Swot analysis nd bcg matrix
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The document discusses Management by Objectives (MBO). It describes MBO as having three steps: 1) set individual objectives and plans, 2) give feedback and evaluate performance, 3) reward according to performance. It also lists two common sources of MBO failure: lack of top management commitment and employees' negative beliefs about management's sincerity in including them in decision making. The document provides information on various strategic management frameworks including the GE 9-cell matrix, life-cycle portfolio matrix, and differences between strategy formulation and implementation.
Swot analysis nd bcg matrix
- 1. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–1 Exhibit 5–6
- 2. Management by Objectives (MBO) Management by Objectives Step 1. Set individual objectives and plans. Step 2. Give feedback and evaluate performance. Step 3. Reward according to performance. Sources of MBO Failures Lack of top management commitment and follow- through on MBO. Employees’ negative beliefs about management’s sincerity in its efforts to include them in the decision-making process. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–2
- 3. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–3 Exhibit 5–10
- 4. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–4
- 5. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–5
- 6. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–6
- 7. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–7
- 8. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–8 Dimensions: Long-term industry attractiveness Business strength/Competitive position SBUs plotted as circles with area proportional to the size of the industry, & a sector within each circle representing the SBUs market share in its industry
- 9. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–9 Strong Average Weak H M L GE 9-Cell MatrixGE 9-Cell Matrix Business Strength/Competitive Position Long-Term Industry Attractiveness
- 10. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–10 SBUs in 3 upper left cells get top investment priority SBUs in 3 middle diagonal cells merit steady investment to maintain & protect their industry positions SBUs in 3 lower right cells are candidates for harvesting or divestiture
- 11. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–11 Advantages of G.E. 9-Cell MatrixAdvantages of G.E. 9-Cell Matrix Allows for intermediate rankings between high & low and between strong & weak Incorporates a wider variety of strategically relevant variables than the BCG matrix Stresses the channeling of corporate resources to SBUs with the greatest potential for competitive advantage & superior performance
- 12. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–12 Weaknesses of G.E. 9-Cell MatrixWeaknesses of G.E. 9-Cell Matrix Provides no guidance on specifics of SBU strategy Only suggests general strategic posture -- aggressive expansion, fortify-&-defend, or harvest/divest Doesn’t address the issue of strategic coordination across related SBUs Tends to obscure SBUs about to “take off” or “crash & burn” -- static, not dynamic
- 13. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–13 Life-Cycle Portfolio MatrixLife-Cycle Portfolio Matrix Dimensions: Industry stage in the life cycle SBU’s competitive position Area of each SBU circle is proportional to size of the industry; sectors denote SBU’s market share in its industry This matrix displays the distribution of the firm’s businesses across the various stages of industry evolution
- 14. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–14 Strong Average Weak SBUs Competitive Position Life-Cycle Portfolio MatrixLife-Cycle Portfolio Matrix Introduction Growth Early Maturity Late Maturity Decline Life- Cycle Stages
- 15. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–15 15 Strategy Formulation vs. Implementation • Strategy Formulation = stage of strategic management that involves planning and decision making that lead to the establishment of the organization’s goals and of a specific strategic plan • Strategy Implementation = stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes Experiential Exercise: Developing Strategy for a Small Business
- 16. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–16 16 Portfolio Strategy • Mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage BCG Matrix
- 17. Copyright © 2006 Thomson Business and Economics. All rights reserved. 5–17 17 Three Levels of Strategy in Organizations Corporate-Level Strategy: What business are we in? Corporation Business-Level Strategy: How do we compete? Textiles Unit Chemicals Unit Auto Parts Unit Functional-Level Strategy: How do we support the business-level strategy? Finance R&D Manufacturing Marketing