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Chapter 6 Strategy Analysis & Choice

Strategic Management: Concepts & Cases 12th Edition Fred David

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -1

Stage 2: The Matching Stage


SWOT Matrix
Strengths Weaknesses Opportunities Threats

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -2

SWOT Matrix
Four Types of Strategies
Strengths-Opportunities (SO) Weaknesses-Opportunities (WO) Strengths-Threats (ST) Weaknesses-Threats (WT)

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -3

SO Strategies

Strengths Weaknesses Opportunities Threats SWOT

SO Strategies

Use a firms internal strengths to take advantage of external opportunities

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -4

WO Strategies

Strengths Weaknesses Opportunities Threats SWOT

WO Strategies

Improving internal weaknesses by taking advantage of external opportunities

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -5

ST Strategies

Strengths Weaknesses Opportunities Threats SWOT

ST Strategies

Use a firms strengths to avoid or reduce the impact of external threats

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -6

WT Strategies
Defensive tactics aimed at reducing internal weaknesses & avoiding environmental threats

Strengths Weaknesses Opportunities Threats SWOT

WT Strategies

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -7

SWOT Matrix
Developing the SWOT
List firms key internal List firms key internal List firms key external List firms key external
Strengths Weaknesses Opportunities Threats

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -8

SWOT Matrix
Strengths S
List Strengths

Weaknesses W
List Weaknesses

Opportunities O
List Opportunities

SO Strategies
Use strengths to take advantage of opportunities

WO Strategies
Overcoming weaknesses by taking advantage of opportunities

Threats T
List Threats

ST Strategies
Use strengths to avoid threats

WT Strategies
Minimize weaknesses and avoid threats

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -9

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

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -10