This sample will let you know about:
- Discuss about the Strategic Fit and stretch.
- Discuss about the SWOT analysis and concept of fit and stretch.
Strategic planning is defined as the process through which the companies can plan their strategies and how to go in direction for attaining the objectives (Smith, 2017). For the effective strategic planning the role of two techniques that is BCG matrix and SWOT analysis will be made. This is because this helps the company in providing direction which can lead to success.
BCG analysis in formulation of strategies
This is a strategic management tool which can be used by the company in order to plan for long- term strategies which will help the company in management of portfolio of their product and services. A company deals in a wide range of products and services and is very necessary for them to manage in such a way that all the products and services are effectively managed. This technique has four categories in which the product of companies falls. These are discussed in the following points connected below-
Dogs- under this the products which have low growth or the low market share comes. Here the companies need to remove the products which comes under this category. For dealing with these products the strategic option can be liquidation or divestitures or retrenchment.
Question mark- this is the category in which the products which is having high growth market but along with a low market share comes. For this category the company needs to invest some money to increase their market share. The strategic option available for this category of product are product development, market penetration and other.
Star products- these are the products which are high in growth market and is also having high market share. Here the company needs to maintain and improve these products for success. In case of star the strategic option available is vertical and horizontal integration, market penetration, market development and many other strategies to retain the product in star category.
Cash cows- these are the products which has low growth market but high market share. Here the company needs to take that much advantage of these products till there market share decreases. Here the strategic option available can be diversification or product development (Shanbhag, Dutt and Bagwe, 2016).
For example, for company Sainsbury the star product is the financial service strategic business unit for the company which they need to maintain in order to maintain their profitability. Also, the supplier management service of the company is the cash cow because they do not have much effective supply management and thus, they need to improve this. For the question mark and dogs comes the confectionery items and synthetic fibre products comes in category of dogs.Order assignment help from our experts!
SWOT analysis and concept of fit and stretch
This is another strategic planning technique which is helpful for companies in order to identify their strengths and weakness for managing it with the changes taking place in the environment (Chiu and Lin, 2019). This is a strategic technique which is used to analyse the internal environment of the company and then in accordance to those points the company identifies the opportunity and threats within the market. The factors comprising the SWOT analysis are discussed in the following points connected below-
Strength- this is the factor which outlines all the capabilities and the areas in which the company and its operations excels and are good. It is very necessary for the companies to maintain all these capabilities and continuously try to upgrade these in accordance to the changes in the external environment.
Weakness- these are the areas in which the company is lacking or is not having the required amount of skills which they need to have to operate in competitive world. Here the company need to work on improving the weakness so that they can be converted into strengths and this assist the company in improving their performance.
Opportunities- these are the options which are present in the external environment and which can improve the area of working of the company. These opportunities need to be identified by the company in order to gain competitive advantage over the other companies.
Threats- these are the factors which may degrade or reduce the working capacity of the company. This is majorly because of the fact that this pertains to the external factors which are not in control of the company (Gürel and Tat, 2017). Thus, for dealing with the threat the strengths will be helpful. Get Assignment Examples.Talk to our Experts!
For example, the SWOT of Woolworths is as follows-
From this SWOT of company, it can be analysed that this analysis helped the company in critically analysing the company and knowing the positive and negative points of the company. That is whether the company is able to meet the opportunity and threat present n the external environment or not. For example, the opportunity is growth in hotel sector this can be grabbed by company because it is the 2nd largest company and they can invest in going to other sectors also. Get assignment help london from our experts!
Strategic Fit and stretch
Strategic stretch- this is defined as the goal which cannot be attained because of variation in the resources required and the resources which are present with the company (Phadermrod, Crowder and Wills, 2019).
Strategic fit- this is the degree to which the company is able to match all the requirements of meeting the opportunity with the present resources and the capabilities. Here the company is fit that is having the resources required to meet the goals and the strategy.
In the end of the report it can be concluded that using the strategic planning is very helpful for the company in attaining success. This is because of the reason that this planning provides a direction to the company in which they can move and attain all objectives. The present report discussed the two strategic planning tools that is BCG matrix and SWOT analysis and how it helped in management of portfolio of product and services.
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