Chapter 4 & 5 Strategic Formulation PDF

**STRATEGIC FORMULATION** **Strategy Formation** The process of developing and implementing plans to achieve an organization\'s long-term goals. **[EXTERNAL ENVIRONMENTAL]** - Composed of all the outside factors or influences that impact the operation of business. **IMPORTANCE** - Help...

**STRATEGIC FORMULATION** **Strategy Formation** The process of developing and implementing plans to achieve an organization\'s long-term goals. **[EXTERNAL ENVIRONMENTAL]** - Composed of all the outside factors or influences that impact the operation of business. **IMPORTANCE** - Helps organizations anticipate changes and adapt accordingly. - Identifies potential opportunities for growth and expansion. - Helps mitigate risks and avoid threats. - Ensures strategies are aligned with the evolving business landscape **TYPES OF EXTERNAL ENVIRONMENT** - **MICRO ENVIRONMENT** - **MACRO ENVIRONMENT** **FORCES EXTERNAL ENVIRONMENTAL** 1. Economic Forces 2. Technological Forces 3. Competitive Forces 4. Political, Legal And Government Forces 5. Social, Cultural, Demographic, Natural Environmental Forces **EXTERNAL ENVIRONMENT ANALYSIS** 1. **PESTEL Analysis** - a strategic framework used to assess the external factors that can [impact] an organization\'s operations. 2. **Porter\'s Five Forces Analysis** - a strategic framework used to assess the competitive intensity and attractiveness of an industry. Developed by Michael Porter, this model identifies five key factors that influence the level of competition and profitability within an industry. \-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-- **PESTEL ANALYSIS** **POLITICAL** - Government policies and regulations - Political stability and instability - Government incentives and subsidies **ECONOMIC** - Economic growth and recession - Interest rates and monetary policy - Exchange rates **SOCIAL-CULTURAL** - Demographic trends - Cultural values, beliefs, and attitudes - Lifestyle changes **TECHNOLOGICAL** - Technological advancements - Research and development - Technological infrastructure **ENVIRONMENTAL** - Climate change and sustainability - Resource availability - Natural disasters **TECHNOLOGICAL** - Technological advancements - Research and development - Technological infrastructure \-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-- **PORTER\'S FIVE FORCES ANALYSIS** **THREAT OF NEW ENTRANTS** **Factors that make it difficult for new competitors to enter the market.** - New products launched by potential competitors pose threats to the business. - Competitors already operating in the market are known as existing competitors. - Potential competitors can enter the market and take away market share, threatening existing companies. - Existing companies deter potential competitors by creating barriers to entry. - These barriers are often costly for new competitors to overcome. - If the threat from potential competitors is low, existing companies may raise product prices to increase profits. - **BARRIERS TO ENTRY** - Economies of scale - Product differentiation - Capital requirements - Switching costs - Government policies **BARGAINING POWER OF SUPPLIERS** **The ability of suppliers to demand higher prices or impose unfavorable terms.** - Industries need raw materials, components, and parts from suppliers. - High dependency on a single supplier increases that supplier\'s bargaining power. - Companies should avoid relying on a single supplier to mitigate risks. - **FACTORS AFFECTING SUPPLIER POWER** - Number of suppliers - Supplier concentration - Product differentiation - Switching costs **BARGAINING POWER OF BUYERS** **The ability of customers to negotiate favorable terms with suppliers.** - Buyers of products or services can be end customers or intermediaries like dealers, wholesalers, and retailers. - The bargaining power of suppliers decreases if they are more dependent on buyers, and vice versa. - The relationship between buyers and sellers, in terms of bargaining power, significantly impacts the overall success of a business. - **FACTORS AFFECTING BUYER POWER** - Number of buyers - Buyer concentration - Product differentiation - Switching costs  **THREAT OF SUBSTITUTE PRODUCTS** **The availability of alternative products or services that can satisfy customer needs.** - Consider competition from other industries offering similar products. - Key factors influencing competition include cost and customer satisfaction (quality). - Customers often compare prices when alternatives are available, putting pressure on manufacturers to lower prices to remain competitive. - **FACTORS AFFECTING THE THREAT OF SUBSTITUTES:** - Price-performance ratio - Buyer switching costs **RIVALRY AMONG THE EXISTING COMPETITORS** **The level of competition among existing firms in an industry.** - The stability of an industry is significantly affected by competition with established industries. - This competition can lead to price wars, which often result in reduced profitability for companies. - **FACTORS AFFECTING RIVALRY** - - - - **\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--** **OPPORTUNITY** - A condition in the general environment that, if exploits, helps a company achieve strategic competitiveness. **THREAT** - A condition in the general environment that may hinder a company\'s efforts to achieve strategic competitiveness. **WHY IS IT IMPORTANT TO KNOW THE COMPANY\'S OPPORTUNITIES AND THREATS?** - By examining opportunities, you can discover untapped markets, and new products or technologies, or identify potential avenues for diversification. - By examining threats, you can identify unfavorable market shifts or changes in technology, and create a defensive posture aimed at preserving your competitive position.   \-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-- **INDUSTRY AND COMPETITIVE ANALYSIS** According to **Michael Porter**, the key factors that shape an industry\'s structure are **suppliers, buyers,** **direct competitors, new entrants, and substitute** products. This process involves examining the overall market environment, assessing the competitive landscape, and understanding the forces that shape industry dynamics. **IMPORTANCE OF INDUSTRY ANALYSIS IN STRATEGIC PLANNING** - Focus on industry structure when developing a strategy. - Conduct industry analysis after examining the external environment to predict future trends. - Perform a SWOT analysis to identify strengths, weaknesses, opportunities, and potential threats. - The success and growth of any industry depend on the company\'s ability to handle competition. - Competitive intensity has a significant impact on business operations. - Effective strategy-making requires a thorough analysis of the industry environment. **Understanding the Industry** 1. Number of Competitors 2. Rate of Industry Growth 3. Stage of the Industry Life Cycle 4. Presence of Substitute Products 5. Overall Regulatory Environment **FRAMEWORKS IN INDUSTRY ANALYSIS** 1. **Porter's Five Forces Analysis** - Analyzes the competitive intensity and attractiveness of an industry. 2. **PESTEL Analysis** - Evaluates external macro-environmental factors. 3. **SWOT Analysis** - Identifies internal and external characteristics to understand an organization's strategic position. 4. **COMPETITOR PROFILING** - Creates detailed profiles of key competitors to understand their strengths, weaknesses, and market strategies. 5. **BENCHMARKING** - Compares an organization's performance and practices against leading competitors or industry best practices to identify improvement areas. 6. **SCENARIO PLANNING** - Analyzes different future scenarios based on varying assumptions to prepare for potential changes in the industry environment. **ANALYZING THE COMPETITIVE ENVIRONMENT** - Competitive analysis involves a deep dive into the strategies, strengths, weaknesses, and market positions of key competitors. - Understanding competitors\' actions, goals, and capabilities allows an organization to anticipate market shifts and react proactively. **Key Components of Competitive Analysis** - Identifying Competitors - Evaluating Competitive Strategy - Assessing Strengths & Weaknesses - Market Position and Share Analysis **COMPETITIVE ADVANTAGE** Refers to a firm's ability to outperform its rivals in the marketplace. Porter (1985) suggested that a firm is able to achieve an advantage through product differentiation or leadership cost. **STRATEGIES** **Cost Leadership** It relates to the incurrence of the lowest cost among market players with quality that is comparable to competitors allowing the firm to price products around the industry average. **Differentiation** Firms tend to offer differentiated or unique product or service characteristics that customers are willing to pay for an additional premium. **Focus** Firms are identifying specific demographic segments or category segments to focus on by using cost leadership strategy (cost focus) or differentiation strategy (differentiation focus). **Price Sensitivity** -- customers in different market segments may have varying levels of price sensitivity. Some segments may be more willing to pay a premium for high-quality products or services, while others may be more price conscious. **Fierce Competition** -- When multiple competitors enter a segment, price-based competition can become fierce, even among firms that aim to differentiate themselves. This can lead to price wars and reduced profitability **Product Differentiation** -- to avoid price-based competition, firms can differentiate their products by offering unique features, benefits, or brand experience that appeal to specific segments. **A RESOURCE PERSPECTIVE**  **PORTER'S STRATEGIC POSITION FOR COMPETITIVE ADVANTAGE** **VARIETY-BASED POSITIONING** - This strategy involves offering a subset of services that are used by a broad range of segments. **NEEDS-BASED POSITIONING** - This strategy focuses on meeting all the needs of a particular **ACCESS-BASED POSITIONING** - This strategy focuses on specific customer segments that are accessible in different ways **ANALYZING THE INTERNAL ENVIRONMENT AND ESTABLISHING LONG-RANGE OBJECTIVES** **INTERNAL ENVIRONMENT ANALYSIS** - **Human Resources** -it refers to the people who work for a company and the department that manages them - **Financial Resources** -it refers to the money and assets that a company has available to fund its operations, grow its business, and achieve its goals. - **Technological Resources** -it refers to the tools, systems, and technology that a company uses to operate effectively, improve its products or services, and stay competitive. - **Operational Efficiency** -it refers to how effectively a company uses its resources-such as time, money, labor, and technology- to produce goods or services at the lowest possible cost while maintaining quality. **ESTABLISH LONG-RANGE OBJECTIVES** - **Vision and Mission Alignment** -vision is the long-term aspiration or dream and mission is the company's purpose - **Measurable Targets** -known as objectives, are specific, quantifiable goals that a company sets to track progress. - **Strategic Focus** -refers to the concentrated effort a company makes to prioritize specific goals, initiatives, or areas of its business to achieve its long-term objectives. **IDENTIFYING** **STRATEGIC ALTERNATIVES** **Identifying Strategic Analysis** - Represent the diverse paths an organization can take to achieve its goals. **Strategic Alternatives** 1. **SWOT ANALYSIS** -it is a foundation tool for identifying strategic alternatives internal and external. 2. **SCENARIO PLANNING** -this involves creating plausible future scenarios based on different assumptions and trends. 3. **PORTER'S FIVE FORCES** **-**this analyzes industry competitiveness 4. **BLUE OCEAN STRATEGY** -refers to untapped market spaces where competition is minimal or nonexistent. 5. **RESOURCES-BASED VIEW** -this emphasizes an organization's unique resources and capabilities as the foundation for competitive advantage. 6. **INCREMENTAL VS. DISRUPTIVE ALTERNATIVES** -identifying which type aligns with the business context is crucial. **\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--** **CONSUMER BUYING BEHAVIOR (what, why, when, how much and how often)** - **Consumer** is a person who consumes, especially an individual belonging to a gender, age, sex, religion etc. and who take product for own use and not for sale to other **CONSUMER BUYING BEHAVIOR (what, why, when, how much and how often)** - Consumer buying behavior encompasses more than just the act of purchasing; it includes how individuals consume products, their activities, and their ideas. - Marketing efforts target not only the purchase decision but also the consumer\'s overall engagement with products and services. - Consumers play a crucial role in deciding where to buy and can be influenced by marketing and advertisements. - Consumer buying behavior: it is the process that covers individuals or groups to select, 1. *use, or* 2. *dispose products,* 3. *services,* 4. *ideas or* 5. *experience (exchange) to satisfy needs and desires* - One should focus on this point to understand tendency of consumer for selection of any product. - Other important factors in the consumer environment are changes in the economy, technology, politics, and culture which affect their buying incentives.  **INDUSTRIAL BUYING BEHAVIOR** - the decision-making process by which formal organizations establish the need for purchase products and services and identify, evaluate, and choose among alternative brands and suppliers - Industrial buying is increasingly important due to the rapid growth of the industrial market. - The buying process in this environment is complex, with decisions influenced by factors like product specifications, quality, and timely availability. - Purchase decisions in the industrial sector take longer and involve multiple stakeholders from technical, commercial, materials, and finance departments. - Following the initial offer, negotiations and information exchanges occur between specialists and representatives from both buyer and seller organizations. **TYPES OF INDUSTRIAL CUSTOMERS** **COMMERCIAL ENTERPRISES:** - These are private sector, profit seeking organizations consisting of Industrial Distributors and Dealers, Original Equipment Manufacturers (OEM„s) and Users **INDUSTRIAL DISTRIBUTORS AND DEALERS:** - Here one takes product from industry and resale as it is to other industry. **ORIGINAL EQUIPMENT MANUFACTURERS (OEM'S):** - These industrial customers purchase industrial goods to incorporate them in the products that they produce. **USERS:** - When a commercial enterprise purchases industrial products or services to support its manufacturing process or to facilitate business operations it is classified as a User. **INSTITUTIONAL CUSTOMERS:** - Public and private institutions such as Hospitals, Schools, Colleges, Universities and Prisons are classified as Institutional Customers - It can be manufacturing units like Cooperative sugar mills or non-manufacturing organizations like Cooperative banks or Cooperative housing societies. **COMPETITIVE ADVANTAGE** - its meaning in different national and international markets and industries - defined as the strategic advantage a business entity has over its rivals within its competitive industry. - This advantage can stem from various factors, including cost structure, product quality, branding, distribution networks, and customer service. - It allows a company to offer products or services that are perceived as superior or more desirable than those of competitors, leading to increased sales and market share. **IN NATIONAL MARKETS** In national markets, competitive advantage often arises from localized factors. These can include: **Resource Availability:** Access to natural resources, skilled labor, and technology can significantly influence a company\'s ability to compete. **Regulatory Environment:** National laws and regulations can create advantages for certain industries. **Cultural Factors:** Understanding local consumer preferences and cultural differences can lead to tailored marketing strategies, enhancing customer loyalty and brand strength. **IN INTERNATIONAL MARKETS** In the context of international markets, competitive advantage becomes even more complex. To succeed globally, businesses often adopt strategies that leverage their unique strengths while addressing local market needs. Key factors include: **Global Supply Chains:** Companies that can efficiently manage supply chains across borders often enjoy lower costs and faster delivery times. This can be a significant advantage in industries such as manufacturing and retail. **Innovation and Technology:** Firms that invest in research and development can create unique products or services that stand out in the global market. **Market Entry Strategies:** The ability to enter and establish a presence in foreign markets can provide a competitive advantage. Companies that adapt their strategies to local conditions---such as forming joint ventures or acquiring local firms---can enhance their market position. **INDUSTRY SPECIFIC CONSIDERATIONS**  **SWOT ANALYSIS** \- the process by which firms choose,maintain or redirect their strategicposition within ever-changing externalenvironment; integrating businessfunctions and identifying theorganization's position in relation to theoutside environment. **STRATEGIC POSITION MAINTAINING OR REDIRECTING WITHIN AN EVER-CHANGING EXTERNAL ENVIRONMENT** **As the external environment changes, firms must:** - **CONTINUOUS MONITORING** - **ADAPTIVE STRATEGIES** - **RISK MANAGEMENT** **INTEGRATING BUSINESS FUNCTIONS** **CROSS-FUNCTIONAL COLLABORATION** - encourages different departments towork together, leveraging theirunique strengths and addressingweaknesses collectively. **ALIGNED OBJECTIVES** - ensures that all business functions arealigned with the organization's overallstrategy, leading to more cohesive andeffective execution of plans. **RESOURCE ALLOCATION** - helps in the efficient allocation ofresources by identifying areaswhere investment is needed tostrengthen weaknesses orcapitalize on opportunities. **IDENTIFYING THE ORGANIZATION'S POSITION IN RELATION TO THE OUTSIDE ENVIRONMENT** - **MARKET POSITIONING** - **ENVIRONMENTAL SCANNING** - **STRATEGIC ALIGNMENT** **INTERNAL ENVIRONMENTAL** - A component of the business environment, which is composed of various elements present inside the organization, that can affect or can be affected with, the choices, activities and decisions of the organization. FOR STRATEGIC ANALYZING THE INTERNAL ENVIRONMENT IS ALSO CRITICAL PLANNING. IT INVOLVES IDENTIFYING THE STRENGTHS AND WEAKNESSES OF A BUSINESS, INCLUDING: - **Resources** - **Capabilities** - **Culture** - **Structure** - **Systems and Processes**  **IDENTIFYING STRATEGIC ALTERNATIVES** This involves generating various options that an organization can pursue to achieve its long-term objectives. **Environmental Scanning**: Organizations must continuously monitor both the external and internal environments to identify potential opportunities and threats. **Brainstorming Sessions** This collaborative approach helps in generating a wide range of options that may not be evident to a single decision-maker. **Evaluation of Alternatives** Once alternatives are identified, they must be evaluated based on criteria such as feasibility, cost, alignment with organizational goals, and potential for competitive advantage. **Prioritization** After evaluating the alternatives, organizations should prioritize them based on their strategic fit and potential impact. This helps in focusing resources on the most promising strategies. **Feedback Mechanisms** Establishing feedback mechanisms allows organizations to reassess their alternatives as market conditions change. This iterative process ensures that strategies remain relevant and effective over time. **Decision-Making** The final step involves making informed decisions about which strategic alternatives to pursue. This decision should be based on a comprehensive analysis of the evaluated options and their alignment with the organization\'s mission and vision. **GLOBAL STRATEGY** ***Global strategy*** refers to the plan of action that organizations adopt to compete effectively in international markets. **Global strategy** is a strategy that a company develops to expand into the global market. **TYPES OF GLOBAL STRATEGIES** 1. **STANDARDIZATION** -is a strategy that a company develops to expland its operations into the global markets -you sell the same products in every location. 2. **INTERNATIONAL** -this involves importing and exporting products. -can allow you to work with foreign suppliers and sell to customers around the world. 3. **MULTINATIONAL** -can cater your products to each individual local market -can also have physical business locations and staff based in various locations. -the ability to cater your business to individual locations**.** **Market Entry Strategies:** Organizations must decide how to enter foreign markets. Common strategies include exporting, franchising, joint ventures, and wholly-owned subsidiaries. Each method has its own risks and benefits, depending on the market and industry. **Standardization vs. Localization:** Companies must choose between standardizing their products and marketing strategies across different markets or localizing them to meet the specific needs and preferences of local consumers. This decision impacts branding, pricing, and product features. **Competitive Advantage:** Establishing a competitive advantage in global markets often requires leveraging unique resources or capabilities. This might involve innovation, cost leadership, or differentiation strategies tailored to specific regions. **Cultural Considerations:** Understanding cultural differences is essential for successful global strategy implementation. Organizations must adapt their approaches to align with local customs, values, and consumer behavior. **Regulatory and Economic Factors:** Companies must navigate various regulatory environments and economic conditions in different countries. This includes understanding trade policies, tariffs, and local laws that can affect operations. **Risk Management:** Global strategies involve inherent risks, such as political instability, currency fluctuations, and economic downturns. Organizations should develop risk management frameworks to mitigate these risks and ensure business continuity. **Performance Measurement:** Establishing metrics to evaluate the success of global strategies is critical. This includes assessing market share, profitability, and customer satisfaction in international markets. **CHAPTER 4: STRATEGY EVALUATION AND SELECTION** - A process to determine the effectiveness of given strategy in achieving the organizational objectives and selecting the appropriate alternatives if current strategy falls. - When the current strategy is unlikely to achieve the objectives set for the planning period, a performance gap exists. **What is a Performance Gap?** - It refers to the difference between the current performance of an individual, team or organization, and desired performance. - It causes employees to underperform, which then leads to an organization with less than anticipated results. The measurable disparity between an organization\'s: - Current performance levels - Desired or expected performance targets It serves as a key indicator for strategic decision-making and organization improvement. **IMPORTANCE OF PERFORMANCE GAP ANALYSIS** 1. Identifies areas needing improvement 2. Informs strategic decision-making 3. Drives continuous improvement 4. Enhances competitive positioning **Common Causes of Performance Gap** - Poor Leadership and Processes. - Not Setting Reasonable Expectations. - General Lack of Motivation and Disengagement. - Skill and Talent Gaps. - The current strategy may not be appropriate in view of changes in environmental factors. - The current strategy may not be appropriate due to internal issues within the firm. - Implementation of the current strategy is being wrongly undertaken. **Gap Analysis** - A process that helps organizations determine how to achieve their business goals. - It compares the current state with an ideal state, which highlights shortcomings and opportunities for improvement. **Steps on How to do a GAP Analysis** 1. Analyze current state. 2. Identify the ideal future state. 3. Find the gap and evaluate solutions. 4. Create and implement a plan to bridge the gap **ADJUSTING CURRENT STRATEGY; ADDING A NEW STRATEGY** **-modifying the existing strategy to better meet goals and adapts performance feedback** 1. Identify Areas for Adjustment 2. Types of Strategy Adjustments 3. Adding New Strategies 4. Risk Assessment - **Tuning:** Small adjustments to improve efficiency - **Realignment:** Shifting focus within the existing strategy - **Enhancement:** Adding new tactics to support the current strategy modifying **Identify Areas for Adjustment** **Performance Gaps** - This step focuses on identifying gaps between your expected and actual results**.** **Environmental Changes** External factors such as changes in competition, regulations, and market conditions require a reevaluation of your strategic position. **Types of Strategy Adjustments** 1. **Incremental Adjustments:** - These are small, tactical changes made to improve or optimize existing strategies. 2. **New Strategic Initiatives** - When incremental changes are insufficient, new initiatives may be required to address emerging opportunities or threats 3. **Radical Strategy Shift** - A radical strategy shift is warranted when the current approach is no longer viable, often due to major disruptions like technological changes or drastic shifts in consumer preferences. **CHANGING OR ADDING NEW STRATEGIES** Developing a new strategy or incorporating additional strategies to address new challenges or opportunities **Adding New Strategies** - Diversification Aims to reduce dependency on a single product or market. Entering new markets or offering new products - Digital Transformation Involves leveraging technology to drive growth and efficiency. Major shift in strategic direction - Sustainability & CSR Focus on ethical practices and sustainability. - Developing New Strategies Creating fresh approaches, new markets, or business models **Risk Assessment** - Identifying Potential Risks Any strategic change introduces risk, whether it\'s operational, financial, or reputational. - Mitigation Plans Develop mitigation strategies to reduce their potential impact **IMPLEMENTING CHANGING OR ADDING NEW STRATEGIES** 1. **Identify the Need for Change** 2. **Develop New Strategy Proposals** 3. **Evaluate and Select New Strategies** 4. **Develop Implementation Plans** 5. **Communicate and Engage** 6. **Implement New Strategies** 7. **Review and Adjust** 8. **Conclusion** **STRATEGY EVALUATION** Strategy evaluation pertains to the process in which a business determines its effectiveness and ability to reach its goals**.** **Why is strategy evaluation important?** - It allows businesses to determine their strengths and weaknesses. - It allows businesses to check the validity of strengths and decisions. - It allows businesses to develop inputs for strategic planning. **PROCESS OF STRATEGY EVALUATION** 1. Fixing the benchmark of performance 2. Measurement of performance 3. Analyzing variance 4. Taking corrective action **METHODS OF STRATEGY EVALUATION** 1. **Boston Consulting Group (BGC) Matrix** A business planning tool used to help with long-term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue, or develop products. It\'s also known as the Growth/Share Matrix. - A business planning tool used to evaluate the strategic position of a firm's brand portfolio. - Aids the company in deciding how to prioritize their various business activities.  2. **Planning Grid** This tool, developed by General Electric, maps the external industry vs. the internal firm\'s forces using multiple factors to determine grid placement. It is used to determine the attractiveness of the industry and the business strengths of the firm. - A strategic framework that helps multi-business corporations manage portfolios and prioritize investments across products and strategic business units (SBU) - Looks at two factors: competitive advantage and industry attractiveness. - Divided into nine strategic options based on the combination of industry attractiveness and competitive advantage  3. **Life Cycle Approach** **Shows the strategy lifecycle divided into three sequential stages (produce, adopt and adapt), and the activities and outputs that occur at each stage. Each stage marks its completion with a specific output.** - The length of time from when a product is introduced into the market until it is taken off shelves. - There are four stages in a product\'s life cycle: introduction, growth, maturity, and decline. - The concept of product life cycle helps inform marketing and sales decisions, from pricing and promotion o expansion or cost-cutting  4. **Profit Impact of Market Strategy (PIMS)** This is a tool that allows you to quickly and accurately reassess the potential effects of your strategy and actions where it matters: In the marketplace and on the bottom line. - A framework that offers a look into the strategies that influence the profitability of any business - It uses a large database of over 3,000 business to identify key drivers of success - Helps a company to identify and quantify several variables like market share, profit share, product quality, investment and service quality etc. **4 QUALITATIVE FACTORS** 1. Customer Satisfaction 2. Employee Morale 3. Corporate Culture 4. Brand Image and Reputation **Qualitative Factors** - Provide a complete picture of a company's performance, strengths, weaknesses, opportunities, and threats. - Play a crucial role in developing a company's brand image and reputation. - Enable decision-makers to identify the underlying causes of business problems and evaluate the impact - Help to identify potential risks and uncertainties that may not be immediately apparent from quantitative data. **Customer Satisfaction** Measuring customer satisfaction levels can provide insights into a company's product quality, customer service, and overall brand image. **Employee Morale** Employee morale can influence productivity, creativity, and turnover rates. Companies with high employee morale tend to have a more positive and productive work environment. **Corporate Culture** Corporate culture encompasses the values, beliefs, and attitudes that shape a company's identity and behavior. A strong corporate culture can enhance employee engagement, productivity, and overall company performance. **Brand Image and Reputation** A company's brand image and reputation reflect its overall market perception and can significantly impact customer loyalty, sales, and profitability. **Customer Value** Measure your pro duct\'s (or service) performance against that of your closest competitors. **The concept of Par Performance** This deals with the question of what strengths, weaknesses, and profit potential are available to a company. **Look-alike Analysis** Use the experience of similar companies in the PIMS database to evaluate the profit potential of your business. **General Findings & Targeted Research** Study the findings that have brought success to the profiled businesses. **STRATEGIC CONTROLS** Strategic control focuses on the evaluation of the strategies implemented if they have resulted on what was planned. It ensures that the strategic aims are achieved. Strategic control is a unique managementprocess that monitors and evaluates theimplementation of an organization\'s strategicplan, ensuring objectives are achieved bysetting performance standards, measuringactual performance, analyzing deviations, andtaking corrective actions. **Schreyogg and Steinmanm** - developed a strategic control process - that operates on a continuous basis - strategic control for them is the critical evaluation of plans, activities - and end results which form a basis for future action. **Strategic Controls: Techniques** **SPECIAL ALERT CONTROL** - is a reactive response to unexpected events. - It aims to quickly assess and adjust strategy - Actions can include forming crisis teams or implementing pre-planned contingency plans. **STRATEGIC SURVEILLANCE CONTROL** - Scans for overlooked factors - It covers areas not covered by other controls - Sources include publications, online mentions, trends, and conferences. **STRATEGIC CONTROLS: Six Steps of the Strategic Control Process** 1. **Determine what to control.** 2. **Implementation of control** 3. **Measure performance** 4. **Compare performance** 5. **Analyze deviations** 6. **Decide if corrective action is needed**