BA 321 – Strategic Management ✓ Strategic positioning refers to staking out to

Midterm Handouts a unique industry position while controlling

Prepared by: Mr. Joseph Ivan P. Lugo cost.
STRATEGY VS. OBJECTIVE
CHAPTER ONE: STRATEGIC
MANAGEMENT – THE NEW CHALLENGE ✓ An Objective is a measurable action taken to
OF THE NEW CENTURY. execute the strategy agreed on by
management and the rest of the
INTRODUCTION organization.
I, UNDERSTANDING STRATEGY AND WHY ✓ An objective follows the paradigm of the
IT IS IMPORTANT SMART formula (Specific, Measurable,
Actionable, Relevant and Time-based).
✓ Strategies are timely methods and processes These series of objectives must be assigned
to get things done in the rightful manner and completed to complete the strategy and
and effect. meet the company’s primary goal.
✓ Strategies are a science of process and ✓ Strategy helps to create a plan on how to
methodology using critical thinking, achieve the goal while an objective is a list of
analyzing approaches, and implementing documented steps that will assist to fulfill
actions. Therefore, is an art using creative goals of the strategy.
approach in getting things done.
✓ In strategies, critical thinking and creative II. STRATEGIC MANAGEMENT: AN
thinking has an important role to translate OVERVIEW
solutions. ✓ Strategic Management – is the on-going
✓ According to Michael Scriven and Richard planning, monitoring, analysis and
Paul, critical thinking is the intellectually assessment of all necessities an organization
disciplined process of actively and skillfully needs to meet its goals and objectives.
conceptualizing, applying, analyzing, ✓ It is a dynamic process that is full of
synthesizing, and or evaluating the commitment to decisions and actions to
information gathered from, generated by, deliver strategic competencies to achieve the
observation, experience, reflection, desired result of corporate profitability and
reasoning, or communication, as guide to growth.
belief and action. ✓ Having defined process for managing an
✓ According to Alyson Dyle (2020), creative institution strategy will help the
thinking is the ability to consider something organization to make logical decisions and
in a new way. Creative thinking exhibits the to quickly keep pace with evolving
quality of thinking outside of the box and technology.
devising new ways or approaches to solve ✓ Strategic management applies to both on-
issues or challenges. premises and mobile platforms.
✓ The combinations of these two must align to
business paradigm and must exhibit BASIC STRATEGIC MANAGEMENT
appropriate and enticing solutions to the CONCEPTS:
problem.
✓ Strategic management is based around an
✓ Taking time to understand the company
organization’s clear understanding of its
resources and external players such us
mission and vision and the values that will
(competitors, society and government) has a
guide the actions of the company.
valuable contribution to pave the higher
✓ Strategic Management process requires
possibilities of success despite risk and
COMMITMENT to strategic planning both
challenges.
short- term and long-term goal.
✓ In a simple way of understanding the term
✓ Strategic management can be prescriptive
STRATEGY, it describes as goal-oriented
strategic management means developing
actions a firm intends to take in its quest to
strategies in advance of an organizational
GAIN AND SUSTAIN competitive
issue. Descriptive strategic management
advantage.
means putting strategies into practice when
✓ Strategy is about understanding where you
needed.
are now, where you are heading and how
✓ Strategic management employs both
you will get there.
theories and practices. Top management is
✓ Therefore, effective strategic decision-
responsible for implementing strategies but
making is vital at all levels of organization
ideas, goals can come from any member of
because it will determine how vision can be
the company.
transformed into action.
✓ The important point in strategic decision
making is to create strategic positioning
(superior value) while containing or
controlling the cost to create it.
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BENEFITS OF STRATEGIC MANAGEMENT: STRATEGIC MANAGEMENT PROCESS:
1. Competitive advantage – the The step-by-step flows of activities toward the
proactive nature of the company it implementation of a strategy to achieve company
always aware of the changing market. goals.
2. Achieving goals – by using clear and
dynamic process in formulating steps Describe the method by which managers conceive
and implementations it keeps company’s of and implement s strategy that can lead to a
goal achievable. sustainable competitive advantage.
3. Sustainable growth – creates A competitive advantage of an organization could
efficient organizational performance be divided into TWO DIFFERENT
which leads to manageable growth. STRATEGIES:
4. Cohesive organization – necessities
communication and goal 1.Industry-Based Model
implementation wide. - It refers to the analyses of the prevailing industry
5. Increased managerial awareness where the firm has its competitive advantages over
–looking towards the company’s future. other firms in the environment.
The company is well prepared to face
future challenges. 2.Resource-Based Model
TYPES OF STRATEGIC MANAGEMENT - It refers to analyses of the prevailing resources
FRAMEWORKS: available to the firm that are present in the internal
environment which could then be utilized in the
According to Peter Ducker, the founder of development of competitive advantage.
management studies, among his contributions is
the seminal idea of “the purpose of business is to Discovering firms’ vision and mission and defining
create a customer, and what the customer wants their value are the first step in the strategic
determines what the business is”. management process.
1. SWOT ANALYSIS: one of the types of STRATEGIC VISION AND INTENT:
strategic management frameworks used by
✓ Strategic vision is the advantage of the
organizations to build and test their strategies. The
firm’s resources and core competencies to
SWOT process helps leaders to determine whether
accomplish its goal in the competitive
the organization’s resources and abilities will be
environment.
effective in the competitive environment.
✓ Strategic vision and intent exist when all
2. BALANCED SCORES CARD: A strategic employees and its executive are committed
management system that translates the vision and to the pursuit of specific performance
strategy of an organization into operational criterion.
objectives and performance measures perspective ✓ Strategic vision provides the manpower
resource with the commitment to remain
✓ Financial Perspective the best in the world.
✓ Customer Perspective ✓ It is concerned with identifying the resource
✓ Internal Business Process Perspective capabilities and core competencies on which
✓ Learning And Growth Perspective the firm can base its strategic action.
STRATEGIC MANAGEMENT CHALLENGES: ✓ It reflects what the firm is capable of doing
and the unique ways to utilize its
The challenges are substantial in the economic competitive advantage.
global arena not only for big corporations operating
in the multi-national environment but also for MISSION – an effective mission establishes the
small firms. firm’s individuality.

Earning above the average return of investments STRATEGIC MISSION

and achieving the desired competencies are ✓ It flows from strategic vision and intent.
challenges that the business must be able to cope ✓ It is the firm’s direction in the pursuit of its
with in the world of competition. operation in the production and operations
Therefore, Strategy is an integrated management (its product and services.)
challenge as the top executive formulated policies ✓ Provides general description of products
and programs that will bring the company in its and services based on own core
desired direction. competencies of the company.

It is an integrated and coordinated set of actions. THE LANDSCAPE OF BUSINESS IN THE

NEW CENTURY:
Overall companies need to introduce new and
innovative strategies consistent with the prevailing The business landscape in the new century is a
market condition. combatant of giant corporations therefore, values of
flexibility, speed, innovations and integration.
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- A new mindset is necessary to cope with ever 3. Knowledge-Based Intensity
changing increasing competition. Forward planning In the new century, knowledge based on new
must be put ahead of time and make new technology and its application is the organizational
amendments as the new landscape develops in the corporate resource that develops greater
new business horizon. competitive advantages.
- Hyper- competitive market- refers to companies
aggressively challenging their competitors in the THE INFLUENCE OF INTERNAL ABOVE
hope of improving their performance. RETURN ON INVESTMENT
THE GLOBAL ECONOMIC SCENARIO: The following strategies are common to people with
higher achievements for greater ROI:
The new global economic scenario – it is the result ✓ Study the business environment.
of borderless flow of goods, services, people, skills ✓ Locate the industry with high potential or
and ideas.
above-average returns.
The development of infrastructures (such as roads, ✓ Identify the strategy needed by the industry
bridges, airports and landing ports) are factors that that will generate greater returns.
contribute to competitive advancement of the ✓ Develop and acquire the needed assets and
country’s economy. skills to implement the strategy.
✓ Use the corporate skills that were developed
THE NEW HORIZON FOR THE PHILIPPINE and implement the strategy.
STRATEGIC COMPETITIVENESS:
The Philippines is in the center in the Asian region ENVIRONMENTAL SCANNING OF
therefore, could serve as the transient point in the INDUSTRY
flow of goods and resources for its neighboring The internal environment is managed by executives
countries. and managers with an eye for profitability and
growth for their firm. Their focus is not only on the
The development of new infrastructures and the internal operation of the business but also on the
liberalization of trade and commerce will create prevailing environment where the firms operate
new investments for its vast natural and human within the industrial landscape.
resources.
ENVIRONMENTAL SCANNING
New investments create new businesses that will
Is the process of seeing the whole scenario of
generate employment sustaining the economic
business operations in terms of the general
well-being of the Filipino people.
business activities prevailing within the industry
THE DEVELOPMENT OF STRATEGIC and the competitors’ strategies that may affect the
COMPETITIVENESS: present market share of the firm.

The Borderless flow of goods, services, knowledge, HORIZONTAL AND VERTICAL EXPANSION
and ideas, and the financial capital for investments
plus the economic interdependence of the world’s HORIZONTAL EXPANSION - is either
countries is the effect of the marching orders for backward integration or forward expansion.
globalization. ✓ Backward integration -processing of the
Global competition has increased the standards in material inputs that are sourced outside the
product quality, cost of production, productivity firms’ operation.
levels, operational efficiency. ✓ Forward integration - taking over the
marketing of the product that was produced
THE TRENDS AND CONDITIONS THAT and used to be channeled to distributors or
ALTER COMPETITION dealers.

1. The Increased Rate of Technological Change VERTICAL EXPANSION - Refers to an

The present rate of technology change has gone too expansion strategy where one company takes
fast during the last decade. The shorter product life control over one or more stages in the production
cycles resulting from the rapid innovation and or distribution of a product.
diffusion of technology place a competitive
premium on being able to quickly introduce new
goods and services into the market.

2. The Advancement in Information Linkages

The advancing technology in the exchange of
information in recent years is brought about by the
presence of new computers and the wireless
transformation of messages across countries.

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