list the SWOT factors from the VEETOWS that relate to the strategic initiative in this functional area.

 

 

Paragraph 1 – Overview, background of the company and industry

 

Paragraph 2 – Overview of internal analysis (key results)

 

Paragraph 3 – Overview of external analysis (key results)

 

Paragraph 4 – Recommended vision and strategy

 

Paragraph 5 – Conclusions/predictions

 

 

  • This should be written last.  The memo should be from you to me (the instructor), the date and the RE (reference) – The Case.
  • Memo should include an overview of the case highlighting salient points and concluding with recommendations.
  • It should not exceed two pages and the desired length is one page
  • This should be the Reader’s Digest of what is attached in the case analysis

 

Introduction and Overview

 

Introduction and overview of the company; need to give some history and background information, where the organization is in the organization life cycle – identify and support.

 

This section should be devoted to giving context to the case and the organization.  Who are key employees; how many does the company/organization have; what kind of business is it in; how long has it been in the business; where is it in the organization life cycle (OLC) and what characteristics support that notion; etc. You need to use critical thinking and analysis when considering the OLC – think about the connection of the BCG matrix to the OLC in supporting your position.

 

 

Mission, Goals and Current Strategies

 

Current mission, goals and strategies – this should discuss what the mission is based on the case, what the current strategies are – if they have not been clearly articulated you need to make assumptions.

 

This section needs to identify the mission.  If it is not given you need to develop one that you think would be appropriate given the information.  Additionally, you need to look at any culture, norms, politics, and symbolism of the organization in connection to current strategies this will assist in communicating the organization’s culture and strategies.  And clearly articulate the goals as they currently exist in the case.

 

 

Internal Analysis

 

You need to have an introductory paragraph to this section.  In it, you need to identify what the IFEM score was and what it means (the score interpretation).

Use the chart (see last 4 pages of this document)

 

Management

 

You can bullet or you need to have separate paragraphs within the management sections that talks about the key factors; identifying whether the factor is a strength or weakness and if it is major or minor.  Then you need to support you rating and weighting.

 

  • A major strength is the well trained, educated and knowledgeable CEO. The case indicated that Tom Smith got an MBA from Harvard and had several years of operational experience at XYZ corp before going out on his own. He has continued to stay current in his industry by availing himself of seminars, training and other venues. He takes this new knowledge and incorporates it into his company. This was weighted .08, a moderate sense of urgency, because while this is already in place and Smith is doing a good job, he must stay current with changes in the industry and competitive environment. As a result, Smith should devote time to keep current and participate in seminars and professional development.
  • A minor weakness is the inexperience of the other members of the senior management team.  (Elaborate)  This was weighted .12, a high sense of urgency, because immediate action should be taken to bring these individuals up to speed and ensure they have the necessary technical skills (discipline specific and general management) to be successful in these positions.

Finance

 

You can bullet or you need to have separate paragraphs within the financial section that talks about the key factors; identifying whether the factor is a strength or weakness and if it is major or minor.  Then you need to support you rating and weighting. Additionally, you are required to provide 3 separate financial metrics (eg. Leverage, profitability, liquidity, activity, etc)  You must show your work!

 

  • The financial position of Azalea Seafood Gumbo Shoppe is considered a minor weakness. While the growth potential is high, the cost associated with producing the product shows cash flow problems. The following financial metrics are calculated and explained to demonstrate the weak financial position. This was weighted .09, a medium sense of urgency. Action needs to be taken to ensure sustainability and financial health of the organization. It should be ongoing and based on a definitive plan.
  • Current Ratio:  Total Current Assets (Balance sheet) divided by Total Current Liabilities (Balance sheet):  89,644 / (100,627 + 72467) = .517

Essentially, this is telling us for every $1 in assets we have $1.97 liabilities or only 51.7 cents of assets for every $1 of liability.  Azalea does is not able to become totally liquid in a rapid fashion. Approximately 50% of the assets can be turned to cash while the remainder will take a longer term to liquidate.

  • Asset Turnover Ratio: Net Sales (Income Statement) divided by Total Assets (Balance Sheet):  193,625 / 223,185 = 86.75%

This metric is telling us for every dollar in asset we have 86.75 cents in sales. Dependent on industry standards would give insight as to whether is bad, really bad, or acceptable.  This is an activity ratio.

  • (The third ratio could be a leverage or profitability one)

 

Marketing and Service

 

You can bullet or you need to have separate paragraphs within the management sections that talks about the key factors; identifying whether the factor is a strength or weakness and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as management.

 

Production and Operations

 

You can bullet or you need to have separate paragraphs within the production and operations section that talks about the key factors; identifying whether the factor is a strength or weakness and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as management.

 

 

 

Human Resource Management

 

You can bullet or you need to have separate paragraphs within the human resource management section that talks about the key factors; identifying whether the factor is a strength or weakness and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as management.

 

Research and Development

 

You can bullet or you need to have separate paragraphs within the research and development section that talks about the key factors; identifying whether the factor is a strength or weakness and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as management.

 

Other Relevant Internal Factors

 

You can bullet or you need to have separate paragraphs within the other relevant internal factors section that talks about the key factors; identifying whether the factor is a strength or weakness and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as management.

 

 

External Analysis

 

You need to have an introductory paragraph to this section.  In it, you need to identify what the EFEM score was and what it means.

 

Use the chart (see last 4 pages of this document)

 

Competition and Industry

 

You can bullet or you need to have separate paragraphs within the competition and industry section that talks about the key factors; identifying whether the factor is an opportunity or threat and if it is major or minor.  Then you need to support you rating and weighting.

 

  • A major opportunity for XYZ company is the lack of competition. The company is on the leading edge of product innovation and has several patents that prevents easy copying or product substitution.
  • A minor threat is the industry is highly regulated. (Elaborate)

Economic

 

You can bullet or you need to have separate paragraphs within the economic section that talks about the key factors; identifying whether the factor is an opportunity or threat and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as competition and industry

 

Social & Cultural

 

You can bullet or you need to have separate paragraphs within the social and cultural section that talks about the key factors; identifying whether the factor is an opportunity or threat and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as competition and industry

 

Demographic

 

You can bullet or you need to have separate paragraphs within the demographic section that talks about the key factors; identifying whether the factor is an opportunity or threat and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as competition and industry

 

Other Relevant External Factors

 

You can bullet or you need to have separate paragraphs within the other relevant external factors section that talks about the key factors; identifying whether the factor is an opportunity or threat and if it is major or minor.  Then you need to support you rating and weighting.

 

  • Same format as competition and industry

 

 

I&E MATRIX ANALYSIS

 

You need to have an introductory paragraph to this section.  In it, you need to identify what the strategy area score was and what it means.  Remember you want to identify the cell the plot is in and what it represents (growth or retrenchment strategic approach).

 

Use the chart (see last 2 pages of this document)

 

 

 

RECOMMENDED STRATEGIC VISION AND SUPPORTING STRATEGIES

 

VISION

Need to identify what the vision should be for the organization based on the analysis. Remember it has to be in alignment with the mission of the organization and needs to take into consideration available and potential resource allocation. This is something you create – what you believe should be the vision moving forward.

 

Grand Strategies and Supporting Strategies

 

Given the I&E analysis, the grand strategies need to be restated. Then the specific generic strategies that are appropriate given the grand strategy need to be identified and explained why they should be executed. The generic strategies will note at least one dominate and one subdominate strategy. Refer to the Generic Grand Strategy matrix document to identify an appropriate strategy and the explanation of what the strategy is.

 

STRATEGIC INTENT

 

This is the statement derived from the pairing of S/W, S/O, S/T, W/O, W/T. What is it that the organization is going to focus on overall that will support the grand strategy and allow the organization to attain its grand strategy?

 

Functional Areas Considerations (SAMPLE Follows)

 

In this section you need to identify the actionable items that need to be addressed in order to fulfill the strategic initiatives.  Essentially you will drill down the strategic intent into the functional areas (such as management, HR, finance, operations, etc). Use the format discussed in class:

 

 

Functional area:  (Identify one of the functional areas – management, finance, marketing, production, human resources0

 

SWOT Factors:  list the SWOT factors from the VEETOWS that relate to the strategic initiative in this functional area. Make sure to put S- W-O-or T before listing the factor.

 

Action Plan/Considerations: Explain how combining the aforementioned SWOT Factors will result in the specific functional area supporting the overall grand strategy identified. (Connect the dots)

 

Metric/Measurements – Identify the baseline measure and then talk about how you will be comparing the progress to it. Eg change in sales, increase in marketshare, etc.

 

Remember to consider the generic or standard Objectives of the functional areas.

 

Management – Innovation and sustainability

 

Finance – High yield and financial health of the organization

 

Production – efficiencies and effectiveness

 

Marketing – creating an affinity for your product and service as well as your brand.

 

Human Resources; high performance workforce

 

 

SAMPLE:

 

Management:  Innovation and sustainability

 

S – Strong leadership team

S – Financially strong, good cash position

S – Integrated approach to production

S – Good overall marketing plan

S – State of the art information technology system

W – Lack of training

W- Shortage of employees

O – Global market opportunities

O – Change in legislation

O – M&A

O – Market Leader

T- Competition

T – Aging population

 

Action Plan/Considerations – Utilizing due diligence, management will identify potential competitors for acquisition and expand the company’s market position through M&A. To do this, issues of culture compatibility, staffing needs, integration and compatibility of internal systems, will need to be addressed. The goal will be to acquire and integrate 1 company in the next 18 months. Identify the resources needed and identify associated timelines for securing them.

 

Metrics – progress of the due diligence process (establish milestones upfront and measure against). Monitor financial cashflow and other financial metrics as they support the venture. Monitor progress on meeting timelines and against established plan.

 

 

 

Conclusions

 

You are to recap the analysis and then discuss your predictions – what you think will be the result of implementing the strategies recommended.  Use good connections, logic and rationale.

 

Appendices

 

Include as attachments the IFEM, EFEM, VEETOWS, I&E Matrix.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


INTERNAL ANALYSIS:

 

Emphasis here is placed on the discussion and analysis of the strategic significance of the Internal Factor Evaluation Matrix (IFEM) and related information from the case.  You must analyze, show connections, and draw conclusions based on the quantitative and qualitative information available. Major management functional areas must be addressed. This includes (1) management, (2) marketing, (3) finance, (4) production of a product, (5) delivery of a service, (6) research and development, and (7) information systems.

 

Grouping all remarks that pertain to a major management functional area under one heading facilitates internal analysis. It is also appropriate to draw connections to factors in the external environment that may exacerbate the internal situation, and vice versa.  Students may not just reiterate the factors, weights, and rates from the IFEM. This is a meaningless exercise. The matrix is designed to facilitate internal analysis; it is not an end in itself. KEY question: What does the IFEM mean and what are its implications for the company’s ability to exercise a range of strategic options?  You should also discuss the limiting strategic effect that a weakness has on the organization.

 

Your analysis of the IFEM should include a brief discussion of the total score obtained for the IFEM. The range of these scores varies from 1 to 4. If there are no mitigating factors, such as polarized scores, the total score tells us something about the strategic nature of the internal environment and hence about the capabilities that the company possesses.  In order to characterize the scores from the IFEM in your analysis, students should use the following expressions:

                        SCORE          INTERPRETATION

============================================================                       3.5 TO 4            EXTREMELY STRONG

3.0 TO 3.49    VERY STRONG

2.6 TO 2.99    STRONG

2.4 TO 2.59    MODERATE

2.0 TO 2.39    WEAK

1.5 TO 1.99    VERY WEAK

1.0 TO 1.49    EXTREMELY WEAK

Borderline scores should be interpreted as such.  These adjectival characterizations are designed to be an aid to analysis. They are not decision-makers.


EXTERNAL ANALYSIS:

Emphasis here is placed on the discussion of the strategic significance of the factors in the External Factor Evaluation Matrix (EFEM) and related material. The same general approach is used that was used in the internal analysis.  Grouping analyses under major external factor headings again facilitates discussion. In the external analysis, however, we are dealing with forces outside of the company, specifically threats and opportunities.  These are forces over which the organization has little or no direct control.  Yet strategies can be developed to take advantage of external factors that are opportunities and blunt the effects of factors that are threats.  In your analysis, connections can and should be made to factors in the internal environment when appropriate. Discussion can also include the mentioning of specific strategies that are emerging in the student’s mind as the analysis proceeds.

 

It is unacceptable to simply state the factors and the weights and rates that were given to them.  You must analyze, evaluate, and state the strategic meaning of the external factors. This is critical because they will become the bases for the strategies that you recommend to position or reposition the company in this external environment.

 

=================>>>>>>>>>>CAUTION<<<<<<<<<<================

Caution for both the IFEM and EFEM analysis— the scores are an aid to decision making; they do not make decisions for you or the manager.  All too often students say that a score means that they have to do this or that.  That is not acceptable, and in fact, it is deadly.  Students must ferret out the meaning of the scores.

Scores on the EFEM have the same range limits as the IFEM. In order to characterize the scores from the EFEM, students should use the following expressions:

                        SCORE          INTERPRETATION

============================================================

3.5 TO 4         EXTREMELY FAVORABLE

3.0 TO 3.49    VERY FAVORABLE

2.6 TO 2.99    FAVORABLE

2.4 TO 2.59    MODERATE

2.0 TO 2.39    HOSTILE

1.5 TO 1.99    VERY HOSTILE

1.0 TO 1.49    EXTREMELY HOSTILE

Borderline scores should be interpreted as such.  These adjectival characterizations are designed to be an aid to analysis. They are not decision-makers.

ü+    ü

               THE INTERNAL AND EXTERNAL FACTOR MATRIX (I/E)    
                   
      IFEM TOTAL WEIGHTED SCORES    
      INTERNAL FACTOR SPACE    
      HIGH       LOW    
     
I
II
III
IV
V
VI
VII
VIII
IX
 
           
EFEM                            3                        2                  1        
TOTAL                  
WEIGHTED HIGH              
SCORES                  
  EXTERNAL              
  FACTOR                
  FAVORABLENESS              
                   
                   
EFEM Total: 0.00                
    LOW              
IFEM Total: 0.00    EXPLANATION NEXT PAGE            
                   
STRATEGY AREA:                
  0.00                
       *NOTE: DIVESTITURE, LIQUIDATION, RETRENCHMENT,    
      AND RESTRUCTURING SHOULD BE ONGOING STRATEGIES,  
      REGARDLESS OF THE ORGANIZATION’S STRATEGIC POSTURE.  
                   
 POSSIBLE STRATEGIES: GROW & HOLD & HARVEST &        
      BUILD MAINTAIN DIVEST        
BACKWARD INTEGRATION……………. X            
CONCENTRIC DIVERSIFICATION……… X X X(?)        
CONGLOMERATE DIVERSIFICATION……. X X(?)          
DIVESTITURE…………………….. X* X* X*        
FORWARD INTEGRATION…………… X            
HORIZONTAL DIVESIFICATION……….. X X(?)          
HORIZONTAL INTEGRATION……….. X X(?)          
LIQUIDATION……………….. X* X* X*        
MARKET DEVELOPMENT……………. X X(?)          
MARKET PENETRATION……………. X X          
PRODUCT DEVELOPMENT………………… X X(?)          
RESTRUCTURING………………… X* X* X*        
RETRENCHMEMT…………………. X* X* X*        
   (?) DEPENDS ON THE FINANCIAL CONDITION OF THE ORGANIZATION      
                   
                   
                   

 


 

 

If the strategy area falls in blocks I, II or IV that would be a grow and build strategy.  If the strategy area falls in blocks VIII, IX or VI that would be considered harvest and divest (retrenchment) strategy. If the strategy area falls in blocks VII, V or III then it would suggest a hold and maintain but we discussed in class that stability is not a reasonable strategy given the one constant in every organization is CHANGE. Therefore if a diagonal was drawn through blocks VII, V and III then if strategy area falls in the upper left triangle – a growth grand strategy would be in order. Conversely, if it falls in lower right triangle – a retrenchment grand strategy would be recommended.

 

 

                                                                                                                                       

 

 

 

 

 

 

 

 

 

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