Strategy Analysis and Choice-Chapter 6

Cash Cows - Quadrant III

Generate cash in excess of their needs should be managed to maintain their strong position for as long as possible

Personal Preferences

Get unduly embedded in strategy choice decisions.

Three Major Regions

Grow and build, Hold and maintain, Harvest or divest

Quadrant IV

Have characteristically high cash-flow levels and limited internal growth needs and often can pursue related or unrelated diversification successfully

IE Matrix

is based on two key dimensions: the IFE total weighted scores on the x-axis and the EFE total weighted scores on the y-axis

Board of directors

A group of individuals who are elected by the ownership of a corporation to have oversight and guidance over management and who look out for shareholders' interests

Most Attractive

A manageable set of the alternative strategies must be developed

Major Benefit

BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

Grand Strategy Matrix

Based on two evaluative dimensions: competitive position and market (industry) growth

Dogs - Quadrant IV

Compete in a slow- or no-market-growth industry businesses are often liquidated, divested, or trimmed down through retrenchment

Political Maneuvering

Consumes valuable time, subverts organizational objectives, diverts human energy, and results in the loss of some valuable employees

Quadrant I

Continued concentration on current markets (market penetration and market development) and products (product development) is an appropriate strategy

Quadrant III

Must make some drastic changes quickly to avoid further decline and possible liquidation, Extensive cost and asset reduction (retrenchment) should be pursued first

Quantitative Strategic Planning Matrix (QSPM)

Objectively indicates which alternative strategies are best uses input from Stage 1 analyses and matching results from Stage 2 analyses to decide objectively among alternative strategies

Question marks - Quadrant I

Organization must decide whether to strengthen them by pursuing an intensive strategy (market penetration, market development, or product development) or to sell them

Stars - Quadrant II

Represent the organization's best long-run opportunities for growth and profitability

Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix

SO (strengths-opportunities) Strategies WO (weaknesses-opportunities) Strategies ST (strengths-threats) Strategies WT (weaknesses-threats) Strategies

Strategies

The advantages, disadvantages, trade-offs, costs, and benefits should be determined.

Quadrant II

Unable to compete effectively need to determine why the firm's current approach is ineffective and how the company can best change to improve its competitiveness

Strategic Position and Action Evaluation (SPACE) Matrix

four-quadrant framework indicates whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given organization

BCG Matrix

graphically portrays differences among divisions in terms of relative market share position and industry growth rate. Allows a multidivisional organization to manage its portfolio of businesses by examining the relative market share position and the industry growth rate of each division relative to all other divisions in the organization