Strategic Marketing

Decision

class
 The TOWS Matrix
Matching the environmental threats
and opportunities with the companys
weakness and especially its
strengths.
SWOT Matrix

Developing the SWOT

List firms key internal Strengths

List firms key internal Weaknesses
List firms key external Opportunities
List firms key external Threats
 The External Environment
The listing of external threats (T) may
be of immediate importance to the
firm as some of these threats ex: the
lack of available energy
 The External Environment
Threats and Opportunities categorized :
Economic
Social
Political
Demographic
Product
Service
Technology
Markets
Competitions
 The Internal Environment
Assessed for Strengths (S) and
Weaknesses (W)
Management
Organization
Operations
Finance
Marketing
SWOT Matrix

Four Types of
Strategies
Strengths-Opportunities (SO)
Weaknesses-Opportunities (WO)
Strengths-Threats (ST)
Weaknesses-Threats (WT)
 SO Strategies

Strengths
Weaknesses Use a firms
internal strengths
Opportunities
to take advantage
Threats SO of external
Strategies opportunities
SWOT
 The SO Strategy (Maxi-Maxi)
Maximize both strengths and
opportunities
Enterprise can lead from strengths,
utilizing resources to take advantage
of the market for its products and
services.
 WO Strategies

Strengths
Weaknesses Improving internal
weaknesses by
Opportunities
taking advantage
Threats WO of external
Strategies opportunities
SWOT
 The WO Strategy (Mini-Maxi)
Minimize the weaknesses and to Maximize
opportunities
Identify opportunities ill the external
environment but have organizational
weaknesses which prevent the firm from
taking advantage of market demands.
 ST Strategies

Strengths Use a firms

Weaknesses strengths
Opportunities to avoid or
Threats ST reduce the impact
Strategies of external
threats
SWOT
The ST Strategy (Maxi-Mini)
Based on the strengths of the
organization that can deal with
threats in the environment
The aim is to maximize the former
while minimizing the latter
 WT Strategies

Defensive tactics
Strengths aimed at reducing
Weaknesses internal
Opportunities weaknesses &
Threats avoiding
WT environmental
Strategies threats
SWOT
The WT Strategy (Mini-Mini)
Minimize both weaknesses and threats
Ex: such a firm prefer a merger, or may cut
back its operations, with the intent of
either overcoming the weaknesses or
hoping that the threat will diminish over
time
WT Position is one that any firm will try to
avoid.
 SWOT Matrix
Strengths S Weaknesses
W
Leave Blank
List Strengths
List Weaknesses
Opportunities SO Strategies WO Strategies
O
Use strengths to take Overcoming
advantage of weaknesses by taking
opportunities advantage of
List Opportunities opportunities

Threats T ST Strategies WT Strategies

Use strengths to avoid Minimize weaknesses

List Threats threats and avoid threats
 Matching Key Factors to Formulate Alternative
Strategies
Key Internal Factor Key External Factor Resultant Strategy

20% annual growth in

Excess working capacity
+ the cell phone industry = Acquire Cellfone, Inc.
(strength)
(opportunity)
(SO) Strategy

Exit of two major foreign Pursue horizontal integration

Insufficient capacity
+ competitors from the = by buying competitor's
(weakness)
industry (opportunity) facilities
(WO) Strategy
Decreasing numbers of Develop new products for
Strong R&D (strength) + =
young adults (threat) older adults
(ST) Strategy
Develop a new
Poor employee morale Strong union
+ = employee benefits
(weakness) activity (threat) package
(WT) Strategy21
 Limitations with SWOT Matrix

Does not show how to achieve a

competitive advantage
Provides a static assessment in time
May lead the firm to overemphasize a
single internal or external factor in
formulating strategies
 The Internal-External Matrix

Positions an organizations various

divisions in a nine-cell display
Similar to BCG Matrix except the IE
Matrix:
Requires more information about the
divisions
Strategic implications of each matrix are
different
 IE Matrix

Based on two key dimensions

The IFE total weighted scores on the x-axis
The EFE total weighted scores on the y-axis
Divided into three major regions
Grow and build Cells I, II, or IV
Hold and maintain Cells III, V, or VII
Harvest or divest Cells VI, VIII, or IX
Grand Strategy Matrix

Tool for formulating alternative strategies

Based on two dimensions
Competitive position
Market growth
 RAPID MARKET GROWTH
Quadrant II Quadrant I
1. Market development 1. Market development
2. Market penetration 2. Market penetration
3. Product development 3. Product development
4. Horizontal integration 4. Forward integration
5. Divestiture 5. Backward integration
6. Liquidation 6. Horizontal integration
WEAK 7. Concentric diversification
STRONG
COMPETITIVE COMPETITIVE
POSITION Quadrant III Quadrant IV
POSITION
1. Retrenchment 1. Concentric diversification
2. Concentric diversification 2. Horizontal diversification
3. Horizontal diversification 3. Conglomerate
4. Conglomerate diversification
diversification 4. Joint ventures
5. Liquidation
SLOW MARKET GROWTH
28
Grand Strategy Matrix

Quadrant I

Excellent strategic position

Concentration on current markets/products
Take risks aggressively when necessary
Grand Strategy Matrix

Quadrant II

Evaluate present approach

How to improve competitiveness
Rapid market growth requires intensive
strategy
Grand Strategy Matrix

Quadrant III

Compete in slow-growth industries

Weak competitive position
Drastic changes quickly
Cost & asset reduction (retrenchment)
Grand Strategy Matrix

Quadrant IV

Strong competitive position

Slow-growth industry
Diversification to more promising growth
areas