Strategy_Formulation-Strategic_Choice

Strategy_Formulation-Strategic_Choice - Strategy...

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Unformatted text preview: Strategy Formulation Strategic Choice Strategic Choice Selection of the Best Strategy Ability of the proposed strategy to deal with strategic factors developed earlier in SWOT analysis. Ability of each alternative to satisfy agreed-on objectives with the least resources and the fewest negative side affects. Develop a new employee benefits package = Strong union activity (threat) + Poor employee morale (weakness) Develop new products for older adults = Decreasing numbers of young adults (threat) + Strong R&D (strength) Pursue horizontal integration by buying competitor's facilities = Exit of two major foreign competitors form the industry (opportunity) + Insufficient capacity (weakness) Acquire Cellfone, Inc. = 20% annual growth in the cell phone industry (opportunity) + Excess working capacity (strength) Key Internal Factor Key External Factor Matching Key Factors to Formulate Alternative Strategies Resultant Strategy Corporate Scenarios are pro forma balance sheets and income statements that forecast each alternative strategy and its various programs will likely have on division and corporate ROI In survey of Fortune 500 firms, 84% reported using computer simulation models in strategic planning. Constructing Corporate Scenarios 3 steps: Use industry scenarios to develop a set of assumptions about the task environment. Develop common-size financial statements for the companys or business units previous years. Construct detailed pro forma financial statements for each strategic alternative Industry Scenarios Examine possible shifts in the societal variables globally. Identify uncertainties in each of the six forces of the task environment. Make a range of plausible assumptions about future trends. Combine assumptions about individual trends into internally consistent scenarios....
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This note was uploaded on 01/20/2012 for the course SM 402 taught by Professor Staff during the Fall '11 term at Ball State.

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Strategy_Formulation-Strategic_Choice - Strategy...

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