STRATEGIC MANAGEMENT 2013

Q 1. ESTABLISH IN DETAILS THE USES OF SWOT IN THE ANALYSIS OF INTERNAL STRATEGIC ASSESSMENT? INTRODUCTION
SWOT analysis plays a very important role in the internal and external assessment of organization. It basically occurs at individual and organizational level. SWOT analysis is a classic strategic planning tool. It is the continuous strategy which analysis the Strength, Weakness, Opportunities, and Threats of individual at personal level as well as organizational level. STRENGTHS WEAKNESSE S
SWOT ANALYSIS

THREATS

OPPORTUNITIES

Strength & weakness are the internal aspects and Opportunity & threats are the external Strengths: Strength basically indicates the positive points of individual and

organization in terms of their of good skills, talent, effective production, good management, credit in the market, profit margin Weaknesses: It basically indicates the negative response and aspects. Opportunities: As indicated is an external aspect. Means what opportunity we get from

external like job, opportunity cost etc.. Threats: It is also the external. It can occur in terms of competitors, politics,

government rules & regulation, climate, natural occurrence. INTERNAL ASSESSMENT OF SWOT: An assessment internal of SWOT helps to analysis the internal employees strength and where the project is, b existing resources that can be used immediately and current problems that wont go away. It can help identify where new resources, skills or allies will be needed. It helps to build up the internal strategy of the organization which leads to the growth and increase credibility of organization.
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USES OF SWOT IN INTERNAL STRATEGY: SWOT can be use in the assessment of Internal Strategy in following ways: Strength: It helps to analysis the positive skills of employees and management. It helps to know the project strength of the organization. Strength can be in term of their good environment, employees bondiness, high productivity level. Good market reputation. Assets Effective working capital

Weaknesses: It helps to analysis the Employees weakness and which can be improved. Reason of less productivity

Opportunities: In terms of good contract Projects, Expansion.

Threats: Natural Calamities Competitors Politics Government rules & regulation.

EXAMPLE OF SWOT ANALYSIS FOR SMALL NGO

STRENGTHS: We are able to follow-up on this research as the current small amount of work means we have plenty of time; Our lead researcher has strong reputation within the policy community; Our organisations director has good links to the Ministry.

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WEAKNESSES: Our organisation has little reputation in other parts of government; We have a small staff with a shallow skills base in many areas; We are vulnerable to vital staff being sick, leaving, etc.

OPPORTUNITIES: We are working on a topical issue, The government claims to want to listen to the voice of local NGOs, Other NGOs from our region will support us.

THREATS: Will the report be too politically sensitive and threaten funding from sponsors? There is a pool of counter-evidence that could be used to discredit our research and therefore our organization. The NGO might therefore decide, amongst other things, to target the report to specific patrons in one ministry, use their lead researcher to bring credibility to the findings and work on building up a regional coalition on the issue.

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2. EXPLAIN WITH THE HELP OF EXAMPLES, THE FORMS OF DIVERSIFICATION? INTRODUCTION
Diversification is a strategic approach adopting different forms. Depending on the applied criteria, there are different classifications. Diversification is a strategy that takes a company into new markets with new products or services. Companies may choose a diversification strategy for different reasons. Firstly, companies might wish to create and exploit economies of scope, in which the company tries to utilize its exciting resources and capabilities in other markets. Secondly, managerial skills found within the company may be successfully used in other markets, where the dominant logic and managerial procedures of management can be successfully transferred to other markets. Thirdly, companies pursuing a diversification strategy may be able to cross-subsidize one product with the surplus of another. Fourthly, companies may also want to use a diversification strategy to spread financial risk over different markets and products, so that the entire success of the company is not reliant on one market or product only. The diversification strategy can be split into two different types: 1. 2. Related diversification Unrelated diversification

1.

Related diversification: Related diversification includes the factor which is related to same process in which

the organization already exists. It moves and brings changes in the same line of production. For example: Shirt making company now diversified into making of nylon thread use as raw material in shirt making. 2. Unrelated diversification Unrelated diversification is totally different field from existing one. For example: Shirt manufacturing firm get diversified into jeans making.

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FORMS OF DIVERSIFICATION: The following are the forms of diversification: 1. Horizontal Diversification These forms involve in acquiring or developing new products or offering new services that could appeal to the companys current customer groups. In this case the company relies on sales and technological relations to the existing product lines. For example a dairy, producing cheese adds a new type of cheese to its products. 2. Vertical Diversification It occurs when the company goes back to previous stages of its production cycle or moves forward to subsequent stages of the same cycle - production of raw materials or distribution of the final product. For example, if you have a company that does reconstruction of houses and offices and you start selling paints and other construction materials for use in this business. This kind of diversification may also guarantee a regular supply of materials with better quality and lower prices. 3. Concentric Diversification Enlarging the production portfolio by adding new products with the aim of fully utilizing the potential of the existing technologies and marketing system. The concentric diversification can be a lot more financially efficient as a strategy, since the business may benefit from some synergies in this diversification model. It may enforce some investments related to modernizing or upgrading the existing processes or systems. This type of diversification is often used by small producers of consumer goods. Example A bakery starts producing pastries or dough products. 4. Heterogeneous (conglomerate) diversification Moving to new products or services that have no technological or commercial relation with current products, equipment, distribution channels, but which may appeal to new groups of customers. The major motive behind this kind of diversification is the high return on investments in the new industry. Furthermore, the decision to go for this kind of diversification can lead to additional opportunities indirectly related to further developing the main company business - access to new technologies, opportunities for strategic partnerships, etc. 5. Corporate Diversification It involves production of unrelated but definitely profitable goods. It is often tied to large investments where there may also be high returns.
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