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Module 3: S.W.O.

T Analysis Model Strategy Formulation


SWOT analysis 1. Leverage (S + O)
Strategic planning tool created by In this situation, integrate opportunities and
Albert Humphrey to evaluate the SWOT advantages. However, opportunities are often
involved in a project or business venture. fleeting, so companies must sharply capture
Involves specifying the objective and opportunities and seize the opportunity to
then identifying the internal and external seek greater development.
factors that are favorable and unfavorable to 2. Inhibitory (W + O)
achieve that objective. Impeding, preventing, influencing and
Things to Consider in making S.W.O.T Analysis
controlling. In this situation, companies need
Technique to provide and add certain resources to
Concept of Environment promote the transformation of internal
Literally means the surroundings, resources and disadvantages into advantages
external objects, influences or circumstances to cater to or adapt to external opportunities.
under which someone or something exists. 3. Vulnerability (S + T)
The environment of any organization is The decrease in the degree or intensity of
“the aggregate of all conditions, events and advantages. When environmental conditions
influences that surround and affect it” ( ). pose a threat to the company’s strengths, the
Since the environment influences an advantages cannot be fully exerted and
organization in multitudinous ways, it is of ending up with a fragile situation. In this
crucial importance to understand it. situation, companies must overcome the
Characteristics of Environment threats to take advantage of them.
1. Environment is complex 4. Problematic (W + T)
2. Environment is dynamic Companies face severe challenges. If they are
3. Environment is multi-faceted. Depends on not properly handled, they may directly
the perception of the observer. threaten the survival of the company.
4. Environment has a far-reaching impact. Advantages of SWOT Analysis
Big and lasting effect that reaches a lot of  Simple to use;
different areas.  Flexible and Adaptable;
External and Internal Environment  Leads to clarification of issues;
Internal: Strengths & Weaknesses  Develops goal-oriented alternatives;
External: Opportunities &Threats  Useful starting point for strategic analysis.
Strength is an inherent capacity which an Disadvantages of SWOT Analysis
organisation can use to gain strategic
 Simplicity
advantage: developmental skills
 Compiling list rather for achieving
Weakness is an inherent limitation or
objectives
constraint which creates strategic
 Usually reflects an evaluator’s position
disadvantages: overdependence
and viewpoint
Opportunity is a favourable condition in the
 Strengths may be confused with
organisation’s environment which enables it
opportunities
to consolidate and strengthen its position:
 May encourage organisations to take a
Growing Demand
lazy course of action
Threat is an unfavourable condition in the
organisation’s environment which creates a
risk for, or causing damage to the
organisation: Emergence of strong new
competitor
Module 4: Implementation and Evaluation BASIC FEATURES IN STRATEGIC
Implementing strategy affects an organization IMPLEMENTATION
from top to bottom; it affects all the functional and
 Very visible leader, such as the CEO, as he
divisional areas of a business. The best formulated
communicate the vision, excitement and
and best implemented strategies become obsolete
behaviors necessary for achievement.
as a firm’s external and internal environments  Everyone in the organization should engaged
change. in the plan.
Strategic implementation is a process that puts  Performance measurement tool are helpful to
provide motivation and follow for follow-up.
plans and strategies into action to reach desired
 Implementation often includes a strategic map,
goals. The strategic plan itself is a written
which identifies and maps the key ingredients
document that details the steps and processes (finances, market, work environment,
needed to reach plan goals, and includes feedback operations, people and partners) that will direct
and progress reports to ensure that the plan is on performance.
track.
COMMON MISTAKES IN STRATEGIC
IMPLEMENTATION
 Not developing ownership in the process.
 Lack of communication and a plan
 Too fluffy, with little concrete meaning and
potentials, or it is offered with no way of
tracking its progress.
 Address the common mistake implementation
annually, allowing management and
employees to become caught up in the day-to-
day operations and neglecting the long term
goals.
 Not making employees accountable for
various aspects of the plan or powerful
enough to authoritatively make changes.

NECESSARY ELEMENTS IN STRATEGIC


IMPLEMENTATION
 The right people must be ready to assist you
with their unique skills and abilities.
 Resources, which include time and money, to
successfully implement the strategy.
 The structure of management must be
communicative and open, with scheduled
meetings for updates.
 Management and technology systems must be
in place to track the implementation,
 Environment in the workplace must be such
that everyone feels comfortable and
motivated.
WHAT STRATEGIC IMPLEMENTATION
STRATEGIC CONTROL MECHANISM
ADDRESSES
Strategic control is the process of
WHO, WHERE, WHEN, and HOW of reaching the monitoring the various strategic of the
desired goals and objectives. Implementation organization and determining whether there is a
involves assigning individuals to tasks and parallelism between the organizational milieu and
that of the environment.
timelines that will help an organization reach its
goals.
Types of Strategic Control According to Purpose Feedback Strategic Control is a combination of the
Presupposition Control sequential and interactive approaches.
Designed to check systematically and
regularly whether the arguments set during the
planning and implementation processes are still
binding.
Implementation Control
Applied to evaluate whether the
intermediate strategies are consistent with the
overall strategy.
Strategic Surveillance
Monitoring system whereby a broad range
of occurrences inside and outside the organization
threatens the implementation of an organization’s STRATEGY EVALUATION
strategy. Shadowing, observing, and scrutinizing Involves looking back at the goals in your
the milieu. strategic plan and assessing how well you’ve done
Vigilance Control against achieving them.
Special type of strategic control that is Typically, the strategy evaluation process involves
applied when immediate reconsideration of an answering questions such as:
organization’s strategy/strategies is pursued. *How much progress have we made towards our
Vision?
Types of Strategic Control According to *Are our Strategic Focus Areas still relevant?
Approach *Which of our Objectives have we completed?
Sequential Strategic Control *Which Objectives are no longer needed?
Traditional way of looking at strategic *Do we have sufficient Projects to deliver
monitoring. It is sequential, looks simple, incomplete Objectives?
straightforward, and less threatening due to its *Are our KPIs still effective for measuring
chronological order, the approach does not lend progress towards our Objectives?
itself to change and versatility. *Where we fell short of our targets, why did this
happen? Not valuing targeted

Interactive Strategic Control


Communicating and collaborative nature
of the process of strategy formulation, strategy
implementation, and strategy control.
Advantageous in all aspects. Takes into
consideration the limitless possibilities that may 1. Evaluation starts at the start
occur in the environments thus, opportunities for 2. Implement consistent processes and tools
improvements are easily executed. 3. Empower teams to evaluate their own
strategies
4. Take corrective action
5. Iterate your plan
6. Celebrate successes

FACTORS THAT MAY INFLUENCE A


COMPANY’S STRATEGIC DECISION MAKING
1. Size of Firm
2. Products
3. Market
4. Competition
5. Philosophy of Management
ORGANIZATIONAL COMPONENTS THAT Organizational Policies. The lifeblood of an
CAN ADD THE VALUE TO THE BUSINESS organization. They put organizational structure
ENTITY and system in place. They ensure order, hierarchy
of authority, and clear delineation of functions,
efficiency, productivity, and good interpersonal
relationship.

Module 5: Organizational Strategies


CONCEPTS ON STRATEGY FORMULATION
Schools of thought on strategy formation
Strategic management is an evolutionary
process. In the course of its development, several
strands of thinking are emerging which are
gradually leading to a convergence of views.

ORGANIZATIONAL STRATEGIES
In most corporations there are several
levels of management.
Corporate strategy is the highest of these levels in
the sense that it is the broadest – applying to all
parts of the firm – while also incorporating the
longest time horizon. It gives direction to
corporate values, corporate culture, corporate
goals, and corporate missions.
Under this broad corporate strategy there are
typically business-level – (designed to position
the strategic business unit in a diversified
corporation. Each firm formulates a business
strategy in order to achieve a sustainable
competitive advantage) - competitive strategies
and functional (developed in key areas in the
organization such as marketing, finance,
production; consistent with long term objectives)
unit strategies. Hence, organizational strategy is
divided into three levels, the corporate level
strategy, the business level strategy, and the
functional level strategies
Operational strategy is an additional level of
strategy encouraged by Peter Drucker in his
theory of management by objectives (MBO).
 Very narrow in focus and deals with day-
to-day operational activities such as
scheduling criteria.
 Must operate within a budget but is not at
Types of Corporate Strategies liberty to adjust or create that budget.
 Operational level strategies are informed
by business level strategies which, in turn,
are informed by corporate level strategies.

Dynamic Strategy
Since the turn of the millennium, some firms
have reverted to a simpler strategic structure
driven by advances in information
technology.
It is felt that knowledge management systems
should be used to share information and
create common goals. Strategic divisions are
Business Strategy thought to hamper this process. This notion
Generic Competitive Strategies of strategy has been captured under the
introduced by Michael Porter rubric of dynamic strategy, popularized by
Carpenter and Sanders.

CHOOSING THE BEST STRATEGY


ALTERNATIVES
Choosing the best strategy is quite tough for
the organization.
▪ get as clear as possible about objectives and
decision criteria
▪ chosen strategies must be effective in
addressing the "critical issues" the company
faces at this time
▪ Consistent with the mission and other
Competitive Tactics
strategies of the organization
Two categories of competitive tactics are those ▪ Consistent with external environment
dealing with timing and market location factors, including realistic assessments of the
competitive environment and trends
Cooperative Strategies ▪ fit the company's product life cycle position
Agreement or alliance between two or more and market attractiveness/competitive
businesses formed to achieve strategically strength situation
significant objectives that are mutually ▪ must be capable of being implemented
beneficial. effectively and efficiently, including being
realistic with respect to the company's
Types of Functional Strategies resources
 Marketing Strategy ▪ The risks must be acceptable and in line with
 Financial Strategy the potential rewards
 Production/Operation
 Human Resources
 R&D Strategy

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