Strategy types and swot

Copyright © 2002 by Harcourt, Inc. All rights reserved.
Strategy and Strategic PlanningStrategy and Strategic Planning
Lecturer: Zhu WenzhongLecturer: Zhu Wenzhong

• Strategy formerly refers to planning and managing anStrategy formerly refers to planning and managing an
operation for a particular purpose such as in a war.operation for a particular purpose such as in a war.
• A strategy is the pattern of decisions and actions thatA strategy is the pattern of decisions and actions that
are taken by the business to achieve its goals.are taken by the business to achieve its goals.
• A business may have a variety of goals or objectives,A business may have a variety of goals or objectives,
but for many businesses, the major goal is to improvebut for many businesses, the major goal is to improve
performance so that profits increase through designingperformance so that profits increase through designing
and implementing strategies.and implementing strategies.
-What is strategy?-What is strategy?

Strategy can be classified into several types,Strategy can be classified into several types,
such as:such as:
• functional strategy,functional strategy,
• business strategy,business strategy,
• and corporate strategy.and corporate strategy.
Differences between these strategies can beDifferences between these strategies can be
seen as follows in the table:seen as follows in the table:
--Types of strategyTypes of strategy

Type of strategy Brief explanations Examples of such a strategy
Functional strategy Strategies of the functional level
developed to improve the efficiency of
a business operations. It is also called
operational strategy.
Marketing strategy
HR strategy
Production strategy
R&D strategy
…
Business strategy Plans a company uses to gain
competitive advantage over
competitors in a market. It is unlikely
that a company can serve an entire
market all the time. Therefore a
company must decide which parts of
the market to aim at and how to be
different from competitors.
Cost leadership strategy
Differentiation strategy
Focus strategy
Withdrawal strategy
Market penetration strategy
New product development strategy
….
Corporate strategy Strategies aimed at the long-term
development of the organization. For
example, a company may consider
where it will be in 10 years time and
how it manages to get there.
Internal development strategy
Takeover and merger strategy
Strategic alliances
….
Table 5-1 Types of strategies

Strategic Planning Process
Strategic Planning Process

-Strategic Planning Process-Strategic Planning Process
• Strategy of a business needs to be well
planned. Well-planned strategy is key to
success. How to plan a strategy is an
important issue to study.
• Generally speaking, there are a number of
common stages when a business plans a
strategy, which is illustrated in the
following table:

Figure 5-1 The strategic planning process
Stage One: Setting goals and objectives
Stage Two: Internal and external analysis
Stage Three: Selecting a proper strategy
Stage Four: Implementing the strategy
Stage Five: Evaluating the strategy
-Strategic Panning Process-Strategic Panning Process

-Strategic Panning Process-Strategic Panning Process
Question for your critical thinking:
Refer to the above figure, could you please
explain what managers need to do in each
stage of the strategic planning process?

-Elements of effective planning and-Elements of effective planning and
strategystrategy
 To be effective, the strategic planning must have
the following characteristics:
1. Focus on the clear purpose of a business.
2. Vision or commonly shared and supported view by
people.
3. Satisfying the needs of customers and clients.
4. Achievable timetable for the strategy, such as longer time
for a corporate strategy.
5. Flexible in plans, such as not too ‘tight’ for people to
follow the strategy.
6. Suitable for the set goals to be achieved …

-Strategic Planning for Crisis-Strategic Planning for Crisis
 Importance:
Crisis (unexpected problems) may occur at times
for a business. However, effective planning
should reduce the impact of the crisis on a
business. So companies often need to have some
contingency plans or strategies to deal with
unexpected conditions.
 Types of crisis:
There are at least the following crisis which may
take place in a business and which are explained
in the following table:

Table 5-3 Types of crisis and their causes
Types of crises for a company Possible causes for the crisis
Financial crises
Lack of working capital to pay its debt
Lack of money to pay salary
Unable to collect large amount of money owed to the business…
Production crises
Breakdown of machines
Fire damages to the stock of raw materials
Failure to deliver products or goods to the buyer on time
Inferior quality products produced …
Human resources crises
Employee strike
High level of staff turnover
Poor staff motivation …
Environmental crises
Waste affecting the local residents’ life
Noise affecting the people around
Operations in the factory leading to the pollution of air and water in
the local area…
Legal crises
Faulty or dangerous products breaking the law
A child’s toy causing harm to children
Food causing health problems …
Image crises
Many of the above problems may affect the image of a business.
Customers may lose their confidence for the product. And sales may be
seriously affected…

Table 5-4 Contingency plans for solving the crisis problems
Types of crises Possible contingency plans
Financial crises
Set aside contingency funds for liquidity problems
Sell some assets to raise funds
Borrow bank loans or overdraft
Obtain government assistance
Production crises
Let some of the work done by other machines
Ask other producers to help produce
Rearrange the time of production, such as overnight working
Use flexible workforce or production methods
HR crises
planning effective consultation for strikes
change reward systems to motivate people
use flexible workforce
communicate well with employees
Image crises
Act quickly when faced with the problem of image
Withdraw the faulty products immediately
Promote the fact that the problem has been found and will be solved soon.
Spend some money for improving the damaged environment or compensating those
who have suffered.
--Strategic Planning for CrisisStrategic Planning for Crisis

SWOT AnalysisSWOT Analysis
• A SWOT analysis (alternatively SWOT
matrix) is a structured planning method used
to evaluate the strengths, weaknesses,
opportunities and threats involved in a
project or in a business venture. A SWOT
analysis can be carried out for a product,
place, industry or person. It involves
specifying the objective of the business
venture or project and identifying the internal
and external factors that are favorable and
unfavorable to achieve that objective.

SWOT……..SWOT……..
• Strengths: characteristics of the business or
project that give it an advantage over
others.
• Weaknesses: characteristics that place the
business or project at a disadvantage
relative to others.
• Opportunities: elements that the project
could exploit to its advantage.
• Threats: elements in the environment that
could cause trouble for the business or
project.

Aim Of SWOT analysisAim Of SWOT analysis
• SWOT analysis aims to identify the key internal and
external factors seen as important to achieving an
objective. SWOT analysis groups key pieces of
information into two main categories:
• internal factors –
the strengths and weaknesses internal to the
organization
• external factors –
the opportunities and threats presented by the
environment external to the organization

Strategy types and swot

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