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STRATEGIC DECISION MAKING

STRATEGIC DECISION MAKING. SWOT ANALYSIS. WHAT IS IT?. SWOT ANALYSIS IS A PROCESS TO IDENTIFY WHERE YOU ARE STRONG AND CAN PURSUE OPPORTUNITIES OR WHERE YOUR WEAKNESSES LIE AND YOU NEED TO DEFEND YOURSELF. SWOT IS A PLANNING TOOL.

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STRATEGIC DECISION MAKING

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  1. STRATEGIC DECISION MAKING SWOT ANALYSIS

  2. WHAT IS IT? SWOT ANALYSIS IS A PROCESS TO IDENTIFY WHERE YOU ARE STRONG AND CAN PURSUE OPPORTUNITIES OR WHERE YOUR WEAKNESSES LIE AND YOU NEED TO DEFEND YOURSELF

  3. SWOT IS A PLANNING TOOL • IDENTIFIES CORE COMPETENCIES TO BUILD STRATEGY AROUND • RECOGNIZES VULNERABILITIES THAT MAY DISQUALIFY YOU FROM PURSUING CERTAIN OPPORTUNITIES • PINPOINT WEAKNESSES THAT CAN BE CORRECTED

  4. WHY DO IT? • REVEAL COMPETITIVE ADVANTAGES • ANALYZE SALES PROSPECTS • DEVELOP PRODUCTS OR MARKETS • OVERCOME PROBLEMS • PLAN FOR THE FUTURE

  5. HELPS CRAFT STRATEGY • DEFINE RESOURCES /SKILLS AVAILABLE TO PURSUE OPPORTUNITY BECAUSE OPPORTUNITY WITHOUT MEANS IS AN ILLUSION • DETERMINE WHICH THREATS YOU SHOULD WORRY ABOUT THE MOST AND HELP CRAFT YOUR DEFENSE

  6. WHEN TO USE IT? • TAKE ON A NEW PRODUCT • ENTER A NEW MARKET • HIRE AN NEW INDIVIDUAL • BUY ANOTHER COMPANY • OFFER A NEW SERVICE

  7. S W O T • STRENGTH • WEAKNESS • OPPORTUNITY • THREAT

  8. STRENGTHS • WHAT ARE WE GOOD AT? • HELP COUNTER THREATS • TAKE ADVANTAGE OF OPPORTUNITIES

  9. POTENTIAL STRENGTHS • DISTINCTIVE COMPETENCE • FINANCIAL RESOURCES • GOOD REPUTATION WITH BUYERS • STRONG SALES FORCE • COST ADVANTAGES • INSULATED FROM COMPETITORS • MARKETING EXPERTISE

  10. WEAKNESSES • INTERNAL TO THE COMPANY • WHERE YOU NEED TO IMPROVE • WHERE YOU COULD BE HARMED

  11. POTENTIAL WEAKNESSES • NO STRATEGIC DIRECTION • OBSOLETE EQUIPMENT/FACILITIES • LACK OF TALENT/KEY COMPETENCE • NARROW PRODUCT LINE • WEAK DISTRIBUTION NETWORK • HIGH COST TO MARKET • LOW PROFITABILITY

  12. OPPORTUNITIES • FUTURE ISSUES • EXTERNAL TO COMPANY • PLACES TO TAKE ADVANTAGE

  13. POTENTIAL OPPORTUNITIES • NEW CUSTOMER GROUPS • NEW TECHNOLOGY/PRODUCTS • NEW MARKET SEGMENTS • EXPANDED TERRITORY • GROWING MARKETS • WEAK RIVAL FIRMS

  14. THREATS • IMAGINE WHAT COULD GO WRONG • FUTURE CHALLENGES • TRENDS THAT CAN HARM YOU

  15. POTENTIAL THREATS • NEW COMPETITORS • SUBSTITUTE PRODUCTS • SLOW MARKET GROWTH • GOVT REGULATIONS/LAWS • PRODUCT LIFE CYCLE • CHANGING BUYER NEEDS/TASTES • DEMOGRAPHICS

  16. ABC Filters Hard times are everywhere and everyone is taking stock. ABC realizes they need to do something as revenues and profits drop through no apparent fault of their own. They stand in danger of losing a main product line, as the manufacturer doesn’t agree that it’s not their fault sales are down. In addition, a new technology has come onto the market with MERV 15 filters with pressure drops of less than 0.1 in w.g., which everyone is going to want. Their current exclusive manufacturers don’t have it yet, but Manufacturer 3 does and it’s available if they are willing to stock it. Time for a SWOT analysis.

  17. SAMPLE WORKSHEET • Question 1: Please list below the four most important Strengths you feel Company brings to the marketplace as compared to our competitors. These is no need to list them in any order. • 1. • 2. • 3. • 4. • Question 2: Please list below the four most important Weaknesses you feel Company has as compared to our competitors in the market place. There is no need to list them in any order. • 1. • 2. • 3. • 4. • Question 3: Please list below four Opportunities you feel are available to Company in the marketplace which we are currently not pursuing or only partially pursuing. There is no need to list them in any order. • 1. • 2. • 3. • 4. • Question 4: Please list below the four biggest Threats you feel exist for Company in the marketplace. There is no need to list them in any order. • 1. • 2. • 3. • 4.

  18. SAMPLE WORKSHEET • Question 1: Please list below the four most important Strengths you feel ABC brings to the marketplace. • 1. QUALITY PRODUCTS • 2. TECHNICAL EXPERTISE (COMPLIMENTS OF NAFA) • 3. PROTECTION FROM COMPETITION • 4. REPUTATION • Question 2: Please list below the four most important Weaknesses you feel ABC has in the market place. • 1. NO SALES TRAINING • 2. NO LEADERSHIP/ACTIVE STRATEGY • 3. LIMITED MARKETING EXPERTISE • 4. INADEQUATE WAREHOUSE SPACE • Question 3: Please list below four Opportunities you feel are available to ABC in the marketplace which are not currently being pursued or only partially pursued. • 1. SALES FROM EXISTING CUSTOMERS – NEW TECHNOLOGY • 2. NEW TECHNOLOGY/PRODUCT ADDITION - NEW CUSTOMERS • 3. INCREASE SALES OF EXISTING PRODUCTS • 4. NEW TERRITORY • Question 4: Please list below the four biggest Threats you feel exist for ABC in the marketplace. • 1. PRODUCT LINE OBSOLETE/LOST • 2. FALLING BEHIND THE MARKET OF NEW TECHNOLOGY • 3. LOSS OF EXCLUSIVITY • 4. NEW COMPETITOR

  19. THE MATRIX

  20. MATRIX RULES • 10-12 PERSONS MAXIMUM/GROUP • PARTICIPANT WORKSHEETS COMPLETE - CAN BE DONE BLIND • TAKE ALL SUGGESTIONS AT FACE VALUE – PRIORITY COMES LATER • REMEMBER TO VIEW FROM THE INSIDE OUT

  21. ABC MATRIX

  22. SCORING THE MATIX • YOU MUST HAVE EQUAL NUMBER OF ITEMS IN EACH QUADRANT • RULE OF THUMB FOR POINTS IS TO USE ¾ THE NUMBER OF ITEMS • STEER AWAY FROM AWARDING LOW POINTS ACROSS THE BOARD – MAKE THE HARD CHOICES • VIEW FROM INSIDE YOUR FIRM !!!

  23. SWOT NUMBERING RULES • 0 - NO IMPACT • 1 - LITTLE IMPACT • 2 - MODERATE IMPACT • 3 - HEAVY IMPACT TOTAL POINTS PER COLUMN = APPROX ¾ THE NUMBER OF ITEMS – GENERALLY AN ODD NUMBER SET SO THAT ZEROS MUST BE AWARDED.

  24. S/O QUADRANT • S/O – TO WHAT EXTENT DOES THIS PARTICULAR STRENGTH ENABLE US TO TAKE MAXIMUM ADVANTAGE OF THIS OPPORTUNITY? • IT REALLY DOES = 3 • IT HAS NO IMPACT = 0

  25. W/O QUADRANT • TO WHAT EXTENT DOES THIS WEAKNESS MAXIMIZE OUR INABILITY TO TAKE ADVANTAGE OF THIS OPPORTUNITY? • MAXIMUM INABILITY = 3 • NO IMPACT = 0

  26. S/T QUADRANT • TO WHAT EXTENT DOES THIS STRENGTH MAXIMIZE OUR ABILITY TO COUNTER A THREAT? • MAXIMIZE OUR ABILITY = 3 • NO IMPACT ON ABILITY TO COUNTER THREAT = 0

  27. W/T QUADRANT • TO WHAT EXTENT DOES THIS WEAKNESS MAXIMIZE MY INABILITY TO COPE WITH THIS THREAT? • MAXIMIZE INABILITY TO COUNTER A THREAT = 3 • NO IMPACT ON ABILITY TO COUNTER A THREAT = 0

  28. PRIORITIZED MATRIX

  29. NOW WHAT? • DETERMINE WHERE YOUR STRENGTHS HELP MOST • DETERMINE WHERE YOUR WEAKNESS HURT YOU MOST • CRAFT WRITTEN STRATEGY TO DEAL WITH THE FUTURE

  30. ONLINE RESOURCES • WWW.MINDTOOLS.COM • WWW.BUSINESSBALLS.COM • WWW.RAPIDBI.COM EACH OF THESE SITES OFFER FREE TEMPLATES YOU MAY USE, ALONG WITH HELPFUL GUIDELINES

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