1

Strategy-Formulation Analytical Framework

Stage 1: The Input Stage

Stage 2: The Matching Stage

Stage 3: The Decision Stage

2

Formulation Framework
External Factor Evaluation Matrix (EFE) Internal Factor Evaluation Matrix (IFE)

Stage 1: The Input Stage

Competitive Profile Matrix

3

Input Stage
Provides basic input information for the matching and decision stage matrices Requires strategists to quantify subjectivity early in the process Good intuitive judgment always needed

Formulation Framework
TOWS Matrix SPACE Matrix
Stage 2: The Matching Stage

BCG Matrix IE Matrix Grand Strategy Matrix

Matching Stage

Match between organizations internal resources and skills and the opportunities and risks created by its external factors.

Matching Key Factors to Formulate Alternative Strategies

Key Internal Factor Key External Factor Resultant Strategy

Excess working capacity (strength)

20% annual growth in the cell phone industry = (opportunity)

Acquire Cellfone, Inc.

Insufficient capacity (weakness)

Exit of two major foreign competitors form the industry (opportunity)

Pursue horizontal integration by buying competitor's facilities

Strong R&D (strength)

Decreasing numbers of young adults (threat)

Develop new products for older adults

Poor employee morale (weakness)

7

+ Strong union activity (threat)

Develop a new employee benefits package

Formulation Framework

Stage 3: The Decision Stage

Quantitative Strategic Planning Matrix (QSPM)

Formulation Framework
External Factor Evaluation Matrix (EFE)

Stage 1: The Input Stage

Internal Factor Evaluation Matrix (IFE) Competitive Profile Matrix

The External Assessment

Prediction is very difficult, especially about the future. -- Neils Bohr

10

Nature of External Audit

Purpose:
Development of Finite List:
Opportunities Threats to be avoided

11

Key External Forces

Five (5) broad categories:
1. Economic forces 2. Social, cultural, demographic, & environmental forces 3. Political, governmental, and legal forces 4. Technological factors 5. Competitive forces
12

Relationships Between Key External Forces and an Organization

Competitors Suppliers Distributors Creditors Customers Employees Communities Managers Stockholders Labor Unions Special Interest Groups Products Services

Key External Forces

Opportunities & Threats

13

Exhibit 2.4

Porters Five Forces Model of Industry Competition

POTENTIAL ENTRANTS

Threat of new entrants Bargaining power of buyers

BUYERS

Bargaining power of suppliers

SUPPLIERS

INDUSTRY COMPETITORS

Rivalry Among Existing Firms

Threat of substitute products or services

SUBSTITUTES

Reprinted with the permission of The Free Press, a division of Simon & Schuster, Inc. from Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright 1980, 1998 by The Free Press.

14

Five Forces Analysis of the Automotive Industry

Threat of Rivalry
Oligopolistic industry Overcapacity Differentiation on basis of functional attributes only temporary

Global Competitive Environment

Threat of Market Entry

High barriers to entry High capital requirements Contrived deterrence Cost disadvantages

Threat of Suppliers
Automotive Industry
Consolidation Single Sourcing Low level of total value added

Threat of Substitutes
Train, public transport or other means of transportation

Threat of Buyers
Numerous potential customers Industry policy of rebates More demanding customers

15

Industry Analysis (EFE)

External Factor Evaluation Matrix Summarize & evaluate:
Economic Social Cultural Demographic Environmental Political Governmental Technological Competitive

16

External Factor Evaluation (EFE)

Menggambarkan keseluruhan opportunities dan threats yang ada untuk mengetahui seberapa besar pengaruh dari setiap faktor tersebut terhadap institusi, respons institusi setiap faktor tersebut dan untuk mengetahui nilai institusi terhadap keseluruhan faktor dibandingkan dengan Institusi lain
17

Industry Analysis (EFE)

Five-Step process:

List key external factors (10-20)

Opportunities

& threats

Assign weight to each (0 to 1.0)

Sum

of all weights = 1.0

18

Industry Analysis (EFE)

Five-step process:
Assign 1-4 rating to each factor
Firms current strategies response to the factor

Multiply each factors weight by its rating

Produces a weighted score

19

Industry Analysis (EFE)

Five-step process:

Sum the weighted scores for each

Determines

the total weighted score for the organization.

Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5

20

USTKey External Factors

Opportunities
Global markets untapped Increased demand Astronomical Internet growth Pinkerton leader in discount market More social pressure to quit smoking

Weight .15

Rating

Weighted score

1 3 1 4 3 2 3 2 2 1

.15 .15 .05 .60 .30 .20 .15 .10 .20 .20 2.10

.05 .05 .15 .10 .10 .05 .05 .10 .20 1.00

Threats
Legislation against the tobacco industry Production limits on tobacco Smokeless market SE region U.S. Bad media exposure from FDA Clinton Administration TOTAL
21

Tabel : Matriks EFE PT. Pos Indonesia

Faktor Eksternal Peluang (opportunities) - Jumlah penduduk - Bentuk negara yang geografis - Perusahaan yang berbentuk Persero - Jumlah SDM memadai - Tersedianya sarana promosi - Perkembangan teknologi Ancaman (threats) - Pesaing baru dan lama - Munculnya produk substitusi - Tuntutan terhadap mutu dan pelayanan - Daya beli konsumen - Kondisi SDM yang berorientasi kepada produk Total 0,10 0,12 0,08 0,05 0,10 1 2 2 2 1 2 0,20 0,24 0,16 0,05 0,20 2,33 0,12 0,10 0,08 0,10 0,05 0,10 3 3 4 2 2 2 0,36 0,30 0,32 0,20 0,10 0,20 Bobot Rating Nilai

22

Industry Analysis (EFE)

Total weighted score of 4.0 =
Organization response is outstanding to threats & weaknesses

Total weighted score of 1.0 =

Firms strategies not capitalizing on opportunities or avoiding threats
23

Industry Analysis (EFE)

Important

Understanding of the factors used in the EFE Matrix is more important than the actual weights and ratings assigned.

24

Formulation Framework
External Factor Evaluation Matrix (EFE) Internal Factor Evaluation Matrix (IFE)

Stage 1: The Input Stage

Competitive Profile Matrix

25

The Internal Assessment

Great spirits have always encountered violent opposition from mediocre minds. -- Albert Einstein

26

Nature of an Internal Audit

All organizations Strengths Weaknesses

27

Nature of an Internal Audit

Basis for objectives & strategies: Internal strengths/weaknesses External opportunities/threats Clear statement of mission

28

Key Internal Forces

Distinctive Competencies A firms strengths that cannot be easily matched or imitated by competitors Building competitive advantage involves taking advantage of distinctive competencies Strategies designed in part to improve on a firms weaknesses and turn to strengths
29

Internal Audit
Parallels process of external audit Gather & assimilate information from:

30

Management Marketing Finance/accounting Production/operations Research & development Management information systems

Functions of Management
Five basic activities

Planning Organizing Motivating Staffing Controlling

31

Functions of Management
Function Planning Organizing Motivating Staffing Controlling
32

Stage When Most Important

Strategy Formulation

Strategy Implementation

Strategy Implementation

Strategy Implementation

Strategy Evaluation

Planning

Forecasting Establishing objectives Planning Devising strategies Developing policies Setting goals
33

Organizing
Organizational design Organizational design Organizational Job specialization Job specialization Job specialization Job descriptions Job descriptions Job specifications Job specifications Job specifications Span of control Span of control Span Unity of command Unity of command Coordination Coordination Job design Job design Job analysis Job analysis Job analysis

Organizing Organizing Organizing

34

Motivating
Leadership Communication Work groups Job enrichment Job satisfaction Needs fulfillment Organizational change Morale

Motivating

35

Staffing
Wage & salary admin Employee benefits Interviewing Hiring Firing Training Management development Safety Affirmative action EEO Labor relations Career development Discipline procedures

Staffing

36

Controlling
Quality control Financial control Sales control Inventory control Expense control Analysis of variances Rewards Sanctions

Controlling

37

Marketing

Process of defining, anticipating, creating, and fulfilling customers needs and wants for products and services

38

Marketing
Customer analysis Selling products/services Product and service planning Pricing Distribution Marketing research Opportunity analysis

1. 2. 3. 4. 5. 6. 7.
39

Marketing
Customer surveys Consumer information Market positioning strategies Customer profiles Market segmentation strategies
40

Customer analysis

Marketing
Advertising Sales Promotion
Selling Products/services

Publicity Sales force management Customer relations Dealer relations

41

Marketing
Test marketing Brand positioning Devising warrantees Product/service planning Packaging Product features/options Product style Quality
42

Marketing
Forward integration Discounts Credit terms Pricing Condition of sale Markups Costs Unit pricing
43

Marketing
Warehousing Channels Coverage

Distribution

Retail site locations Sales territories Inventory levels Transportation

44

Marketing
Data collection Data input
Marketing research

Data analysis Support all business functions

45

Marketing
Assessing costs Assessing benefits Opportunity Analysis Assessing risks Cost/benefit/risk analysis

46

Finance/Accounting

Determining financial strengths and weaknesses key to strategy formulation Investment decision (Capital budgeting) Financing decision Dividend decision

47

Finance/Accounting

Functions of Finance/Accounting Investment decision (Capital budgeting) 2. Financing decision 3. Dividend decision
1.
48

Basic Financial Ratios

Firms ability to meet its short-term obligations Ratios
Liquidity ratios Current ratio Quick (or acid-test) ratio
49

Basic Financial Ratios

Extent of debt financing Ratios

Leverage ratios

Debt-to-total-assets Debt-to-equity Long-term debt-to-equity Times-interest earned

50

Basic Financial Ratios

Effective use of firms resources Ratios

Inventory-turnover

Activity ratios

Fixed assets turnover Total assets turnover Accounts receivable turnover Average collection period

51

Basic Financial Ratios

Effectiveness shown by returns on sales and investment Ratios

Profitability ratios

Gross profit margin Operating profit margin Net profit margin Return on total assets (ROA)

52

Basic Financial Ratios

Effectiveness shown by returns on sales and investment Ratios

Return on stockholders equity (ROE) Earnings per share Price-earnings ratio

Profitability ratios (continued)

53

Basic Financial Ratios

Firms ability to maintain economic position Ratios

Growth ratios

Sales Net income Earnings per share Dividends per share

54

Production/Operations

Process Capacity Inventory Workforce Quality

55

Production/Operations
Design of facility Choice of technology Facility layout Process Process flow analysis Facility location Line balancing Process control
56

Production/Operations
Forecasting Facilities planning Aggregate planning Capacity Scheduling Capacity planning Queuing analysis
57

Production/Operations

Raw material Inventory Work in process Finished goods Materials handling

58

Production/Operations
Job design Work measurement Workforce Job enrichment Work standards Motivation techniques

59

Production/Operations
Quality control Sampling Quality Testing Quality assurance Cost control

60

Research and Development

Development of new products before competition Improving product quality Improving manufacturing processes to reduce costs

61

Research and Development

Financing as many projects as possible Use percentage-of-sales method R&D budgets Budgeting relative to competitors Deciding how many successful new products are needed
62

Management Information Systems

Purpose

Improve performance of an enterprise by improving the quality of managerial decisions.

63

Internal Analysis (IFE)

Menggambarkan keseluruhan strength dan weakness yang ada untuk mengetahui seberapa besar pengaruh dari setiap faktor tersebut terhadap institusi, respons institusi setiap faktor tersebut dan untuk mengetahui nilai institusi terhadap keseluruhan faktor dibandingkan dengan Institusi lain
64

Internal Analysis (IFE)

Five-Step Process:

List key internal factors (10-20)

Strengths

& weaknesses

Assign weight to each (0 to 1.0)

Sum

of all weights = 1.0

65

Internal Analysis (IFE)

Assign 1-4 rating to each factor
Firms

current strategies response to the

factor

Multiply each factors weight by its rating

Produces

a weighted score

66

Internal Analysis (IFE)

Sum the weighted scores for each

Determines

the total weighted score for the organization possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5

Highest

67

Internal Analysis (IFE)

Mandalay Bay
Internal Strengths
Largest casino company in world Room occupancy rates over 95% Increasing free cash flows Owns 1 mile on Las Vegas strip Strong management team Buffets at most facilities Minimal comps provided Long-range planning Reputation as family-friendly Financial ratios
68

Weight

Rating

Weighted score

.05 .10 .05 .15 .05 .05 .05 .05 .05 .05

4 4 3 4 3 3 3 4 3 3

.20 .40 .15 .60 .15 .15 .15 .20 .15 .15

Internal Analysis (IFE)

Mandalay Bay
Internal Weaknesses
Most properties located in Las Vegas Little diversification Family reputation, not high rollers Laughlin properties Recent loss of joint ventures
Weight Rating Weighted score

.05 .05 .05 .10 .10

1 2 2 1 1

.05 .10 .10 .10 .10

TOTAL (including Strengths)

1.0

2.75

69

Tabel : Matriks IFE PT. Pos Indonesia

Faktor Internal Kekuatan (strengths) - Keragaman jenis jasa pengiriman - Harga murah - Jaringan pos yang sangat luas - Sebaran lokasi pelayanan - Kemudahan mencapai tempat pelayanan & pengiriman Kelemahan (weaknesses) - Ketepatan waktu pengiriman - Kecepatan pengiriman - Kecepatan pelayanan petugas - Informasi biaya dan waktu pengiriman - Kemudahan memperoleh info promosi dan iklan Total

Bobot 0,09 0,10 0,10 0,10 0,11

Rating 4 4 3 3 3

Nilai 0,36 0,40 0,30 0,30 0,33

0,11 0,11 0,10 0,09 0,09 1

1 1 1 2 2

0,11 0,11 0,10 0,18 0.18 2,37

70

Menentukan Distinctive Competencies

Diantara sejumlah strengths yang dimiliki suatu institusi dapat saja beberapa diantaranya merupakan distinctive competencies. Untuk mengevaluasi apakah suatu strength adalah distinctive competency dapat digunakan metode Barney yaitu dengan konsep VRIO
71

VRIO
x Value : apakah faktor tersebut memberikan keunggulan kompetitif pada institusi ? x Rareness : apakah pesaing tidak memiliki faktor tersebut ? x Imitability : apakah tidak mudah untuk memiliki faktor tersebut ? x Organization : apakah institusi memanfaatkan faktor tersebut secara maksimal ? Jika jawab dari keempat : Ya

distinctive competency
72

Formulation Framework
External Factor Evaluation Matrix (EFE) Internal Factor Evaluation Matrix (IFE)

Stage 1: The Input Stage

Competitive Profile Matrix

73

Industry Analysis (CPM)

Competitive Profile Matrix

Identifies firms major competitors and their strengths & weaknesses in relation to a sample firms strategic position

74

(CPM)
Critical Success Factor Advertising Product Quality Price Competition Management Financial Position Customer Loyalty Global Expansion Market Share

Avon

LOreal

Procter & Gamble

Weight Rating Score Rating Score Rating Score

0.20 0.10 0.10 0.10 0.15 0.10 0.20 0.05 1.00

1 4 3 4 4 4 4 1

0.20 0.40 0.30 0.40 0.60 0.40 0.80 0.05 3.15

4 4 3 3 3 4 2 4

0.80 0.40 0.30 0.30 0.45 0.40 0.40 0.20 3.25

3 3 4 3 3 2 2 3

0.60 0.30 0.40 0.30 0.45 0.20 0.40 0.15 2.80

Total
75

Competitive Profile Matrix

Critical Success Factors Brand Recognition Market Share Financial Strength R&D Product Quality Advertising Number of Retail Outlets Product Mix Depend on Suppliers for Quality Total
76

Weight 0.15 0.14 0.13 0.10 0.10 0.12 0.05 0.11 0.10 1.00

Nike Weighted Rating Score 4 0.60 4 0.56 3 0.39 4 0.40 3 0.10 4 0.48 4 0.20 4 0.44 2 0.20 3.37

Adidas Weighted Rating Score 4 0.60 2 0.28 2 0.26 2 0.20 3 0.30 3 0.36 1 0.05 3 0.33 3 0.30 2.68

Reebok Weighted Rating Score 4 0.60 3 0.42 2 0.26 3 0.30 3 0.30 4 0.48 3 0.15 3 0.33 2 0.20 3.04

Formulation Framework
TOWS Matrix SPACE Matrix
Stage 2: The Matching Stage

BCG Matrix IE Matrix Grand Strategy Matrix

77

Strategy Analysis & Choice

Whether its broke or not, fix itmake it better. Not just products, but the whole company if necessary. -- Bill Saporito

78

SWOT ANALYSIS
 Asumsi: Suatu strategi yang efektif akan memaksimalkan kekuatan (Strength) dan peluang (Opportunities), dan meminimalkan kelemahan (Weaknesses) dan ancaman ((Threat)  Opportunities: Situasi penting dari faktor eksternal yang menguntungkan perusahaan. (perubahan teknologi, membaiknya hubungan pembeli & pemasok, dll)  Threat: faktor internal yang tidak menguntungkan perusahaan. (masuknya pesaing baru, lambatnya pertumbuhan pasar, meningkatnya kekuatan pembeli & pemasok, dll)  Strength: Kekuatan internal meliputi sumberdaya, keterampilan/ keunggulan lainnya relatif terhadap pesaing dan kebutuhan pasar yang dilayani/ ingin dilayani perusahaan. (sumber daya keuangan, citra, dll)  Weaknesses: Kekurangan/ keterbatasan daam sumber daya, keterampilan dan kapabilitas yang menghambat kinerja perusahaan.

79

ANALISA SWOT (TOWS) MATRIX

Dikemukakan oleh : Thomas L. Wheelen dan J. David Hunger Menggunakan matrix untuk menghasilkan strategi alternatif dengan memanfaatkan EFE dan IFE

Langkah-Langkahnya :
Pada blok opportunities cantumkan sejumlah opportunities yang diambil dari tabel EFE Pada blok threats cantumkan sejumlah threats yang diambil dari EFE Pada blok strength, cantumkan sejumlah strength yang diambil dari IFE Pada blok weakness cantumkan sejumlah weakness yg diambil dari IFE Dapatkan sejumlah strategi-strategi yang mungkin untuk perusahaan berdasarkan kombinasi dari 4 elemen tersebut
80

Matching Stage
TOWS Matrix Threats Opportunities Strengths Weaknesses
81

TOWS Matrix
Develop four types of strategies Strengths-Opportunities (SO) Weaknesses-Opportunities (WO) Strengths-Threats (ST) Weaknesses-Threats (WT)
82

Kuadran SO, ST, WO, WT

x Kuadran SO : posisi yang paling menguntungkan dimana institusi sedang melihat peluang-peluang dan memiliki kekuatan untuk meraihnya x Kuadran ST : institusi dengan beberapa kekuatan yang dimilikinya sedang menghadapi ancaman dari luar. Institusi dapat menggunakan kekuatan untuk menciptakan peluang di masa yang akan datang x Kuadran WO : institusi sedang melihat peluang tetapi mengalami kendala dalam meraihnya karena perusahaan memiliki kelemahan. Institusi harus dapat mengeliminir kekurangan-kekurangan supaya lebih efektif dalam meraih peluang x Kuadran WT : posisi yang paling tidak menyenangkan dimana perusahaan sedang menghadapi ancaman dari luar bersamaan dengan posisinyapun sedang lemah. Institusi bertahan sambil mengkaji ulang keterlibatan institusi dalam pelayanan yang sedang terancam tersebut
83

STRATEGI SO, ST, WO, WT

x Strategi SO : strategi memanfaatkan peluang dengan mendayagunakan kekuatan internal x Strategi ST : strategi untuk menghadapi atau menghidarkan ancaman dengan mendayagunakan kekuatan yang dimiliki x Strategi WO : strategi untuk mengatasi kelemahan dengan cara memanfaatkan peluang yang ada x Strategi WT : strategi yang meminimalkan kelemahan sambil mencegah ancaman yang ada di luar

84

SO Strategies

Threats Opportunities Weaknesses Strengths (TOWS)

SO Strategies

Use a firms internal strengths to take advantage of external opportunities

85

WO Strategies

Threats Opportunities Weaknesses Strengths (TOWS)

WO Strategies

Improving internal weaknesses by taking advantage of external opportunities

86

ST Strategies
Using firms strengths to avoid or reduce the impact of external threats.

Threats Opportunities Weaknesses Strengths (TOWS)

ST Strategies

87

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

Threats Opportunities Weaknesses Strengths (TOWS)

WT Strategies

88

TOWS Matrix
Steps in developing the TOWS Matrix
1. 2. 3. 4.

List the firms key external opportunities List the firms key external threats List the firms key internal strengths List the firms key internal weaknesses

89

TOWS Matrix
Developing the TOWS Matrix

1. 2. 3. 4.

Match internal strengths with external opportunities and record the resultant SO Strategies Match internal weaknesses with external opportunities and record the resultant WO Strategies Match internal strengths with external threats and record the resultant ST Strategies Match internal weaknesses with external threats and record the resultant WT Strategies

90

TOWS Matrix
Leave Blank Strengths-S
List Strengths

Weaknesses-W
List Weaknesses

Opportunities-O
List Opportunities

SO Strategies
Use strengths to take advantage of opportunities

WO Strategies
Overcome weaknesses by taking advantage of opportunities

Threats-T
List Threats
91

ST Strategies
Use strengths to avoid threats

WT Strategies
Minimize weaknesses and avoid threats

SWOT MATRIX

EXTERNAL INTERNAL FACTORS

STRENGHTS (S) List Internal Strenghts Here S-O Strategies Generate strategies here that use Strenghts to take adventage of opportunities S-T Strategies Generate strategies here that use strenghts to avoid threats

WEAKNESSES (W) List Internal Weaknesses Here W-O Strategies Generate strategies here that take adventage of opportunities by overcoming weaknesses W-T Strategies Generate strategies here that minimize weaknesses and avoid threats

OPPORTUNITIES (O) List External Opportinities Here

THREATS (T) List External Threats Here

92

TOWS Matrix

Strengths 1. Customer satisfaction. 2. Copyright to one-click method. 3. Humanitarian efforts. 4. Strong Research & Development. 5. Exclusive agreements with Internet sites. 6. Ability to track customer interests. 7. Formation of strategic alliances with physical retailers.

Weaknesses 1. Accumulated deficits. 2. Anticipates further losses. 3. Slowing growth, core business, U.S. Books, Music, & Video. 4. Lawsuit with Barnes & Noble over patent for oneclick method. 5. Class Action Suits filed with stockholders. 6. Doses not have a mission statement. 7. Financial position.

93

TOWS Matrix

S-O Strategies Opportunities 1. Expand European presence 1. Continuous increase of through strategic alliances internet users. with established online 2. Increasing business to retailers or physical consumer e-commerce. retailers 3. U. S. Internet economy (S1,O1,O2,O3,O5). 2. Refocus on core business projections 3.1 trillion by taking full advantage of by 2004. e-books sales projection 4. Brick & Mortar (S1,S2,S6,O1,O2,O3). companies lack technology expertise. 5. European on-line projections 3.1 trillion by 2004.

W-O Strategies 1. Enter into more strategic agreements with U. S. physical retailers possibly Wal-mart (W2,W3,W7,O4,O5).

94

TOWS Matrix

Threats 1. Seasonality of internet usage & revenue generation. 2. Economic downturn & global recession. 3. Low consumer confidence levels. 4. Competition. 5. Security/Privacy of information concerns. 6. Internet Taxation. 7. Market valuation .

S-T Strategies

W-T Strategies
Reduce fulfillment costs by reduction in number of fulfillment centers (W1,W2,W3,W7,T1,T2,T3,T7). 1.

1. Establish direct order link with publishers/manufacturers (S5, T4). 2. Enhance attractiveness of platform (S1,S2,S4,S6,T4,T7). 3. Promote ease of use (S2,T4,T5).

95

FORMULATION FRAMEWORK
TOWS Matrix SPACE Matrix
Stage 2: The Matching Stage

BCG Matrix IE Matrix Grand Strategy Matrix

96

SPACE Matrix
SPACE = The Strategic Position and ACtion Evaluation

Dikemukakan oleh : R. Howe, R. Mason & K. Dickel Diadaptasi oleh : Fred R. David Menilai seluruh strategic factors Mengolah
97

Ditampilkan pada sistem koordinat 2 dimensi

SPACE Matrix
Strategic Position and Action Evaluation Matrix

Four quadrant framework Determines appropriate strategies

Aggressive Conservative Defensive Competitive

98

SPACE Matrix
Two Internal Dimensions

Financial Strength [FS] Competitive Advantage [CA]

Two External Dimensions

Environmental Stability [ES] Industry Strength [IS]

99

SPACE Matrix
Overall Strategic position determined by:

Financial Strength [FS] Competitive Advantage [CA] Environmental Stability [ES] Industry Strength [IS]

100

SPACE Matrix
Developing the SPACE Matrix:

101

EFE Matrix IFE Matrix Financial Strength Competitive Advantage Environmental Stability Industry Strength

SPACE Matrix

Select variables to define FS, CA, ES, & IS Assign numerical ranking from +1 (worst) to +6 (best) for FS and IS; Assign numerical ranking from 1 (best) to 6 (worst) for ES and CA. Compute average score for FS, CA, ES, & IS

102

SPACE Matrix
Internal Strategic Position External Strategic Position

Financial Strength (FS)

Return on investment Leverage Liquidity Working capital Cash flow Ease of exit from market Risk involved in business

Environmental Stability (ES)

Technological changes Rate of inflation Demand variability Price range of competing products Barriers to entry Competitive pressure Price elasticity of demand

103

SPACE Matrix
Internal Strategic Position External Strategic Position

Competitive Advantage CA
Market share Product quality Product life cycle Customer loyalty Competitions capacity utilization Technological know-how Control over suppliers & distributors

Industry Strength (IS)

Growth potential Profit potential Financial stability Technological know-how Resource utilization Capital intensify Ease of entry into market Productivity, capacity utilization

104

Conservative

SPACE Matrix FS
+6 +5 +4 +3 +2 +1

Aggressive

CA
-6 -5 -4 -3 -2 -1 -1 -2 -3 -4 -5 +1 +2 +3 +4 +5 +6

IS

Defensive
105

-6

ES

Competitive

SPACE Matrix : NIKE

INTERNAL STRATEGIC POSITION
Financial strength Environmental stability +4 -3 +1 best to +6 worst -6 worst to 1 best Y axis: 4 + (-3) = 1

EXTERNAL STRATEGIC POSITION

Competitive advantage Industry strength
Conservative

-2 +3

-6 unstable to 1 stable +1 best to +6 worst

FS Aggressive

X axis: 3 + (-2) = 1

CA

IS

Defensive

ES

Competitive

106

SPACE Matrix : AMAZON

FS Conservative Aggressive

CA

IS

Y axis Financial strength Environmental stability X axis Industry strength 107 Competitive advantage

Defensive

ES

Competitive

+1 -2 3 -2

+1 worst to + 6 best -1 best to 6 worst +1 worst to +6 best -1 best to -6 worst

Y axis: 1 + (-2) = -1

X axis: 3 + (-2) = 1

Opportunities Posisi Strategis SO + 0,59 ; + 0,60

+2,75

Weakness
-2,50

+0,60 +0,59 +3,09

Strength

Rata-Rata Opportunities = +33/12 = + 2,75 Rata-Rata Threats = -28/13 = - 2,15 Rata-Rata Strength = +34/11 = + 3,09
108

-2,15

Koordinat X = +3,09 + (-2,50) = 0,59 Threats Koordinat Y = +2,75 + (-2,15) = 0,60

Rata-Rata Weakness = -15/6 = - -2,50

SPACE MATRIX POSISI STRATEGIS PERUSAHAAN

OPPORTUNITIES Supports a Turn Oriented Strategy Supports an Aggressive Strategy

WEAKNESSES

STRENGTHS

Supports a Difensive Strategy

Supports a Diversification Strategy

THREATS 109

Formulation Framework
TOWS Matrix SPACE Matrix
Stage 2: The Matching Stage

BCG Matrix IE Matrix Grand Strategy Matrix

110

BCG Matrix
Boston Consulting Group Matrix

Enhances multidivisional firms efforts to formulate strategies Autonomous divisions (or profit centers) constitute the business portfolio Firms divisions may compete in different industries requiring separate strategy Graphically portrays differences among divisions Focuses on market share position and industry growth rate Manage business portfolio through relative market share position and industry growth rate

111

BCG Matrix
Relative Market Share Position
High 1.0 Medium .50

Low 0.0

Industry Sales Growth Rate

High +20

Stars II

Question Marks I

Medium 0

Cash Cows III

Low -20

Dogs IV

112

Kondisi Bisnis Perusahaan

Perusahaan dengan satu bisnis Diversifikasi perusahaan yang berhubungan Diversifikasi perusahaan yang tak ada hubungan

Bersaing sebagai satu bisnis Apple Computer McDonalds Corp. Wrigley Maytag Texas Air Ford Motor
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Membagi kompetensi bisnis satu sama lain P&G Philip Morris Dow-Corning Johnson & Johnson Du Pont Gilette

Tiap unit bisnis otonom pada pasar yang berbeda-beda ITT Rockwell GE LTV Textron Litton

Pendekatan Portofolio
Pendekatan portofolio ditandai ciri berikut :
Menguji setiap bisnis perusahaan yang terpisah sebagai elemen portofolio dari total bisnis. Suatu unit bisnis dalam portofolio perusahaan, pada derajat tertentu, adalah merupakan penghasil (generators) atau penerima (recipients) dari sumber-sumber (resources) perusahaan. Pendekatan portofolio merupakan cara yang sederhana dan visual untuk mengidentifikasi dan mengevaluasi alternatif strategi guna dapat menghasilkan dan mengalokasikan sumber-sumber perusahaan (corporate resources)

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SUSUNAN MATRIKS BCG

Matrix BCG ini dibentuk dari empat sel (Matriks 2 X 2) yang mengukur laju pertumbuhan pasar (market growth) pada sumbu vertikal, dan pangsa pasar relatif (relative market share) pada sumbu horizontal Didalam matriks BCG, setiap unit bisnis menempati salah satu dari kategori tanda tanya
Question mark Star Cash cow Dogs

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MATRIKS BCG
Matrixs BCG merupakan model yang sederhana dan paling banyak digunakan. Model ini berguna bagi top manager yang membawahi unit bisnis yang berbeda-beda (diversified forms), khususnya untuk mengalokasikan sumber-sumber (resources) dari satu unit ke unit bisnis lainnya. Matriks ini juga digunakan untuk memperkirakan posisi pasar suatu unit bisnis beberapa tahun ke depan bila tidak dilakukan perubahan kebijakan (policies) selama ini

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Bentuk BCG Matrix

High

Star

Question Mark

Market Growth

Cash Cow

Dog

Low Strong
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Relative Market Share

Weak

The Boston Consulting Groups Growth-Share Matrix

20%18%16%14%12%10%8%6%4%2%0

Market Growth Rate

Stars

Question marks

5
Cash cows

?? ?
2
Dogs

1 8

6
10x 4x 2x 1.5x 1x

7
Relative Market Share
.5x .4x .3x .2x .1x

118

Indikator Cash Flow

Beberapa indikator berikut diperlukan dalam penyusunan matriks BCG: Cash flow merupakan indikator kunci pada matriks BCG Cash flow merepresentasikan kemampuan dari unit bisnis untuk membangun portofolio-nya Cash flow dalam matriks BCG dapat dibagi atas: Pemakaian kas (cash use) karena pangsa pasar relatif (relative market share) di sumbu horizontal Penerimaan kas (cash generated) karena pertumbuhan pasar (market growth rate) di sumbu vertikal Relative market share dapat dihitung dari ratio market share unit bisnis dengan market share pesaing tertinggi
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Market growth atau pertumbuhan pada industri bersangkutan.

Asumsi Cash flow vs. posisi bisnis

Hubungan antara cash flow perusahaan dengan portofolio bisnisnya dapat terjadi berdasarkan beberapa asumsi :
Profit margin dan penerimaan kas (cash generation) makin besar dengan bertambahnya relative market share, akibat learning curve Market growth membutuhkan uang tunai (cash used) guna membiayai modal kerja, penambahan kapasitas, dan investasi lainnya Sebagian unit bisnis membutuhkan uang tunai lebih besar dari pendapatannya, sedang sebagian lain menghasilkan lebih besar dari yang digunakannya Dalam portofolio perusahaan, cash flow keseluruhan perusahaan harus seimbang, yaitu antara kebutuhan tunai total dengan kemampuan unit-unit usaha dalam menghasilkan uang tunai ditambah pembiayaan dari luar.

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Analisa Cash Flow

High

Star
Cash generated +++

Question Mark
Cash generated + Cash use ----

Market Growth

Cash use

--0

Cash Cow
Cash generated +++ Cash use ++

Dog
Cash generated + Cash use 0

Low Strong
121

Relative Market Share

Weak

4 Strategi Utama BCG Matrix

Build market share Hold market share Harvest Divest
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BCG Matrix: Karakteristik Kuadran

30% Star
Earnings: high stable, growing Cash flow: neutral Strategy: hold or invest for growth

Question Mark
Earnings: low, unstable, growing Cash flow: negative Strategy: build market share or harvest/divest

Market Growth

Cash Cow
Earnings: high stable Cash flow: high stable Strategy: hold or add market share

Dog
Earnings: low, unstable Cash flow: neutral or negative Strategy: harvest/divest

-10%

10
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Relative Market Share

1.0

.1

Penggunaan Model : Simbol

P roduc t A T o ta l M a rk et M a rk et S ha re

P roduc t A P revious M a rk et S ize a nd P os ition

B
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P roduc t B M a rk et S m a ller but firm ha s g rea ter

Plotting Your SBUs

30% Star Question Mark

C
Market Growth A Cash Cow Dog

A
-10% 10
125

B
.1

1.0 Relative Market Share

Traditional SBU or Product Path

30% Star 2 Market Growth Question Mark 1

Cash Cow 3

Dog 2 4

-10% 10
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1.0 Relative Market Share

.1

Question mark

???

MATRIKS BCG & BUSINESS LIFE CYCLE

Berada pada kuadran 1, dimana relative market share-nya rendah (low), namun dengan market groqth rate yang tinggi (high) Ini mengingat posisi market share yang rendah, menunjukkan cash generated yang rendah pula, dan cash use yang tinggi pada market growth yang tinggi. Dalam kondisi bisnis question mark ini perusahaan harus memutuskan untuk memperkuat diri dengan strategi intensif (penetrasi pasar, pengembangan pasar, atau pengembangan produk) atau menjualnya bila pelaksanaan strategi terlalu mahal. Misi yang dituntut dari anak perusahaan ini adalah membangun (build) market share. Dalam daur hidup bisnis, posisi ini terletak pada masa perkenalan atau masa-masa awal bisnis (introduction) perusahaan
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Star

MATRIKS BCG & BUSINESS LIFE CYCLE

Berada pada kuadran II, menunjukkan baik relative market share dan market growth yang tinggi, serta menunjukkan cash generated maupun cash use yang tinggi pula. Posisi star merupakan posisi dominan yang dikejar setiap perusahaan dan posisi yang paling kuat, namun harus dipertahankan dengan investasi yang memadai. Hal tersebut dapat dilakukan dengan strategi integrasi, strategi intensif atau joint ventures, melalui integrasi ke hilir (forward), ke hulu (backward) atau ke pesaing (horizontal), serta melalui penetrasi pasar, pengembangan pasar, atau pengembangan produk dan joint ventures. Misi yang perlu dilakukan adalah mempertahankan (hold) market share. Posisi hold sama dengan siklus pertumbuhan (growth) pada business life cycle.
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Cash cow MATRIKS BCG & BUSINESS LIFE CYCLE

Berada pada kuadran III, yaitu dengan relative market share yang tinggi namun market growth-nya rendah. Pada market share yang tinggi, biaya per unit cenderung rendah dan berarti menghasilkan laba yang tinggi. Sebaliknya dengan market growth yang rendah, bisnis dalam keadaan menurun sehingga kurang di perlukan uang tunai untuk keperluan investasi. Unit bisnis ini memiliki keuntungan dan cash flow yang tinggi Misi yang di emban adalah memanen (harvest) keuntungan dan cash flow jangka pendek untuk membiayai bisnis anak perusahaan yang lainnya, dengan pendapatan yang besar, namun dengan pertumbuhan yang rendah

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Dog

MATRIKS BCG & BUSINESS LIFE CYCLE

Berada pada kuadran IV, berada pada posisi yang lemah dan industri sudah tidak menarik. Biasanya strategi yang baik adalah melakukan divestasi, kecuali masih ada kemungkinan memperbaikinya dengan biaya yang tidak terlalu mahal. Misi yang dilakukan adalah melakukan (divest) bisnis tersebut. Disini perusahaan berada dalam keadaan declining atau mengalami siklus menurun.

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HUBUNGAN ANTARA KATEGORI BISNIS, MISI DAN DAUR HIDUP

KUADRAN KATEGORI MISI DAUR HIDUP

I II III IV

Question Mark (?) Stars Cash Cows Dogs

Build Hold Harvest Divest

Introduction Growth Mature Decline

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Keuntungan MATRIKS BCG

Pendekatan yang sederhana pemakaiannya dan disajikan secara visual Memudahkan penentuan portofolio bisnis dari divisi atau anak perusahaan Merangsang minat dalam perencanaan strategi Mendorong perusahaan untuk melihat formulasi strategi sebagai hubungan kerjasama antara unit-unit bisnis yang ada didalam perusahaan Memperlihatkan bagaimana setiap unit perusahaan memiliki penerimaan dan penggunaan dana tunai (cash flow) yang berbedabeda terhadap pencapaian tujuan perusahaan.
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KELEMAHAN MATRIKS BCG

Penggunaan tinggi dan rendah pada growth-share matriks untuk empat kategori, terlalu menyederhanakan masalah bisnis. Hubungan antara market share dengan profitabilitas tidak selalu linier karena market share unit bisnis yang rendah masih bisa mendapatkan keuntungan yang besar, bila di pasarkan pada niche market Tingkat perrumbuhan yang tinggi tidak selalu yang terbaik. Matriks ini hanya memperhitungkan pesaing yang kuat dengan mengabaikan pesaing-pesaing kecil yang sedang tumbuh dengan cepat. Market growth hanyalah salah satu saja dari faktor daya tarik industri (industry attractiveness) dan market share adalah juga salah satu dari posisi kompettif bisnis.
133

GE Multifactor Portfolio Matrix

High
Industry Attractiveness

Business Strengths Medium Low

High Invest/Grow Selectivity /earnings Harvest /Divest

Medium

Low

134

GE/McKinsey Matrix & Arah Strategis Memposisikan berbagai divisi organisasi dalam 9-sel berdasarkan analisa SWOT dengan weighted scores (dari matriks EFE and IFE). Strategi yang dapat ditempuh, adalah: Grow and build (divisi pada sel 1, 2 or 4): market penetration, market development, product development or backward, forward and horizontal integration. Hold and maintain (divisi pada sel 3, 5, 7): market penetration or product development. Harvest or divest (divisi pada cells 6, 8, 9): divest, liquidate, or retrench.

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GE Multifactor Portfolio Matrix

Business Strengths
High Medium Low

Industry Attractiveness

High

Invest/Grow 1 Invest/Grow 2 Dominate/ 3 Strongly Selectively Delay/ (build) (build) divest Earn/ 5 Protect (hold) Harvest/ 8 divest Harvest/ 6 divest

Invest/Grow 4 Medium Selectively (build) Earn/ 7 Protect (hold)

Low

Harvest/ 9 divest

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ADL Portfolio Matrix

Industry Maturity (Attractiveness)
Embrionic Dominant Strong Selective Niche Invest Growing Mature Aging Hold

Consolidate
Improve

Competitive Position

Maintain
Harvest

Favorable Tenable Weak

Liquidate
Divest

Selective

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Penggunaan ADL Matrix

ADL Matrix adalah matriks yang dibuat oleh konsultan Arthur D. Little sebagai penyempurnaan dari GE/McKinsey Matrix Perbedaannya: Pada ADL Matrix di-plotkan posisi daya saing (competitive position) perusahaan terhadap tahaptahap siklus hidup (life cyclus dari produk, pasar, dan industri. Penggunaan ketiga matriks dalam proses portofolio bisnis barangkali akan memberikan hasil yang lebih baik.
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Illustrasi: Analisa Portofolio Internasional

Competitive Strengths
High Medium Low
Countrys Attractiveness: Market size, Market rate of growth, Regulasi pemerintah, Faktor ekonomi, Politik, dll. Products Competitive Strength: Market share, Product fit, Contribution margin, Market support, dll.

Country Attractiveness

High

Invest/Grow

Dominate/ Divest/ Joint Venture Selective Strategies Harvest/ Divest/ Combine/ License

Medium

Low

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Formulation Framework
TOWS Matrix SPACE Matrix
Stage 2: The Matching Stage

BCG Matrix IE Matrix Grand Strategy Matrix

140

INTERNAL EXTERNAL (IE) MATRIX

Matriks Internal-External adalah salah satu alat yang dapat digunakan untuk memposisikan perusahaan kedalam matriks yang terdiri atas 9 sel, untuk menyusun strategi perusahaan/grand strategy. IE Matrix terdiri atas sumbu X yang menyatakan skor total dari IFE matrix (IFAS) dan sumbu Y yang menyatakan skor total EFE matrix (EFAS) Arti posisi internal pada sumbu X dan posisi eksternal pada sumbu Y adalah sebagai berikut :

POSISI PADA SUMBU X

POSISI INTERNAL LEMAH POSISI EXTERNAL RENDAH POSISI INTERNAL RATA-RATA POSISI EXTERNAL SEDANG POSISI INTERNAL KUAT POSISI EXTERNAL TINGGI

POSISI PADA SUMBU Y

141

9 SEL POSISI MATRIKS INTERNAL-EKSTERNAL

POSISI I, II, IV
Posisi perusahaan yang menempati sel I, II & IV dapat digambarkan sebagai GROW & BUILD. Strategi yang cocok untuk masing-masing posisi sel ini adalah : Intensive (market penetration, market development & product development) atau integration (backward integration, forward integration, horizontal integration)

POSISI III, V, VII

Posisi yang menempati sel III, V & VII dapat digambarkan sebagai HOLD & MAINTAIN. Strategi yang cocok untuk masing-masing posisi sel ini adalah : Market penetration & product development.

POSISI VI, VIII, IX

Posisi perusahaan yang menempati sel VI, VIII & IX dapat menggunakan strategi HARVEST or DIVESTITURE

142

9 SEL POSISI MATRIKS INTERNAL-EKSTERNAL

SKOR TOTAL IFE/IFAS
4,0 4,0 TINGGI KUAT 3,0 RATA-RATA 2,0 LEMAH 1,0

I
3,0

II

III

SKOR TOTAL EFE/ EFAS

RATA RATA 2,0

IV

VI

RENDAH

VII

VIII

IX

1,0

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IE MATRIX : AMAZON
The IFE Total Weighted Score Strong 3.0 to 4.0 I Average 2.0 to 2.99 II
3

High 3.0 to 3.99

Weak 1.0 to 1.99 III 1

2 The EFE Total Weighted Score Medium 2.0 to 2.99 IV V VI

Low 1.0 to 1.99

VII

VIII

IX

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Segments 1. U. S. Books, Music-Dom 2. Early-Stage Businesses and Other 3. International

Revenue $1,700 million 683 million 381 million

EFE 2.5 3.5 3.6

IFE 1.9 2.5 2.5

Formulation Framework
TOWS Matrix SPACE Matrix
Stage 2: The Matching Stage

BCG Matrix IE Matrix Grand Strategy Matrix

145

Grand Strategy Matrix

Popular tool for formulating alternative strategies All organizations (or divisions) can be positioned in one of four quadrants Based on two evaluative dimensions:

Competitive position Market growth

146

RAPID MARKET GROWTH

1. 2. 3. 4. 5. 6.

Quadrant II Market development Market penetration Product development Horizontal integration Divestiture Liquidation

1. 2. 3. 4. 5. 6. 7.

WEAK COMPETITIVE POSITION

1. 2. 3. 4. 5.
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Quadrant I Market development Market penetration Product development Forward integration Backward integration Horizontal integration Concentric diversification

Quadrant III Quadrant IV Retrenchment 1. Concentric diversification Concentric diversification 2. Horizontal diversification Horizontal diversification 3. Conglomerate diversification Conglomerate diversification 4. Joint ventures Liquidation SLOW MARKET GROWTH

STRONG COMPETITIVE POSITION

Grand Strategy Matrix

Quadrant I

Excellent strategic position Concentration on current markets and products Take risks aggressively when necessary

148

Grand Strategy Matrix

Quadrant II
Evaluate present approach seriously How to change to improve competitiveness Rapid market growth requires intensive strategy

149

Grand Strategy Matrix

Quadrant III
Compete in slow-growth industries Weak competitive position Drastic changes quickly Cost and asset reduction indicated (retrenchment)

150

Grand Strategy Matrix

Quadrant IV

Strong competitive position Slow-growth industry Diversification indicated to more promising growth areas

151

Grand Strategy Matrix : Amazon

RAPID MARKET GROWTH Quadrant II Amazon WEAK COMPETITIVE POSITION STRONG COMPETITIVE POSITION Quadrant I

Quadrant III SLOW MARKET GROWTH

Quadrant IV

152

Formulation Framework

Stage 3: The Decision Stage

Quantitative Strategic Planning Matrix (QSPM)

153

QSPM
Quantitative Strategic Planning Matrix

Only technique designed to determine the relative attractiveness of feasible alternative actions

154

QSPM
Quantitative Strategic Planning Matrix

Tool for objective evaluation of alternative strategies Based on identified external and internal crucial success factors Requires good intuitive judgment

155

QSPM
Quantitative Strategic Planning Matrix

List the firms key external opportunities & threats; list the firms key internal strengths and weaknesses Assign weights to each external and internal critical success factor

156

QSPM
Quantitative Strategic Planning Matrix

Examine the Stage 2 (matching) matrices and identify alternative strategies that the organization should consider implementing Determine the Attractiveness Scores (AS)

157

QSPM
Quantitative Strategic Planning Matrix

Compute the total Attractiveness Scores Compute the Sum Total Attractiveness Score

158

QSPM
Strategic Alternatives
Key External Factors Economy Political/Legal/Governmental Social/Cultural/Demographic/ Environmental Technological Competitive Key Internal Factors Management Marketing Finance/Accounting Production/Operations Research and Development Computer Information 159 Systems Weight Strategy 1 Strategy 2 Strategy 3

QSPM
Strategic Alternatives Key Internal Factors Strengths Customer satisfaction Copyright to One-click online shopping Humanitarian efforts Strong Research & Development Exclusive agreements with Internet sites (Associates) Ability to track customized interests through customized home page Formation of strategic alliances Agreement with AOL Weaknesses Accumulated deficits/Anticipates further losses Financial position Slowing growth, core business-U.S. Books, & Music Video Lawsuit with Barnes & Noble over patent to 1 click method Class action suits filed by stockholders Does not have a mission statement SUBTOTAL Weight Enter into strategic agreements w/physical retailers AS TAS 4 0.40 2 0.02 4 3 0.44 0.27 Expand European presence through strategic alliances AS TAS 2 0.20 4 0.04 2 2 0.22 0.18

0.10 0.08 0.03 0.09 0.01 0.02 0.11 0.09

0.11 0.07 0.08 0.03 0.04 0.05 1.00

1 3 2 4 -

0.11 0.21 0.16 0.16 1.77

2 2 4 3 -

0.22 0.14 0.32 0.12 1.44

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QSPM
Limitations:

Requires intuitive judgments and educated assumptions Only as good as the prerequisite inputs

161

QSPM
Positives:

Sets of strategies examined simultaneously or sequentially Requires the integration of pertinent external and internal factors in the decision-making process

162

Cultural Aspects of Strategy Choice

Culture: The set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm

163

Cultural Aspects of Strategy Choice

Culture: Successful strategies depend on degree of support from a firms culture

164

Politics of Strategy Choice

Politics in organizations: Management hierarchy Career aspirations Allocation of scarce resources

165

Politics of Strategy Choice

Political tactics for strategists:
166

Equifinality Satisfying Generalization Focus on Higher-Order Issues Provide Political Access on Important Issues

Role of A Board of Directors

Duties and Responsibilities:

1. 2. 3. 4.
167

Control and oversight over management Adherence to legal prescriptions Consideration of stakeholder interests Advancement of stockholders rights

This is the end of the PRESENTATION

168