Flavors That Bring Alive Traditions

 
 

APPLIED STRATEGIC MANAGEMENT

NAME: Nair Vaishak Ramakrishnan

UOB: 09032138
Batch NO: BBMD2 0931
Lecturers Name: G.V.NATHAN
Submission Date: 27TH OCT 2010
  1 
TABLE OF CONTENTS

Acknowledgement------------------------------------------------------------------------------ Pg 3

Project Outline---------------------------------------------------------------------------------- Pg.4

Executive Summary---------------------------------------------------------------------------- Pg.6

Industry Life Cycle----------------------------------------------------------------------------- Pg.7

Key Factors of Success------------------------------------------------------------------------ Pg.8

Porter’s 5 Forces-------------------------------------------------------------------------------- Pg.9

SWOT Analysis

• Internal Factor Analysis Summary-------------------Pg.11

• External Factor Analysis Summary------------------Pg.12

Strategic Factor Analysis Summary-------------------------------------------------------- Pg.13

TOWS Matrix--------------------------------------------------------------------------------- Pg.15

Assessment of Company’s Performance--------------------------------------------------- Pg.17

Review of options for future direction----------------------------------------------------- Pg.18

Implementation of new strategies----------------------------------------------------------- Pg.19

Usefulness of Strategic Management Models--------------------------------------------- Pg.20

List of Reference------------------------------------------------------------------------------ Pg.22

WORD COUNT: 4016 WORDS

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Nair Vaishak Ramakrishnan
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 ACKNOWLEDGEMENT

I take this opportunity to thank my Prof G.V NATHAN, Understanding Strategic

Management & Applied Strategic Management, for providing me with the opportunity
to have such a good experience of researching on an assignment like this and whose able
guidance helped me sail through this module successfully with a project on Strategic
analysis of AMUL dairy industry. I can’t sum up all that I have learned from him, except
to say that it is often his words and his thoughts that I use when I motivate my younger
brother to do his studies and activities.

I would like to express my gratitude to Prof. G.V.NATHAN for giving eloquent and
clear voice to my ideas. Thank you for telling me that, I too, could make that difference.
And thank you for always pushing me, to dream of what is possible, rather than settling
for what is.

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Nair Vaishak Ramakrishnan
UOB: 09032138
 UNIVERSITY OF BRADFORD/MDIS
APPLIED STRATEGIC MANAGEMENT
PROJECT OUTLINE

NAME: Nair Vaishak Ramakrishnan

STUDENT NO: 09032138

BATCH NO: BBMD2 0951A

SELECTED COMPANY: ANAND MILK UNION LTD - AMUL

_____________________________________________________________________

Brief Of Company: Amul is a Dairy Industry, which was formed in 1946 in Anand,
INDIA. It is a brand name managed by an apex cooperative organization, Gujarat Co-
operative Milk Marketing Federation Ltd (GCMMF) that is India’s largest dairy
industry. Currently it has revenue of US$ 1.33 billion, with a pool of 2.8 million
employees.

Reasons for selecting this company: Amul has followed patterns and models to
achieve success while coping with certain limitations. It has been able to

. Produce an appropriate blend of products that satisfies all strata of society.

. Plough back the profits by prudent use of men, material and machines, in the rural
sector for the common good of the producers.

. Amul is an example par excellence of and intervention for rural change.

Main strategic issues facing the company:

Milk vendors, the unorganized sector

Strong competition from MNC’s

Better cattle management- Better milk yield

High collection rate of milk

Required increasing membership with more village societies

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Company’s contribution to National Economy: It is one of the best examples of
cooperative achievement of developing economy. It has spurred the white revolution of
India, which has made India the largest producers of milk and milk products in the
world.

Company’s Contribution to Regional Economy: The Amul Model is a three-tier

cooperative structure, which was set-up to delegate the various functions. Amul models
helped in eliminating internal competition and ensuring that an economy of scale is
achieved. It has established itself as a uniquely appropriate model for rural development.

Recent Strategic Dilemma:

. Growing price of milk and milk products

. Ban on export of milk powder

. Higher cost of production and threat of subsidized imports flooding the dairy markets

Recent Strategic choice: Moving consumers from lose milk to packaged milk and
gradually move them up the value chain.

Strong supply chain design

Improving the socio-economic condition of the consumer anchors the desire to enhance
lifestyle.

Source of information on company

www.amul.com
www.etstrategicmarketing.com
Word count: 351

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 EXECUTIVE SUMMARY

In today’s competitive world while entering in the market it is very necessary to have
good knowledge of the potential of a particular market. The growth of a company is
invariably determined not just by its strategy, but on how it responds to the challenges it
encounters. Over the decades AMUL has successfully countered several challenges that
have come its way with innovative responses and continuous improvement, which have
enabled it to remain stable and even convert some of these challenges into opportunities.
It is the culture of endurance that has accorded AMUL the insight and focus to deal with
the current economic environment. Drawing from its inner strength and beliefs, AMUL
responded by launching several initiatives across all its operations in various
geographies that are helping the group achieve growth even in current times. It is also
this very strategic culture that will propel AMUL to continue on its growth trajectory in
years to come.

The report provides a comprehensive insight into the company, including business
strategies and operations, by using strategic analysis models such as industry life cycle,
porter’s 5 forces and also the key success factors index, SWOT analysis. I have reported
an assessment of the internal and external environment of AMUL dairy, considered its
strengths and weaknesses, opportunities and threats, its competitive advantages that are
valuable for the efficiency and effectiveness of its operations. Based on the information
obtained from the above assessments, I analyzed its strategic matrix and generated
several strategic options to attain its strategic options more successfully has been made.
Lastly I have included in this report, the usefulness of applying these management
models for AMUL dairy.

(Word count: 274 words)

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 INDUSTRY LIFE CYCLE

Introduction Growth Maturity Decline

DAIRY
INDUSTRY

Time

White revolution in INDIA began in 1946 with two village cooperatives and 250 liters
of milk per day, nothing but a trickle compared to the flood it has become today. They
came up with AMUL as a brand name, which means “ priceless” in Sanskrit language. It
has made INDIA the largest producers of milk and milk products in the world and the
white revolution has finally created a billion dollar brand.

The industry life cycle has four stages. They are introduction, Growth, Maturity and
decline. Dairy industry as a whole falls under early stage of maturity, this is because of
the vast range of products they offer to the customers domestically and internationally.
Countries like Sri-Lanka, U.A.E, Australia, Hong Kong, China, Singapore, UK, and
USA have already started selling Amul products of late (of late/ recent years). Especially
Wal-Mart has made separate shelves to sell low fat AMUL dairy products. Quality and
reliability is important in order for this industry to grow higher.

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 KEY SUCCESS FACTOR

Amul Nestle Britannia

Slno
Weighted Weighted
Weights Rankings Weighted Rankings Rankings
Score Score
Score
1 Product quality 0.28 5.0 1.40 5.0 1.40 5.0 1.40
Diverse product
2
mix
0.18 5.0 0.90 5.0 0.90 5.0 0.90
3 Pricing 0.14 4.0 0.56 4.0 0.56 4.0 0.56
Robust supply
4
chain
0.12 4.0 0.48 3.0 0.36 3.0 0.36
Customer
5
awareness
0.11 3.0 0.33 5.0 0.55 4.0 0.44
Product
6
availability
0.07 4.0 0.28 4.5 0.31 4.0 0.28
7 Packaging 0.05 3.5 0.17 4.0 0.20 4.0 0.20
8 Advertisement 0.05 2.5 0.12 4.0 0.20 3.5 0.17
TOTAL 1.00 4.24 4.48 4.31

The key success factors of the Amul industry are those things that affect industry
members ability to prosper in the market place-accessibility to raw materials, packaging,
cost focus, Advertisement, product design, reputation & credibility, quality control,
strategic alliances, are ultimately so important that all firms in the industry must pay
close attention to them. These key factors of success are critical in the dairy industry in
particular, as they are the factors that shape whether a company will be financially and
competitively successful. These critical factors may vary from time to time within the
industry as driving forces and competitive conditions change.

After calculating the weighted score for all three companies, it seems that NESTLE has
got the highest weighted score compared to the other two companies. This is because
NESTLE is able to achieve a high score in product availability success factor and
Advertisement success factor. Nestle plays a lead role in advertisement. Their marketing
strategy is to reach each and every one through advertisements. They spend a lot in
terms of Advertisements. While Goodwill plays an important role for Amul, as it’s been
in the market from past three generations, so the advertisement is the least role for their
strategy. Still Amul does come up with taglines of movies and current affairs.

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UOB: 09032138
 PORTER’S 5 FORCES

Potential entrants
⇒ Economies of scale
⇒ Capital requirements
⇒ Access to distribution
channels
⇒ Government policy

Other Stakeholders Buyers

⇒ Government ⇒ Product differentiation
⇒ Shareholders
Industry Competitors ⇒ Product consumption
⇒ Employees   ⇒ Switching costs
⇒ Economies of scale
⇒ Cost effectiveness

Suppliers Rivalry among existing

⇒ Cost effectiveness Substitutes
⇒ Strategic alliances firms ⇒ Substitute products
⇒ Economies of scale ⇒ Product characteristics ⇒ Cost ratio
⇒ Size of company ⇒ Number of competitors ⇒ Product demand
⇒ Growth rate
⇒ Capacity
⇒ Size & strengths
 

♦ Rivalry among existing firms (HIGH): Cost is perhaps the strongest driver of
company rivalry, which is due to the lack of product differentiation. In short, firms must
be continually working to decrease their cost as much as possible. Dairy itself has lots of
branches where there is a competitor for each and every product in the market. The
major competitors for AMUL are NESTLE and BRITIANNIA, these are strong
contenders; however, this is a potential threat as each one of them does not have their
own market space in their respective sections. The Indian market is dominated by loads
of small local and regional players.

♦ Threat of new entrants (HIGH): In analyzing the current Dairy industry, I believe that
the threat by new entrants is relatively high. This is because there are very few entry
barriers for the dairy industry. As Amul being more of a local player, the chances are
very high for other competitors to barge in.

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 Amul is defending against Domestic players like Mahananda, Vijay, Milma and other
co-operative milk brands. Economies of scale play an important role behind their
success.

♦ Bargaining power of buyers (LOW): Products like ice cream, curd, milk, powders,
milk additives etc are easily been switched between brands, but under liquid milk
category it is comparatively less. Milk being a necessity in a day-to-day life the power of
bargaining does not exist.

♦ Threat of substitute: (high): Threat of substitute is high as there is availability of other

products in the market. There are plenty of substitutes in the market available for each
product. Distant substitutes are present in many of the categories of business of
GCMMF (Gujarat Co-operative Milk Marketing Federation). For example in the Masti
Buttermilk category it faces competition from cold drinks and Ice cream.

♦ Bargaining power of suppliers (LOW): The objective of Amul dairy is non-profiting.

As it is a part of cooperative society, it runs for the benefit of farmers, who are the
suppliers of milk and milk products. According to the concept of co-operative society, a
supplier has a bargaining power to have a good return on his/her supply. However
supplier has limited rights to bargain with the cooperative society because it is made and
run, for the sake of mass and not for individual benefits but it is made sure that the
supplier gets his/her fare share of return. There is an appropriate bargaining power of
supplier. As the farmers rights are protected under the cooperative rules and regulations,
it ultimately results in moderate power of the bargaining from the supplier.

♦ Relative of other Stakeholders (High): Relative of other stakeholders in the food and
beverage industry is high because the product of this company may affect or works well
with another industry’s product. If one does not coordinate properly then there is a loss
of its value.

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Nair Vaishak Ramakrishnan
UOB: 09032138
 SWOT ANALYSIS
INTERNAL FACTOR ANALYSIS SUMMARY (IFAS)
Weighted
Internal Factors Weight Rating Comments
Score
Strengths
S1 Wide range of products 0.15 5.0 0.75 Opportunities for expansion

S2 Economies of scale 0.15 5.0 0.75 Back bone of the industry

S3 Low cost manufacturing Key element in a competitive

0.10 4.5 0.45 market
S4 Strong cooperative org. 0.05 4.0 0.20 Since 1946

S5 Global player 0.05 3.5 0.17 International Demand

Weaknesses
W1. Poor management of Unprofessional management
logistics
0.10 3.0 0.30
W2 low investment 0.05 2.5 0.12 Low capital investment
W3 Perishability 0.15 3.5 0.52 Pasteurization
W4 lower yield management 0.10 3.5 0.35 Awareness of development

W5 Problem in distribution 0.10 2.5 0.25 Local vendors

Total Scores
1.00 3.86

The strengths for AMUL are product differentiation, Economies

of scale, Low cost manufacturing, and strong cooperative
organization. The demand profile is absolutely optimistic.
While the margins are quite reasonable, even on packed liquid
milk. Wal-Mart has low fat products of AMUL on their shelves,
due to high customer demands.

The weaknesses for AMUL are Poor management of logistics,

Low investment, perishability, lower yield management.
Persihability is being overcome partially by UHT technology.
UHT (Ultra high temperature) gives a longer shelf life to milk
and milk products.

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Nair Vaishak Ramakrishnan
UOB: 09032138
 EXTERNAL FACTOR ANALYSIS SUMMARY (EFAS)

Weighted
External Factors Weight Rating Comments
Score
Opportunities
O1 Growing global demands 0.15 5.0 0.75 Wall mart, Mustafa
Satisfy demands
O2 Greater Productivity 0.10 3.0 0.30
O3 Export potential 0.05 3.5 0.17 Global demands, GATT
O4 Robust economy growth 0.10 4.0 0.40 Strong economy
O5 Supply Chain Management 0.10 4.0 0.40 Being addressed

Threats
T1 Competitors 0.15 4.0 0.60 Local producers
T2 Rising environmental costs 0.15 3.0 0.45 Measures are taken

T3 Milk vendors 0.05 3.0 0.15 Barrier to export globally

T4 Adulteration 0.05 1.0 0.05 Corruption

T5 Lower cattle yield 0.10 3.5 0.35 Future produce

Total Scores 1.00 3.62

As a Global enterprise, AMUL will be meeting global

demands and ensure greater productivity and the
opportunity to enhance integration in order to increase
efficiency and effectiveness in the business. It already has
wide geographic positions and hence this will give it an advantage to get access to gain
presence in mature markets. Efforts to exploit export potential are already on, as AMUL
is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. By following the
new GATT treaty, opportunities have increased tremendously for the export of agri-
products in general and dairy products in particular.

Local competitors are the major problem facing by AMUL. They sell their products at a
lower price, since being a low capital company; they have fewer expenses
to take care of. Secondly as the environmental costs are rising day by day,
it’s getting tough to carry the same pricing throughout. Thus cutting down
the extra cost will surely help. Adulteration -also a major threat to quality
-takes place due to illiterate farmers from remote villages.

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 STRATEGIC FACTOR ANALSIS SUMMARY (SFAS) MATRIX

Duration

I
N
T
E
R
M
E
S D L
H I O
O A N
STRATEGIC FACTORS WEIGHTS RATINGS WEIGHTED R T G COMMENTS
SCORE T E
S1 Wide range of products 0.15 4.5 0.67 X More choices
S2 Economies of scale 0.10 5.0 0.50 X Key to success
X Technology
W3 Perishability 0.15 3.0 0.45
advancement
W4 Lower yield X Better cattle
0.10 3.5 0.35
Management management
X Global
O1 Growing global demand 0.15 5.0 0.75
exposure
X Opportunity for
O5 Supply chain demand 0.10 4.0 0.40
growth
X Healthy
T1 Competitors 0.10 3.0 0.30
competition
T2 Rising environmental X During
0.15 4.0 0.60
Cost inflation
TOTAL 1.00 4.02

There are certain strategic factors, which are with a long-term mission, and some need to
be addressed in the short term. There are other factors, which do not fall into either of
the terms mentioned above; they are classified as intermediate term.

SHORT TERM

The strategic factors that the company needs to satisfy in the short run are Economies of
scale as it can change by building few more storage capacity at their new projects. This
will also benefit in global expansion of the company. As short term defines a period of a
year or so, the solution should be found with in a year for a proper success.

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INTERMEDIATE TERM

The strategic factors that the company needs to consider during this term are lower yield
management, supply chain demand and rising environmental costs. These are classified
into intermediate duration because the company must be able to overcome its
weaknesses, make use of the opportunities and defeat the threats. All this must be done
at the right time to ensure efficient results. In this case the factors are such that the
earliest (short term) might not be the best decision to make, as the duration might not be
sufficient to overcome all the issues with a clear outlay.

LONG TERM

The strategic factors that the company needs to satisfy during this period are the strength
of having a wide range of products. They must be able to continue to maintain many
products varieties and build on them efficiently. Using R&D (research and development)
to overcome the problem of pasteurization as well as satisfying growing global demand
is not an easy task and hence requires time and efficiency to meet the needs globally.
Last but not least is overcoming the threat of competitors in the long run.

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 TOWS MATRIX

INTERNAL FACTORS STRENGTHS (S) WEAKNESSES (W)

S1 Low cost manufacturing
S2 Economies of scale
S3 Wide range of products
S4 Strong cooperative org.
S5 Global player
W1 Poor management of logistics
W2 low investment
W3 Perishability
W4 lower yield management
W5 Problem in distribution

EXTERNAL FACTORS
OPPORTUNITIES (O)
O1 Growing global demands
O2 Greater Productivity
O3 Export potential
O4 Robust economy growth
O5 Supply Chain
Management
SO Strategies WO Strategies
- Increased productivity - Increase of opportunity
through cost effective through new GATT treaty.
manufacturing. - Develop new process to
- Increase global demand improve the quality and
through global shelf life of milk and milk
exposure. products.
- Improve channel of - Increase awareness of
distribution. scientific developments.

THREATS (T) ST Strategies WT Strategies

T1 Competitors - Efficient and economical
- Product eliminating
procurement
T2 Rising environmental and diversification
- Control over logistics and
costs - Value marketing
yield.
T3 Milk vendors - Hygienic processing
- Product positioning
facilities.
T4 Adulteration
T5 Lower cattle yield

SO STRATEGIES (Maxi Maxi)

Amul can use the strategies that have been formed after in-depth strategic analysis of the
company and its industry. Some suggestions in this case would be to increase
productivity by using cost effective manufacturing techniques. Also, increase demand
for their products world over by first gaining more exposure to the global market. With
the use of expansion strategy, it can overcome the location issue, as AMUL can expand
more areas and it will make the distribution of channel areas easier and convenient.

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ST STRATEGIES (Maxi Mini)

Amul must put into action some of these strategic options to meat the threats’ using its
strengths. Product differentiation is very important to differentiate AMUL from the
competitors, as it can tackle down the competitor’s product if Amul products are more
outstanding and different from its competitors. Options available can be classifieds as
product elimination and diversification strategy, value marketing strategy and also
developing hygienic processing facilities. These are some of the main areas of focus
under this section.

WO STRATEGIES (Mini Maxi)

The strategies formulated to overcome the weakness through opportunities are increase
of opportunity through new GATT treaty, develop new process to improve the quality
and shelf life of milk and milk products, this can be achieved through pasteurization,
homogenization and many other processes like producing UHT milk etc. finally to also
increase awareness of scientific developments.

WT STRATEGIES (Mini Maxi)

The strategies that have been formed to overcome the weakness and threats in AMUL
Company and the dairy industry as a whole are to apply efficient and economical
procurement of products. Secondly to have control over the logistics and to maintain
them efficiently. Lastly, create the right type of product positioning for the various
product categories that Amul deals with.

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ASSESSMENT OF COMPANY’S PERFORMANCE

Effectiveness:

It got very strong supply chain. Even after growing so big, it never left its key players-
the milk suppliers. It even launched product for diabetic patients, like Pro- biotic
Wellness Ice-cream, which was India’s first sugar free delights. From past 5 decades
AMUL is consistent, and stable in the growth of overall turnover. As price being a
sensitive issue for most of the INDIANS, low priced ice creams and creamer wins the
battle of quality with affordability. It not only contributes a low cost strategy, but also
contributes healthy and hygienic guaranteed products.

Efficiencies:

Amul in a day collects 9.10 million liters of milk from around 3.32 million farmers. It
converts the milk into branded, packed products and delivers those goods to over 5
million retail outlets across the country. It has a capacity to store 13.07 million liter per
day. Its supply chain is one of the most complicated yet successful one. Amul is the
largest brand in Asia, and second largest in the world. It has more than 30 dairy products
produced, out of which the market leader is AMUL GHEE & AMUL BUTTER with
85% of the market share.

Return On Investors:

It started with revenue of US$ 355 million during 1995 and the sales turnover recorded
in 2008/2009 is US$ 1504 million, which is way ahead of the goal created then. Now
there is an increase of 8% in the total revenue in the financial year 2009/2010, which is
around US$ 1700 million. During June 2009, while recession was hitting everywhere,
AMUL added its revenue with US$ 108 million to its profit. Thus continuing this scale
will surely increase the revenue in the coming years and returns of the investors will
increase as well.

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REVIEW OF OPTIONS FOR FUTURE DIRECTION

Product Positioning: Placing a product in that part of the market where it will receive a
favorable reception compared to competing products. In case of Amul it has a
positioning strategy and it is “The taste of India”. This had created value for everyone in
the value chain, be it customers or the suppliers/farmers. The USP for Amul is Quality
with affordability, which appeals to most of the targeted markets.

Amul positioned itself with India’s first pro-biotic wellness ice cream and sugar free
delights for diabetics. This was based on good strategies of positioning which helps
increase awareness and also improve brand image. They expanded their products in
terms of those that can be used even by those who are restricted from consumption due
to medical reasons. Amul also priced their products such that it made competitor
“kwality walls” rethink their marketing/pricing strategy. This type of product positioning
has proved beneficial to amul and so they must come up with many more of such ideas
and products that can help them move forward.

Product Elimination and diversification: Product elimination is when the product

reaches the stage where continued support is no longer justified where performance is
falling short of expectations; it is desirable to pull the product out of the market place. In
this case Amul eliminated one such product that was bottled water called “JALDHARA”
this was done as they noticed that this product did not have many potential customers to
last in the market. Product diversification is where seeking unfamiliar products or
markets or both in the pursuits of growth. Therefore Amul in this category too had a
philosophy that was followed. They had progressive addition of higher value products
while maintaining the desired growth in existing products. Secondly Amul introduced
products with consistent value addition but never left the core philosophy of “ providing
milk at a basic affordable price.”

Amul must also use a value marketing strategy, which provides a product that works as
claimed, and is accompanied by decent service, and is also delivered on time. It must
include and provide the following: i.e. commitment to quality, value for money, the
generation for awareness and finally foster loyalty.

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IMPLEMENTATION OF NEW STRATEGIES

Product Positioning:

» System: Product improvisation-Amul must try and improve on certain products that
are or as popular as the other products like butter, milk, and ice cream. This does not
have to be done only after having a clear marketing research. These are a few
common actions that must be taken.

» Structure: Amul hoardings are successful, but there is a need to advertise by cable
channels, newspapers etc to reach the rural areas. For improvisation they must focus
on advertising to gain more awareness for those products.

» Policy: It must include strengthening of liquidity and working capital in order to be

more successful while trying to create awareness. Also to maintain the quality of the
products as the percentage of perishability is very high for these products.

Product Elimination & Diversification:

» System: Supply chain add-ons must be further strengthened for easier

diversification of the products. Also to venture in to new fields such as processed
food, vegetable and fruits.

» Structure: Venture into the above-mentioned fields is a good option as they can use
the same Anand Pattern to carry on its operations. Therefore strategizing wont take
much of time and more over this will give higher margins

» Policy: They must achieve diversification and elimination of products through a

good research system and also analyze the strengths, weaknesses, threats and
opportunities. Amongst them they must try to nullify the threats and weaknesses.

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USEFULNESS OF STRATEGIC MANAGEMENT MODELS

There were several models that were applied so as to assess the competitive environment
of AMUL and to develop and generate more strategic options for the company. Brief
descriptions on the usefulness of the models being used in the company analysis are
given.

• Industry Life Cycle: this model came to use as a useful tool for analyzing the
effects of an industry’s evolution on competitive forces. It is important to understand
the use of this model because it is a survival tool for businesses to compete in the
industry effectively and successfully. I have identified that the current dairy industry
is positioned in the early maturity stage. As the global demands have pushed the bars
way high comparatively.
• Key Success Factors: key success factors are those resources, skills and attributes of
the organization in the industry that are essential to deliver success in the market
place. When undertaking a strategic analysis of the environment, the identification of
the key success factors for an industry may provide a useful starting point. These
factors are of great use particularly in the dairy industry as they are the factors that
shape whether a company will be financially and competitively successful.
• PORTER’S 5 FORCES: This model is useful to analyze the competitive industry
environment and business strategy development. This analysis helped me understand
the strengths of AMUL’S current competitive position. Its objective was to
investigate how the organization needs to form its strategy in order to develop
opportunities in its environment and protect itself against competition and other
threats of substitutes, power of suppliers and buyers.
• SWOT ANALYSIS: This can be very helpful for recognizing and analyzing
organization’s internal strengths and weaknesses, as well as the external
opportunities and threats faced by the organization. By understanding these four
aspects of its situation, the company can better leverage its strengths, correct its
weaknesses, capitalize on golden opportunities, and deter potentially devastating
threats.

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• STRATEGIC FACTOR ANALYSIS SUMMARY: This model is developed to
deal with the criticisms of SWOT Analysis. Hence when used together they are a
powerful set of analytical tools for strategic analysis. This matrix is very useful as it
summarizes the organizations strategic factors combining the external and internal
factors of the company. The revised weights reflect the priority of each factor as a
determinant of the company’s future success.
• TOWS MATRIX: This matrix is very useful for generating a series of alternatives
that the decision makers of a company or business unit might not otherwise have
considered. It can be used for the organization as a whole or for a specific business
unit within a corporation. In this report it was useful in analyzing the strengths of the
company and how it can be used to generate strategic options by taking advantage of
the opportunities and to avoid threats. Also to generate strategies that take advantage
of opportunities to overcome weaknesses, minimize weaknesses and avoid threats.

(Word count: 497 words)

 
 

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List of References

 Lynch Richard, (2003), Corporate Strategy, 5th Edition, Pearson Education

Limited (UK)

 G Johnson & K Scholes (2005) 7th Edition Exploring Corporate Strategy -

Text & Cases, Prentice Hall

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