theme7 strat analisys presentation

7/24/2019 THEME7 Strat Analisys Presentation

1/37

1

THEME 7:

STRATEGIC DIAGNOSIS SWOT analysis.

Portfolio management.

BCG matrix. Sallenave matrixes.

GE-McKinsey matrix.

Alfonso VARGAS SNCHEZ


2/37

2

STRATEGIC MANAGEMENT

1.-WHERE AM I NOW?

2.-WHERE DO I WANT TO GO?

3.-WHAT DO I NEED TO DO NOW TO GET THERE?


3/37

3

Your future depends on manythings, but MOSTLY ON YOU.

Wherever an opportunity exists there is

usually a threat and vice versa:PROBLEMS ARE OPPORTUNITIES.


4/37

4

WHERE AM I NOW?: current state analysis.

The best tool for doing this is:

THE

SWOT

ANALYSIS

THE

SWOTSWOT

ANALYSIS

SSTRENGTHS WWEAKNESSES OOPPORTUNITIES TTHREATS

WHAT IS GOOD/

GOING WELL

WHAT IS BAD/

NEEDS IMPROVEMENT

WHAT OPPORTUNITIES

ARE THERE?

WHAT DANGERS/PROBLEMS

LIE AHEAD?

INTERNAL FACTORS that create or destroy value.

As a result of value chain and resources & capabilitiesanalysis.

Using internal assessments and external benchmarking.

EXTERNAL FACTORS that create or destroy value.

As a result of PEST and Porters competitive forcesanalysis.


5/37

5

SWOT ANALYSIS can be used:

As the first stage of a planning exercise or project.

When things are going well, because it shakes you

out of complacency and shows new opportunities. When things are going badly, as it helps to re-

direct your efforts and put things into perspective.

On an ongoing periodic basis to reviewperformance improvement.


6/37

6

SWOT ANALYSIS IN ACTION.

The process follows a number of steps:

Define the situation you want to look at.

Brainstorm and write down all the strengths, weaknesses,opportunities and threats that occur to you.

Review the list, make additions, changes. Define broad areas for action in priority order.

Identify steps to be taking in each broad area, withtimescales.

Discuss the SWOT with al least one other person. Set a review date to go back to step 1 and look at the whole

process again. Review at least annually.


7/37

7

FACTORS IN A SWOT ANALYSIS

THREATS:

-A new competitor in your own home market.

-Price war.

-Competitor has a new, innovative substituteproduct or service.

-New regulations.-Increased trade barriers.

-A potential new taxation on your product orservice.

OPPORTUNITIES:

-Developing market (China, the Internet).

-Mergers, joint ventures or strategic alliances.

-Moving into new attractive market segments.

-A new international market.

-Loosening of regulations .-Removal of international trade barriers.

-A market that is led by a weak competitor.

WEAKNESSES:

-Lack of marketing expertise.

-Undifferentiated products and service (i.e. inrelation to your competitors).

-Location of your company.-Competitors have superior access to distributionchannels.

-Poor quality of goods or services.-Damaged reputation.

STRENGTHS:

-Marketing expertise.

-Exclusive access to natural resources.

-Patents.

-New, innovative product or service.

-Location of your business.

-Cost advantage through proprietary know-how.

-Quality processes and procedures.-Strong brand or reputation.


8/37

8

CONFRONTATION MATRIX

WEAKNESSES

CHALLENGES &

ACTIONS

STRENGTHS

THREATSOPPORTUNITIESANALYSIS


9/37

9

CONFRONTATION MATRIX

Defensive strategyAdjust strategyWEAKNESSES

Reactive strategyOffensive strategySTRENGTHS

THREATSOPPORTUNITIESANALYSIS


10/37

10

CONFRONTATION MATRIX.

Example:

DEFENSIVE STRATEGY:

T2, W1, W3: Investment in newproductive facilities for existing

products.

ADJUST STRATEGY:

O1, W1: Investment in newproductive facilities for the new

product.

WEAKNESSES:

W1: Obsolete facilities.W2: Low staff qualification.

W3: Noncompetitive prices.

REACTIVE STRATEGY:

T3, S1: Precise fulfillment of the

new regulations.

T2, S2: Excellence in customer

service.

OFFENSIVE STRATEGY:

O2, S1, S3: Intense brand

promotion towards large retailers

and end customers.

STRENGTHS:

S1:Financial strength.

S2:Loyal and reliable

customer base.

S3:Good factory and

warehouses locations.

THREATS:

T1:Existing products

consumption is declining.

T2:An important competitor

has arisen.

T3:New regulations from the

European Union.

OPPORTUNITIES:

O1:Strong demand of a new

product.

O2: Possibility of selling through

large retailers.

ANALYSIS


11/37

11

SWOT ANALYSIS:

The SMART test for actions

All actions should be:

Specific,

Measurable, Achievable,

Relevant, and

Timed.


12/37

12

PORTFOLIO MANAGEMENT


13/37

13

BCG MATRIX: A portfolio management

tool based on product life cycle theory.


14/37

14


15/37

15

FOUR CATEGORIES OF SBUS

DOGS (low growth, low market share):

-Avoid and minimize the number of Dogs in acompany.-Watch out for expensive rescue plans.

-Dogs must deliver cash, otherwise they must beliquidated.

CASH COWS (low growth, high market share):

-Profits and cash generation should be high.Because of the low growth, investments which areneeded should be low.

-Cash Cows are often the stars of yesterday andthey are the foundation of a company.

QUESTION MARKS (high growth, low market

share):

-Question Marks have the worst cashcharacteristics of all, because they have high cashdemands and generate low returns, because of theirlow market share.

-If the market share remains unchanged, Question

Marks will simply absorb great amounts of cash.-Either invest heavily, or sell off, or invest nothingand generate any cash that you can. Increasemarket share or deliver cash.

STARS (high growth, high market share):

-Stars use large amounts of cash. Stars are leadersin the business; this is why they should alsogenerate large amounts of cash.

-Stars are frequently roughly in balance on net cashflow. However, any attempt should be made tohold your market share in Stars, because the

rewards will be Cash Cows if market share is kept.


16/37

16

TO SUM UP

Cows: steady sources of cash flow.

Dogs: very little cash flow with little prospect ofgrowth.

Question marks: risks, very negative cash flows.

Stars: goods in expanding markets, but very little cashflows.


17/37

17


18/37

18


19/37

19


20/37

20


21/37

21

THE AIM IS

to keep the cows, sell the dogs to finance the question marks

and work to turn the stars into cows

before the cows you have turn into dogs.


22/37

22

EXAMPLES


23/37

23

BCG MATRIX

BENEFITS:

If a company is able to use the experiencecurve to its advantage, it should be able tomanufacture and sell new products at a pricethat is low enough to get early market shareleadership. Once it becomes a star, it isdestined to be profitable.

BCG model is helpful for managers to

evaluate balance in the firms currentportfolio of Stars, Cash Cows, QuestionMarks and Dogs.

BCG method is applicable to large companiesthat seek volume and experience effects.

The model is simple and easy to understand. It provides a base for management to decide

and prepare for future actions.

LIMITATIONS:

It neglects the effects of synergy betweenbusiness units.

High market share is not the only success factor. Market growth is not the only indicator for

attractiveness of a market. Sometimes Dogs can earn even more cash as

Cash Cows. The problems of getting data on the market share

and market growth. There is no clear definition of what constitutes a

"market". A high market share does not necessarily lead to

profitability all the time. The model uses only two dimensions: market

share and growth rate. This may temptmanagement to emphasize a particular product, orto divest prematurely.

A business with a low market share can beprofitable too.

The model neglects small competitors that havefast growing market shares.


24/37

24

-Luxury cars.-Jewellery.

-Hypermarkets.

-Fashion.

-Hotel business.

-Publishing.

-Newspapers.


25/37

25

McKinsey-GE matrix

-It is a later and more

advanced form of the

BCG matrix.

-SBUs are portrayed as a

circle.

-The size of the circles

represent the Market Size.

-The size of the pies

represent the Market

Share of the SBU's.

-Arrows represent the

direction and themovement of the SBU's in

the future.


26/37

26

McKinsey-GE matrix

TYPICAL EXTERNAL FACTORSTHAT AFFECT MARKETATTRACTIVENESS:

- Market size.- Market growth rate.- Market profitability.- Pricing trends.- Competitive intensity / rivalry.

- Overall risk of returns in the industry.- Entry barriers.- Opportunity to differentiate products

and services.- Demand variability.- Segmentation.- Distribution structure.- Technology development

TYPICAL INTERNAL FACTORS THAT AFFECTCOMPETITIVE STRENGTH OF ASTRATEGIC BUSINESS UNIT:

Strength of assets and competencies. Relative brand strength (marketing). Market share. Market share growth. Customer loyalty.

Relative cost position (cost structure comparedwith competitors). Relative profit margins (compared to competitors). Distribution strength and production capacity. Record of technological or other innovation. Quality. Access to financial and other investment resources. Management strength


27/37

27

McKinsey-GE matrix

11 22 44

33 55 77

66 88 99


28/37

28

McKinsey-GE matrix


29/37

29

McKinsey-GE matrix


30/37

30

McKinsey-GE matrix

The UK retail market

Si S l f th B i


31/37

31

S

O

U

T

H

9

2

Relative Market Share

Relative Market Share

Market

Growth

Rate

Market

Growth

Rate

Size = Sales of the Business

Size = Net Assets

1

1

10%

10%


32/37

32

M

G

R

R M S

HUELVA CORPORATION, PLC

1

1.5


33/37

33

COMPETITIVE STRENGTH

MARKET

ATTRAC-

TIVENESS

BANESO INDUSTRIAL CORPORATION (BIC)

L

M

H

H M L


34/37

34

P

R

O

F

I

T

S

(%)

INVESTMENT (%)

PROFIT / INVESTMENT MATRIX

++

--


35/37

35

R

O

I

ROI / ROS MATRIX

ROI = ROS x ROT


36/37

36

COMERCIAL EFFICACY MATRIX

MARKETING EFFORT

ROS=ROMxME

11

22

33 44


37/37

37

Imagination rules the world.

(Napoleon)

theme7 strat analisys presentation

Documents