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CHAPTER 6 • STRATEGY ANALYSIS AND CHOICE 201
gic decisions, but they should never be used to dictate the choice of strategies. Behavioral,
cultural, and political aspects of strategy generation and selection are always important to
consider and manage. Because of increased legal pressure from outside groups, boards of
directors are assuming a more active role in strategy analysis and choice. This is a positive
trend for organizations.

Key Terms and Concepts

Aggressive Quadrant (p. 182) Input Stage (p. 176)
Attractiveness Scores (AS) (p. 193) Internal-External (IE) Matrix (p. 184)
Board of Directors (p. 198) Matching (p. 177)
Boston Consulting Group (BCG) Matrix (p. 184) Matching Stage (p. 176)
Business Portfolio (p. 184) Quantitative Strategic Planning Matrix
Cash Cows (p. 186) (QSPM) (p. 192)
Champions (p. 197) Question Marks (p. 186)
Competitive Position (CP) (p. 181) Relative Market Share Position (p. 184)
Competitive Quadrant (p. 184) SO Strategies (p. 178)
Conservative Quadrant (p. 184) Stability Position (SP) (p. 181)
Culture (p. 196) Stars (p. 186)
Decision Stage (p. 176) Strategic Position and Action Evaluation (SPACE)
Defensive Quadrant (p. 184) Matrix (p. 181)
Directional Vector (p. 182) Strategy-Formulation Framework (p. 177)
Dogs (p. 187) Strengths-Weaknesses Opportunities-Threats (SWOT)
Equifinality (p.197 ) Matrix (p. 178)
Financial Position (FP) (p. 181) ST Strategies (p. 178)
Governance (p. 198) Sum Total Attractiveness Scores (STAS) (p. 195)
Grand Strategy Matrix (p. 191) Total Attractiveness Scores (TAS) (p. 195)
Halo Error (p. 177) WO Strategies (p. 178)
Industry Position (IP) (p. 181) WT Strategies (p. 179)

Issues for Review and Discussion

1. Many multidivisional firms do not report revenues or profits by division or segment in their
Form 10K or Annual Report. What are the pros and cons of this management practice?
Discuss.
2. Define halo error. How can halo error inhibit selecting the best strategies to pursue?
3. List six drawbacks of using only subjective information in formulating strategies.
4. For a firm that you know well, give an example SO Strategy, showing how an internal
strength can be matched with an external opportunity to formulate a strategy.
5. For a firm that you know well, give an example WT Strategy, showing how an internal weak-
ness can be matched with an external threat to formulate a strategy.
6. List three limitations of the SWOT matrix and analysis.
7. For the following three firms using the given factors, calculate a reasonable Stability Position
(SP) coordinate to go on their SPACE Matrix axis, given what you know about the nature
of those industries.

Factors Winnebago Apple U.S. Postal Service
Barriers to entry into market
Seasonal nature of business
Technological changes
SP Score

8. Would the angle or degrees of the vector in a SPACE Matrix be important in generating
alternative strategies? Explain.