[MUSIC] Let's think about your strategic selection, you've done all of this prior analysis, you've analyzed the markets, the products, the prizes, etc., and you've established some possibilities. Obviously what you need to do next is to actually evaluate them and then select those that are most likely to secure a sustainable competitive advantage in the future. Evaluation criteria for the strategic options that you have highlighted. Well, the approach taken here is sort of largely prescriptive. The focus is on what should be done to evaluate the possibilities that an organization faces. It has been described by Lynch, there are six main criteria for evaluating options. Number 1, consistency. Number 2, suitability. Number 3, validity. 4, feasibility. Number 5, the business risk, and number 6, the attractiveness to stakeholders. Let's have a look at each of this in turn. Let's start with consistency. This involves comparing options with the mission objectives of the organization. Since organizations define their purpose through their mission and their objective, options that are not consistent with these may lead to a rejection of that specific option. A reevaluation of the mission, even, and those objectives. Objection of the option may be desirable since it reflects recognition of a lack of strategic fit. If the mission and objectives are too restrictive, a reevaluation may be needed. Organizations in highly competitive situations or in harsh trading environments become option driven rather than objective driven. However, frequent changes in the mission and objectives can also lead to confusion, uncertainty, a lack of development of core competencies. Let's have a look at suitability. Suitability can be evaluated by some SWOT analysis. Something you've looked at previously. Another words the building upon the strengths of the organization, it's called competencies. Rectifying any weakness, taking environmental issues into account. Opportunities, threats, all of these things play a part here. What about validity? The validity of a strategic option, depends on the robustness of the assumptions about the future in which it is base. This, of course, a way of bringing some of your mathematical skills, some probability if you wish. For what it does mean is it you need to consider. Number one, the quality of information concerning the environment, and number two, that information about customers, three competitors, and of course the resources you have available. Assessing the technique used interpret the data and testing the assumptions is a key point here. Feasibility. Feasibility depends on whether the business has or can obtain the appropriate skills, the culture, the internal resources, the reaction of the competitors, in fact the reaction of the customers and suppliers as well. And other aspects of the external environment. It relies upon a commitment from employees, managers, and other strategic stakeholders. Business risk. There's always a risk in business. Generally, the greater the risk, the greater the required return for a viable option. However, risks need to be assessed. The extent to which risk is acceptable to an organization depends on the degree of risk aversion of senior managers. What's risky for one business, may be less risky for another. The attractiveness to stakeholders. Some options are uncontroversial. With others, however, there maybe a conflict between stakeholder interest. For example, cost reduction options may increase shareholder wealth but they also need to reduction in employment or working conditions. And maybe even a reduction in pay for employees. Not all options are equally attractive to all stakeholders. Those whose interests are threatened may be powerful enough to frustrate the implementation of a particular strategy. In addition, international consideration of your options, well, this is where if your product or service involves international markets or foreign production, you need to give consideration to differing national regulations, their cultures, their working practices. These may be the reasons for considering internationalization in the first place. [MUSIC]
