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Strategic Analysis Models for Comprehensive Business Portfolio Selection

Learn how to select suitable strategies by analyzing internal and external environments, SWOT, and strategy categories. Understand the SWOT matrix and the factors influencing strategy selection.

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Strategic Analysis Models for Comprehensive Business Portfolio Selection

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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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