Strategic Management

Fred R. David

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06_______________________Strategy Analysis and Choice

After studying this chapter, you should be able to do the following:

a. Describe a three-stage framework for choosing amongalternative strategies

b. Explain how to develop a SWOT Matrix, Space Matrix, BCGMatrix, IE Matrix and QSPM.

c. Identify important behavioral, political, ethical, and socialresponsibility considerations in strategy analysis and choice.

d. Discuss the role of intuition in strategic analysis and choice.

e. Discuss the role of organizational culture in strategic analysisand choice.

Learning Objectives

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Contents

1. The nature of strategy and choice

2. A comprehensive strategic-management model

3. The input stage

4. The matching stage

5. The decision stage

6. Cultural aspect of strategy choice

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Introduction - “Notable Quotes”

"Strategic management is not a box of tricks or abundle of techniques. It is analytical thinking andcommitment of resources to action. But quantificationalone is not planning. Some of the most importantissues in strategic management cannot be quantified atall."

—Peter Drucker

"Life is full of lousy options."

—General P. X. Kelley

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The Nature of Strategy Analysis and Choice

Strategy analysis and choice seek to determinealternative courses of action that could best enable thefirm to achieve its mission and objectives. The firm’spresent strategies, objectives, and mission, coupledwith the external and internal audit information,provide a basis for generating and evaluating feasiblealternative strategies.

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A Comprehensive Strategy-Formulation Framework

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A SWOT Matrix

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The SPACE Matrix

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The BCG Matrix

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The Internal-External matrix

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The Grand Strategy Matrix

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The Decision Stage

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Cultural Aspect of Strategy Choice

Strategies that require fewer cultural changes may be more

attractive because extensive changes can take considerable time

and effort.

Not only has the “right” corporate culture become the essence

and foundation of corporate excellence, but success or failure of

needed corporate reforms hinges on management’s sagacity and

ability to change the firm’s driving culture in time and in tune

with required changes in strategies.

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The politics of Strategy Choice

All organizations are political. Unless managed, politicalmaneuvering consumes valuable time, subvertsorganizational objectives, diverts human energy, andresults in the loss of some valuable employees.Sometimes political biases and personal preferencesget unduly embedded in strategy choice decisions.Internal politics affect the choice of strategies in allorganizations.

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