Course Code: BFIB301I-5

Course Name: International Business Strategy

UNIT - 5

MISSION VISION CORE VALUES

CHRIST is a nurturing ground for an individual’s holistic development to Excellence and Service Faith in God | Moral Uprightness
make effective contribution to the society in a dynamic environment Love of Fellow Beings
Social Responsibility | Pursuit of Excellence
 CHRIST
Deemed to be University

UNIT – V - STRATEGY GENERATION AND SELECTION

The strategy analysis and choice process, strategy
formulation analytical framework, SWOT and
SPACE, BCG, Internal-External matrix, grand strategy
matrix, QSPM, culture and politics of
strategy analysis and choice, business ethics, code of
business ethics, ethics culture and bribes.

2
Excellence and Service
 CHRIST
Deemed to be University

Strategy Formulation Analytical Framework

● The Strategy Formulation Analytical Framework is a structured approach that

organizations use to develop and analyze potential strategies. This framework
helps identify, evaluate, and choose the best strategic options to achieve the
organization’s objectives.
● It typically involves three key stages: Input Stage, Matching Stage,
and Decision Stage. Each stage uses specific tools and methods to ensure
that the strategy aligns with the organization’s goals, resources, and market
conditions.

3
Excellence and Service
 CHRIST
Deemed to be University

Stage Input Stage Matching Stage Decision Stage

Purpose Collect data on internal/external factors Generate strategic alternatives Select the best strategy

Tools EFE Matrix, IFE Matrix, Competitive SWOT Analysis, SPACE Matrix, BCG Quantitative Strategic Planning Matrix
Profile Matrix Matrix, IE Matrix, Grand Strategy Matrix (QSPM)

Example Healthcare company assessing Consumer goods company using the Energy company using QSPM to choose
regulatory changes and competitor BCG Matrix to make investment between renewable energy expansion or
capabilities decisions on different products enhancing traditional sources

4
Excellence and Service
 CHRIST
Deemed to be University

SWOT and SPACE

● SWOT and SPACE analyses are two essential tools used in

strategic management to evaluate an organization's internal and
external environment.
● They help companies understand their current position, identify
strategic options, and make informed decisions about future
directions.

5
Excellence and Service
 CHRIST
Deemed to be University

SWOT Analysis
SWOT Analysis is a strategic planning tool that helps organizations assess their internal strengths and weaknesses, as well as external
opportunities and threats. This four-quadrant approach provides a comprehensive view of the factors that can impact the organization's
success.

• Purpose: To identify and analyze internal and external factors that affect an organization’s performance and strategic options.

1. Strengths
Strengths are internal factors that give the organization an advantage, like a strong brand, loyal customer base, or skilled workforce. These
attributes help the organization stand out and compete effectively.

2. Weaknesses
Weaknesses are internal factors that put the organization at a disadvantage, such as high costs or limited resources. Identifying weaknesses
helps focus on areas for improvement.

3. Opportunities
Opportunities are external factors that the organization can leverage for growth, like new market trends or technological advances.
Recognizing opportunities allows proactive strategic planning.

4. Threats
Threats are external factors that could harm the organization, such as increased competition or regulatory changes. Understanding threats
enables the organization to develop defensive strategies.

6
Excellence and Service
 CHRIST
Deemed to be University

7
Excellence and Service
 CHRIST
Deemed to be University

SWOT Matrix

● The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is a

strategic tool that helps managers develop four types of strategies by matching
internal and external factors:
● SO (Strengths-Opportunities) Strategies: Use internal strengths to take
advantage of external opportunities.
● WO (Weaknesses-Opportunities) Strategies: Improve internal weaknesses
by capitalizing on external opportunities.
● ST (Strengths-Threats) Strategies: Use internal strengths to mitigate or avoid
the impact of external threats.
● WT (Weaknesses-Threats) Strategies: Defensive tactics aimed at reducing
internal weaknesses and avoiding external threats.

8
Excellence and Service
 CHRIST
Deemed to be University

9
Excellence and Service
 CHRIST
Deemed to be University

Components of the SPACE Matrix

● The SPACE Matrix has four axes, each representing a different

factor:
● Financial Position (FP): Measures financial strength (e.g., ROI,
cash flow).
● Competitive Position (CP): Assesses competitiveness relative to
peers.
● Stability Position (SP): Looks at industry stability and volatility.
● Industry Position (IP): Assesses the attractiveness and strength of
the industry.

10
Excellence and Service
 CHRIST
Deemed to be University

Steps to Develop a SPACE Matrix

● Select variables for each dimension (FP, CP, SP, IP).

● Assign values:
● FP and IP: Range from +1 (worst) to +7 (best).
● SP and CP: Range from -1 (best) to -7 (worst).
● Calculate average scores for each dimension.
● Plot scores on the SPACE Matrix.
● Add scores for the x-axis (CP + IP) and y-axis (FP + SP) to find coordinates.
● Draw a directional vector from the origin to the plotted point, indicating the
strategy.

11
Excellence and Service
 CHRIST
Deemed to be University

● The BCG Matrix, developed by the

Boston Consulting Group, is a
strategic tool used to evaluate an
organization’s product portfolio based
on market growth rate and relative
market share. It helps organizations
allocate resources and prioritize
products for growth, stability, or
divestment. The matrix classifies
products into four categories:

12
Excellence and Service
 CHRIST
Deemed to be University

1. Stars

● High Growth, High Market Share

Stars are products with a high market share in a rapidly growing market. They often require significant
investment to sustain growth but have the potential to become future cash cows.
● Example: A leading smartphone model in a growing tech market.
● Strategy: Invest to maintain or increase market share.

2. Cash Cows

● Low Growth, High Market Share

Cash Cows are products with a high market share in a slow-growing or mature market. These products
generate steady profits with little investment, often funding other segments.
● Example: A popular soft drink brand in a mature beverage market.
● Strategy: Maximize profit and use cash flow to support Stars and Question Marks.

13
Excellence and Service
 CHRIST
Deemed to be University

● 3. Question Marks
● High Growth, Low Market Share
Question Marks are products in a growing market but with low market share. They require substantial investment to increase market
share and may have the potential to become Stars, or they could fail.
● Example: A new product entering a competitive, fast-growing market.
● Strategy: Invest selectively or consider divestment based on potential.

● 4. Dogs

● Low Growth, Low Market Share

Dogs are products with low market share in a slow-growing market. They typically generate little profit and may be considered for
divestment to free up resources.
● Example: An outdated tech gadget in a declining market.
● Strategy: Divest or minimize investment to focus on more profitable products.

14
Excellence and Service
 CHRIST
Deemed to be University

BCG Matrix Summary Table

Category Market Growth Market Share Strategy

Stars High High Invest to maintain/increase share

Cash Cows Low High Maximize profit, fund other

segments

Question Marks High Low Selective investment or

divestment

Dogs Low Low Divest or reduce investment

15
Excellence and Service
 CHRIST
Deemed to be University

Summary Table
Aspect Social Responsibility Ethical Sensitivity
Definition Obligation to act in society’s best interests, considering Awareness and consideration of ethical issues, ensuring
environmental and social impacts moral alignment and stakeholder fairness

Key Focus Areas Environmental sustainability, community impact, employee Fairness, transparency, legal compliance
well-being

Examples Reducing pollution, supporting local communities, ensuring Avoiding exploitative practices, promoting honest
fair labor practices communication, ensuring adherence to laws

16
Excellence and Service