Toolkit:

SWOT analysis:
Internal threats: are constraints within a firm’s own control
Examples:
 Finance: most firms lack sufficient sources of finance, thereby limiting their ability to
achieve organizational objectives.
 People: poor working relations and ineffective communication systems hinder the
performance of an organization.
 Marketing: firms might not have as attractive marketing campaigns as their rivals.
 Production: firms may lack the resources and/or expertise to improve their operations
SWOT analysis: provides a framework for strategic analysis to allow managers to asses the
current situation facing an organization.
 Strength: the things that the organization does well or better than it’s rivals
 Weaknesses: the things that the organization does not do so well in relation to it’s
competitors
 Opportunities: external factors that provide openings for an organization to succeed.
 Threats: external factors that hold back the business preventing it achieving it’s
organizational goals.
Advantages:
1. It helps managers to develop a better understanding of the organizations position in the
market.
2. It enables the organization to reflect on it’s strengths and weaknesses
3. It encourages decision makers to examine the strategic opportunities for the
organization and the possible threats of certain decisions.
4. It facilitates strategic thinking.
Disadvantages:
1. It requires the organization to be honest, although it is not aways easy to acknowledge
or disclose to one’s weaknesses or shortcomings.
2. Does not guarantee that a strategy will be successful.
3. Changes in internal and external factors could make the SWOT analysis outdated quickly
4. There may be errors and/or biases.

Ansoff matrix: is a strategic decision-making tool, used to devise product and market growth
strategies for an organization.
Market penetration: is a growth strategy that focuses on developing existing markets with
existing products in order to increase sales revenue and market share.
 This growth strategy focuses on developing existing markets with existing products in
order to increase sales revenue and market share.
 It focuses on using strategies to increase the usage rate of existing customers
 Is it a low-risk strategy as it focuses on what the organization does and know well
 It is used to reduce competition in mature market
 There is little need of investment or further market research as the strategy focuses on
marketing it’s existing products to it’s existing customers.
Market development: is a growth strategy that involves a business selling existing products in
new or unexplored markets
 This growth strategy involves selling existing products in new or unexplored markets
 It focuses on using customer loyalty to persuade them to buy a new product
 It also relies on a greater distribution network, such as retailers to get the product to
customers spread around the world
 This strategy carries an element of risk as the organization might not succeed in
unexplored markets.
 It can also be expensive for a business to invest and establish itself in new markets,
especially if these are overseas locations.

Products development :is a growth strategy that involves a business introducing new products
to it’s existing ones
 This growth strategy involves introducing new products to existing customers.
 It focuses on product differentiation in order to remain competitive or to improve its
competitiveness.
 Products are usually developed to replace their existing ones or to extend the product
range and marketed at current customers.
 It is a medium risk growth strategy because product development can incur substantial
investment costs.
Diversification: is a growth strategy that involves the business moving into new markets with
new products
 Involves organizations moving into new markets with new products
 It is a high risk growth strategy as the organization enters a market that it has no
experience or expertise in.
There are two types:
1. Related diversification: the organization operate within the same industry
2. Unrelated diversification: involves the organization entering new industries
Summery:
Market penetration: Product development:
 Low risk  Medium risk
 Familiar markets  Product extension
 Changing marketing mix  Product development
 Reposition brands  Acquisition
 Competitors retaliate  Brand extension

Market development: Diversification:

 Medium risk  High risk
 Familiar products  Spread risks.
 New supply chains  New products
 Changing marketing mix  New markets
 Unknown markets  Loss of focus on core
Limitations:
 It only looks at two ways a company can grow (by making new
products or entering new markets), but in the real world, there
are more ways for a company to grow.
 It doesn't measure the risks or rewards of each strategy. The
risks in the four growth strategies are quite different, so
managers still need to figure out how risky, costly, and rewarding
each option might be.
 Before choosing any of these growth strategies, more research
and analysis are needed. For example, you'd need to look into
how much it costs to develop a new product or expand into a new
market.

STEEPLE analysis: is a situational and planning tool that provides a

brainstorming framework for managers to examine the impact of external
factors on businesses.

o Social: are those related to people, their lifestyles and their beliefs, all
of which have a direct impact on business operations

o Technological: refers to the changes and developments in machinery

and equipment development for business operations and their growth
and evolution.

o Economic: refer to the determinants of an economy’s performance

o Ethical: refer to the moral values and beliefs that apply to businesses
and how they operate.

o Political: refers to the role that governments play in business

operations

o Legal: refer to the laws that affect the way in which businesses operate
as well as how employees and customers behave

o Environmental: refer to the ecological aspects of business activity that

can have positive as well as negative impacts on organization

Advantages:
1. It helps to promote pre-emptive thinking and helps managers to plan
more strategically. This is often more effective than to relying on
intuition, emotions or gut feelings. Hence, STEEPLE analysis enables
managers to make more informed decisions.
 2. Examining the STEEPLE factors enables the business to identity both
opportunities and threats, even though the organization needs to be
prepared to deal with the threats.
3. A STEEPLE analysis is quite simple to create. Interpretations of each
of the factors should be clear and succinct.
4. As a planning or analytical tool, STEEPLE analysis can help managers
make more objective and sensible decisions. This is because they need
to consider the external opportunities and threats for the organization.

A decision tree: A decision tree is a visual organizational planning tool for senior
managers to assist them in making a more informed choice based on the
probability of the various outcomes and expected returns for a particular
project or decision.

A chance node, shown as circles on a decision tree diagram,

represents the probable outcome of a particular decision.

A decision node, shown as squares on a decision tree diagram, refers

to a decision that needs to be made.

Advantages Disadvantages
As a planning tool, decision trees offer As a purely quantitative planning tool,
managers a visual representation of decision trees ignore qualitative factors
different decisions and choices, with (non-financial information) that often
probable and quantifiable outcomes. affect decision making.
This makes decision making more
informed, objective, and logical.
It helps managers to consider the The probabilities are, at best, only
various financial risks involved with forecasts even if based on market
different choices options, not just the research data. This means the
potential financial rewards. predicted outcomes are still unknown.
Changes in the external business
environment can easily change the
probably outcomes
The results are easy to understand, As a quantitative decision-making
with tangible quantitative results to technique, the use of decision trees
support decision making.It is a flexible does not necessarily reduce the amount
organizational planning tool that can be of risks, whatever the predicted net
applied to many different situations and outcome figures might reveal.
decisions
As a planning tool, decision trees offer For very complex decisions with
managers a visual representation of numerous and interconnected options,
different decisions and choices, with it can be difficult to construct a decision
probable and quantifiable outcomes. tree diagram that is concise and
This makes decision making more succinct.
informed, objective, and logical.