Chapter 7

Question 1

What are the best ways to take stock of the present position of a company

Answer 1

Analyse the businesses strengths, weaknesses, opportunities and threats

Question 2

What is the model used for corporate appraisal

How can we categorize this model

Answer 2

SWOT diagram

Internal: strengths and weaknesses

External: opportunities and threats

We must try to match the strengths with opportunities, covert weaknesses into strengths, and convert threats into opportunities

Question 3

How can SWOT analysis be developed further

Answer 3

Weirichs TOWs matrix

Strengths, weaknesses, opportunities, threats

SO - use strengths to capitalise on opportunities - short term

ST - use strengths to counter threats - medium term

WO- address weaknesses and turn into opportunity

WT - avoid threats and minimize weaknesses

Question 4

In which 3 ways can a gap be closed in gap analysis

Answer 4

1. Efficiency strategies : reduce costs, economize on assets used
2. Expansion strategies: develop new products and/ or new markets
3. Diversification strategies: enter new industries with growth/ profit opportunities

Question 5

What is the model used for direction of growth of a company

What are the two variables

What are each category

Answer 5

Product market growth matrix aka Ansoff

In terms of markets and in terms of products (new or existing)

EM EP- market penetration - increase market share

EM NP - product development

NM EP - market development - eg online, new country, new demographic

NM NP - diversification - can be related (vertical/ horizontal integration) or unrelated (conglomerate)

Question 6

What are the different ways proposed strategies can be evaluated

Answer 6

Considering the benefits and risks
Considering knock on strategic and financial considerations
Evaluating quantitative and qualitative issues
Considering viewpoints of different stakeholder groups

Question 7

Which model can be used to evaluate strategic options

Break it down

Answer 7

The SFA model

Suitability - how does strat fit with current position or outlook

Feasibility - is strat realistic given resources, competences and tech

Acceptability - Will stakeholders support the strat

Question 8

How can acceptability be evaluated in the SFA model

Answer 8

3 rs

Impact or Return faced by stakeholder

Risk shareholder is exposed to

Shareholders likely Response