vaishak -amul

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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

Nair Vaishak Ramakrishnan

UOB: 09032138

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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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.


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

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.

DAIRY INDUSTRY


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KEY SUCCESS FACTOR

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.

Amul Nestle Britannia

Slno

Weights Rankings

Weighted Score

Rankings Weighted Score Rankings Weighted

Score

1 Product quality 0.28 5.0 1.40 5.0 1.40 5.0 1.40

2 Diverse product 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 4 Robust supply

chain 0.12 4.0 0.48 3.0 0.36 3.0 0.36

5 Customer awareness 0.11 3.0 0.33 5.0 0.55 4.0 0.44

6 Product 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


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PORTER’S 5 FORCES

♦ 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.

Buyers ⇒ Product differentiation ⇒ Product consumption ⇒ Switching costs ⇒ Economies of scale ⇒ Cost effectiveness

Industry Competitors

Rivalry among existing firms

⇒ Product characteristics ⇒ Number of competitors ⇒ Growth rate ⇒ Capacity ⇒ Size & strengths

Potential entrants ⇒ Economies of scale ⇒ Capital requirements ⇒ Access to distribution

channels ⇒ Government policy

Substitutes ⇒ Substitute products ⇒ Cost ratio ⇒ Product demand

Suppliers ⇒ Cost effectiveness ⇒ Strategic alliances ⇒ Economies of scale ⇒ Size of company

Other Stakeholders ⇒ Government ⇒ Shareholders ⇒ Employees


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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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SWOT ANALYSIS INTERNAL FACTOR ANALYSIS SUMMARY (IFAS)

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.

Internal Factors Weight Rating Weighted Score Comments

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 0.10 4.5 0.45 Key element in a competitive 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 logistics 0.10 3.0 0.30 Unprofessional management

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


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EXTERNAL FACTOR ANALYSIS SUMMARY (EFAS)

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.

External Factors Weight Rating Weighted Score Comments

Opportunities

O1 Growing global demands 0.15 5.0 0.75 Wall mart, Mustafa

O2 Greater Productivity 0.10 3.0 0.30 Satisfy demands

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


UOB: 09032138

STRATEGIC FACTOR ANALSIS SUMMARY (SFAS) MATRIX

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.

Duration STRATEGIC FACTORS

WEIGHTS

RATINGS

WEIGHTED SCORE

S H O R T

I N T E R M E D I A T E

L O N G

COMMENTS

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

W3 Perishability 0.15 3.0 0.45 X Technology advancement

W4 Lower yield Management 0.10 3.5 0.35 X Better cattle

management

O1 Growing global demand 0.15 5.0 0.75 X Global

exposure

O5 Supply chain demand 0.10 4.0 0.40 X Opportunity for growth

T1 Competitors 0.10 3.0 0.30 X Healthy competition

T2 Rising environmental Cost 0.15 4.0 0.60 X During

inflation TOTAL 1.00 4.02


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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

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.

INTERNAL FACTORS

EXTERNAL FACTORS

STRENGTHS (S)

S1 Low cost manufacturing S2 Economies of scale S3 Wide range of products S4 Strong cooperative org. S5 Global player

WEAKNESSES (W)

W1 Poor management of logistics W2 low investment W3 Perishability W4 lower yield management W5 Problem in distribution

OPPORTUNITIES (O)

O1 Growing global demands O2 Greater Productivity O3 Export potential O4 Robust economy growth O5 Supply Chain Management

SO Strategies

- Increased productivity through cost effective manufacturing.

- Increase global demand through global exposure.

- Improve channel of distribution.

WO Strategies

- Increase of opportunity through new GATT treaty.

- Develop new process to improve the quality and shelf life of milk and milk products.

- Increase awareness of scientific developments.

THREATS (T)

T1 Competitors T2 Rising environmental costs T3 Milk vendors T4 Adulteration T5 Lower cattle yield

ST Strategies

- Product eliminating and diversification

- Value marketing - Hygienic processing

facilities.

WT Strategies

- Efficient and economical procurement

- Control over logistics and yield.

- Product positioning


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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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