STA 5301

STAGE 2: MATCHING STAGE Proses Menganalisis Arah Pilihan Stratejik

STRATEGIC MANAGEMENT
TAHAP 2: MENGANALISIS ARAH PILIHAN STRATEJIK
(1/2)
• Proses: Mempas-paskan dan Menetapkan Arah Pilihan Stratejik
MENGANALISIS ARAH PILIHAN STRATEJIK • A manageable set of the most attractive alternative strategies
• focuses on generating feasible alternative strategies by aligning
DAN MEMUTUSKAN STRATEGI BARU must be developed by applying the tools that are proposed in
key external and internal factors
• techniques include: “The Strategy-Formulation Analytical Framework”.
1) the Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, • The advantages, disadvantages, trade-offs, costs, and benefits
(Textbook: David, F.R. & F.R. David. 2017. Strategic Management: A Competitive Advantage Approach, Concepts and Cases.
16th edition. Chapter 8. Pearson Global Edition) 2) the Strategic Position and Action Evaluation (SPACE) Matrix, of these strategies should be determined.
Faculty Member: Prof. Sammy Kristamuljana, PhD 3) the Boston Consulting Group (BCG) Matrix, • Identifying and evaluating alternative strategies should involve
([email protected]) 4) the Internal-External (IE) Matrix, and many of the managers and employees who earlier assembled
5) the Grand Strategy Matrix the organizational vision and mission statements, performed the
external audit, and conducted the internal audit.
______________________________________________________________________________________________________
This material is developed exclusively for class lecture at
The Undergraduate Program of Accounting and Finance – School of Business and Economics, Universitas Prasetiya Mulya
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2024

Proses Menganalisis Arah Pilihan Stratejik STAGE 2: MATCHING STAGE objectives

Stage 2: The Matching Stage approach (1/2)
(2/2) TAHAP 2: Tujuan MENGANALISIS ARAH PILIHAN STRATEJIK

• Alternative strategies proposed by participants should be • The Strengths-Weaknesses-Opportunities-Threats • SO Strategies • WO Strategies

(SWOT) Matrix helps managers develop four types of • use a firm's internal strengths to • aim at improving internal
considered and discussed in a series of meetings. take advantage of external weaknesses by taking
strategies:
• Proposed strategies should be listed in writing. • SO (strengths-opportunities) Strategies
opportunities advantage of external
opportunities
• When all feasible strategies identified by participants are • WO (weaknesses-opportunities) Strategies
given and understood, the strategies should be ranked in • ST (strengths-threats) Strategies
order of attractiveness. • WT (weaknesses-threats) Strategies

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Stage 2: The Matching Stage approach (2/2) The process of making SWOT Matrix (1/2) The process of making SWOT Matrix (2/2)
• ST Strategies • WT Strategies 1. List the firm's key external opportunities. 6. Match internal weaknesses with external
• use a firm's strengths to avoid • defensive tactics directed at 2. List the firm's key external threats. opportunities, and record the resultant WO strategies.
or reduce the impact of external reducing internal weakness and 7. Match internal strengths with external threats, and record the
threats avoiding external threats 3. List the firm's key internal strengths.
resultant ST strategies.
4. List the firm's key internal weaknesses. 8. Match internal weaknesses with external
5. Match internal strengths with external threats, and record the resultant WT strategies.
opportunities, and record the resultant SO strategies.

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The Example of Matching Key External and Internal
Factors to Formulate Alternative Strategies What is The SPACE Matrix (1/2)
• Strategic Position and Action Evaluation (SPACE) Matrix
• four-quadrant framework indicates whether aggressive, conservative,
defensive, or competitive strategies are most appropriate for a given
organization

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The SPACE Matrix SPACE Matrix Axes

What is The SPACE Matrix (2/2)
• Two internal dimensions (financial position [FP] and
competitive position [CP])
• Two external dimensions (stability position [SP] and industry
position [IP])
• Most important determinants of an organization's overall
strategic position

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Steps to Develop a SPACE Matrix Steps to Develop a SPACE Matrix Steps to Develop a SPACE Matrix
1. Select a set of variables to define financial position (FP), 3. Compute an average score for FP, CP, IP, 6. Draw a directional vector from the origin of the SPACE Matrix
competitive position (CP), stability position (SP), and industry and SP. through the new
position (IP). 4. Plot the average scores for FP, IP, SP, and intersection point.
2. Assign a numerical value ranging from +1 CP on the appropriate axis. ► This vector reveals the type of strategies recommended for the
5. Add the two scores on the x-axis and plot organization: aggressive, competitive, defensive, or conservative
(worst) to +7 (best) to each of the variables that make up the the resultant point on X. Add the two scores
FP and IP dimensions. on the y-axis and plot the resultant point on
Assign a numerical value ranging from –1 Y. Plot the intersection of the new xy point.
(best) to –7 (worst) to each of the variables that make up the
SP and CP dimensions.

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Example Strategy Profiles Example Strategy Profiles

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The Strategy-Formulation The Boston Consulting Group (BCG)

Analytical Framework Matrix
• BCG Matrix
• graphically portrays differences among divisions in terms of relative
market share position and industry growth rate
• allows a multidivisional organization to manage its portfolio of
businesses by examining the relative market share position and the
industry growth rate of each division relative to all other divisions in the
organization

• BCG Matrix does not fit to be used to analyze a bank that

consists of a single business unit

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The BCG Matrix The Internal-External (IE) Matrix The Internal-External (IE) Matrix
• The IE Matrix is based on two key dimensions: the IFE total
weighted scores on the x-axis and the EFE total weighted
scores on the y-axis
• Three Major Regions
• Grow and build
• Hold and maintain
• Harvest or divest
• The IE Matrix does not fit to be used to analyze a bank that
consists of a single business unit

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 The IE Matrix
The Grand Strategy Matrix The Grand Strategy Matrix
• Grand Strategy Matrix
• based on two evaluative dimensions: competitive position and market
(industry) growth

• The Grand Strategy Matrix does not fit to be used to analyze a

bank that consists of a single business unit

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The Grand Strategy Matrix The Grand Strategy Matrix

STAGE 3: DECISION STAGE
• Quadrant I • Quadrant III TAHAP 3: MEMUTUSKAN STRATEGI BARU
• continued concentration on current markets (market penetration • must make some drastic changes quickly to avoid further decline
and market development) and products (product development) is and possible liquidation • involves the Quantitative Strategic Planning Matrix (QSPM)
an appropriate strategy • Extensive cost and asset reduction (retrenchment) should be • reveals the relative attractiveness of alternative strategies and
• Quadrant II pursued first thus provides objective basis for selecting specific strategies
• unable to compete effectively • Quadrant IV
• need to determine why the firm's current approach is ineffective • have characteristically high cash-flow levels and limited internal
and how the company can best change to improve its growth needs and often can pursue related or unrelated
competitiveness diversification successfully

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The Objective of Quantitative Strategic The Quantitative Strategic Planning

Matrix (QSPM) Steps in a QSPM
Planning Matrix (QSPM)
1. Make a list of the firm's key external opportunities
• Quantitative Strategic Planning Matrix (QSPM) and threats and internal strengths and
• objectively indicates which alternative strategies are best weaknesses in the left column.
• uses input from Stage 1 analyses and matching results from Stage 2
analyses to decide objectively among alternative strategies 2. Assign weights to each key external and internal
factor.

3. Examine the Stage 2 (matching) matrices, and

identify alternative strategies that the organization
should consider implementing.

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 Steps in a QSPM (cont.) Positive Features of the QSPM Limitations of the QSPM
• Sets of strategies can be examined sequentially or • Always requires informed judgments
4. Determine the Attractiveness Scores (AS). simultaneously • It is only as good as the prerequisite information and matching
5. Compute the Total Attractiveness Scores. • Requires strategists to integrate pertinent external and internal analyses on which it is based
factors into the decision process
6. Compute the Sum Total Attractiveness
• Can be adapted for use by small and large for-profit and
Score. nonprofit organizations

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A QSPM for a Retail A QSPM for a Retail

Computer Store Computer Store (cont.)

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