Expert Answer:TOWS, Strategic Approaches and Value Strategy,

  

Solved by verified expert:For the 4 following separate items the requirements are attached as a link. Acceptable formats include: Word, Excel, PPT, & Prezi (or other Microsoft compatible programs).1) Value StrategyObjective: To identify the value of an organization’s strategy by determining the strength of its business model.2) How to Develop a Competitive Advantage video link: This video shows how competitive advantage should be woven into the corporate strategy.3) A short two paragraphs: For this Journal Entry: In your own words, how does TOWS differ from SWOT? Support your thoughts by providing at least 4 specific differences and explanations of each.4) Personal TOWS Analysis – see attachment 2.1 and if needed attached reading materialDevelop a TOWS Matrix based on your own personal situation (this will be used in an assignment in Week 3)“How to conduct a personal SWOT analysis,”Quast, L. Forbes, 4/15/2013: http://www.forbes.com/sites#/sites/lisaquast/2013/…
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MGMT4020 Strategic Management
Activity 1.1: Strategic Approaches
Objective: To determine which strategic approach an organization is implementing
Format:
 Acceptable formats include: Word, Excel, PPT, & Prezi (or other Microsoft compatible programs)
 Responses must indicate that you have a clear understanding of the concepts
 Responses should show a logical thought process and should answer all aspects of the questions
 Cite your resources!!!! This includes in-text citation & works cited.
Grading: Scores will be based on clarity and completeness of the information you provide
“Five of the Most Frequently Used and Dependable Strategic Approaches to Setting a Company Apart
from Rivals”
1. Low-Cost Provider Strategy
2. Broad Differentiation Strategy
3. Focused Low-Cost Strategy
4. Focused Differentiation Strategy
5. Best-Cost Provider Strategy
(Thompson, Peteraf, Gamble, Strickland III, 2018)
Task: Determine which strategic approach is being implemented by the following organizations. Provide 3
examples for each organization that shows how they exhibit this strategy.
Organization
Kirkland
(Costco’s Private Label)
Strategic Approach
Examples
1.
2.
3.
1.
Marshall’s
2.
3.
1.
IKEA
2.
3.
1.
Trader Joe’s
2.
3.
1.
Starbucks
2.
3.
MGMT4020 Strategic Management
Activity 2.1: Personal TOWS Matrix
Objective: To gain a better understanding of TOWS through application
Format:
 Acceptable formats include: Word, Excel, and PPT
 You may use the matrix provided, or find or develop your own
 Responses should show a logical thought process and should provide sufficient detail
Grading:
 Scores will be based on clarity and completeness of the information you provide
Task: Develop a TOWS Matrix based on your own personal situation (this will be used in an assignment in Week 3)
1: Read “How to Conduct a Personal SWOT Analysis”
“How to conduct a personal SWOT analysis,” Quast, L. Forbes, 4/15/2013.
While this article focuses on SWOT and not TOWS, it provides great information to help steer you in the right
direction for conducting a personal analysis on your competitive position in the market place.
2: Use what you have learned about TOWS to direct the information from the Forbes article from SWOT to
TOWS, and develop your own personal TOWS Matrix.
Internal Factors
Internal Strengths (S)
Internal Weaknesses (W)
External Factors
S1_____________________ W1_____________________
S2_____________________ W2_____________________
S3_____________________ W3_____________________
SO Strategies
WO Strategies
ST Strategies
WT Strategies
O1_____________________
External
Opportunities (O)
O2_____________________
O3_____________________
T1_____________________
External Threats (T)
T2_____________________
T3_____________________
MGMT4020 Strategic Management
Assignment 1.1: Value Strategy
Objective: To identify the value of an organization’s strategy by determining the strength of its business model.
Format:
 Acceptable formats include: Word, Excel, PPT, & Prezi (or other Microsoft compatible programs)
 Responses must indicate that you have a clear understanding of the concepts
 Responses should show a logical thought process and should answer all aspects of the questions
 Cite your resources!!!! This includes in-text citation & works cited.
Grading:
 Scores will be based on clarity and completeness of the information you provide
Part I: Refer to Illustration Capsule 1.2 in the text: Contrasting Business Models: Internet Radio, Satellite Radio, and
Over-Air Broadcast Radio. Examine both the customer value proposition and profit formula for each, and then
provide your thoughts for the following:

While each of the business models has its current pros and cons, which one do you think is a more
sustainable business model for the next 10 years? Explain.

For the one you chose as more sustainable for the long-term, how do you think the business model will
change in the next five years?
Part II: Refer to the figure below to examine the customer value proposition for each of the companies. Based on
this comparison, provide suggestions for each company in terms of where to focus their efforts, and possibly where
to divest their efforts, to sustain a competitive advantage over the others.
(Telecom Circle: http://www.telecomcircle.com/2013/07/war-of-ecosystems/ )
1
The TOWS Matrix –A Tool for Situational Analysis
Heinz Weihrich*, Professor of Management, University of San Francisco
This article has two main purposes One is to review general considerations in strategic planning and the second to introduce the TOWS
Matrix for matching the environmental threats and opportunities with the company’s weaknesses and especially its strengths. These factors
per se are not new; what is new is systematically identifying relationships between these factors and basing strategies on them. There is little
doubt that strategic planning will gain greater prominence in the future. Any organization—whether military, product oriented,
service-oriented or even governmental—to remain effective, must use a rational approach toward anticipating, responding to and even
altering the future environment.
Situational Analysis: A New Dimension in Strategic Planning
Today most business enterprises engage in strategic planning, although the degrees of sophistication and formality
vary considerably Conceptually strategic planning is deceptively simple: analyze the current and expected future
situation, determine the direction of the firm and develop means for achieving the mission. In reality, this is an
extremely complex process, which demands a systematic approach for identifying and analyzing factors external to
the organization and matching them with the firm’s capabilities.
The purpose of this article is twofold: first, the concept of strategy and a model showing the strategic process are
introduced. This part not only provides an overview of strategic planning, but also alerts the reader to the various
alternatives available for formulating a strategy. The second purpose of the article is to propose a conceptual
framework for identifying and analyzing the threats (T) and opportunities (O) in the external environment and
assessing the organization’s weaknesses (W) and strengths (S) For convenience, the matrix that will be introduced is
called TOWS, or situational analysis. Although the sets of variables in the matrix are not new, matching them in a
systematic fashion is. Many writers on strategic planning suggest that a firm uses its strengths to take advantage of
opportunities, but they ignore other important relationships, such as the challenge of overcoming weaknesses in the
enterprise to exploit opportunities. After all, a weakness is the absence of strength and corporate development to
overcome an existing weakness may become a distinct strategy for the company. Although efforts are now being
made to gain greater insights into the way corporate strengths and weaknesses are defined, much remains to be
done.1
The TOWS matrix, discussed later in detail, also serves as a conceptual framework for future research about the
combination of external factors and those internal to the enterprise, and the strategies based on these variables.
*
The author is Professor of Management, School of Business and Management, University of San Francisco, San Francisco, CA 94117,
U.S.A. He has had many years of business and consulting experience in the United States and Europe, working with such companies as
Volkswagen, Hughes Aircraft Company, etc.
Long Range Planning © Heinz Weihrich
2
Equally important, the matrix ‘forces’ practicing managers to analyze the situation of their company and to develop
strategies, tactics, and actions for the effective and efficient attainment of its organizational objectives and its
mission.
Strategic Planning
The term ‘strategy’ (which is derived from the Greek word ‘strategos’, meaning ‘general’) has been used in different
ways. Authors differ in at least one major aspect, Some, such as Kenneth Andrews,2 Alfred D. Chandler3 George A.
Sterner/John B. Miner,4 and Richard Vancil,5 focus on both the end points (purpose, mission, goals, objectives) and
the means of achieving them (policies and plans). But other writers such as Igor H. Ansoff 6 and Charles W.
Hofer/Dan Schendel7 emphasize the means to the ends in the strategic process rather than the ends per se. The great
variety of meanings of the word ‘strategies’ is illustrated in the glossary of one book:
[Strategies are] general programs of action and deployment of emphasis and resources to attain comprehensive objectives; the
program of objectives of an organization and their changes, resources used to attain these objectives, and policies governing the
acquisition, use, and disposition of these resources; tile determination of the basic long-term objectives of an enterprise and the
adoption of courses of action and allocation of resources necessary to achieve these goals.8
In this article, primarily because of space limitations, the narrow meaning will be used, that is, the ends will not be
emphasized so that sufficient attention can be given to the analysis of the current situation. It is assumed that the
purpose of the firm has already been established, yet is subject to change after an evaluation of the situation.
Present
External
Environmen
Inputs
People
Capital
Managerial
Skills
Technical
Skills
Goals of
Claimants
External
Treats and
Opportunities
Evaluation and
Strategic
Choice
Enterprise
Profile
Forecast
of Future
Environmen
Resource
Audit
Alternative
Strategies
Short Range
Planning
Internal
Weaknesses
and Strengths
Implementation
Consistency
Testing
Contingency
Planning
Figure 1. Strategic planning process
Long Range Planning © Heinz Weihrich
Medium Range
Planning
3
Although specific steps in the formulation of the strategy may vary, the process can be built, at least conceptually,
around the following framework:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Recognition of the various organizational inputs, especially the goal inputs of the claimants to the enterprise.
Preparation of the enterprise profile.
Identification of the present external environment.
Preparation of a forecast with predictions of the future environment.
Preparation of a resource audit with emphasis on the company’s internal weaknesses and strengths.
Development of alternative strategies, tactics and other actions.
Evaluation and choice of strategies.
Consistency testing.
Preparation of contingency plans.
These steps—shown in Figure 1—then, serve as the framework for the discussion that follows.
Inputs for Strategic Planning
Strategic planning, to be effective, must carefully consider the inputs into the system. These inputs, de-emphasized
in this discussion, are enclosed by broken lines, as shown in Figure 1. They include people, capital, managerial and
technical knowledge and skills. In addition, various groups of people make demands on the enterprise.
Unfortunately, many of the goals of these claimants are incongruent with each other and it is the manager’s task to
integrate these divergent needs and goals.
Employees, for example, want higher pay, more benefits and job security. Consumers demand safe and reliable
products at a reasonable price. Suppliers want assurance that their products are purchased. Stockholders want not
only a high return on their investment but also security of their money. Federal, state and local governments
depend on taxes paid by the enterprise; they also expect the enterprise to comply with their laws. Similarly, the
community demands that enterprises be ‘good citizens’, providing jobs and emit a minimum of pollutants. Other
claimants to the enterprise may include financial institutions and labor unions; even competitors have a legitimate
claim for fair play. It is clear that many of these claims are incongruent with each other, and it is management’s job
to integrate the legitimate objectives of the claimants.
The Enterprise Profile
The way an enterprise has operated in the past is usually a starting point to determine where it will go and
where it should go. In other words, top executives wrestle with such fundamental questions as:
‘What is our business?’
‘Who are our customers?’
‘What do our customers want?’
‘What should our business be?’
These and similar questions should provide answers about the basic nature of the company, its products and
services, geographic domain, its competitive position and its top management orientation and values. These
topics demand elaboration.
Long Range Planning © Heinz Weihrich
4
Geographic Orientation. A company must also answer questions such as:
‘Where are our customers?’
‘Where are those who should be our customers, but are not at present?’
Companies need to develop a profile of their geographic market. While some firms may restrict themselves to the
eastern part of the United States, others view the whole country as their region of operations. Many large
companies, of course, conduct their business on different continents.
Competitive Situation. Business firms usually do not have an exclusive market; instead, they compete with
other firms. But current market share is not necessarily a sufficient indicator of a firm’s long-range potential.
One must also consider other factors and competitive items such as price, quality, cost, services, product
innovation, distribution systems, facilities and locations.
The assessment of the competitive situation involves several steps. First, key success factors must be
identified. Then the relative importance of these key success factors needs to be estimated. Next, the firm’s
competitive position in respect to these key success factors must be evaluated and ranked. Thus, only a careful
analysis of the current competitive position provides an indication of the company’s future growth and profits.
The competitive analysis, especially for large firms, is done for individual business units, product lines or even
specific products. Moreover, the competitive analysis focus is not only on the present situation, but also looks
into the more distant future. 9 This analysis becomes intricate for firms that compete in the national and
international markets.
Top Management Orientation. An enterprise profile is shaped by people, especially executives. They set the
organizational climate, they influence the atmosphere in the organization and they determine the direction of the
company. For example, management may not pursue opportunities in the liquor business because it conflicts with
top management’s values that are against the production and consumption of alcohol. Another example of the
influence of values may be management’s commitment to socially responsible actions, believing that these activities
will benefit the enterprise in the long run.
The External Environment: Threats and Opportunities
In the analysis of the external environment, many diverse factors need to be considered. Today, the threats certainly
would include the problems of inflation, energy, technological change and government actions. The diverse
factors—which can be either threats or opportunities—can be grouped into the following categories: economic,
social and political factors, products and technology, demographic factors, markets and competition, plus others.
Economic Factors. The general state of the economy certainly affects strategy formulation. For example, the
expansion phase of the business cycle in the 1960s created an abundance of business opportunities while the
recession in the first half of the 1970s required many industries to change their strategy, and drastically reduce
their business activities. The strategist, of course, takes other economic factors besides the business cycle into
account, such as the level of employment, the availability of credit and the level of prices. Also, individual
companies are affected differently by economic factors. What is a threat to one firm is an opportunity for
another.
Long Range Planning © Heinz Weihrich
5
Social and Political Factors. Social developments also influence the business strategy. For instance,
consumerism and consumer protection movements require the firm’s attention to product safety and truth in
packaging. Similarly, managers are confronted by a host of federal, state and local laws and regulations. The
public’s demand for clean air, clean water and a clean environment is often considered a threat to business. At
the same time, these factors can become opportunities, as shown by the car emission test requirements in many
states which presented opportunities for the companies to develop, produce or operate such test equipment.
Products and Technology. Products need to be adjusted to technological changes. For example, the astonishing
success of the Volkswagen Beetle in the 1960s diminished in the 1970s. New customer demands for optional
equipment, safety requirements and competition, along with new technology, gave rise to a new generation of
VWs. It must be remembered that in almost all situations success is only temporary and product innovation is
needed to ensure a competitive advantage for the firm. Of course, innovation is also costly and risky and the
failure rate of new products is high; yet, a policy of no innovation at all may cause the demise of a company.
Demographic Factors. Demographic changes significantly affect business. In the United States there are geographic
shifts such as the movement of many people to the ‘sun belt’. White-collar jobs tend to increase proportionally to
blue-collar occupations. Income levels are expected to change, although the direction is less clear and may vary for
different sectors of the labor market. The age composition will also change with elderly people making up an
increasing proportion of the population. The strategist must take these and other factors into account because they
influence the preferences for the kinds of products and services demanded by consumers.
Markets and Competition. In the United States, coping with competition in the marketplace is a corporate way
of life. The following questions and the answers to them are crucial for formulating a strategy:
‘Who are our competitors?’
‘How does our company compare with the competition’
‘What are the strengths and weaknesses of our competitors?’
‘What are their strategies?’
‘How do we best compete?’
Other Factors. There are, of course, many other factors that might be particularly important to a specific firm.
The availability of raw materials, suppliers and the transportation system, are a few examples. The everchanging environment demands continuous scanning for opportunities and threats. A company that discovers
customer needs and provides the products and services demanded, certainly has a better chance for success
than an enterprise that ignores such changes.
Information Gathering and Forecast of the Future. To collect data on the various factors is, to say the least, a
tedious task. The study by Jerry Wall of 1211 executives, all readers of the Harvard Business Review, gives
some insights on how companies collect information about their competitors. The sources used most
frequently include: company sales persons, published sources, and personal and professional contacts with
competitors and customers. Other less frequently used sources include: formal market research, brokers,
wholesalers and other middlemen, analyses of processes and products of competitors, and suppliers. The least
utilized sources include: employees of competitors, advertising agencies and consultants.10
Since there are many factors that need to be analyzed, the executives must be selective and concentrate on
those factors that are critical for the success of the enterprise. Furthermore, it is not enough for the strategist to
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