Professional Documents
Culture Documents
Aggressive
Conservative
Defensive
Competitive
Ch 6 -1
SPACE Matrix
Two Internal Dimensions
Financial Strength (FS)/ Financial
Position ( FP)
Competitive Advantage (CA)/
Competitive Position ( CP)
Ch 6 -2
SPACE Matrix
Two External Dimensions
Environmental Stability/Stability Position
(ES)/SP
Industry Strength/Industry Position (IS)/
IP
Ch 6 -3
SPACE Factors
Internal Strategic Position
Technological changes
Rate of inflation
Demand variability
Price range of competing products
Barriers to entry
Competitive pressure
Price elasticity of demand
Ease of exit from market
Risk involved in business
Ch 6 -4
SPACE Factors
Internal Strategic Position
Competitive Advantage
(CA)/CP
Market share
Product quality
Product life cycle
Customer loyalty
Competitions capacity utilization
Technological know-how
Control over suppliers & distributors
Ch 6 -5
1.
2.
1.
2.
3.
Ch 6 -6
5.
6.
Ch 6 -7
Ch 6 -8
BCG Matrix
Boston Consulting Group Matrix
Enhances multidivisional firm in formulating
strategies
Autonomous divisions = business portfolio
Divisions may compete in different industries
Focus on market-share position & industry
growth rate
Ch 6 -9
BCG Matrix
Relative Market Share Position
Ratio of a divisions own market share in an
industry to the market share held by the largest
rival firm in that industry
Ch 6 -10
Ch 6 -11
BCG Matrix
Question Marks
Low relative market share, competes in highgrowth industry
Cash needs are high
Case generation is low
Ch 6 -12
BCG Matrix
Stars
High relative market share and high growth rate
Best long-run opportunities for growth & profitability
Ch 6 -13
BCG Matrix
Cash Cows
High relative market share, competes in lowgrowth industry
Generate cash in excess of their needs
Milked for other purposes
Ch 6 -14
BCG Matrix
Dogs
Low relative market share, competes in slow or
no market growth
Weak internal & external position
Ch 6 -15
Ch 6 -16
Ch 6 -17
IE Matrix
Ch 6 -18
Ch 6 -19
Strategy-Formulation Analytical
Framework
SWOT Matrix
SPACE Matrix
Stage 2:
The Matching Stage
BCG Matrix
IE Matrix
Ch 6 -20
Ch 6 -21
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 -22
Ch 6 -23
Ch 6 -24
Ch 6 -25
Ch 6 -26
Strategy-Formulation Analytical
Framework
Stage 3:
The Decision Stage
Quantitative Strategic
Planning Matrix
(QSPM)
Ch 6 -27
QSPM
Quantitative Strategic Planning Matrix
Ch 6 -28
Strategic Alternatives
QSPM
Key External Factors
Economy
Political/Legal/Governmental
Social/Cultural/Demographic/
Environmental
Technological
Competitive
Weight
Strategy 1
Strategy 2
Strategy 3
Ch 6 -29
2.
3.
Ch 6 -30
Ch 6 -31
QSPM
Limitations
Ch 6 -32
QSPM
Advantages
Ch 6 -33
Ch 6 -34
Ch 6 -35
Ch 6 -36
Governance Issues
Board of Directors Roles & Responsibilities
Control & oversight over management
Adherence to legal prescriptions
Consideration of stakeholder interests
Advancement of stockholder rights
Ch 6 -37
Global Perspective
Corporate Tax Rates Worldwide Europe is Lowest
Ch 6 -38
Ch 6 -39
Ch 6 -40
Business Portfolio
Attractiveness Scores
(AS)
Cash Cows
Board of Directors
Competitive Advantage
(CA)
Boston Consulting
Group (BCG) Matrix
Competitive Quadrant
Ch 6 -41
Dogs
Culture
Environmental Stability
(ES)
Defensive Quadrant
Financial Strength
(FS)
Directional Vector
Governance
Ch 6 -42
Internal-External (IE)
Matrix
Halo Error
Matching
Industry Strength
(IS)
Matching Stage
Input Stage
Quantitative Strategic
Planning Matrix (QSPM)
Ch 6 -43
Stars
SO Strategies
ST Strategies
Sustainability
Ch 6 -44
WO Strategies
Total Attractiveness
Scores (TAS)
WT Strategies
Ch 6 -45
Ch 6 -46