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CS Professional · Strategic Management and Corporate Finance · Analyzing the External and Internal Environment

A Pune-based auto-component maker has a weak in-house R&D team (weakness). The government has launched a subsidy for technology partnerships with global firms (opportunity). The company signs a joint development agreement with a German firm to fill its R&D gap. Which TOWS strategy is this?

It is a WO strategy. The company uses an external opportunity, the subsidy for technology partnerships, to overcome an internal weakness, its weak R&D. No existing strength is being exploited, so it is not an SO strategy.

  1. ASO strategy
  2. BWO strategyCorrect
  3. CST strategy
  4. DWT strategy

Explanation

The firm is using an external opportunity (subsidy for tie-ups) to overcome an internal weakness (weak R&D). That is the definition of a WO strategy. It is not SO because no strength is being leveraged.

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