strategy formulation

1. Corporate Planning
Aileen Macandili
11-MPMG-039
Jeannifer B. Villanueva
11-MPMG-011

2. Strategy Formulation
5.1 Situational Analysis (SWOT)
5.2 Review of Mission and Objective
5.3 Generating Alternative Strategies using
the TOW’s Matrix
5.4 Business Strategies
5.5 Impact of the Internet on the Business
Strategy

3. SWOT Analysis
• A SWOT analysis is a strategic planning
method used to evaluate the
Strengths, Weaknesses, Opportunities, an
d Threats involved in a project or in a
business venture.
• It is an analytical framework to help
summarize in a quick and concise way the
risk and opportunities for any company
across the value chain.

4. The aim of SWOT analysis
To identify the key internal and external
factors that are important to achieving
the objective. A SWOT analysis groups
key pieces of information into two main
categories:
1. Internal factors
2. External factors

5. Internal factors
Factors pertaining to the internal environment
of the company are usually classified as
Strengths (S) or Weaknesses (W)
• Strengths: characteristics of the
business, or project team that give it an
advantage over others
• Weaknesses (or Limitations):
characteristics that place the team at a
disadvantage relative to others

6. Structure of a SWOT analysis
A SWOT analysis is
typically represented
by a 4-box model that
lists the
Strengths, Weakness
es, Opportunities, and
Threats in the
following order:
Strength Weakness
Opportunities Threats

7. External Factors
Factors that are external to the company are
classified as Opportunities (O) or Threats
(T).
• Opportunities: external chances to improve
performance (e.g. make greater profits) in
the environment
• Threats: external elements in the
environment that could cause trouble for
the business or project

8. Use of SWOT analysis
• an integral part of a marketing plan and can also be
part of a business plan
• helps match the company’s resources and
capabilities to threats and opportunities in the
competitive environment
• can be very subjective, but adding weighting and
criteria to each factor increases the validity of the
analysis.
• may be used in any decision-making situation when a
desired end-state (objective) has been defined
• may be used in pre-crisis planning and preventive
crisis management and in creating a recommendation
during a viability study/survey.

9. The TOWS Matrix
TOWS Analysis is a variant of the classic
business tool, SWOT Analysis. It is a
relatively simple tool for generating
strategic options. The only difference
between TOWS and SWOT is that TOWS
emphasizes the external environment
while SWOT emphasizes the internal
environment.

10. Uses of TOWS Matrix
By analyzing the external environment (threats and
opportunities), and internal environment (weaknesses
and strengths):
TOWS Matrix can be used to think about the strategy of
your whole organization, a department or a
team, think about a process, a marketing
campaign, or even own skills and experience.
It can be used to take advantage of the opportunities
open, at the same time minimizing the impact of
weaknesses and be protected against threats
it helps to consider how to use the external environment
to strategic advantage, and identify some of the
strategic options available

11. Identifying Strategic Options
TOWS analysis helps you get a better
understanding of the strategic choices to
win a situation. It helps to ask, and
answer, the following questions:
How do you:
• Make the most of your strengths?
• Circumvent your weaknesses?
• Capitalize on your opportunities?
• Manage your threats?

12. The
TOWS
Matrix
External Opportunities
(O)
List 4-5 external
opportunities
here
1.
3.
2.
4.
External Threats
(T)
List 4-5
external
threats here
1.
3.
2.
4.
Internal Strengths
(S)
List 4-5
internal
threats here
1.
3.
2.
4.
S-O
"Max-Max"
Strategy
Strategies that
use strengths to
maximize
opportunities.
S-T
"Max-Min"
Strategy
Strategies that
use strengths
to minimize
threats.
Internal
Weaknesse
s (W)
List 4-5
internal
weaknesse
s here
1.
3.
2.
4.
W-O
"Min-Max"
Strategy
Strategies that
minimize
weaknesses by
taking
advantage of
opportunities.
W-T
"Min-Min"
Strategy
Strategies that
minimize
weaknesses
and avoid
threats.

13. The Matrix Strategies
• SO - Use internal strengths to capitalize on
external opportunities.
• WO - Improve internal weaknesses by
using external opportunities.
• ST - Use internal strengths to avoid
external threats
• WT - This is the most defensive position on
the matrix. The strategies created here will
want to avoid threats and minimize
weaknesses

14. REVIEW OF MISSION AND OBJECTIVE
A goal or objective is a desired result a
person/ organization envisions, plans and
commits to achieve—a personal or
organizational desired end-point in some
sort of assumed development. Many
people endeavor to reach goals within a
finite time by setting deadlines.
A Mission is a pre established and self
imposed purpose of an organization.

15. Mission Statement
A statement of the purpose of a company or
organization. The mission statement guide
the actions of the organization, spell out its
overall goal, provide a path, and guide
decision-making. It provides the framework or
context within which the company's strategies
are formulated. An effective mission
statement commonly clarifies the
organization's purpose.

16. Mission statements often include the
following information:
1. Purpose and aim(s) of the
organization
2. The organization's primary
stakeholders: clients/customers,
shareholders, etc.
3. How the organization provides
value to these stakeholders, for example
by offering specific types of products
and/or services

17. Business Strategies
Business strategies refer to the aggregated
strategies of single business firm or a
strategic business unit in a diversified
corporation. There are several types of
business strategies implemented in
business environment to achieve a
sustainable competitive advantage and
long-term success.

18. Types of Business Strategies
1. Cost Strategy
2. Product Differentiation strategy
3. Focus strategy
4. Stability Strategy
5. Growth Strategy
6. Vertical Integration Strategy
7. Merger Strategy
8. Price-Skimming Strategy
9. Product Elimination Strategy
10.Acquisition Strategy

19. Impact of the Internet in
Business Strategy
The Internet and its myriad of
applications, tools and technologies have
been adopted quickly by most businesses
since the mid-1990s. The Internet has
affected communication
paradigms, advertising
methods, information access and
dissemination, workforce mobility, business
practices and operational methods of
businesses across domains and sectors.

20. Impact of Internet on Business
• Expanded communication capabilities
• fosters collaboration on projects across
boundaries and locations
• facilitated quicker transactions &
fostered good e-commerce relations
• Workforce mobility through wireless
internet options
• Web-enabled enterprise applications
adopted by many businesses

21. Benefits of Internet in Business
• Lower costs of start up capital and
operating expense
• Larger customer market than traditional
business
• Accommodates niche businesses
• Customers can shop anytime, anywhere

22. Negative Impact of Internet in
Business
Today, a massive amount of business is
done over the Internet. Everything from
buying stock to paying taxes to making
household purchases can be done
online, often at a substantial savings. But in
certain fields or situations, the Internet is
simply bad for business.

23. New Competitors
• The Internet brings new competitors to
many areas of business who offers
products or services online through any
number of selling venues, thus adding
literally millions of new merchants to the
global marketplace. For existing
businesses, these new online sellers
represent a challenge to retain customers
or risk being driven out of business.

24. No Geographical Restrictions
The Internet removes the restrictions of
geography. Shopping locally is no longer
the only choice, and goods can be ordered
from anywhere. Smaller businesses need
only create a website to expand their
customer bases to everyone with Internet
access rather than being restricted by a
local or regional market.

25. Obsolescence
• Certain products and services are quickly
becoming obsolete in the digital
age, including stock brokers, travel agents
and even the post office. They have been
largely replaced by stock websites, travel
websites and e-mail, respectively. While
some companies have spotted these trends
before they occurred and offered online
services to augment their business
model, others have been left with a
depleted customer base.

26. Lesser Labor Force
Automation on the Internet also has
eliminated countless jobs. As businesses
use the Internet to simplify and streamline
their operations, there is less need for a
large labor force. For cases in which an
automated online system can sort data or
answer customers' questions, the human
element is sometimes deemed
unnecessary.

27. Security
In online business, confidentiality and
security become major concerns. Beyond
day-to-day transactions, major security
threats such as hackers, viruses, and e-
terrorism means providing security online is
an added expenditure that simply doesn't
exist elsewhere. Breaches of security, such
as the highly publicized theft of credit card
data on several occasions, lead customers
to question the safety of doing business
online, which can hurt business further by
lowering confidence levels.

28. Lost Productivity
There is reported lost productivity due to employees
using the Internet at work spending a substantial
amount of their workday replying to personal e-
mail, following live sporting events and web
surfing.
Even when employees are not equipped with
computers, the availability of wireless Internet on
phones and other mobile devices creates a
constant distraction that can cut into work time.
Many employers have taken steps to regulate
their employees' Internet usage, but concerns
about privacy and legality linger.

29. THANK YOU!!