH WEAK COMPETITIVE POSITION STRONG COMPETITIVE POSITION Grand Strategy Matrix
  22. 22. Recommended Strategy and Plan of action
  23. 23. Quantitative Strategic Planning Matrix Strategic Alternatives Key External Factors Weight Product development Market penetration  Economy 0.30 2 0.6 3 0.9  Political/Legal/Governmental 0.10 1 0.1 3 0.3  Social/Cultural/Demographic/Enviro nmental 0.10 4 0.4 2 0.2  Technological 0.20 2 0.4 2 0.4  Competitive 0.30 2 0.6 2 0.6 1.00 Key Internal Factors  Management 0.20 2 0.4 3 0.6  Marketing 0.20 3 0.6 2 0.4  Finance/Accounting 0.10 2 0.2 4 0.4  Production/Operations 0.20 3 0.6 3 0.6  Research and Development 0.10 2 0.2 3 0.3  Computer Information Systems 0.20 2 0.4 3 0.6 Total: 1.00 4.5 5.3
  24. 24. Recommended Strategy and Plan of action • Market Penetration – There have enough potential in the market • The Wallace Group needs to increase the number of salespersons, increase advertising expenditures, offering extensive sales promotion items, or increase publicity efforts to capture more market shares.
  25. 25. Thanks

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