Strategic Management and Joint Venture
QSPM:
The Quantitative Strategic Planning Matrix (QSPM) is a viable tool for making strategy-formulation decisions. This powerful basis will assist managers of a firm to take alternative feasible strategies for their particular business.
For developing a QSPM, there are six major steps as follows:
Step 1
Make a list of the firm’s key external opportunities/threats and internal strengths/weaknesses. As we have done in SWOT analysis before.
Step 2
Assign weights to each key external and internal factor. This part is already done in SWOT analysis.
Step 3
Examine matrices, and identify alternative strategies than the company should consider implementing. In this part, three alternative strategies grasp from previous analysis based on SWOT matching. These alternative strategies are:
- Product Centric diversification – include new unrelated products or services. In this case products like Coke Diet, Juices, Vitamin water, etc. could be considered as centric diversification part.
- Joint venture – a kind of strategy that occurs when two or more company form a temporary partnership for the purpose of capitalizing on some opportunity. Joint venture with Cadbury has been suggested in this part.
- Conglomerate Diversification – include new unrelated products. Entering into snack business is an example of this strategy for coke.
Step 4
Determine the attractiveness scores (AS) defined as numerical values which indicate the relative attractiveness of each factor in a strategy.
Step 5
Compute the total attractiveness scores (TAS) multiplying the weights from step 2 by the attractiveness scores from step 4.
Step 6
Compute the sum total attractiveness score. The total attractiveness score identifies which strategy is most attractive in set of strategies and is the best way for decision-making.
Strategic Alternatives
1 Product Centric Diversification
2 Joint Venture with Cadbury
3 Entering into snack business Alternative Strategy 1 Alternative
The Quantitative Strategic Planning Matrix (QSPM) is a viable tool for making strategy-formulation decisions. This powerful basis will assist managers of a firm to take alternative feasible strategies for their particular business.
For developing a QSPM, there are six major steps as follows:
Step 1
Make a list of the firm’s key external opportunities/threats and internal strengths/weaknesses. As we have done in SWOT analysis before.
Step 2
Assign weights to each key external and internal factor. This part is already done in SWOT analysis.
Step 3
Examine matrices, and identify alternative strategies than the company should consider implementing. In this part, three alternative strategies grasp from previous analysis based on SWOT matching. These alternative strategies are:
- Product Centric diversification – include new unrelated products or services. In this case products like Coke Diet, Juices, Vitamin water, etc. could be considered as centric diversification part.
- Joint venture – a kind of strategy that occurs when two or more company form a temporary partnership for the purpose of capitalizing on some opportunity. Joint venture with Cadbury has been suggested in this part.
- Conglomerate Diversification – include new unrelated products. Entering into snack business is an example of this strategy for coke.
Step 4
Determine the attractiveness scores (AS) defined as numerical values which indicate the relative attractiveness of each factor in a strategy.
Step 5
Compute the total attractiveness scores (TAS) multiplying the weights from step 2 by the attractiveness scores from step 4.
Step 6
Compute the sum total attractiveness score. The total attractiveness score identifies which strategy is most attractive in set of strategies and is the best way for decision-making.
Strategic Alternatives
1 Product Centric Diversification
2 Joint Venture with Cadbury
3 Entering into snack business Alternative Strategy 1 Alternative