This document discusses strategic analysis and choice for organizations. It outlines the process of selecting strategies, which involves focusing on strategic alternatives through gap analysis, evaluating alternatives using objective and subjective factors, and considering decision factors like suitability, feasibility, and acceptability. The best choice is then selected. Key steps include identifying alternatives, assessing their pros and cons using tools like portfolio analysis, and forecasting alternatives' impacts through corporate scenarios. Criteria for evaluation include suitability to the organization's goals, capability to implement, and stakeholder reactions.

1. STRATEGY ANALYIS AND
CHIOCE
By
Group No. 4 (S4 MBA)
Under the Leadership of
Miss. Sunaina T Suku
MSN Institute of Management and Technology
2013-2015

2. “When a crisis forces choosing among alternatives, most
people will choose the worst possible one”
Rudin’s Law
“Life is full of lousy options”
General P. X. Kelley
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3. Doing Great in a Weak Economy…How ?
A case of Apple Inc
Geoff Colvin, “The World’s Most Admired Companies,” Fortune
(March 16, 2009): 76–86.
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4. Introduction
• Organizations continually face the challenge of
exercising choice among alternatives.
• Strategic choice is an inalienable part of the
decision making process.
• The process of strategic choice is essentially a
decision making process.
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5. • Some strategy option is more appropriate than
other
• Strategist should evaluate the existing
alternatives before choosing the best strategy
• Strategy analysis and choice enable the firm to
achieve its mission and objectives.
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6. Definition
The decision to select from among the grand
strategies considered, the strategy which will
best meet the enterprise’s objective. The
decision involves focusing on a few
alternatives considering the selection factors,
evaluating the alternatives against these
criteria and making the actual choice.”
- Prof. Azhar Kazmi
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7. Approaches for strategic choice
• Planned approach :This approach involves formal
appraisal of the relevant strategic options for suitability,
acceptability and feasibility
• Enforced choice approach :An organization has various
stakeholder. The dominate stakeholders play an important
role in strategic choice. Their expectations considered.
• Experience based approach :Managers possess an
experience curve. Past experience of managers a
guideline for strategic choice.
• Command approach :The strategic choice is based on the
command of top management. It is top down approach.
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8. Process of selecting Strategies
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Focusing on Strategic Alternatives
Evaluating the Strategic Alternatives
Considering Decision Factors
Choosing the best Choice

9. Focusing on Strategic Alternatives
• It involves identification of all alternatives.
• The strategist examines what the organization
wants to achieve (desired performance) and
what it has really achieved (actual performance).
• This done through gap analysis.
• GAP ANALYSIS = Actual Performance –
Desired Performance
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10. Result of GAP analysis Strategy
Large gap due to expected
environmental opportunities
Expansion Strategy
Narrow Stability Strategy
Large due to bad performance Retrenchment Strategy
Multiple reasons Combination Strategy
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11. Evaluating the Strategic Alternatives
• The next step is to assess the pros and cons of
various alternatives and their suitability.
• The tools which may be used are portfolio
analysis, GE business screen and corporate
Parenting.
• Analysis done on the basis of the objective and
subjective factors.
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12. • The Objective Factors- Based on analytical
techniques and hard facts or data.
• The Subjective Factors- Based on one’s
personal judgment, collective or descriptive
factors.
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13. The Objective Factors-
Environmental factors
• Volatility of
environment
• Input supply from
environment
• Powerful stakeholders
Organizational factors
• Organization’s
mission
• Strategic intent
• Business definition
• Strengths and
weaknesses
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14. The Subjective Factors-
• Strategies adopted in the previous period;
• Personal preferences of decision- makers;
• Management’s attitude toward risk;
• Pressure from stakeholders;
• Pressure from corporate culture; and
• Needs and desires of key managers.
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15. Constructing Corporate scenario
• Corporate scenario consists of Performa
balance sheets and income statement which
forecasts the strategic alternative’s impact on
various divisions.
• First: 3 sets of estimated figures for optimistic,
pessimistic and most likely conditions are
manipulated for all economic factors and key
external strategic factors.
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16. • Second: Common size financial statements with
projections are drawn.
• Third: Based on historical data from previous
years balance sheet projection for next 5 years
for Optimistic (O), Pessimistic (P), and Most
likely (M) are developed
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17. Evaluating and Selecting Criteria
Johnson et al (2008)
• Suitability
• Feasibility
• Acceptability (SFA)
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18. Suitability
• It analyzes an organization’s position first and
then changes in the environment and assesses
the fit between these keeping in view the
organizational goal (expectation of stakeholders)
• It evaluates the rationale of the strategic option
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19. • Then needs to define suitability criteria for assessing
the strategy e.g. it could be environmental suitability,
capability suitability and expectation suitability.
• The next thing is to have a selection criterion. This
could be based on
ranking (score cards)
 decision trees
scenario matching
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20. Acceptability
• Here an outcome based view of strategy is taken
and strategy performance expectation is judged.
• The performance of strategy in this case is
measured in terms of return, risk and
stakeholder reactions
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21. • Returns are calculated based on the benefits
stakeholders are expected to get by pursuing
the particular strategy
• The risk of a strategy in this area concerns the
probability of its failure and possible
consequences thereafter
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22. Feasibility
• It considers whether an organization has the required
resources, capabilities and competences to implement
the strategy in practice
• Financial feasibility is established by forecasting and
analyzing cash-flows and/or break-even analysis, among
others.
• Assessment of the availability of other resources, as
deemed necessary to carry out activities involved in the
strategy implementation is also done
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23. Some other Factors
• Cultural Factors
• Political Factors
• Organizational Factors
• Competitive Advantages
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