Course coordinator
Prof. Begum Khaleda Khanam
Ch 6 -1
Ch 6 -2
Comprehensive Strategy-Formulation
Framework
Stage 1:
The Input Stage
Stage 2:
The Matching Stage
Stage 3:
The Decision Stage
Ch 6 -3
Strategy-Formulation Analytical
Framework
Internal Factor Evaluation
Matrix (IFE)
Stage 1:
The Input Stage
Ch 6 -4
Strategy-Formulation Analytical
Framework
SWOT Matrix
SPACE Matrix
Stage 2:
The Matching Stage
BCG Matrix
IE Matrix
Ch 6 -5
SWOT Matrix
Four Types of Strategies
Strengths-Opportunities (SO)
Weaknesses-Opportunities (WO)
Strengths-Threats (ST)
Weaknesses-Threats (WT)
Ch 6 -6
SO Strategies
Strengths
Weaknesses
Opportunities
Threats
SWOT
SO
Strategies
Use a firms
internal strengths
to take advantage
of external
opportunities
Ch 6 -7
WO Strategies
Strengths
Weaknesses
Opportunities
Threats
SWOT
WO
Strategies
Improving internal
weaknesses by
taking advantage
of external
opportunities
Ch 6 -8
ST Strategies
Strengths
Weaknesses
Opportunities
Threats
SWOT
ST
Strategies
Use a firms
strengths
to avoid or
reduce the impact
of external
threats
Ch 6 -9
WT Strategies
Strengths
Weaknesses
Opportunities
Threats
SWOT
WT
Strategies
Defensive tactics
aimed at reducing
internal
weaknesses &
avoiding
environmental
threats
Ch 6 -10
SWOT Matrix
Strengths S
Weaknesses W
Leave Blank
List Strengths
List Weaknesses
Opportunities O
SO Strategies
WO Strategies
List Opportunities
Overcoming weaknesses
by taking advantage of
opportunities
Threats T
ST Strategies
WT Strategies
List Threats
Ch 6 -11
Resultant Strategy
Ch 6 -12
Cash Use
(growth
rate)
High
Low
Low
Internal
(redirected
resources
within the
firm)
Turnaround or
retrenchment
Divesture
Liquidation
Vertical integration
Conglomerate
diversification
I
II
IV III
Concentrated growth
Market development
Product development
Innovation
Horizontal integration
Concentric diversification
Joint venture
Maximize Strengths
External
(acquisition or
merger for
resource
capability)
Ch 6 -14
WEAK
COMPETITIVE
POSITION
1.
2.
3.
4.
5.
Quadrant II
Market development
Market penetration
Product development
Horizontal integration
Divestiture
Liquidation
1.
2.
3.
4.
5.
6.
7.
Quadrant I
Market development
Market penetration
Product development
Forward integration
Backward integration
Horizontal integration
Concentric diversification
Quadrant III
Quadrant IV
Retrenchment
1.
Concentric diversification
Concentric diversification
2.
Horizontal diversification
Horizontal diversification
3.
Conglomerate
diversification
Conglomerate
diversification
4.
Joint ventures
Liquidation
SLOW MARKET GROWTH
STRONG
COMPETITIVE
POSITION
Ch 6 -15
Medium
Low
Business Strength
High
Medium
Low
Ch 6 -16
Strategy-Formulation Analytical
Framework
Stage 3:
The Decision Stage
Quantitative Strategic
Planning Matrix
(QSPM)
Ch 6 -17
Strategic Alternatives
QSPM
Key External Factors
Economy
Political/Legal/Governmental
Social/Cultural/Demographic/
Environmental
Technological
Competitive
Weight
Strategy 1
Strategy 2
Strategy 3