Professional Documents
Culture Documents
Strategic Management
Prof.: Mara Razumova
Contents
4.1 Where to search for competitive advantage
4.2 Alternative strategies evaluation tools
4.3 Alternative strategies selection tools
Where to search?
Value chain inside the firm
SWOT
Benchmarking
Firms value
chain
Distributors
own value
chain
Hotel s
value chain
Tour operator
value chain
Travel agency
value chain
Food, equipment,
linen.. suppliers
value chains
Hotel s value
chain
Opportunity for
cost reduction?
Opportunity for
integration ?
Where to search?
SWOT
analysis of the actual position of a firm
SWOT analysis:
actual competitive position of a firm
Factors which help the
organization achieve its
objectives
Internal factors
under the control
of managers
External factors
outside the control
of managers
Strength
Weakness
Opportunity
Threat
SWOT analysis:
analysis of a specific strategic decision
Competitive advantage evaluated: launch of a new
product
Strength
Weakness
Opportunity
Threat
10
11
12
13
Analysis
Identify our reference firm success factors
14
Adaptation
Analyze how the success factors can be applied
them to our firm. We will need to:
15
Contents
4.1 Where to search for competitive advantage
4.2 Alternative strategies evaluation tools
4.3 Alternative strategies selection tools
16
Strategic choice
How we will compete?
What are our strategic directions?
Which methods we use?
Strategic
option 1
Strategic
analysis
Key
issues
Strategic
option 2
Strategic
option 3
Evaluation
and
selection
criteria
Strategic
option
selected
17
18
19
20
21
22
23
Is it sufficiently profitable?
24
Reaction of competitors
Example: A tour operator wish to double its capacity, but the licensing
body may consider that such a growth is unsustainable and reject
issuing the license
Escuela Universitaria de Turismo Felipe Moreno
Escuela de Turismo de Baleares www.etb-baleares.ess
25
26
27
28
Payback period
Accounting rate of return
Discounted cash flow
Net present value
Internal rate of return
Risk
29
30
o What if?
o Strategy outcome is based on a number of
assumptions (inflation rate, interest rate,
exchange rate, input prices, etc)
o Sensitivity analysis demonstrates
how sensitive is the project outcome to the
assumptions?
Escuela Universitaria de Turismo Felipe Moreno
Escuela de Turismo de Baleares www.etb-baleares.ess
31
32
33
Contents
4.1 Where to search for competitive advantage
4.2 Alternative strategies evaluation tools
4.3 Alternative strategies selection tools
34
35
36
Short
term
benefits
Robust to
changes
No
negative
environm.
Impact
Total
score
Ranking
Option 1
No
Yes
No
Yes
Option 2
Yes
Yes
No
Yes
Option 3
No
Yes
Yes
Yes
Doing
nothing
Yes
No
Yes
No
Ranking
Factor
Strategic
options
37
Long
term
benefits
Short
term
benefits
Robust to
changes
No
negative
environm.
Impact
weight
30%
10%
35%
25%
Option 1
No
Yes
No
Option 2
Yes
Yes
Option 3
No
Doing
nothing
Yes
Total
score
Ranking
Yes
35
No
Yes
65
Yes
Yes
Yes
70
No
Yes
No
65
Strategic
options
38
Basic reading
Evans et al.: Chapter 12
39
Review questions
Describe the main evaluation criteria applied to
strategic options
What is screening? When it can be applied?
What is cost-benefit analysis? What advantages and
disadvantages has this technique?
What is sensitivity analysis?
40