HASSAN ALI

10-ME-80 SECTION:B ASSIGNMENT: DIFFERENT STRATEGY TOOLS

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PEST ANALYSIS TOOLS

PEST is a mnemonic standing for Political, Economic, Social and Technological. These headings are used first to brainstorm the characteristics of a country or region. The data obtained can be used to draw conclusions as to the significant forces of change operating within it. So it is an effective way to know the different opportunities and threats present in the environment of any country. By understanding your environment, one can take advantage of the opportunities and minimize the threats. So the different factors effecting the situation are enlisted below: Political Factors Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include: tax policy employment laws environmental regulations trade restrictions and tariffs political stability

Economic Factors Economic factors affect the purchasing power of potential customers and thefirm's cost of capital. The following are examples of factors in the macroeconomy: economic growth interest rates exchange rates inflation rate

Social Factors Social factors include the demographic and cultural aspects of the external macroenvironment. These factors affect customer needs and the size of potential markets. Some social factors include:

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health consciousness population growth rate age distribution career attitudes emphasis on safety

Technological Factors Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include: R&D activity automation technology incentives rate of technological change

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SWOT ANALYSIS TOOL

The PEST factors combined with external microenvironmental factors can be classified as opportunities and threats in a SWOT analysis. Brief Description: SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the Threats you face. What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of your business or projects, you can manage and eliminate threats that would otherwise catch you unawares. Strengths and Weaknesses are internal factors, while Opportunities and Threats are external factors that can have an effect on you, organizational unit and or projects.

Effective Usage: The SWOT chart to the right is a useful tool for everyone including team members and managers. When developing your personal SWOT chart look and think in-depth about how each area effects your department and even you personally. Share the chart with colleagues in order to get feedback and different suggestions until the chart is full with thoughts. This will then enable you to refine it and, ultimately, implement it into your organization and/or project.

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Listing Your Internal Factors: Strengths and Weaknesses (S, W) Internal factors include your resources and experiences. General areas to consider are:

Human resources - staff, volunteers, board members, target population Physical resources - your location, building, equipment Financial - grants, funding agencies, other sources of income Activities and processes - programs you run, systems you employ Past experiences - building blocks for learning and success, your reputation in the community Don't be too modest when listing your strengths. If you're having difficulty naming them. Although the strengths and weakness of your organization are your internal qualities, don't overlook the perspective of people outside your group. Identify strengths and weaknesses from both your own point of view and that of others-those you serve or deal with. Listing External Factors: Opportunities and Threats (O, T) External factors include:

Future trends - in your field (Is research finding new treatments?) or the culture The economy - local, national, or international Funding sources - foundations, donors, legislatures Demographics - changes in the age, race, gender, culture of those you serve or in your area The physical environment Legislation Local, national or international events

In short, SWOT Analysis can be used to "kick off" strategy formulation, or in a more sophisticated way as a serious strategy tool. You can also use it to get an understanding of your competitors, which can give you the insights you need to craft a coherent and successful competitive position.

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GAP ANALYSIS TOOL

Gap Analysis is the comparison of actual performance with potential performance. It evaluates the difference between the situations of your project or plan compared to your actual target. It starts with defining your goals and compares the goals to the actual position of the business. By conducting a Gap Analysis, you can identify what you need to do to "bridge the gap" and make your project a success. You can use Gap Analysis at any stage of a project to analyze your progress, but it's most useful at the beginning. To carry out a Gap Analysis, first identify your project's objectives - this is your "future state." Then analyze your current situation, making sure that you gather information from the right sources. Finally, identify how you'll bridge the gap between your current situation and the desired future state. The SERVQUAL tool used for the GAP analysis is given below. SERVQUAL TOOL FOR GAP ANALYSIS: Introduction: The service quality model or the GAP model developed by a group of authors- Parasuraman, Zeithaml and Berry at Texas and North Carolina in 1985, highlights the main requirements for delivering high service quality.It measures the gap between customer expectations and experience. The basic assumption of the measurement was that customers can evaluate a firm's service quality by comparing their perceptions with their expectations. It identifies five gaps that cause unsuccessful delivery. Gap between consumer expectation and management perception: This gap arises when the management does not correctly perceive what the customers want. For instance hospital administrators may think patients want better food, but patients may be more concerned with the responsiveness of the nurse. Key factors leading to this gap are: Insufficient marketing research Poorly interpreted information about the audience's expectations Research not focused on demand quality Too many layers between the front line personnel and the top level management

Gap between management perception and service quality specification :

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Here the management might correctly perceive what the customer wants, but may not set a performance standard. Gap 2 may occur due the following reasons: Insufficient planning procedures Lack of management commitment Unclear or ambiguous service design

Gap between service quality specification and service delivery: This gap may arise owing to the service personnel. The reasons being poor training, incapability or unwillingness to meet the set service standard. The possible major reasons for this gap are: Deficiencies in human resource policies. Failure to match demand and supply Lack of proper customer education and training

Gap between service delivery and external communication: Consumer expectations are highly influenced by statements made by company representatives and advertisements. The gap arises when these assumed expectations are not fulfilled at the time of delivery of the service. The gap between actual service and the promised one may occur due to the following reasons: Over-promising in external communication campaign Failure to manage customer expectations

Gap between expected service and experienced service: This gap arises when the consumer misinterprets the service quality. The physician may keep visiting the patient to show and ensure care, but the patient may interpret this as an indication that something is really wrong. 5 DIMENSIONS OF SERVQUAL: Tangibles: appearance of physical facilities, equipment, personnel, and communication materials Reliability: ability to perform to the promised service and dependably provide and prompt accurately service

Responsiveness:

willingness

help

customers

Assurance: knowledge and courtesy of employees and their ability to convey trust and

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confidence Empathy: the caring, individualized attention the firm provides its customers

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MULTIPLE CRITERIA DECISION TOOL

MCDM or MCDA are well-known acronyms for multiple criteria decision making and multiple criteria decision analysis. MCDA is a valuable tool that we can apply to many complex decisions. It is most applicable to solving problems that are characterized as a choice among alternatives. It has all the characteristics of a useful decision support tool. It helps us focus on what is important, is logical and consistent, and is easy to use. At its core MCDA is useful for:

Dividing the decision into smaller, more understandable parts Analyzing each part Integrating the parts to produce a meaningful solution

When used for group decision making, MCDA helps groups talk about their decision opportunity (the problem to be solved) in a way that allows them to consider the values that each views as important. It also provides a unique ability for people to consider and talk about complex tradeoffs among alternatives. In effect, it helps people think, re-think, query, adjust, decide, rethink some more, test, adjust, and finally decide. MCDA problems are comprised of five components: Goal Decision maker or group of decision makers with opinions (preferences) Decision alternatives Evaluation criteria (interests) Outcomes or consequences associated with alternative/interest combination

GRID ANALYSIS TOOL FOR MCDM: Grid Analysis is a useful technique to use for making a decision. It's particularly powerful where you have a number of good alternatives to choose from, and many different factors to take into account. This makes it a great technique to use in almost any important decision where there isn't a clear and obvious preferred option. Being able to use Grid Analysis means that you can take

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decisions confidently and rationally, at a time when other people might be struggling to make a decision. How to Use the Tool Grid Analysis works by getting you to list your options as rows on a table, and the factors you need consider as columns. You then score each option/factor combination, weight this score by the relative importance of the factor, and add these scores up to give an overall score for each option. While this sounds complex, this technique is actually quite easy to use. The following procedure is used to for grid analysis: List all of your options as the row labels on the table, and list the factors that you need to consider as the column headings. For example, if you were buying a new laptop computer, factors to consider might be cost, dimensions, and hard disk size. Next, work your way down the columns of your table, scoring each option for each of the factors in your decision. Score each option from 0 (poor) to 5 (very good). Note that you do not have to have a different score for each option - if none of them are good for a particular factor in your decision, then all options should score 0. The next step is to work out the relative importance of the factors in your decision. Show these as numbers from, say, 0 to 5, where 0 means that the factor is absolutely unimportant in the final decision, and 5 means that it is very important. Now multiply each of your scores from step 2 by the values for relative importance of the factor that you calculated in step 3. This will give you weighted scores for each option/factor combination. Finally, add up these weighted scores for each of your options. The option that scores the highest wins!