Strategic analysis Flashcards
1
Q
Benefits of SWOT
A
- SWOT helps managers assess the most likely successful future strategies and the constraints on them.
- Effective SWOT analysis may result in clearer and more relevant business objectives, better strategic decisions and less risk as the business will be better prepared for the future
- SWOT analysis will improve business planning and decision making by using the strengths to overcome future threats and the opportunities to overcome present weaknesses. Therefore reducing risk.
2
Q
Evaluations of SWOT
A
- SWOT should be used as a management guide for future strategies not as a specific guide for future action.
- Using only SWOT may be insufficient to identify appropriate strategies.Other strategic analysis and strategic choice techniques are also important.
- Depends on:
How up to date the SWOT analysis is
Subjectivity of individual conducting the SWOT analysis
3
Q
PEST Analysis
A
Helps identify political or environmental factors that may need to be overcome or use for a competitive advantage.
4
Q
Evaluation of PEST
A
- Needs to be constantly updated and reviewed, especially in a dynamic environment
- For multinational businesses, or for a business considering foreign expansion for the first time, it will be important to undertake PEST analysis for each country in which it operates
5
Q
Benefits of PEST
A
- PEST analysis is able to identify potential issues in markets that a business may need to overcome. Thus leading to better decision making.
6
Q
Blue ocean strategy
A
- The basis of this approach to developing business strategy is to stop competing and start creating. It means finding and developing uncontested markets.
- Create and exploit new demand
- Product differentiation and low cost
- High value to customer but low cost to business
7
Q
Red ocean strategy
A
- Highly contested markets
- “Out-compete” the competition
- Exploit existing demand
8
Q
Advantages of blue ocean strategy
A
- Allows a business to think of new ideas. Useful when entering new markets.
- Useful when developing an innovative marketing strategy
9
Q
Scenario planning
A
- Process of identifying possible scenarios and discuss what strategy the business could adopt if each scenario actually occurred.
10
Q
Benefits of scenario planning
A
- Forces managers to consider the main risks and uncertainties that affect their business.
- Makes managers adopt a flexible approach as different scenarios will require different strategies.
11
Q
Limitations of scenario planning
A
- It will be less effective if only short-term risks are considered. Looking far into the future can lead to more creative strategies.
12
Q
Porters Five Forces Analysis
A
- Help develop an understanding of forces in each market.
13
Q
Benefits of Porters Five Forces Analysis
A
- Helps businesses identify whether or not to enter the market due to profitability or competition
- Helps develop strategies to improve competitive position such as product differentiation and market segmentation.
14
Q
Evaluation of Porters Five Forces
A
- It is static analysis that examines an industry at just one moment in time. This is especially bad because businesses that operate in dynamic environment analysis may quickly become outdated.
- Porter on its own is not sufficient enough to develop strategy.
- The model can become very complex when trying to use it to analyse many modern industries with multiple product groups and different market segments within the same industry.
15
Q
Core competencies
A
- Core competencies are those capabilities that are critical to a business achieving competitive advantage.
