Strategic Marketing Decision

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Strategic Marketing Decision class
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The TOWS Matrix

• Matching the environmental threats and
  opportunities with the companys weakness and
  especially its strengths.

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The TOWS Matrix A Conceptual Model

• Preparation of the enterprise profile
• Step 1 Deals with some basic questions
  pertaining to the internal and external
  environments
• Step 2 and Step3 concern primarily the present
  and future situation in respect to the external
  environment

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The TOWS Matrix A Conceptual Model

• Preparation of the enterprise profile
• Step 4 the audit of strengths and weaknesses,
  focuses on the internal resources of the
  enterprise.
• Step 5 and Step 6 are the activities necessary
  to develop strategies, tactics and more specific
  actions in order to achieve the enterprises
  purpose and overall objectives.

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The TOWS Matrix A Conceptual Model

• Preparation of the enterprise profile
• Step 7 since an organization operates in a
  dynamic environment, contingency plans must be
  prepared.

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There are different ways of analyzing the
situation

• Identification of important problems
• Determining the purpose and objectives of the
  firm
• Focus on opportunities

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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

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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

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The External Environment

• Threats and Opportunities categorized
• Economic
• Social
• Political
• Demographic
• Product
• Service
• Technology
• Markets
• Competitions

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The Internal Environment

• Assessed for Strengths (S) and Weaknesses (W)
• Management
• Organization
• Operations
• Finance
• Marketing

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SWOT Matrix
Four Types of Strategies

• Strengths-Opportunities (SO)
• Weaknesses-Opportunities (WO)
• Strengths-Threats (ST)
• Weaknesses-Threats (WT)

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SO Strategies
Use a firmsinternal strengthsto take
advantageof external opportunities
StrengthsWeaknessesOpportunities ThreatsSWOT
SOStrategies
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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.

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WO Strategies
Improving internalweaknesses bytaking
advantageof externalopportunities
StrengthsWeaknessesOpportunities ThreatsSWOT
WOStrategies
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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.

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ST Strategies
Use a firms strengthsto avoid orreduce the
impactof externalthreats
StrengthsWeaknessesOpportunities ThreatsSWOT
STStrategies
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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

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WT Strategies
Defensive tacticsaimed at reducinginternal
weaknesses avoidingenvironmentalthreats
StrengthsWeaknessesOpportunities ThreatsSWOT
WTStrategies
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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.

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SWOT Matrix
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Matching Key Factors to Formulate Alternative
Strategies
Key Internal Factor
Key External Factor
Resultant Strategy
(SO) Strategy
(WO) Strategy
(ST) Strategy
(WT) Strategy
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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

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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

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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

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Grand Strategy Matrix

• Tool for formulating alternative strategies
• Based on two dimensions
• Competitive position
• Market growth

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RAPID MARKET GROWTH

• Quadrant I
• Market development
• Market penetration
• Product development
• Forward integration
• Backward integration
• Horizontal integration
• Concentric diversification

• Quadrant II
• Market development
• Market penetration
• Product development
• Horizontal integration
• Divestiture
• Liquidation

WEAK COMPETITIVE POSITION
STRONG COMPETITIVE POSITION

• Quadrant IV
• Concentric diversification
• Horizontal diversification
• Conglomerate diversification
• Joint ventures

• Quadrant III
• Retrenchment
• Concentric diversification
• Horizontal diversification
• Conglomerate diversification
• Liquidation

SLOW MARKET GROWTH
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Grand Strategy Matrix
Quadrant I

• Excellent strategic position
• Concentration on current markets/products
• Take risks aggressively when necessary

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Grand Strategy Matrix
Quadrant II

• Evaluate present approach
• How to improve competitiveness
• Rapid market growth requires intensive strategy

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Grand Strategy Matrix
Quadrant III

• Compete in slow-growth industries
• Weak competitive position
• Drastic changes quickly
• Cost asset reduction (retrenchment)

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Grand Strategy Matrix
Quadrant IV

• Strong competitive position
• Slow-growth industry
• Diversification to more promising growth areas