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PHILIPPINE CHRISTIAN UNIVERSITY

GRADUATE SCHOOL
STRATEGIC MANAGEMENT

PART 2 - CASE ANALYSIS FORMAT FOR STRATEGIC MANAGEMENT


I.

CASE BACKGROUND

Give a summary of the salient case facts that indicate the firms mission, past and current
objectives, strategies, as well as its historical growth in terms of financial performance and
condition. Discuss the current issues and concerns of the companys top management.
II.

ENVIRONMENTAL ANALYSIS

A. External Environment Analysis


1. General Environment
Opportunities

Threats

Socio-Cultural Env
Political/Legal Env
Technological Env
Economic Env
Opportunities are those favorable conditions that could affect the strategic decisions of the
company.
Threats are those unwanted conditions that could affect the business
environment.

2. Industry Environment
Industry Environment
Rivalry
Bargaining Power of Consumer
Bargaining Power of Customer
New Entrants & Entry Barriers
Threats from Product Substitution

Opportunities

Threats

Identify the opportunities and threats in the industry where the company operates and
competes
and those affecting the competitive forces.

3. External Factors Evaluation Matrix (EFE)


Opportunities:

Weight

Rating

Weighted Score

Threats:
Total Weighted Score
Conclusion:
Evaluate the general environment and industry environments using the EFE. A Total Weighted Score of
2.5 and above means favorable opportunities for the company. Otherwise, threat outweighs
opportunities.

B. Internal Environment Analysis


Internal environment are those functional areas where the company operates. Companys
position is evaluated with their strengths and weaknesses.
Strengths are those
capabilities that enhance the competitive position and weaknesses
are the unwanted
conditions that weaken its competitive position. Assess the strengths and weaknesses
using the Internal Factors Evaluation Matrix (IFE).

Functional Areas
Finance
Marketing
Org & Mgt
Prod
MIS

Strengths

Weaknesses

Internal Factor Evaluation Matrix (IFE)


Strengths:

Weight

Rating

Weighted Score

Weaknesses:
Total Weighted Score
Conclusion:
C. Competitive Position
Competitive Positions:
Capitalization
Employees
Advertising
Market Reach
Gross Revenue
Net Income

Company A

Company B

Company C

Provide table comparison and scores among major competitors.


D. Competitive Profile Matrix (CPM)
Critical Success Factors

Capitalization
Employees
Brand reputation
Successful new introductions
Market Share
Total
Conclusion:

Company A
Weight Rating Score

Company B
Rating Score

Company C
Rating Score

E. Assumptions
1.
2.
3.
4.
III.

General Environment Stability


Industry Growth Prospects
Financial Strength and competitive position
Show relevant ratios
PROBLEM STATEMENT

1. Support information why this is a problem


2. Time Context
3. View Point
IV.

ALTERNATIVE COURSES OF ACTIONS


1. TOWS / SWOT Matrix
Strength

Weaknesses

Opportunities
Threats
2. IFE/EFE Matrix

EFE

High (3.0 -4.0)


Medium(2.0
2.0)
Low (1.0
1.99)

3. SPACE Matrix

Strong (3.0
4.0)
I
IV
VII

IFE
Average (2.0
2.9)
II
V
VIII

Weak (1.0 1.99)


III
VI
IX

4. GRAND Strategy Matrix


RMG
Q1

Q2

WCP

SCP
Q3

Q4
SMG

5. SUMMARY OF STRATEGY
STRATEGY
OPTIONS

TOWS

IFE/EFE

SPACE

GSM

TOTAL

6. Quantitative Strategic Planning Matrix (QSPM) - The Best ACA


Key Factors

Opportunities
1.More people are dining out, and
food producers are devoting more
attention to products designed for
restaurants, vending machines, and
other foodservice providers.
2.Worldwide, demand is also on the
rise for packaged type of food as
more people adopt a lifestyle that
includes less time for the
preparation of food.
3. World population is growing at
2.6%
4. Expiration and renegotiation of
commodity prices in mid-2008 will
expect to lower the production cost
of baked products relying on wheat,
eggs and natural gas.
5. Enhance waters containing
vitamins or supplements are
gaining popularity
Threats
1.Public health concern of chemical
and bacterial contamination.
2. Rising cost of petroleum affects
cost of production and logistics
3. Rising rate of obesity. People are
more health conscious
4. U.S. dollar gains making export
less competitive
5. ConAgra Foods primary
competitor domestically (North
America) together with other
domestic stores such as Heinz
Company and Sara Lee.
Strengths
1.Highly leveraged with 84% debtto-equity ratio for 2008 which
means making profit out of others
money. Financially capable for
acquisition.
2. Early user of all communications
media (outdoor billboards, journals,

WEIG
HT

MARK
ET
PENE
TRATI
ON
Rati
ng

INTEGRATI
ON
STRATEGIE
S
Weig Rati
ht
ng

MARKET
DEVELOPMEN
T

Weigh Rati
t
ng

Weig
ht

0.2

0.8

0.2

0.6

0.2
0.1

4
2

0.8
0.2

2
3

0.4
0.3

3
2

0.6
0.2

0.1

0.2

0.2

0.2

0.1

0.3

0.1

0.2

0.1

0.2

0.2

0.2

0.1

0.1

0.1

0.2

0.05

0.1

0.1

0.1

0.025

0.02
5

0.1

0.025

0.025

0.05

0.05

0.07
5
0.2

0.4

0.8

0.4

0.05

0.15

0.05

0.15

magazines, radio)
Good product recall
3.Effective launch of several
0.05
websites for advertising and
publicity (Oreo Double Stuf Racing
League (DSRL)eague (DSRL)
4. Food safety program has been
0.2
adopted as issues of chemical as
issues of chemical and bacterial
contamination and new food-borne
0.2
pathogens remain a public health
concern.
5. . Actively researching consumers
eating habits and preferences at
home and at Restaurants. Good
marketing research program.
Weaknesses
1.Weak liquidity ratios of 1.03x and
0.63x current ratio for 2008 and
2007 respectively also 0.54x and
0.34x acid-test ratio for 2008 and
2009 respectively.
2. Negative revenue growth rate for
US Cheese (9%), Canada & North
American Foodservice (10%) and
European Union (17%)
3. Divisions are determined by
geographical area and not by
product
4.Geographic concentration on
North America
5.Kraft Foods has low market share
but enjoys high margin in grocery
business.
Total

V.

0.2

0.05

0.15

0.4

0.4

0.4

0.6

0.4

0.6

0.1

0.1

0.2

0.1

0.05

0.05

0.05

0.05

0.05
0.04

3
3

0.15
0.12

2
2

0.1
0.08

4
4

0.2
0.16

0.06

0.24

0.12

0.12

4.77
35

4.05

4.525

RECOMMENDATION: ACA No . 1 Market Penetration. Expand


geographical concentration to the various other markets especially the
developing markets
1. Actions Plans

Function
al areas
Marketing

Objective

To expand the geographical


concentration to other
markets especially the
developing markets

Strategy

1. Apply marketing research as to what


products are more sellable in the
various areas in the developing world.
2. Create an extensive Brand
management techniques to allow

Tim
e
Fra
me
2
mos.
6
mos.

Budg
et

Productio
n

To penetrate new markets by


establishing new plants and

Organizati
on

Finance

Added markets will help earn


more profits to meet its debt
management

HRD

Familiarize companys
standards in a different
cultural environment.

Informatio To help manage key areas of


n System risk and reduce its impact and
provide an informed view of
information system risk across
the organization.

VI.
1.
2.
3.
4.

market penetration in regard to pricing


and affordability
3. Introduce locally made ads created
by local advertising firms.
1. Establish a factory in Southeast Asia,
India and in other continents especially
in developing areas. This will further
improve profitability by using
economies of scale and easier product
distribution.
2. Increase budget with regard to
developing healthy processed foods
that can be sold to health conscious
individuals.
3. Decentralization of production plants
including personnel.
4. Technological innovations, advances
in computerization and quality
management characterize production
capabilities and processes.
1. Create local production
organizational .structure in the
different factories that will be
established in the different areas.
2. Employ local personnel for different
positions in the plants
3. Determine if a friendly trade relation
with a host country can be established.
1.Maintain and monitor profitability and
leverage of the company vis-a-vis the
expansion of markets
2.
1.Establish local training as to the
companys standards in production,
finance ,marketing and administrative
functions.
1.The company must provide
automated risk-management tools that
can be implemented in public and
private sectors.
2. The company must be able to
measure and manage the risk posed by
the entire range of assets, entities, due
to market penetration

FINANCIAL PROJECTIONS (5 Years)


Projected Income Statement
Projected Balance Sheet
Projected Statement of Cash Flow
Projected Ratio Analysis

3
mos.
2 yrs

3
mos.
2
yrs.
1 yr.

2 yrs

2
yrs.
3
mos.
1
mo.
2 yrs

1
mo.
1
mo.

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