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Session 6 Selecting Strategies

Session 6 Selecting Strategies. Comprehensive thinking about: internal and external environments requirement of business portfolio Then to select the most suitable strategies from all possible alternatives. Analysis models: SWOT Matrix of strategy selecting model Strategy-category model.

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Session 6 Selecting Strategies

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  1. Session 6Selecting Strategies

  2. Comprehensive thinking about: • internal and external environments • requirement of business portfolio Then to select the most suitable strategies from all possible alternatives.

  3. Analysis models: • SWOT • Matrix of strategy selecting model • Strategy-category model

  4. SWOT Model • external opportunities and threats • internal strength and weakness Main purpose • To use external opportunities and internal strength, to lower external threats and internal weakness

  5. external opportunities and threats • Opportunities：from the macro view • Case: micro-soft • Threats：from the macro environment • case: tax rate • Case: IBM • The relation between opportunities and threats • internal strength and weakness • Strength: HR, technical, brand, etc. • Weakness:

  6. Opportunities • SO strategy • Active development • Market penetration • WO strategy • Lower the weakness • Product development Strength Weakness • WT strategy • Risky • exit • ST strategy • Avoid weakness • Market development Threats SWOT Matrix: the position of business

  7. Evaluation of SWOT • A little simple: opportunities and weaknesses always coexist. The best choice are not easy to find • A little static: trying to find a way from current situation • SWOT is suitable for broad judge

  8. Opportunities SO strategy WO strategy Strength Weakness WT strategy ST strategy Threats Strategy graph • Opportunities(2.2) threats(1.2);Strength(3.4);weakness(1.3)

  9. Matrix for selecting strategies • Strategic goals: strengthen the advantage and avoid the weakness • Approaches : to use internal or external resources • objective：use internal or external resources to strengthen the • advantages or to avoid weakness

  10. Overcome weakness Exit Improve management • development • integration • diversification By using internal resources By using external resources • development • diversification • integration development concentration Enhance strength Matrix for selecting strategies

  11. Strategy-category model • Developed from BCG matrix • Speed of the market development • The average growth rate • Position in the market • Relative market share

  12. Rapid development • Star • concentration • Vertical integration • Central diversification • question • Development strategy • Exit strategy Strong position • Dog • exit • diversification • Cash cow • Development strategy • diversification Slow development Weak position

  13. Factors influencing strategies selection • Current or former strategies • characteristic of entrepreneur : risk-aversion, risk-preference • The reactions of competitors • Characteristics of industries (competitive market, monopoly, etc.)

  14. Interested groups • Share-holders： • managers：personal goals and company’s goals • employee • customers • suppliers • Investors/loaner: venture capital • Government • Society

  15. Organizational structure： • Influence the strategic decision-making：information transfer • Influence the strategy implementation

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