Custom term paper on STRATEGY FORMULATION

Summary of matrices

After applying to ACF International four methods of strategic analysis such as SWOT-TOWS analysis, SPACE matrix, BCG matrix and grand matrix, it was determined that the chosen organization needs to set its priority on the group of strategies which allow to use the strengths of the organization in order to use the opportunities to the fullest. Results obtained from BCG matrix indicate that ACF International should maximally finance their projects and expand the scope of operations. SPACE matrix shows that evaluation of ACF International on key four strategic dimensions yields similar results: strategic vector of the organization pointed to the aggressive quadrant. Among four basic types of strategies – prospective, defending, analyzing and reacting – prospecting approach is the most aggressive one. This approach focuses on expansion into new markets and stimulation of new opportunities.

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According to grand matrix analysis, the set of strategies relating to strong competitive position and to rapid market growth is the best solution for ACF International. The most appropriate strategies for ACF International with regard to its nonprofit profile are market development, horizontal integration and related diversification. Finally, according to SWOT analysis, there are 4 sets of strategies: SO, WO, ST and WT. Using the results of SPACE and grand matrix analysis, it is possible to determine that the SO set of strategies is the best option for target organization. SWOT-based strategies include launching educational and health care centers included into the network of ACF International and sharing the unique culture and values of ACF International with new centers in order to initiate long-term changes, using staff devotion and shared values in order to facilitate marketing and to increase awareness of global problems in the developed countries, using innovative technologies in order to develop own forecasts or emergency situations and to create a network for early tracking of possible crises, creating information resource, legal database and knowledge base devoted to malnutrition and hunger which could be promoted in social networks and easily assessed using mobile applications, using partnerships with well-known organizations to attract more volunteers (and perhaps launching joint programs to eliminate malnutrition) and investing part of available liquid assets into creating a powerful program of mobile donations.

F. Analysis of strategies

1. Relevance of high-score strategies

After using four methods of strategic analyzing and formulating set of alternative strategies, all four results appeared to be coherent and quite sustainable. This fact first of all points at the relative correctness of evaluating factors and strategies for all chosen methods. Furthermore, the scores developed for grand matrix and for SWOT-TOWS analysis are quite consistent, as well as the results of SPACE analysis. Since estimates for corresponding variables and dimensions correlate, it is possible to state that all assumptions and estimates were done correctly. As a result, strategies with high scores are relevant to ACF International.

2. SWOT-based strategies

The collection of strategies generated on the basis of SWOT-TOWS analysis contains four sets of strategies mapping specific SWOT factors to corresponding factors relating to the different quadrant of the analysis. Since the results of all four methods appeared conformable with each other, it is possible to consider the strategies generated in the second step of SWOT analysis as elaboration of more generic vectors and alternative strategies generated by other methods. The conclusions of all four methods are consistent, and thus appropriate strategies of SWOT origin can be successfully included into finally proposed strategies and prioritized, provided that they are mapped with more generic dimensions before prioritization.

Six sub-strategies formulated in SWOT analysis can briefly be classified as:

ü      Network of educational and health care centers

ü      Marketing facilitation using staff

ü      Innovative early tracking of emergency situations

ü      Creating knowledge base on malnutrition and hunger

ü      Using partnerships to attract more volunteers

ü      Investing into mobile donations software

These sub-strategies can be mapped to more generic strategies provided by grand matrix analysis (horizontal integration, market development and related diversification) as it is shown in Table 5.

Table 5. Elements of strategies recommended to ACF International

G. Prioritization of strategies

1. QSPM results

The sub-strategies originating from SWOT served as the basis for identifying key factors for each of the strategic alternatives. The attractiveness scores were assigned using the following scale: 1- not acceptable, 2 – possibly acceptable, 3 – probably acceptable, and 4 – most acceptable. Detailed scores and weights are listed in Appendix A – QSPM Matrix. As a result, the following scores were obtained: for market development strategy total attractiveness score is 5.15, for related diversification strategy the score is 5.4, and for horizontal integration strategy the score is 5.95. Thus, ACF International should choose the strategy of horizontal integration.

2. Proposed strategies

As a result of strategy formulation and evaluation, it was determined that the most optimal strategy for ACF International is horizontal integration (score 5.95), the second preferable strategy is related diversification, and the least preferable strategy out of three alternatives is the market development strategy. The approach of horizontal integration implies close collaboration with partner companies and other nonprofit organization. In particular, ACF International will greatly benefit from collaborating with major competitors (Mercy Corps and Save the Children) in order to launch joint projects and new initiatives.

The sub-strategies generated by SWOT analysis for this alternative are the following:

ü      Using partnerships with well-known organizations to attract more volunteers (and perhaps launching joint programs to eliminate malnutrition);

ü      Investing part of available liquid assets into creating a powerful program of mobile donations;

The expansion of market share for ACF International will thus be performed with the help of partner relationships, and it would be ideal to create a network for nonprofit organizations working to eliminate hunger and malnutrition. ACF International could also use its stable financial position and innovative power in order to create an information network with data on hunger and malnutrition and opportunities to help, with online and mobile availability. Launching a mobile donation program will help ACF International and its partners to gain more financial stability, and to be able to provide the services to a larger number of people. Furthermore, ACF International should promote joint projects in order to strengthen the reputation of the organization and of its partners. Overall, nonprofit organizations can make a change if they are working together to reach the best for the whole world, and the results of strategic analysis have proved this fact.