strategy analysis

1

Ir. Erlinda Muslim, MEENip. 19601028 198811 2001

Strategy Analysis and Choice

Manajemen Strategi Industri

2

Stage 1: The Input Stage

Stage 2: The Matching Stage

Stage 3: The Decision Stage

Strategy-Formulation Analytical Framework

3

External Factor EvaluationMatrix (EFE)

Competitive ProfileMatrix

Internal Factor EvaluationMatrix (IFE)

Stage 1:The Input Stage

Formulation Framework

4

• Provides basic input information for the matching and decision stage matrices

• Requires strategists to quantify subjectivity early in the process

• Good intuitive judgment always needed

Input Stage

5

SPACE Matrix

Stage 2:The Matching Stage

TOWS Matrix

BCG Matrix

IE Matrix

Grand Strategy Matrix


6

• Match between organization’s internal resources and skills and the opportunities and risks created by its external factors.

Matching Stage

7

Resultant StrategyKey External FactorKey Internal Factor

Develop a new employee benefits package

=Strong union activity (threat)

+Poor employee morale (weakness)

Develop new products for older adults

=Decreasing numbers of young adults (threat)

+Strong R&D (strength)

Pursue horizontal integration by buying competitor's facilities

=Exit of two major foreign competitors form the industry (opportunity)

+Insufficient capacity (weakness)

Acquire Cellfone, Inc.=20% annual growth in the cell phone industry (opportunity)

+Excess working capacity (strength)

Matching Key Factors to Formulate Alternative Strategies

8


Quantitative Strategic Planning Matrix

(QSPM)

Stage 3:The Decision Stage

9






10

Prediction is very difficult, especially about the future.

-- Neils Bohr

The External Assessment

11

Purpose:

– Development of Finite List:•Opportunities•Threats to be avoided

Nature of External Audit

12

Five (5) broad categories:

1. Economic forces2. Social, cultural, demographic, &

environmental forces3. Political, governmental, and legal

forces4. Technological factors5. Competitive forces

Key External Forces

13

Key External Forces

CompetitorsSuppliers

DistributorsCreditors

CustomersEmployees

CommunitiesManagers

StockholdersLabor Unions

Special Interest GroupsProductsServices

Opportunities&

Threats

Relationships Between Key External Forces and an Organization

14

Porter’s Five Forces Model of Industry

Competition

Exhibit 2.4

Reprinted with the permission of The Free Press, a division of Simon & Schuster, Inc. from Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright © 1980, 1998 by The Free Press.

INDUSTRYCOMPETITORS

Rivalry AmongExisting Firms

INDUSTRYCOMPETITORS

Rivalry AmongExisting Firms

POTENTIALENTRANTS

SUBSTITUTES

BUYERSSUPPLIERS

Threat of substitute products

or services

Bargaining powerof buyers

Threat ofnew entrants

Bargaining powerof suppliers

15

Five Forces Analysis of the Automotive Industry

Global Competitive Environment

Threat of Buyers

Threat of Suppliers

Threat of Substitutes

Threat of Market Entry

Automotive

Industry

Threat of Rivalry

Train, public transport or other means of transportation

High barriers to entry High capital

requirements Contrived deterrence Cost disadvantages

Consolidation Single Sourcing Low level of total value added

Numerous potential customers Industry policy of rebates More demanding customers

Oligopolistic industry Overcapacity

Differentiation on basis of functional attributes only temporary

16

External Factor Evaluation External Factor Evaluation MatrixMatrix

Summarize & evaluate:

CompetitivePoliticalCultural

Technological

EnvironmentalSocial

Governmental

DemographicEconomic

Industry Analysis (EFE)

17

Menggambarkan keseluruhan opportunities dan threats yang ada untuk mengetahui seberapa besar pengaruh dari setiap faktor

tersebut terhadap institusi, respons institusi setiap faktor

tersebut dan untuk mengetahui nilai institusi terhadap

keseluruhan faktor dibandingkan dengan Institusi lain

External Factor Evaluation (EFE)

18

Five-Step process:

• List key external factors (10-20)Opportunities & threats

• Assign weight to each (0 to 1.0)Sum of all weights = 1.0


19

Five-step process:

• Assign 1-4 rating to each factor•Firm’s current strategies response to

the factor

• Multiply each factor’s weight by its rating•Produces a weighted score


20

Five-step process:

• Sum the weighted scores for eachDetermines the total weighted score for the organization.

• Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5


21

.201.20 Clinton Administration

.202.10 Bad media exposure from FDA

.102.05 Smokeless market SE region U.S.

.153.05 Production limits on tobacco

.202.10 Legislation against the tobacco industry

Threats

.303.10 More social pressure to quit smoking

2.101.00TOTAL

.604.15 Pinkerton leader in discount market

.051.05 Astronomical Internet growth

.153.05 Increased demand

.151.15 Global markets untapped

Weighted

scoreRatingWeight

UST—Key External FactorsOpportunities

22

Faktor Eksternal Bobot Rating Nilai

Peluang (opportunities)

- Jumlah penduduk 0,12 3 0,36

- Bentuk negara yang geografis 0,10 3 0,30

- Perusahaan yang berbentuk Persero 0,08 4 0,32

- Jumlah SDM memadai 0,10 2 0,20

- Tersedianya sarana promosi 0,05 2 0,10

- Perkembangan teknologi 0,10 2 0,20

Ancaman (threats)

- Pesaing baru dan lama 0,10 2 0,20

- Munculnya produk substitusi 0,12 2 0,24

- Tuntutan terhadap mutu dan pelayanan 0,08 2 0,16

- Daya beli konsumen 0,05 1 0,05

- Kondisi SDM yang berorientasi kepada produk

0,10 2 0,20

Total 1 2,33

Tabel : Matriks EFE PT. Pos Indonesia

23

Total weighted score of 4.0 =Organization response is outstanding to threats & weaknesses

Total weighted score of 1.0 =Firm’s strategies not capitalizing on opportunities or avoiding threats


24

Important

• Understanding of the factors used in the EFE Matrix is more important than the actual weights and ratings assigned.


25






26

Great spirits have always encountered violent opposition from mediocre minds.

-- Albert Einstein

The Internal Assessment

27

All organizations –

• Strengths• Weaknesses

Nature of an Internal Audit

28

Basis for objectives & strategies:

– Internal strengths/weaknesses– External opportunities/threats– Clear statement of mission

Nature of an Internal Audit

29

Distinctive Competencies

• A firm’s strengths that cannot be easily matched or imitated by competitors

• Building competitive advantage involves taking advantage of distinctive competencies

• Strategies designed in part to improve on a firm’s weaknesses and turn to strengths

Key Internal Forces

30

• Parallels process of external audit• Gather & assimilate information

from:• Management• Marketing• Finance/accounting• Production/operations• Research & development• Management information systems

Internal Audit

31

Five basic activities –

– Planning– Organizing– Motivating– Staffing– Controlling

Functions of Management

32

Planning

Stage When Most ImportantFunction

Strategy Formulation

Organizing

Strategy Implementation

Motivating


Staffing

Controlling


Strategy Evaluation

Functions of Management

33

Planning

Forecasting

Establishing objectives

Devising strategies

Developing policies

Setting goals

Planning

34

Organizing

Organizational design

Job specializationJob descriptions

Job specificationsSpan of control

Unity of commandCoordinationJob design

Job analysis

Organizing

Organizational design

Job specializationJob descriptions



Job analysis

Organizing

Organizational designJob specializationJob descriptions



Job analysis

OrganizingOrganizing

35

Motivating

LeadershipCommunication

Work groupsJob enrichmentJob satisfactionNeeds fulfillmentOrganizational

changeMorale

Motivating

36

Staffing

Wage & salary adminEmployee benefits

InterviewingHiringFiring

TrainingManagement development

SafetyAffirmative action

EEOLabor relations

Career developmentDiscipline procedures

Staffing

37

Controlling

Quality controlFinancial control

Sales controlInventory controlExpense control

Analysis of variancesRewardsSanctions

Controlling

38

Process of defining, anticipating, creating, and fulfilling customers’ needs and wants for products and services

Marketing

39

1. Customer analysis2. Selling products/services3. Product and service planning4. Pricing5. Distribution6. Marketing research7. Opportunity analysis

Marketing

40

Customer analysis

Customer surveys

Consumer information

Market positioning strategies

Customer profiles

Market segmentation strategies

Marketing

41

Selling Products/services

Advertising

Sales

Promotion

Publicity

Sales force management

Customer relations

Dealer relations

Marketing

42

Product/service planning

Test marketing

Brand positioning

Devising warrantees

Packaging

Product features/options

Product style

Quality

Marketing

43

Pricing

Forward integration

Discounts

Credit terms

Condition of sale

Markups

Costs

Unit pricing

Marketing

44

Distribution

Warehousing

Channels

Coverage

Retail site locations

Sales territories

Inventory levels

Transportation

Marketing

45

Marketing research

Data collection

Data input

Data analysis

Support all business functions

Marketing

46

Opportunity Analysis

Assessing costs

Assessing benefits

Assessing risks

Cost/benefit/risk analysis

Marketing

47

• Determining financial strengths and weaknesses key to strategy formulation

• Investment decision (Capital budgeting)

• Financing decision• Dividend decision

Finance/Accounting

48

Functions of Finance/Accounting –

1. Investment decision (Capital budgeting)

2. Financing decision3. Dividend decision

Finance/Accounting

49

Liquidity ratios

Firm’s ability to meet its short-term obligations

Ratios

Current ratio

Quick (or acid-test)

ratio

Basic Financial Ratios

50

Leverage ratios

• Extent of debt financing

Ratios

Debt-to-total-assets

Debt-to-equity

Long-term debt-to-equity

Times-interest earned


51

Activity ratios

• Effective use of firm’s resources

Ratios

Inventory-turnover

Fixed assets turnover

Total assets turnover

Accounts receivable turnover

Average collection period


52

Profitability ratios

• Effectiveness shown by returns on sales and investment

Ratios

Gross profit margin

Operating profit margin

Net profit margin

Return on total assets (ROA)


53

Profitability ratios(continued)

• Effectiveness shown by returns on sales and investment

Ratios

Return on stockholders’ equity (ROE)

Earnings per share

Price-earnings ratio


54

Growth ratios

• Firm’s ability to maintain economic position

Ratios

Sales

Net income

Earnings per share

Dividends per share


55

• Process• Capacity• Inventory• Workforce• Quality

Production/Operations

56

Process

Design of facility

Choice of technology

Facility layout

Process flow analysis

Facility location

Line balancing

Process control


57

Capacity

Forecasting

Facilities planning

Aggregate planning

Scheduling

Capacity planning

Queuing analysis


58

Inventory

Raw material

Work in process

Finished goods

Materials handling


59

Workforce

Job design

Work measurement

Job enrichment

Work standards

Motivation techniques


60

Quality

Quality control

Sampling

Testing

Quality assurance

Cost control


61

• Development of new products before competition

• Improving product quality• Improving manufacturing

processes to reduce costs

Research and Development

62

R&D budgets

Financing as many projects as possible

Use percentage-of-sales method

Budgeting relative to competitors

Deciding how many successful new

products are needed

Research and Development

63

Purpose –– Improve performance of an

enterprise by improving the quality of managerial decisions.

Management Information Systems

64

Internal Analysis (IFE)

Menggambarkan keseluruhan strength dan weakness yang ada

untuk mengetahui seberapa besar pengaruh dari setiap faktor tersebut terhadap

institusi, respons institusi setiap faktor tersebut dan untuk mengetahui nilai institusi

terhadap keseluruhan faktor dibandingkan dengan Institusi

lain

65

Five-Step Process:

• List key internal factors (10-20)Strengths & weaknesses

• Assign weight to each (0 to 1.0)Sum of all weights = 1.0


66

Assign 1-4 rating to each factorFirm’s current strategies response

to the factor

• Multiply each factor’s weight by its ratingProduces a weighted score


67

• Sum the weighted scores for eachDetermines the total weighted score

for the organization

Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5


68

.153.05 Financial ratios

.153.05 Reputation as family-friendly

.204.05 Long-range planning

.153.05 Minimal comps provided

.153.05 Buffets at most facilities

.153.05 Strong management team

.604.15 Owns 1 mile on Las Vegas strip

.153.05 Increasing free cash flows

.404.10 Room occupancy rates over 95%

.204.05 Largest casino company in world

Weighted

scoreRatingWeight

Mandalay BayInternal Strengths


69

2.751.0TOTAL (including Strengths)

.101.10Recent loss of joint ventures

.101.10Laughlin properties

.102.05Family reputation, not high rollers

.102.05Little diversification

.051.05Most properties located in Las Vegas

Weighted

scoreRatingWeight

Mandalay BayInternal Weaknesses


70

Faktor Internal Bobot Rating Nilai

Kekuatan (strengths)

- Keragaman jenis jasa pengiriman 0,09 4 0,36

- Harga murah 0,10 4 0,40

- Jaringan pos yang sangat luas 0,10 3 0,30

- Sebaran lokasi pelayanan 0,10 3 0,30

- Kemudahan mencapai tempat pelayanan & pengiriman

0,11 3 0,33

Kelemahan (weaknesses)

- Ketepatan waktu pengiriman 0,11 1 0,11

- Kecepatan pengiriman 0,11 1 0,11

- Kecepatan pelayanan petugas 0,10 1 0,10

- Informasi biaya dan waktu pengiriman 0,09 2 0,18

- Kemudahan memperoleh info promosi dan iklan

0,09 2 0.18

Total 1 2,37

Tabel : Matriks IFE PT. Pos Indonesia

71

Diantara sejumlah strengths yang dimiliki suatu institusi dapat saja beberapa diantaranya merupakan distinctive competencies.

Untuk mengevaluasi apakah suatu strength adalah distinctive competency dapat digunakan metode Barney yaitu dengan konsep VRIO

Menentukan Distinctive CompetenciesMenentukan Distinctive Competencies

72

Value : apakah faktor tersebut memberikan keunggulan kompetitif pada institusi ?

Rareness : apakah pesaing tidak memiliki faktor tersebut ?

Imitability : apakah tidak mudah untuk memiliki faktor tersebut ?

Organization : apakah institusi memanfaatkan faktor tersebut secara maksimal ?

Jika jawab dari keempat : Ya

distinctive competency

VRIOVRIO

73






74

Competitive Profile Matrix

• Identifies firm’s major competitors and their strengths & weaknesses in relation to a sample firm’s strategic position

Industry Analysis (CPM)

75

(CPM) Procter Avon L’Oreal &

Gamble

2.803.25

3.15

1.00Total

0.1530.20

40.05

10.05Market Share

0.4020.40

20.80

40.20Global Expansion

0.2020.40

40.40

40.10Customer Loyalty

0.4530.45

30.60

40.15Financial Position

0.3030.30

30.40

40.10Management

0.4040.30

30.30

30.10Price Competition

0.3030.40

40.40

40.10Product Quality

0.6030.80

40.20

10.20Advertising

ScoreRating

Score

Rating

Score

Rating

Weight

Critical Success Factor

76

Competitive Profile Matrix

Nike Adidas Reebok

Critical Success Factors Weight RatingWeightedScore Rating

WeightedScore Rating

WeightedScore

Brand RecognitionMarket ShareFinancial StrengthR&DProduct QualityAdvertisingNumber of Retail OutletsProduct MixDepend on Suppliers forQuality

0.150.140.130.100.100.120.050.110.10

443434442

0.600.560.390.400.100.480.200.440.20

422233133

0.600.280.260.200.300.360.050.330.30

432334332

0.600.420.260.300.300.480.150.330.20

Total 1.00 3.37 2.68 3.04

77

SPACE Matrix


TOWS Matrix

BCG Matrix

IE Matrix



78

Whether it’s broke or not, fix it—make it better. Not just products, but the whole company if necessary.

-- Bill Saporito

Strategy Analysis & Choice

79

Asumsi: Suatu strategi yang efektif akan memaksimalkan kekuatan (Strength) dan peluang (Opportunities), dan meminimalkan kelemahan (Weaknesses) dan ancaman ((Threat)

Opportunities: Situasi penting dari faktor eksternal yang menguntungkan perusahaan. (perubahan teknologi, membaiknya hubungan pembeli & pemasok, dll)

Threat: faktor internal yang tidak menguntungkan perusahaan. (masuknya pesaing baru, lambatnya pertumbuhan pasar, meningkatnya kekuatan pembeli & pemasok, dll)

Strength: Kekuatan internal meliputi sumberdaya, keterampilan/ keunggulan lainnya relatif terhadap pesaing dan kebutuhan pasar yang dilayani/ ingin dilayani perusahaan. (sumber daya keuangan, citra, dll)

Weaknesses: Kekurangan/ keterbatasan daam sumber daya, keterampilan dan kapabilitas yang menghambat kinerja perusahaan.

SWOT ANALYSIS

80

Dikemukakan oleh : Thomas L. Wheelen dan J. David Hunger

Menggunakan matrix untuk menghasilkan strategi alternatif dengan

memanfaatkan EFE dan IFE

Langkah-Langkahnya : Pada blok opportunities cantumkan sejumlah opportunities

yang diambil dari tabel EFE Pada blok threats cantumkan sejumlah threats yang diambil

dari EFE Pada blok strength, cantumkan sejumlah strength yang

diambil dari IFE Pada blok weakness cantumkan sejumlah weakness yg

diambil dari IFE Dapatkan sejumlah strategi-strategi yang mungkin untuk

perusahaan berdasarkan kombinasi dari 4 elemen tersebut

ANALISA SWOT (TOWS) MATRIX

81

TOWS Matrix

– Threats– Opportunities– Strengths– Weaknesses

Matching Stage

82

Develop four types of strategies

– Strengths-Opportunities (SO)– Weaknesses-Opportunities

(WO)– Strengths-Threats (ST)– Weaknesses-Threats (WT)

TOWS Matrix

83

Kuadran SO : posisi yang paling menguntungkan dimana institusi sedang melihat peluang-peluang dan memiliki kekuatan untuk meraihnya

Kuadran ST : institusi dengan beberapa kekuatan yang dimilikinya sedang menghadapi ancaman dari luar. Institusi dapat menggunakan kekuatan untuk menciptakan peluang di masa yang akan datang

Kuadran WO : institusi sedang melihat peluang tetapi mengalami kendala dalam meraihnya karena perusahaan memiliki kelemahan. Institusi harus dapat mengeliminir kekurangan-kekurangan supaya lebih efektif dalam meraih peluang

Kuadran WT : posisi yang paling tidak menyenangkan dimana perusahaan sedang menghadapi ancaman dari luar bersamaan dengan posisinyapun sedang lemah. Institusi bertahan sambil mengkaji ulang keterlibatan institusi dalam pelayanan yang sedang terancam tersebut

Kuadran SO, ST, WO, WTKuadran SO, ST, WO, WT

84

Strategi SO : strategi memanfaatkan peluang dengan mendayagunakan kekuatan internal

Strategi ST : strategi untuk menghadapi atau menghidarkan ancaman dengan mendayagunakan kekuatan yang dimiliki

Strategi WO : strategi untuk mengatasi kelemahan dengan cara memanfaatkan peluang yang ada

Strategi WT : strategi yang meminimalkan kelemahan sambil mencegah ancaman yang ada di luar

STRATEGI SO, ST, WO, WT

85

SO

Strategies

Use a firm’s internal

strengths to take advantage

of external opportunities

ThreatsOpportunitiesWeaknesses

Strengths(TOWS)

SO Strategies

86

WO

Strategies

Improving internal

weaknesses by taking

advantage of external

opportunities


Strengths(TOWS)

WO Strategies

87

ST

Strategies

Using firm’s strengths to

avoid or reduce the impact of external threats.


Strengths(TOWS)

ST Strategies

88

WT

Strategies

Defensive tactics aimed at reducing

internal weaknesses and avoiding

environmental threats.


Strengths(TOWS)

WT Strategies

89

Steps in developing the TOWS Matrix

1. List the firm’s key external opportunities

2. List the firm’s key external threats3. List the firm’s key internal strengths4. List the firm’s key internal

weaknesses

TOWS Matrix

90

Developing the TOWS Matrix

5. Match internal strengths with external opportunities and record the resultant SO Strategies

6. Match internal weaknesses with external opportunities and record the resultant WO Strategies

7. Match internal strengths with external threats and record the resultant ST Strategies

8. Match internal weaknesses with external threats and record the resultant WT Strategies

TOWS Matrix

91

WT Strategies

Minimize weaknesses and avoid threats

ST Strategies

Use strengths to avoid threats

Threats-T

List Threats

WO Strategies

Overcome weaknesses by taking advantage of

opportunities

SO Strategies

Use strengths to take advantage of opportunities

Opportunities-O

List Opportunities

Weaknesses-W

List Weaknesses

Strengths-S

List Strengths

Leave Blank

TOWS Matrix

92

OPPORTUNITIES (O)List External

Opportinities Here

EXTERNALFACTORS

INTERNALFACTORS

THREATS (T)List ExternalThreats Here

S-O StrategiesGenerate strategies

here that use Strenghts to take

adventage ofopportunities

S-T StrategiesGenerate strategies

here that use strenghts to avoid

threats

W-O StrategiesGenerate strategies

here that takeadventage of

opportunities byovercoming weaknesses

W-T StrategiesGenerate strategieshere that minimize

weaknesses andavoid threats

STRENGHTS (S)List Internal

Strenghts Here

WEAKNESSES (W)List Internal

Weaknesses Here

SWOT MATRIX

93

TOWS Matrix

Strengths Weaknesses 1. Customer satisfaction.

2. Copyright to one-click method.

3. Humanitarian efforts. 4. Strong Research &

Development. 5. Exclusive agreements

with Internet sites. 6. Ability to track

customer interests. 7. Formation of strategic

alliances with physical retailers.

1. Accumulated deficits. 2. Anticipates further losses. 3. Slowing growth, core

business, U.S. Books, Music, & Video.

4. Lawsuit with Barnes & Noble over patent for one-click method.

5. Class Action Suits filed with stockholders.

6. Doses not have a mission statement.

7. Financial position.

94

TOWS Matrix

Opportunities S-O Strategies W-O Strategies 1. Continuous increase of

internet users. 2. Increasing business to

consumer e-commerce. 3. U. S. Internet economy

projections 3.1 trillion by 2004.

4. Brick & Mortar companies lack technology expertise.

5. European on-line projections 3.1 trillion by 2004.

1. Expand European presence through strategic alliances with established online retailers or physical retailers (S1,O1,O2,O3,O5).

2. Refocus on core business by taking full advantage of e-books sales projection

(S1,S2,S6,O1,O2,O3).

1. Enter into more strategic agreements with U. S. physical retailers possibly Wal-mart (W2,W3,W7,O4,O5).

95

TOWS Matrix

Threats S-T Strategies W-T Strategies 1. Seasonality of internet

usage & revenue generation.

2. Economic downturn & global recession.

3. Low consumer confidence levels.

4. Competition. 5. Security/Privacy of

information concerns. 6. Internet Taxation. 7. Market valuation .

1. Establish direct order link with publishers/manufacturers (S5, T4).

2. Enhance attractiveness of platform (S1,S2,S4,S6,T4,T7).

3. Promote ease of use (S2,T4,T5).

1. Reduce fulfillment costs by reduction in number of fulfillment centers

(W1,W2,W3,W7,T1,T2,T3,T7).

96

SPACE Matrix


TOWS Matrix

BCG Matrix

IE Matrix


FORMULATION FRAMEWORK

97

SPACE Matrix•SPACE = The Strategic Position and ACtion Evaluation

•Dikemukakan oleh : R. Howe, R. Mason & K. Dickel

•Diadaptasi oleh : Fred R. David

•Menilai seluruh strategic factors

•Mengolah Ditampilkan pada sistem

– koordinat 2 dimensi

98

Strategic Position and Action Evaluation Matrix

Four quadrant framework Determines appropriate strategies

Aggressive Conservative Defensive Competitive

SPACE Matrix

99

Two Internal Dimensions Financial Strength [FS] Competitive Advantage [CA]

Two External Dimensions Environmental Stability [ES] Industry Strength [IS]

SPACE Matrix

100

Overall Strategic position determined by:

– Financial Strength [FS]– Competitive Advantage [CA]– Environmental Stability [ES]– Industry Strength [IS]

SPACE Matrix

101

Developing the SPACE Matrix:

• EFE Matrix• IFE Matrix• Financial Strength• Competitive Advantage• Environmental Stability• Industry Strength

SPACE Matrix

102

• Select variables to define FS, CA, ES, & IS

• Assign numerical ranking from +1 (worst) to +6 (best) for FS and IS; Assign numerical ranking from –1 (best) to –6 (worst) for ES and CA.

• Compute average score for FS, CA, ES, & IS

SPACE Matrix

103

Environmental Stability (ES)

Technological changes

Rate of inflation

Demand variability

Price range of competing products

Barriers to entry

Competitive pressure

Price elasticity of demand

Financial Strength (FS)

Return on investment

Leverage

Liquidity

Working capital

Cash flow

Ease of exit from market

Risk involved in business

External Strategic PositionInternal Strategic Position

SPACE Matrix

104

Industry Strength (IS)

Growth potential

Profit potential

Financial stability

Technological know-how

Resource utilization

Capital intensify

Ease of entry into market

Productivity, capacity utilization

Competitive Advantage CA

Market share

Product quality

Product life cycle

Customer loyalty

Competition’s capacity utilization

Technological know-how

Control over suppliers & distributors

External Strategic PositionInternal Strategic Position

SPACE Matrix

105

FS+6

+1

+5+4+3

+2

-6

-5

-4

-3

-2

-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6

ES

CA IS

Conservative Aggressive

Defensive Competitive

SPACE Matrix

106

SPACE Matrix : NIKE

INTERNAL STRATEGIC POSITION Financial strength +4 +1 best to +6 worst Y axis: 4 + (-3) = 1 Environmental stability -3 -6 worst to –1 best

EXTERNAL STRATEGIC POSITION Competitive advantage -2 -6 unstable to –1 stable X axis: 3 + (-2) = 1 Industry strength +3 +1 best to +6 worst

Conservative FS Aggressive

CA IS

Defensive ES Competitive

107

FS

Conservative Aggressive

CA IS

Defensive ES Competitive

SPACE Matrix : AMAZON

Y axis Financial strength +1 +1 worst to + 6 best Y axis: 1 + (-2) = -1 Environmental stability -2 -1 best to –6 worst X axis Industry strength 3 +1 worst to +6 best X axis: 3 + (-2) = 1 Competitive advantage -2 -1 best to -6 worst

108

-2,50 +0,59 +3,09

+2,75

+0,60

-2,15

Posisi StrategisSO

+ 0,59 ; + 0,60

Weakness Strength

Opportunities

Threats

Rata-Rata Opportunities= +33/12 = + 2,75

Rata-Rata Threats= -28/13 = - 2,15

Rata-Rata Strength= +34/11 = + 3,09

Rata-Rata Weakness= -15/6 = - -2,50

Koordinat X =+3,09 + (-2,50) = 0,59

Koordinat Y =+2,75 + (-2,15) = 0,60

109

Supports an Aggressive Strategy

Supports a Turn Oriented Strategy

Supports a Diversification Strategy

Supports a Difensive Strategy

OPPORTUNITIES

THREATS

WEAKNESSES STRENGTHS

SPACE MATRIX POSISI STRATEGIS PERUSAHAAN

110

SPACE Matrix


TOWS Matrix

BCG Matrix

IE Matrix



111

Boston Consulting Group Matrix

• Enhances multidivisional firms’ efforts to formulate strategies

• Autonomous divisions (or profit centers) constitute the business portfolio

• Firm’s divisions may compete in different industries requiring separate strategy

• Graphically portrays differences among divisions

• Focuses on market share position and industry growth rate

• Manage business portfolio through relative market share position and industry growth rate

BCG Matrix

112

DogsDogs

IVIV

Cash CowsCash Cows

IIIIII

Question MarksQuestion Marks

II

StarsStars

IIII

Relative Market Share PositionHigh1.0

Medium.50

Low0.0

Ind

ust

ry S

ales

Gro

wth

Rat

e High+20

Low-20

Medium0

BCG Matrix

113

Kondisi Bisnis Perusahaan

Perusahaan dengan satu bisnis

Diversifikasi perusahaan yang berhubungan

Diversifikasi perusahaan yang tak ada hubungan

Bersaing sebagai satu bisnis Membagi kompetensi bisnis satu sama lain

Tiap unit bisnis otonom pada pasar yang berbeda-beda

Apple ComputerMcDonald’s Corp.WrigleyMaytagTexas AirFord Motor

P&GPhilip MorrisDow-CorningJohnson & JohnsonDu PontGilette

ITTRockwell GELTVTextronLitton

114

Pendekatan PortofolioPendekatan portofolio ditandai ciri berikut :

Menguji setiap bisnis perusahaan yang terpisah sebagai elemen portofolio dari total bisnis.

Suatu unit bisnis dalam portofolio perusahaan, pada derajat tertentu, adalah merupakan penghasil (generators) atau penerima (recipients) dari sumber-sumber (resources) perusahaan.

Pendekatan portofolio merupakan cara yang sederhana dan visual untuk mengidentifikasi dan mengevaluasi alternatif strategi guna dapat menghasilkan dan mengalokasikan sumber-sumber perusahaan (corporate resources)

115

• Matrix BCG ini dibentuk dari empat sel (Matriks 2 X 2) yang mengukur laju pertumbuhan pasar (market growth) pada sumbu vertikal, dan pangsa pasar relatif (relative market share) pada sumbu horizontal

• Didalam matriks BCG, setiap unit bisnis menempati salah satu dari kategori “tanda tanya” Question mark Star Cash cow Dogs

SUSUNAN MATRIKS BCG

116

• Matrixs BCG merupakan model yang sederhana dan paling banyak digunakan.

• Model ini berguna bagi top manager yang membawahi unit bisnis yang berbeda-beda (diversified forms), khususnya untuk mengalokasikan sumber-sumber (resources) dari satu unit ke unit bisnis lainnya.

• Matriks ini juga digunakan untuk memperkirakan posisi pasar suatu unit bisnis beberapa tahun ke depan bila tidak dilakukan perubahan kebijakan (policies) selama ini

MATRIKS BCG

117

Bentuk BCG Matrix

Relative Market Share

Star Question Mark

DogCash Cow

High

MarketGrowth

Low

WeakStrong

118

The Boston Consulting Group’s Growth-Share Matrix

20%-18%-16%-14%-12%-10%- 8%- 6%- 4%- 2%- 0M

arke

t G

row

th R

ate

10x 4x 2x 1.5x 1x Relative Market Share

.5x .4x .3x .2x .1x

Dogs 87

3 ?Question marks

? ?2

1

Cash cows

6

Stars

5

4

119

Indikator Cash Flow Beberapa indikator berikut diperlukan dalam penyusunan matriks BCG:

Cash flow merupakan indikator kunci pada matriks BCG

Cash flow merepresentasikan kemampuan dari unit bisnis untuk membangun portofolio-nya

Cash flow dalam matriks BCG dapat dibagi atas: Pemakaian kas (cash use) karena pangsa pasar relatif (relative market share) di sumbu

horizontal Penerimaan kas (cash generated) karena pertumbuhan pasar (market growth rate) di

sumbu vertikal

Relative market share dapat dihitung dari ratio market share unit bisnis dengan market share pesaing tertinggi

Market growth atau pertumbuhan pada industri bersangkutan.

120

Asumsi Cash flow vs. posisi bisnis

Hubungan antara cash flow perusahaan dengan portofolio bisnisnya dapat terjadi berdasarkan beberapa asumsi :

Profit margin dan penerimaan kas (cash generation) makin besar dengan bertambahnya relative market share, akibat learning curve

Market growth membutuhkan uang tunai (cash used) guna membiayai modal kerja, penambahan kapasitas, dan investasi lainnya

Sebagian unit bisnis membutuhkan uang tunai lebih besar dari pendapatannya, sedang sebagian lain menghasilkan lebih besar dari yang digunakannya

Dalam portofolio perusahaan, cash flow keseluruhan perusahaan harus seimbang, yaitu antara kebutuhan tunai total dengan kemampuan unit-unit usaha dalam menghasilkan uang tunai ditambah pembiayaan dari luar.

121

Analisa Cash Flow


Star Question Mark

DogCash Cow

High

MarketGrowth

Low

WeakStrong

Cash generated +++

Cash use - - - 0

Cash generated + Cash use - - - - -

Cash generated +++Cash use - ++

Cash generated +Cash use - 0

122

4 Strategi Utama BCG Matrix

Build market share

Hold market share

Harvest

Divest

123

BCG Matrix:Karakteristik Kuadran


StarEarnings: high stable, growingCash flow: neutralStrategy: hold or invest for growth

Question MarkEarnings: low, unstable, growingCash flow: negativeStrategy: build market shareor harvest/divest

DogEarnings: low, unstableCash flow: neutral or negativeStrategy: harvest/divest

Cash CowEarnings: high stableCash flow: high stableStrategy: hold or add marketshare

30%

MarketGrowth

-10%

.110 1.0

124

Penggunaan Model : Simbol

Product APrevious

Market Sizeand Position

B

MarketShare

Product ATotalMarket

Product B MarketSmaller but firmhas greater share

125

Plotting Your SBU’s


Star Question Mark

DogCash Cow

30%

MarketGrowth

-10%.110 1.0

A

BC

A

C

B

126

Traditional SBU or Product Path


Star Question Mark

DogCash Cow

30%

MarketGrowth

-10%.110 1.0

12

23

4

127

MATRIKS BCG & BUSINESS LIFE CYCLE? ? ?? ? ?

Question mark

Berada pada kuadran 1, dimana relative market share-nya rendah (low), namun dengan market groqth rate yang tinggi (high)

Ini mengingat posisi market share yang rendah, menunjukkan cash generated yang rendah pula, dan cash use yang tinggi pada market growth yang tinggi.

Dalam kondisi bisnis “question mark” ini perusahaan harus memutuskan untuk memperkuat diri dengan strategi intensif (penetrasi pasar, pengembangan pasar, atau pengembangan produk) atau menjualnya bila pelaksanaan strategi terlalu mahal.

Misi yang dituntut dari anak perusahaan ini adalah membangun (build) market share. Dalam daur hidup bisnis,

posisi ini terletak pada masa perkenalan atau masa-masa awal bisnis (introduction) perusahaan

128

StarMATRIKS BCG & BUSINESS LIFE CYCLE

Berada pada kuadran II, menunjukkan baik relative market share dan market growth yang tinggi, serta menunjukkan cash generated maupun cash use yang tinggi pula.

Posisi star merupakan posisi dominan yang dikejar setiap perusahaan dan posisi yang paling kuat, namun harus dipertahankan dengan investasi yang memadai.

Hal tersebut dapat dilakukan dengan strategi integrasi, strategi intensif atau joint ventures, melalui integrasi ke hilir (forward), ke hulu (backward) atau ke pesaing (horizontal), serta melalui penetrasi pasar, pengembangan pasar, atau pengembangan produk dan joint ventures.

Misi yang perlu dilakukan adalah mempertahankan (hold) market share. Posisi “hold” sama dengan siklus pertumbuhan (growth) pada business life cycle.

129

Cash cowMATRIKS BCG & BUSINESS LIFE CYCLE

Berada pada kuadran III, yaitu dengan relative market share yang tinggi namun market growth-nya rendah.

Pada market share yang tinggi, biaya per unit cenderung rendah dan berarti menghasilkan laba yang tinggi.

Sebaliknya dengan market growth yang rendah, bisnis dalam keadaan menurun sehingga kurang di perlukan uang tunai untuk keperluan investasi.

Unit bisnis ini memiliki keuntungan dan cash flow yang tinggi

Misi yang di emban adalah memanen (harvest) keuntungan dan cash flow jangka pendek untuk membiayai bisnis anak perusahaan

yang lainnya, dengan pendapatan yang besar, namun dengan pertumbuhan yang rendah

130

Dog MATRIKS BCG & BUSINESS LIFE CYCLE

Berada pada kuadran IV, berada pada posisi yang lemah dan industri sudah tidak menarik.

Biasanya strategi yang baik adalah melakukan divestasi, kecuali masih ada kemungkinan memperbaikinya dengan biaya yang tidak terlalu mahal.

Misi yang dilakukan adalah melakukan (divest) bisnis tersebut. Disini perusahaan berada dalam keadaan

“declining” atau mengalami siklus menurun.

131

KUADRAN KATEGORI MISI DAUR HIDUP

I Question Mark (“?”) Build Introduction

II Stars Hold Growth

III Cash Cows Harvest Mature

IV Dogs Divest Decline

HUBUNGAN ANTARA KATEGORI BISNIS, MISI DAN DAUR HIDUP

132

Keuntungan MATRIKS BCG

Pendekatan yang sederhana pemakaiannya dan disajikan secara visual

Memudahkan penentuan portofolio bisnis dari divisi atau anak perusahaan

Merangsang minat dalam perencanaan strategi Mendorong perusahaan untuk melihat formulasi strategi sebagai

hubungan kerjasama antara unit-unit bisnis yang ada didalam perusahaan

Memperlihatkan bagaimana setiap unit perusahaan memiliki penerimaan dan penggunaan dana tunai (cash flow) yang berbeda-beda terhadap pencapaian tujuan perusahaan.

133

• Penggunaan tinggi dan rendah pada growth-share matriks untuk empat kategori, terlalu menyederhanakan masalah bisnis.

• Hubungan antara market share dengan profitabilitas tidak selalu linier karena market share unit bisnis yang rendah masih bisa mendapatkan keuntungan yang besar, bila di pasarkan pada “niche market”

• Tingkat perrumbuhan yang tinggi tidak selalu yang terbaik.

• Matriks ini hanya memperhitungkan pesaing yang kuat dengan mengabaikan pesaing-pesaing kecil yang sedang tumbuh dengan cepat.

• Market growth hanyalah salah satu saja dari faktor daya tarik industri (industry attractiveness) dan market share adalah juga salah satu dari posisi kompettif bisnis.

KELEMAHAN MATRIKS BCG

134

GE Multifactor Portfolio Matrix

Invest/Grow

Selectivity/earnings

Harvest /Divest

Business StrengthsBusiness Strengths

Ind

ust

ry A

ttra

ctiv

enes

sIn

du

stry

Att

ract

i ven

ess

HighHigh

HighHigh

MediumMedium

MediumMedium

LowLow

LowLow

135

GE/McKinsey Matrix & Arah Strategis

Memposisikan berbagai divisi organisasi dalam

9-sel berdasarkan analisa SWOT dengan weighted

scores (dari matriks EFE and IFE). Strategi yang dapat

ditempuh, adalah:Grow and build (divisi pada sel 1, 2 or 4):

market penetration, market development, product development or backward, forward and horizontal integration.

Hold and maintain (divisi pada sel 3, 5, 7): market penetration or product development.

Harvest or divest (divisi pada cells 6, 8, 9): divest, liquidate, or retrench.

136

Earn/ 7Protect(hold)

Dominate/ 3Delay/divest

Earn/ 5 Protect(hold)

Invest/Grow 2Selectively

(build)

Invest/Grow 1Strongly(build)

Invest/Grow 4Selectively

(build)

Harvest/ 6divest

Harvest/ 8divest

Business Strengths In

du

stry

Att

ract

i ven

ess

High

High

Medium

Medium

Low

Low Harvest/ 9 divest

GE Multifactor Portfolio Matrix

137

ADL Portfolio Matrix

Industry Maturity (Attractiveness)

Com

pet

itiv

e P

osit

i on

Embrionic

Dominant

Growing

Favorable

Mature

Weak Divest

Harvest

Hold

Niche

Improve

Selective

Invest

Aging

Tenable

Strong

Consolidate

Maintain

Liquidate

Selective

138

Penggunaan ADL Matrix

ADL Matrix adalah matriks yang dibuat oleh konsultan Arthur D. Little sebagai penyempurnaan dari GE/McKinsey Matrix

Perbedaannya:Pada ADL Matrix di-plotkan posisi daya saing (competitive position) perusahaan terhadap tahap-tahap siklus hidup (life cyclus dari produk, pasar, dan industri.

Penggunaan ketiga matriks dalam proses portofolio bisnis barangkali akan memberikan hasil yang lebih baik.

139

Illustrasi: Analisa Portofolio Internasional

Dominate/Divest/

Joint Venture

Selective Strategies

Invest/Grow

Competitive Strengths

Cou

ntr

y A

t tra

ctiv

enes

s

High

High

Medium

Medium

Low

Low

Harvest/Divest/

Combine/License

Country’s Attractiveness:Market size,

Market rate of growth, Regulasi pemerintah,

Faktor ekonomi,Politik, dll.Product’s

Competitive Strength:

Market share,Product fit,

Contribution margin, Market support, dll.

140

SPACE Matrix


TOWS Matrix

BCG Matrix

IE Matrix



141

• Matriks Internal-External adalah salah satu alat yang dapat digunakan untuk memposisikan perusahaan kedalam matriks yang terdiri atas 9 sel, untuk menyusun strategi perusahaan/grand strategy.

• IE Matrix terdiri atas sumbu X yang menyatakan skor total dari IFE matrix (IFAS) dan sumbu Y yang menyatakan skor total EFE matrix (EFAS)

• Arti posisi internal pada sumbu X dan posisi eksternal pada sumbu Y adalah sebagai berikut :

POSISI INTERNAL POSISI INTERNAL POSISI INTERNALLEMAH RATA-RATA KUAT

POSISI EXTERNAL POSISI EXTERNAL POSISI EXTERNALRENDAH SEDANG TINGGI

POSISI PADA SUMBU X

POSISI PADA SUMBU Y

INTERNAL EXTERNAL (IE) MATRIX

142

POSISI I, II, IV• Posisi perusahaan yang menempati sel I, II & IV dapat digambarkan

sebagai GROW & BUILD. Strategi yang cocok untuk masing-masing posisi sel ini adalah : Intensive (market penetration, market development & product development) atau integration (backward integration, forward integration, horizontal integration)

POSISI III, V, VII• Posisi yang menempati sel III, V & VII dapat digambarkan sebagai

HOLD & MAINTAIN. Strategi yang cocok untuk masing-masing posisi sel ini adalah : Market penetration & product development.

POSISI VI, VIII, IX• Posisi perusahaan yang menempati sel VI, VIII & IX dapat

menggunakan strategi HARVEST or DIVESTITURE

9 SEL POSISI MATRIKS INTERNAL-EKSTERNAL

143

VII

IV

I

VIII

V

II

IX

VI

III

4,0 TINGGI

3,0

RATARATA

2,0

RENDAH

1,0

4,0 KUAT 3,0 RATA-RATA 2,0 LEMAH 1,0

SKOR TOTALEFE/EFAS

SKOR TOTAL IFE/IFAS

9 SEL POSISI MATRIKS INTERNAL-EKSTERNAL

144

IE MATRIX : AMAZON

The IFE Total Weighted Score Strong Average Weak 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99 High I II III 3.0 to 3.99

3 2

1

Medium IV V VI The EFE Total Weighted Score

2.0 to 2.99

Low VII VIII IX 1.0 to 1.99

Segments Revenue EFE IFE 1. U. S. Books, Music-Dom $1,700 million 2.5 1.9 2. Early-Stage Businesses and Other

683 million 3.5 2.5

3. International 381 million 3.6 2.5

145

SPACE Matrix


TOWS Matrix

BCG Matrix

IE Matrix



146

• Popular tool for formulating alternative strategies

• All organizations (or divisions) can be positioned in one of four quadrants

• Based on two evaluative dimensions:– Competitive position– Market growth


147

Quadrant IV

1. Concentric diversification

2. Horizontal diversification

3. Conglomerate diversification

4. Joint ventures

Quadrant III

1. Retrenchment


3. Horizontal diversification

4. Conglomerate diversification

5. Liquidation

Quadrant I

1. Market development

2. Market penetration

3. Product development

4. Forward integration

5. Backward integration

6. Horizontal integration


Quadrant II

1. Market development

2. Market penetration

3. Product development

4. Horizontal integration

5. Divestiture

6. Liquidation

RAPID MARKET GROWTH

SLOW MARKET GROWTH

WEAK COMPETITIVE

POSITION

STRONGCOMPETITIVE

POSITION

148

Quadrant I

• Excellent strategic position• Concentration on current

markets and products• Take risks aggressively when

necessary


149

Quadrant II

•Evaluate present approach seriously

•How to change to improve competitiveness

•Rapid market growth requires intensive strategy


150

Quadrant III

•Compete in slow-growth industries

•Weak competitive position•Drastic changes quickly•Cost and asset reduction

indicated (retrenchment)


151

Quadrant IV

• Strong competitive position• Slow-growth industry• Diversification indicated to more

promising growth areas


152

Grand Strategy Matrix : Amazon

RAPID MARKET

GROWTH

Quadrant II Quadrant I

Amazon

WEAK STRONG

COMPETITIVE COMPETITIVE

POSITION POSITION

Quadrant III Quadrant IV

SLOW MARKET GROWTH

153


(QSPM)

Stage 3:The Decision Stage


154


• Only technique designed to determine the relative attractiveness of feasible alternative actions

QSPM

155


• Tool for objective evaluation of alternative strategies

• Based on identified external and internal crucial success factors

• Requires good intuitive judgment

QSPM

156


• List the firm’s key external opportunities & threats; list the firm’s key internal strengths and weaknesses

• Assign weights to each external and internal critical success factor

QSPM

157


• Examine the Stage 2 (matching) matrices and identify alternative strategies that the organization should consider implementing

• Determine the Attractiveness Scores (AS)

QSPM

158


• Compute the total Attractiveness Scores

• Compute the Sum Total Attractiveness Score

QSPM

159

Key Internal FactorsManagementMarketingFinance/AccountingProduction/OperationsResearch and DevelopmentComputer Information Systems

Strategy 3Strategy 2

Strategy 1

WeightKey External FactorsEconomyPolitical/Legal/GovernmentalSocial/Cultural/Demographic/EnvironmentalTechnologicalCompetitive

Strategic Alternatives

QSPM

160

QSPM Strategic Alternatives

Key Internal Factors Weight

Enter into strategic agreements

w/physical retailers

Expand European presence through strategic alliances

Strengths AS TAS AS TAS Customer satisfaction 0.10 4 0.40 2 0.20 Copyright to One-click online shopping 0.08 - - - - Humanitarian efforts 0.03 - - - - Strong Research & Development 0.09 - - - - Exclusive agreements with Internet sites (Associates) 0.01 2 0.02 4 0.04 Ability to track customized interests through customized home page

0.02 - - - -

Formation of strategic alliances 0.11 4 0.44 2 0.22 Agreement with AOL 0.09 3 0.27 2 0.18 Weaknesses Accumulated deficits/Anticipates further losses 0.11 1 0.11 2 0.22 Financial position 0.07 3 0.21 2 0.14 Slowing growth, core business-U.S. Books, & Music Video

0.08 2 0.16 4 0.32

Lawsuit with Barnes & Noble over patent to 1 click method

0.03 - - - -

Class action suits filed by stockholders 0.04 4 0.16 3 0.12 Does not have a mission statement 0.05 - - - - SUBTOTAL 1.00 1.77 1.44

161

Limitations:

• Requires intuitive judgments and educated assumptions

• Only as good as the prerequisite inputs

QSPM

162

Positives:

• Sets of strategies examined simultaneously or sequentially

• Requires the integration of pertinent external and internal factors in the decision-making process

QSPM

163

Culture:

• The set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm

Cultural Aspects of Strategy Choice

164

Culture:

• Successful strategies depend on degree of support from a firm’s culture

Cultural Aspects of Strategy Choice

165

Politics in organizations:

• Management hierarchy• Career aspirations• Allocation of scarce resources

Politics of Strategy Choice

166

Political tactics for strategists:

• Equifinality• Satisfying• Generalization• Focus on Higher-Order Issues• Provide Political Access on

Important Issues

Politics of Strategy Choice

167

Duties and Responsibilities:

1. Control and oversight over management

2. Adherence to legal prescriptions3. Consideration of stakeholder

interests4. Advancement of stockholders’

rights

Role of A Board of Directors

Discussion

Nike vs Reebok

Kijang vs Kuda

Nokia vs Sony Ericson

What type’s of strategies?

Discussion

Pepsi vs Coke

Mc Donald vs KFC

Who will be winner?

This is the end of the PRESENTATION

Ir. Erlinda Muslim, MEENip. 19601028 198811 2001

Strategy Analysis and Choice

strategy analysis

Documents

Transcript of strategy analysis