Stage One

Where are We Now?

Strengths and Weaknesses Analysis
Performance Importance

Strengths Fundamental Marginal Neutral Marginal Fundamental High Medium Low

strength strength weakness weakness

Marketing
Factors
Financial
Factors
Manufacturing
Factors
Organizational
Factors
 MARKERTING FACTORS

1-RELATIVE MARKET SHARE 9-PRODUCT QUALITY 17-AFTER SALES SERVICES

2-REPUTATION 10-PROGRAMME OF PRODUCT 18-MANUFACTURING COSTS

MODIFICATION

3-PREVIOUS PERFORMANCE 11-NEW PRODUCT PROGRAM 19-MANUFACTURING FLEXIBILITY

4-COMPETITIVE STANCE 12-DISTRIBUTION COSTS 20-RAW MATERIAL ADVANTAGE

5-CUSTOMER BASE 13-DEALER NETWORK 21-PRICING

6-CUSTOMER LOYALTY 14-DEALER LOYALTY 22-ADVERTISING

7-BREADTH OF PRODUCT RANGE 15-GEOGRAPHICAL COVERAGE 23-UNIQUE SELLING PROPOSITIONS

8-DEPTH OF PRODUCT RANGE 16-SALES FORCE 24-STRUCTURE OF COMPETITION

 Financial Factors

1. Cost of capital
2. Availability of capital
3. Profitability
4. Financial stability
5. Margins
 Manufacturing factors

1. Production facilities
2. Economies of scales
3. Flexibility
4. Workforce
5. Technical skill
6. Delivery capabilities
7. Supplier sourcing flexibility
 Organizational factors

1. Culture
2. Leadership
3. Managerial capabilities
4. Workforce
5. Flexibility
6. Adaptability
 The TOWS Matrix
Internal Organizational Organizational
elements strengths weaknesses
External
elements
Strategic options

Environmental SO: Strengths can be WO : The strategies

opportunities (and used to capitalize or developed need to
risks) build upon existing or overcome
emerging organizational
opportunities weaknesses if
existing or emerging
opportunities are to
be exploited
Environmental ST : Strengths in the WT : The strategies
threats organization can be pursued must
used to minimize minimize or overcome
existing or emerging weaknesses and as
threats far as possible cope
with threats
 The TOWS framework
Step 1. Prepare a profile of the enterprise which embraces (a) the type
of business: (b) its geographic domain: (c) the competitive situation;
and (d) the preoccupations and culture of the senior management team

Step 2 : Identify and evaluate the economic, social, political,

demographic, products and technology, and market/competitive
environments.

Step 3 : Prepare a forecast, make predictions and assess the future

Step 4 : Prepare a detailed strengths and weaknesses audit of (a) the

management and organization; (b) operations; (c) finance, (d)
marketing; and (e) the other parts of the organization.
Step 5 : Identify the strategic choices facing the organization.

Step 6 : Make the strategic choices.

Step 7 : Prepare the contingency plans.

 Strategic Audit
Characteristics
• Comprehensive
• Systematic
• Independent
• Periodic
 Economic/ Political/
Markets Competitors
Demog. Legal
Social/ Dealers
Cultural
Marketing
Macro Environment Environment Task Environment
Suppliers
Techno.
PR
Ecological
Agencies

Market Audit

Products Marketing Sales Force

Functions

Price Promo

Distribution
 The Strategic Audit
• The Environment Audit
• The Strategy Audit
• The Organization Audit
• The Systems Audit
• The Productivity Audit
• The Functions Audit
• The Environment Audit
– The Macro Environment
• Political/Legal/Fiscal
• Economic/Demographic
• Social/Cultural
• Technological
• Ecological
– The Task Environment
• Markets
• Competitors
• Distributors/Dealers
• Suppliers
• Advertising/PR Agencies
• The Strategy Audit
– The business Mission
– Corporate & Marketing Objectives
– Marketing Strategy
• The Organization Audit
– Organization
– Functional Efficiency
• The Systems Audit
– Information Systems
– Planning Systems
– Control Systems
– New Product Systems
• The Productivity Audit
– Profitability Analysis
– Cost-effectiveness Analysis
• The Functions Audit
– Products
– Price
– Distribution
– Sales Force
– Advertising & Promotion