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Generate Alternative Strategies Using QSPM Analysis

The QSPM strategy matrix has become a popular tool for formulating alternative
strategies. All organisations can be positioned in one of the QSPM strategy matrix's four
strategy quadrants.
The QSPM strategy matrix is based on two evaluative dimensions: competitive
position and market growth. Appropriate strategies for an organisation to consider are
determined based on whether quadrant I, II III and IV best describe the farm.
According to the results of the TOWS matrix, the farm plan to focus on the two
main strategies that the farm think to be mostly important. The farm will
concentrate to improve the following items :
> Improve the level of technology for a better milk quality (I)
> Find new market opportunities (II)
(I) Reflects the farm need for new technology in order to maintain and improve
the quality of the milk. New technology can also improve the economic efficiency by
reducing cost and increasing the productivity (of the labour and of the herd). This is
possible by the availability of credit.
(II) Find new openings in a growing market. The foreseeable local market
saturation urge us to find solutions if the farm wants to increase the production.
The QSPM will help us by determining priorities between the two strategies.
Here, it is clearly demonstrated that the strategy (I), with a score of 4,75 is the most
attractive and feasible strategy for UM&M farm. The second strategy is less attractive
though, it is still important.

METHODOLOGY

The steps in formulating one strategy are:


1. Presentation the farm;
2. Create a mission statement;
3. Identify key internal strengths and weaknesses;
4. Identify key external opportunities and threats;
5. Generate alternative strategies using: IE analysis, TOWS analysis, SPACE
analysis, QSPM analysis;
6. Refine alternative strategies.
7. Identify key internal strengths and weaknesses
All organisations have strengths and weaknesses in the functional areas of
business. No enterprise is equally strong or weak in all areas. Internal
strengths/weaknesses, coupled with external opportunities/threats and a clear statement of
mission, provide the basis for establishing objectives and strategies. Organisations strive
to capitalise upon internal strengths and overcome weaknesses.
The internal strategic management audit focuses on identifying and evaluating a
firm's KEY strengths and weaknesses in management, marketing, finance / accounting,
production/operations, research and development, and information systems. There are
many sub areas within these functions, such as customer service, warranties, advertising,
packaging, distribution, product quality, and pricing under marketing.
8. Identify key external opportunities and threats
The external strategic management audit is sometimes called environmental
scanning or industry analysis. An external audit focuses on identifying and evaluating
trends and events beyond the control of a single firm, such as increased foreign
competition, population shifts to the Sunbelt, an aging society, information technology,
and the computer revolution. An external audit reveals KEY opportunities and threats
confronting an organisation so that managers can formulate strategies to take advantage
of the opportunities and avoid or reduce the impact of threats. Trends and events in the
following areas represent opportunities and threats: social, cultural, demographic,
geographic, political, legal, governmental, economic, technological, and competitive.
The purpose of an external audit is to develop a finite list of environmental
opportunities that could benefit a firm, and environmental threats that should be avoided.
As the term "finite" suggests, the external audit is not aimed at developing an exhaustive
list of every possible factor that could influence the business. Rather, it is aimed at
identifying essential variables that offer actionable responses. Please use only one line to
enter your external factors, even if you must abbreviate your response.

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