Professional Documents
Culture Documents
Chapter 6
Chapter 6
Vision
Mission
Objectives
External audit
Internal audit
Stage 1:
The Input Stage
Stage 2: Stage 3:
The Matching Stage The Decision Stage
Strategy-Formulation Analytical
Framework
Internal Factor Evaluation
Matrix (IFE)
Note: EFE and CPM form external and IFE from internal (assessment)
Stage 1: The Input Stage
Strengths-Opportunities (SO):
Use a firm’s internal strengths to take advantage of external
opportunities
Weaknesses-Opportunities (WO):
Improving internal weaknesses by taking advantage
of external opportunities
Strengths-Threats (ST):
Use a firm’s strengths to avoid or reduce the impact of external
threats.
Weaknesses-Threats (WT):
Defensive tactics aimed at reducing internal weaknesses and
avoiding external threats
SWOT MATRIX
Strengths – S Weaknesses –
W
Leave Blank
List Strengths
List Weaknesses
Opportunities – SO Strategies WO Strategies
O
Use strengths to take Overcoming
advantage of weaknesses by taking
List Opportunities opportunities advantage of
opportunities
Develop a new
Poor employee morale Strong union
+ = employee benefits
(weakness) activity (threat) package
High
+20
Industry Sales Growth Rate
Question Marks
Low relative market share – compete in high-
growth industry
Cash needs are high
Case generation is low
Stars
High relative market share and high growth rate
Best long-run opportunities for growth & profitability
Cash Cows
High relative market share, competes in low-
growth industry
Generate cash in excess of their needs
Milked for other purposes
Dogs
Quadrant I
Quadrant II
Quadrant III
Quadrant IV
Quantitative Strategic
Stage 3:
Planning Matrix
The Decision Stage
(QSPM)
Limitations
Requires intuitive judgments & educated
assumptions
Only as good as the prerequisite inputs
Advantages
Sets of strategies considered simultaneously or
sequentially
Integration of pertinent external & internal
factors in the decision making process
Example of a QSPM for Dell