Evaluation of Alternatives

and Strategic Choice

Chapter # 7

Presented by:
RABIA ANUM &
ASMA TARIQ
 Learning Objectives
After completing this chapter the student should be able to:

1. Understand the rationale underlying the various strategic

thinking maps used to evaluate strategic alternatives.
2. Discuss, evaluate, and select appropriate adaptive strategic
alternatives for a health care organization.
3. Discuss, evaluate, and select appropriate market entry strategic
alternatives.
4. Discuss, evaluate, and select appropriate strategic posture and
generic positioning alternatives.
5. Determine whether selected strategies are consistent,
coordinated, and fit the situation.
6. Understand the role of the service delivery and support
strategies.
What And Why Evaluation???
 Evaluation of the Adaptive
Strategies
Methods to evaluate the adaptive strategies include:

• Threats, opportunities, weaknesses, and strengths (TOWS) matrix.

• Product life cycle (PLC) analysis.
• Boston Consulting Group (BCG) portfolio analysis.
• Extended portfolio matrix analysis.
• Strategic position and action evaluation (SPACE).
• Program evaluation.
TOWS Matrix (Threats, opportunities,
weaknesses, and strengths )
 TOWS Matrix (Threats, opportunities,
weaknesses, and strengths )
THE SURVIVAL QUADRANT
An organization faced with both external threats and significant
internal weaknesses that result in competitive disadvantages is
in a difficult position. Because the organization must attempt to
minimize both weaknesses and threats, this quadrant is often
referred to as the survival quadrant
THE INTERNAL FIX-IT QUADRANT
The internal fix-it quadrant indicates that managers should
attempt to minimize competitively relevant internal weaknesses
and maximize external opportunities. Typically, an organization
will recognize an external opportunity but have a competitive
disadvantage that prevents it from taking advantage of the
opportunity. Therefore, this quadrant is referred to as the
internal fix-it quadrant.
 TOWS Matrix (Threats, opportunities,
weaknesses, and strengths )
THE EXTERNAL FIX-IT QUADRANT
In the external fix-it quadrant, the organization recognizes that it
has significant competitively relevant strengths but that it must
deal with external environmental threats. Therefore, managers
must attempt to maximize the organization’s competitive
advantages manifest in its strengths and minimize the external
threats.
THE FUTURE QUADRANT
The future quadrant represents the best situation for an
organization as it attempts to maximize its competitively relative
strengths and take advantage of external opportunities. It
represents the strategies that the organization will adopt for future
growth. Strategies in this quadrant lead from the strengths
(competitive advantages) of the organization and use its internal
resources to capitalize on the market for its products and
services.
Product Life Cycle (PLC) Analysis
Portfolio Analysis (BCG)
 Portfolio Analysis (BCG)
Stars Problem Child
High market share Low market share
High market growth High growth market
Market Development Harvesting
Product Development Liquidation
Penetration
Vertical Integration

Cash Cows Dogs

Low market growth Low market share
High market share No market growth
Enhancement Retrenchment
Penetration Liquidated
Harvesting
Extended portfolio matrix analysis
Strategic Position and Action
Evaluation (SPACE)
 Program Evaluation

Two program evaluation methods that have been

used successfully are,

• Needs/capacity assessment
• Program priority setting.
 Needs/capacity assessment

Determined by,
1. Community need.
2. The organization’s capacity to deliver the
program to that community.
 Community need

It is a function of
• Clear community requirements (environmental,
sanitation, disease control, and so on) and personal
health care (primary care) gaps.
• The degree to which other institutions (private and
public) fill the identified health care gaps.
• Public/community health objectives.
 Organizational capacity

It is organization’s ability to initiate, maintain, and enhance

its set of adaptive strategy programs.
Organizational capacity is composed of,
• Funding to support programs.
• Other organizational resources and skills.
• The program’s fit with the mission and vision of the
organization.
 Program Priority setting

“VERY IMPORTANT”
or “ESSENTIAL”.
 Q-sort method
• It is a part of Q-methodology (a set of philosophical,
psychological, statistical, and psychometric ideas
oriented to research on the individual)
• Q-sort evaluation helps overcome the problem of all
programs being ranked as very important by forcing a
ranking based on some set of assumptions.
• Q-sort as “a sophisticated way of rank-ordering objects.”
• Q-sort Evaluation
• Q-sort Procedure
 Evaluation of the Market Entry
Strategies
Market Entry Strategies include:
• Acquisition
• Licensing
• Venture Capital Investment
• Merger
• Alliance
• Joint Venture
• Internal Development
• Internal Venture
Evaluation of the Market Entry
Strategies
 Conclusions
• To initiate strategic thinking and planning, it is important
that the organization has a process in place for
understanding the internal and external environments and
methods for evaluating strategic alternatives.
• There are several methods for deciding which of the
adaptive strategic alternatives is most appropriate for an
organization. The TOWS (threats, opportunities,
weaknesses, and strengths) matrix, product life cycle (PLC)
analysis, portfolio analyses (BCG and extended), strategic
position and action evaluation (SPACE) analysis, and
program evaluation were examined in considerable depth.
• The organization’s internal resources, competencies, and
capabilities (strengths), the external conditions, and the
organization’s objectives will determine which of these
strategies is most appropriate.
 Take Home Message

“Getting the facts is the key to good decision making.

Every mistake that I made – and we all make mistakes –
came because I didn’t take the time. I didn’t drive hard
enough. I wasn’t smart enough to get the facts.”

Charles F. Knight
Chairman, Emerson Electric