Monday, 16 December 2019

Unit 9: Strategic Analysis and Choice


Unit 9: Strategic Analysis and Choice  
Strategic choice is the decision to select from among the alternatives considered, the strategy which will best meet the enterprise objectives.

This decision-making process consists of four distinct steps: Focusing on a few alternatives.

Considering the selection factors.

Evaluating the alternatives.

Making the actual choice.

Strategic analysis framework consists of three stages: Input stage, Matching stage and Decision stage    179 Unit 9: Strategic Analysis and Choice The basic purpose of industry analysis is to assess the strengths and weaknesses of a firm Notes relative to its competitors in the industry.

Portfolio analysis is an analytical tool which views a corporation as a basket or portfolio of products or business units to be managed for the best possible returns, and help a corporate to build a multi-business strategy.

Various matrices are used under this approach.

Though the portfolio approaches have limitations, but all these limitations can be overcome through effective strategy development and meticulous planning.

While the core competence concept appealed powerfully to companies disillusioned with diversification, it did not offer any practical guidelines for developing corporate-level strategy.

Contingency plans are organised and coordinated set of steps to be taken if an emergency or disaster (fire, hurricane, injury, robbery, etc.) strikes.

BCG Matrix: Most popular and the simplest matrix to describe a corporation’s portfolio of businesses or products.

Display Matrices: Frameworks in which products or business units are displayed as a series of investments from which top management expects a profitable return.

Market Growth Rate: The percentage of market growth, that is, the percentage by which sales of a particular product or business unit have increased.

Portfolio strategy approach: A method of analysing an organisation’s mix of business in terms of both individual and collective contributions to strategic goals.

Relative Market Share: The ratio of the market share of the concerned product or business unit in the industry divided by the share of the market leader.

Strategic Choice: Selection of a strategy that will best meet the firm’s objectives.

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