Evaluating Strategic Choices Flashcards
(20 cards)
What is the SAF framework used for?
To assess if a strategic option is the right choice for an organisation
What does SAF stand for?
Suitability
Acceptability
Feasibility
Why is SAF important in exam scenarios?
It helps structure your evaluation of strategy options when advising a board or client
When is SAF most useful?
When comparing 2 or more strategies, or advising whether to proceed with a strategic initative
Real-life trigger for SAF use?
A business considering international expansion, digital transformation, or a new product line
What does SUITABILITY mean in SAF?
Checks whether the strategy fits the external environment and organisations strengths
How do we evaluate Suitability?
SWOT fit
Strategic positioning
Risk level
Suitable competitive advantage
What would make a strategy unsitable?
A luxury brand trying to enter a budget market - may not align with core identity
What helps assess Suitability?
SWOT
PESTEL
FIVE FORCES
VALUE CHAIN
STRATEGIC GAP ANALYSIS
What does ACCEPTABILITY mean in SAF?
Measure whether stakeholders are likely to support the strategy
What are 3 areas assessed under Acceptability?
Risk
Return
Stakeholder reaction
Who are key stakeholders to consider?
Shareholders / employees / customers / lenders / government / community
What tools help assess Acceptability?
Risk analysis
Sensitivity analysis
Stakeholder mapping
Shareholder value analysis
Real Life example of Acceptability conflict?
Layoffs may improve profit but upset employees > need managing carefully
What does FEASIBILITY mean in SAF?
Can the organisation practically implement the strategy?
What do we assess under feasibility?
Finance
Time
Skills & capabilities
Operational capacity
Tools to evaluate Feasinbility?
Resource Audit (9 Ms)
Cash flow forecast
Project plans
BE analysis
Investment appraisal: NPV, IRR
What are examples of financial tests for feasibility?
NPV, IRR, Payback Period, ROCE
What is Gap Analysis in strategy evaluation?
It compares where the organisation is now vs where it wants to be, and identifies the ‘gap’ that must be closed
Think: current performance vs strategic objective
Formula: strategic position - forecasted position = strategic gap
How does Gap Analysis support SAF evaluation?
Suitability: checks if strategy helps close the performance gap
Feasibility: Highlights what resources or capabilities are missing
Implementation: Guides action planning to close the gap
💡 Example:
If a company wants 25% growth in 3 years but projections show only 10%, gap analysis prompts action (e.g. expansion, investment, new products).
