01 Jan T1: Government Regulations

TOWS Guidelines

Start with your SFAS matrix.

Identify what you believe to be the two most strategic S,W,O, and T factors facing your firm.

Place these eight factors on your TOWS matrix, with the two Opportunities and the two Threats going down the first right column. Place your two Strengths and your two Weaknesses in the first row at the top of the TOWS matrix.

Review a sample TOWS matrix to make sure you have your S,W,O, and T factors correctly positioned.

Designate each factor as either #1 or #2.

Now create what you think are the four best strategies using the S,W,O, and T factors.

You will create a SO Strategy using either one of your Strengths and Opportunities.

You will create a WO Strategy using either of your Weaknesses and Opportunities.

You will create a ST Strategy using either of your Strengths and Threats.

You will create a WT Strategy using either of your Weaknesses and Threats.

Designate which factor (S2/T1, W1/T1) you are using.

Each of these strategies should incorporate the two factors you have selected. See the TOWS matrix examples. You can use the same factor, say S1 in both strategies.

See the attached examples of TOWS matrixes.

SFAS Guidelines

· Start with your EFAS and IFAS assignments.

o Make all corrections to these assignments.

· The SFAS matrix is to contain the ten most strategic factors from your EFAS and IFAS.

· You need to include at least two factors from your S,W,O, and T factors in your EFAS and IFAS assignments.

· Label each factor on your SFAS matrix, such as S1, S2, W1, etc. These numbers need not corresponding with the numbers you used on your EFAS and IFAS assignments.

· So now you have the “SWOT #” for each SFAS factor and ten “SFAS factors”, develop a “Weight” for each factor.

· Make sure the total weights for these ten factors equals 1.0.

· Now work on your “Comments” for each factor. You may have to revise your comments to reflect the instructor’s remarks on your EFAS and IFAS assignments.

· Use your comments to develop your “Ratings” for each factor.

· Remember, good comments should be reflected in ratings of 3.8 and higher, average comments should have ratings of 3.3-3.5, and poorly performed comments tend to have ratings below 3.3.

· Multiple your “Weight” and “Rating” for each factor, and place these numbers in the “Weighted Score” column.

· Total up the “Weighted Score” column and enter at the bottom of the matrix.

· Make sure the “Total Weighted Score” matches your perception of how well a firm is operating.

STRATEGIC FACTOR ANALYSIS SUMMARY (SFAS)

SWOT

#

FACTORS

WEIGHT

RATING

WGTD

SCORE

COMMENTS

TOTAL SCORES

STRATEGIC FACTOR ANALYSIS SUMMARY (SFAS)

Progressive Auto Insurance

SWOT

#

FACTORS

WEIGHT

RATING

WGTD

SCORE

COMMENTS

S1

Claims Handling

.15

4.8

.72

Progressive is considered a leader in the industry

S2

Customer Service

.05

3.5

.18

Progressive policy holders rate high but none policy holders rate low. Gap needs bridged.

S3

Employee Satisfaction

.10

3.5

.35

Most employees are happy but limited advancement opportunities frustrates some

W1

Out Dated Technology

.10

2.5

.25

Progressive operating systems are over 10 yrs old

W2

Claims Errors

.05

2.5

.13

Progressive has a goal of below 10% currently around15%

O1

Technology

.15

2

.30

Progressive needs to grow its technology reach by using more social media and other online support tools to consumers vs. the competition.

O2

Department of Insurance

.05

2

.10

Progressive has had a difficult past with the DOI. Improvement on relationship needed to make business easier.

T1

Competition

.10

2.5

.25

Progressive needs to diversify its product offering. Many other companies offer multiple lines of coverage for easy to the consumer.

T2

Stock Market

.10

3.5

.35

Progressive’s profitability is tied to the stock market heavily. If the market falls, so do Progressive’s profits. This accounts for a large sum of profits.

T4

Weather

.15

4

.60

Progressive sets aside a certain reserve each year. If weather is more damaging than predicted the cash flow of the company is put in serious jeopardy.

TOTAL SCORES

1.00

3.23

US Airways (USA) TOWS ANALYSIS

Internal Factors

External Factors

Strengths (S)

S1: Innovative Thinking

S2: Employee Incentives

Weaknesses (W)

W1: Fleet Variety

W2: West Coast Presence

Opportunities (O)

O1: Merger & Acquisitions

O2: Special Events

SO Strategies

S1/O1-USAused an innovative thought process by talking to the unions of American Airlines (AA), which gained their support for a merger with USA prior to going into negotiations with AMR, parent company of American Airlines.

WO Strategies

W2/O1- A merger between USA and AA would increase the routes and presence of the consolidated airlines on the west coast. In addition, a hub would be gained in Dallas – Forth Worth that would present stronger routes in the mid-west.

Threats (T)

T1: Government Regulations

T2: Fuel Prices

ST Strategies

S2/T2- There is not much the airlines can do about the price of fuel. However, innovative thinking on the part of employees has developed ways of reducing fuel consumption of the aircraft.

WT Strategies

W1/T2- USA operates a number of different aircraft. The use of smaller aircraft in many cases result in the consumption of less fu