As We Strategize We Must Not Jeopardize Animal Welfare
Consumers are increasingly resentful of companies that harm wild- life or treat animals inhumanely. According to the World Wildlife Fund’s Living Planet Report, the world’s animal species are dying, and humans are a big reason why. The Report reveals that global
populations of wild mammals, fish, birds, amphibians, and reptiles declined 58 percent on average in the last 45 years. Specifically, land animals declined by 38 percent, marine species incurred a 36 percent drop, and the number of freshwater species decreased by 81 percent.
Using 1970 as a baseline, an estimated 66 percent of the world’s wild animal population will be extinct by 2020. This fact has prompted experts to call this time in history “the Anthropocene,” because these declining numbers for species are uncharted territory. Species like eastern and western gorillas are nearly extinct and poaching has deci- mated both elephant and northern white rhino populations. Even vulture populations are headed towards extinction as are certain spe- cies of bees. Other causes of the mass extinction of wildlife include urban development, over-hunting, pollution, disease, and climate change—all of which are tied to humans. In many respects, the earth is becoming inhospitable to animals and humans. SWOT factors and strategies oftentimes address this business ethics issue.
Source: http://www.aol.com/article/news/2016/10/27/were-on-track-to-lose- a-huge-chunk-of-the-worlds-animal-popula/21593252/
Are We Safe Here Mom?
Strengths Weaknesses
1. Inventory turnover up 5.8 to 6.7
2. Average customer purchase up $97 to $128 3. Employee morale is excellent
4. In-store promotions = 20 percent increase in sales
5. Newspaper advertising expenditures down 10 percent
6. Revenues from repair and service in store up 16 percent
7. In-store technical support persons have MIS degrees
8. Store’s debt-to-total-assets ratio down 34 percent
1. Software revenues in store down 12 percent
2. Location of store hurt by new Hwy 34 3. Carpet and paint in store in disrepair 4. Bathroom in store needs refurbishing 5. Total store revenues down 8 percent 6. Store has no website
7. Supplier on-time-delivery up to 2.4 days
8. Customer checkout process too slow 9. Revenues per employee up 19 percent
Opportunities SO Strategies WO Strategies
1. Population of city growing 10 percent 2. Rival computer store opening 1 mile away 3. Vehicle traffic passing store up 12 percent 4. Vendors average 6 new products a year 5. Older adults’ use of computers up 8 percent 6. Small business growth in area up 10 percent 7. Desire for websites up 18 percent by realtors 8. Desire for websites up 12 percent by small firms
1. Add 4 new in-store promotions monthly (S4, O3)
2. Add 2 new repair and service persons (S6, O5)
3. Send flyer to all seniors over age 55 (S5, O5)
1. Purchase land to build new store (W2, O2)
2. Install new carpet, paint, and bath (W3, W4, O1)
3. Up website services by 50 percent (W6, O7, O8)
4. Launch mailout to all realtors in city (W5, O7)
Threats ST Strategies WT Strategies
1. Best Buy opening new store in 1 year nearby 2. Local university offers computer repair 3. New bypass Hwy 34 in 1 year will divert traffic 4. New mall being built nearby
5. Gas prices up 14 percent 6. Vendors raising prices 8 percent
1. Hire 2 more repair persons and market these new services (S6, S7, T1)
2. Purchase land to build new store (S8, T3) 3. Raise out-of-store service calls from
$60 to $80 (S6, T5)
1. Hire 2 new cashiers (W8, T1, T4) 2. Install new carpet, paint, and bath
(W3, W4, T1)
FIGURE 6-3
A SWOT Matrix for a Retail Computer Store
Travel Stock/Shutterstock
Some important aspects of a SWOT Matrix are evidenced in Figure 6-3. For example, note that both the internal and external factors and the SO, ST, WO, and WT strategies are stated in specific terms. This is important! For example, regarding the second SO strategy (SO2), if the analyst simply said, “Add new repair and service persons,” the reader may conclude that 20 new repair and service persons are needed, when only 2 are needed. So, in stating strategies, be as quantitative and divisional as possible. Furthermore, remember to consult the vision and mission statements of the firm; and keep in mind what the firm considers its competitive advantages or core competencies based on its value chain analysis. Take care to develop SO, WO, ST, and WT strategies based on these considerations as well as the factors receiving the highest weights from your EFE and IFE Matrices.
Regarding specificity, for each SWOT strategy included in the matrix, ask yourself this question: “Is the strategy stated specifically enough to estimate the cost (or savings) if it is se- lected for implementation?” If the answer is NO, then the strategy is too vague as stated. Thus, whenever words such as “expand, increase, decrease, more, or reduce” are used in a SWOT Matrix, clarify with a percent or number exactly what you are proposing. There is no need to give estimated costs in a SWOT Matrix, but the information must be specific enough to generate these numbers if the particular strategy is selected for implementation. Vagueness is disastrous in strategic planning, especially in a SWOT Matrix.
As shown in Figure 6-3, it is important to include the “S1, O2” notation after each strategy in a SWOT Matrix. This notation reveals the rationale for each alternative strategy in terms of the internal and external factors that were “matched” to formulate desirable strategies. For ex- ample, note that this retail computer store business may need to “purchase land to build a new store” because a new Highway 34 will make the current location less desirable. The “S4, T5”
type of notation, given after each strategy in a SWOT Matrix, accents that “strategies do not come out of the blue yonder.”
The purpose of SWOT analysis and each Stage 2 matching tool is to generate a list of feasible, specific alternative strategies, not to select or determine which strategies are best.
Not all of the strategies developed in the SWOT Matrix will be selected for implementa- tion. No firm has sufficient capital or resources to implement every strategy formulated.
As a rule of thumb, include at least four strategies in each SO, ST, WO and WT quadrant to encompass all aspects of the business; usually a SWOT matrix, thus, will include 16 strate- gies total.
Although the SWOT Matrix is widely used in strategic planning, the analysis does include limitations.3 First, SWOT analysis does not reveal how to achieve a competitive advantage, so it must not be an end in itself. The analysis should be the starting point for a discussion on how proposed strategies could be implemented as well as cost-benefit, uniqueness, and trad- eoff considerations that ultimately could lead to competitive advantage. Second, SWOT is a static assessment (or snapshot) in time. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
Third, there are interrelationships among the key internal and external factors that SWOT does not reveal, but that may be important in devising strategies. Fourth, there are no weights or ratings in a SWOT analysis. Finally, the relative attractiveness of alternative strategies is not provided.
The Strategic Position and Action Evaluation (SPACE) Matrix
The Strategic Position and Action Evaluation (SPACE) Matrix is another Stage 2 matching tool that uses two axes and four quadrants to reveal whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given organization. Axes of the SPACE Matrix represent two internal dimensions (financial position [FP] and competitive position [CP]) and two external dimensions (stability position [SP] and industry position [IP]). To perform SPACE analysis, simply rate a company on each of the four dimensions (axes) named above and revealed in Figure 6-4.4
Depending on the type of organization, numerous variables could make up each of the di- mensions represented on the axes of the SPACE Matrix. Factors that were included in the firm’s EFE and IFE Matrices should be considered in developing a SPACE Matrix. Other variables
LO 6.4
commonly included in a SPACE analysis are given in Table 6-1. For example, return on invest- ment, leverage, liquidity, working capital, and cash flow are commonly considered to be deter- mining factors of an organization’s financial position (FP).
Steps in Performing SPACE Analysis
The process of developing a SPACE Matrix can be summarized in six steps.
Step 1 Select a set of variables to define financial position (FP), competitive position (CP), stability position (SP), and industry position (IP).
1. Let’s first elaborate on the difference between the SP and IP axes. The term SP refers to the volatility of profits and revenues for firms in a given industry based on the factors considered in the SPACE. Thus, SP volatility (stability) is based on the expected impact of changes in profits by volatility in core external factors such as technology, economy, demographic, seasonality, and so on. The higher the frequency and magnitude of profitability changes in a given industry, the more unstable the SP becomes. An industry can be stable or unstable on SP, yet high or low on IP. The robotics industry, for instance, would be unstable (-7) on the SP axis due to constant developments and upgrades, yet high growth on the IP axis (+7), whereas the canned food industry would be stable (-1) on the SP axis, yet low growth on the IP axis (+1).
SP FP Conservative
Market penetration
Market development
Product development
Related diversification
Defensive
Retrenchment
Divestiture
Liquidation
Backward, forward, horizontal integration
Market penetration Market development
Product development
Diversification (related or unrelated)
Backward, forward, horizontal integration
Market penetration
Market development
Product development Aggressive
Competitive CP
+6 +5 +4 +3 +2 +1 0 0 –1 –2 –3 –4 –5 –6 –7
IP –6 –5
–7 –4 –3 –2 –1 +1 +2 +3 +4 +5 +6 +7
+7
FIGURE 6-4 The SPACE Matrix
Source: Based on H. Rowe, R. Mason, and K. Dickel, Strategic Management and Business Policy: A Methodological Approach (Reading, MA: Addison-Wesley Publishing Co. Inc., © 1982), 155.