PPT 4 Flashcards
What is an Opportunity Matrix?
A 2x2 matrix used to assess opportunities based on two dimensions: attractiveness and probability of success, guiding firms in deciding whether to pursue, monitor, or ignore opportunities.
What strategy is recommended for opportunities that are high in attractiveness and high in probability of success?
Pursue Aggressively (Cell I).
What strategy is recommended for opportunities that are low in attractiveness but high in probability of success?
Monitor closely (Cell II).
What are some examples of business opportunities?
New market segments, new technologies, product line extensions, internet marketing, forward/backward integration, and alliances/joint ventures.
What is the recommended strategy for threats that are high in seriousness and high in probability of occurrence?
Prepare contingency plans (Cell I).
What is Environmental Scanning?
The process of scanning macro (political, legal, social, cultural, etc.) and micro (customers, competitors, suppliers, etc.) environmental factors to identify opportunities and threats.
What does Internal Analysis identify?
Internal Analysis helps identify the firm’s strengths and weaknesses.
What is Benchmarking?
Comparing the firm’s business processes and performance metrics to industry best practices to identify areas for improvement.
Give examples of strengths in a firm.
Low-cost manufacturing, technological know-how, strong distribution network, a motivated workforce, brand reputation, expertise in customer service, intellectual capital, and patents.
Give examples of weaknesses in a firm.
No clear strategic direction, obsolete facilities, high debt, high unit costs, weak brand image, and internal operating problems.
What is a Threats Matrix?
A 2x2 matrix used to assess threats based on their seriousness and probability of occurrence, guiding firms in deciding whether to prepare contingency plans, monitor, or ignore.
What is the business classification matrix?
A matrix that classifies businesses as Speculative, Ideal, Troubled, or Mature based on risks and returns.
