PPT 1 -​ Changed the way modern

STRATEGIC MANAGEMENT corporations do business

-​ Called Business Policy
-​ Set of managerial decisions and BASIC MODEL OF STRATEGIC
actions that determines the long MANAGEMENT
run performance of a corporation. ●​ Environmental Scanning -
-​ Incorporates such topics as gathering info
strategic planning, environmental ●​ Strategy Formulation - developing
long-range plans
scanning and industry analysis.
●​ Strategy Implementation- putting
strategy into action
STRATEGIC MANAGEMENT
●​ Evaluation and Control -
INCLUDES: monitoring performance
-​ Environmental Scanning (Internal
& External) ENVIRONMENTAL SCANNING
-​ Strategy Formulation (Strategic or -​ Monitoring, evaluating and disseminating
long-range planning) of information from external and internal
environments to key people within the
-​ Strategy Implementation
corporation
-​ Evaluation and control -​ Identify strategic factors
-​ Uses SWOT
****PHASES OF STRATEGIC
MANAGEMENT ●​ External opportunities and threats
Phase 1 Basic Financial Planning ●​ Natural environment: resources
-​ Planning is based on historical and climate
data ●​ Societal environment: general
Phase 2 Forecast-based Planning forces
-​ Managers attempt to propose ●​ Task environment: industry
five-year plans analysis
Phase 3 Externally Oriented (strategic) ●​ Structure: chain of command
Planning ●​ Culture: beliefs, expectations,
-​ Based on external factor, study values
market trends ●​ Resources: assets, skills,
Phase 4 Strategic Management competencies, knowledge
-​ Includes all levels
PPT 2
BENEFITS OF STRATEGIC STRATEGY FORMULATION
MANAGEMENT Strategic Management -​ Development of long-range plans
emphasizes long-term performance -​ SWOT
●​ Clearer sense of strategic vision -​ defining the corporate mission,
for the firm specifying achievable objectives,
●​ Sharper focus on what is developing strategies, and setting
strategically important policy guidelines.
●​ Improved understanding of a Factors of Strategy Formulation
rapidly changing environment ●​ Mission - reason for existence
●​ Objectives - what results to accomplish
Globalization ●​ Strategies - plan to achieve the mission
-​ Integrated internalization of market and objectives
and corporations ●​ Policies - broad guidelines for
decision-making
Some of the areas in which a 3.​ Functional Strategy
corporation might establish its goals -​ functional area to achieve
and objectives are: corporate and business unit
● Profitability (net profits) objectives and strategies by
● Efficiency (low costs, etc.) maximizing resource
● Growth (increase in total assets, sales, etc.) productivity
● Shareholder wealth (dividends plus stock
price appreciation) PPT 3
● Utilization of resources (ROE or ROI)
● Reputation (being considered a “top” firm)
PPT 4
● Contributions to employees (employment
security, wages, diversity)
● Contributions to society (taxes paid, PPT 5
participation in charities, providing a needed
product or service) R GROUP 1
● Market leadership (market share) STRATEGY FORMULATION
● Technological leadership (innovations, ●​ Process of using available
creativity) knowledge to document the
● Survival (avoiding bankruptcy) intended direction of a business
● Personal needs of top management (using and the actionable steps to reach
the firm for personal purposes, such as
its goals.
providing jobs for relatives)
●​ This process is used for resource
3 TYPES OF STRATEGY allocation, prioritization,
1.​ Corporate Strategy organization-wide alignment, and
-​ describes a company’s validation of business goals.
overall direction in terms of
VISION
its general attitude toward
growth and the
●​ A long-term picture of what an
management of its various
organization aspires to become.
businesses and product
●​ Acts as a roadmap for the future,
lines.
inspiring action and setting a clear
-​ Stability, growth &
direction for the organization.
retrenchment
Importance of Vision:
2.​ Business Strategy
-​ Occurs at the business unit ●​ Provides direction for strategic
or product level, and it planning and decision-making.
emphasizes improvement ●​ Aligns resources and activities
of the competitive position towards the desired future state.
of a corporation’s products ●​ Motivates employees and
or services in the specific stakeholders to work towards a
industry or market segment common goal.
served by that business ●​ Helps the organization respond to
unit. environmental changes and stay
-​ Competitive & cooperative competitive.
strategies
MISSION PORTER'S COMPETITIVE
STRATEGIES
●​ The mission is a general statement
of how you will achieve your vision. Michael Porter’s Generic Competitive
●​ Strategies are a series of ways to Strategies framework outlines three
use the mission to achieve the primary approaches that businesses can
vision. adopt to achieve a sustainable competitive
●​ Goals are statements of what advantage:
needs to be accomplished to
implement the strategy. 1.​ Cost Leadership Strategy –
Becoming the lowest-cost producer
Importance of Mission: in the industry.
2.​ Differentiation Strategy –
●​ Defines the company's purpose, Offering unique products/services
guiding decision-making and valued by buyers.
direction. 3.​ Focus Strategy – Targeting a
●​ Helps organizations create and specific niche market.
implement their strategic plans and
build high-performing teams. Types of Focus Strategy:
●​ Helps teams understand what they
need to work on and what they can ●​ Cost Focus – Achieving a cost
let go of, as strategy involves advantage within a specific
making choices. segment.
●​ Differentiation Focus – Creating
BUSINESS STRATEGY unique offerings for a target
segment.
●​ The strategic initiatives a company
pursues to create value for the CORPORATE STRATEGY
organization and its stakeholders
and gain a competitive advantage ●​ The overarching strategy that sets
in the market. a company's long-term direction,
●​ A business strategy is crucial to a identifies its competitive
company's success and is needed advantage, and aligns resources
before any goods or services are for success.
produced or delivered.
Types of Corporate Strategy:
Importance of Business Strategy:
1.​ Growth Strategy
●​ Helps leaders set organizational 2.​ Stability Strategy
goals and gives companies a 3.​ Retrenchment Strategy
competitive edge. 4.​ Combination Strategy
●​ Determines various business
factors, including: Key Components of Corporate
○​ Price Strategy:
○​ Suppliers
○​ Employee recruitment 1.​ Visioning – Defines the vision,
○​ Resource allocation mission, and corporate values.
2.​ Objective Setting – Translates
vision into measurable goals.
 3.​ Resource Allocation – Ensures R GROUP 2
resources are directed toward
high-priority areas. Stability Strategies
4.​ Risk Management – Identifies and
-​ approaches or methods that
mitigates risks. organizations, individuals, or
5.​ Execution Plan – Defines how systems use to maintain consistent
goals will be achieved. performance.

Benefits of Corporate Strategy: 5 EXAMPLES OF STABILITY

STRATEGIES
●​ Provides strategic direction.
1.​ Market Stability Strategy
●​ Helps organizations stay flexible
2.​ Financial Stability Strategy
and adapt. 3.​ Financial Stability Strategy
●​ Improves strategic 4.​ Government and Policy Stability
decision-making. 5.​ Economic Stability

GROWTH STRATEGY Retrenchment Strategies

-​ set of deliberate measures that

●​ A plan a company uses to increase organizations undertake to reverse
its business by expanding into new or prevent a decline in their
markets, launching new products, financial position.
or acquiring other companies.
TYPES OF RETRENCHMENT
Importance of Growth Strategy STRATEGIES

●​ Helps a company achieve ●​ Turnaround Strategy- reduces

the harmful tendencies that affect
long-term success and
the performance of the business.
competitiveness. ●​ Divestment Strategy-or
●​ Enables overcoming challenges divestiture means getting rid of
and meeting market expectations. aspects of a business by closing
●​ Develops sustainable competitive them down or selling them off.
advantages. ●​ Liquidation Strategy- the process
of “winding up” a business and
How to Create a Growth Strategy: selling off its assets to pay off its
debt and obligation.
1.​ Evaluate financial, market, and
Examples of Retrenchment Strategy
industry positions.
2.​ Set clear objectives. ●​ Merger and acquisitions
3.​ Decide on Key Performance ●​ Corporate restructuring
Indicators (KPIs) to measure ●​ Management change
success. ●​ Personnel Cuts/ Lay-offs
4.​ Consider different strategies (e.g.,
PORTFOLIO ANALYSIS
market penetration, product
development, mergers & -​ quantitative technique that is used
acquisitions). to determine the specific
5.​ Create an action plan involving characteristics of an investment
different departments and teams. portfolio.
-​ the process of analyzing a portfolio
involves several stages, including
 a statistical performance review,
risk and risk-adjusted metrics.

STEPS IN PORTFOLIO ANALYSIS

1.Performance Analysis

-​ assesses how well a portfolio has

performed over a specific period,
helping investors evaluate the
success of their investments.

2. Risk Analysis

-​ analyzing the risk in their portfolio,

investors can gauge the likelihood STAR
of future fluctuations or financial
losses. ●​ HIGH Market Share
●​ HIGH Market Growth
3. Risk-adjusted Analysis
QUESTION MARK
-​ relate portfolio performance to the
level of risk taken. This provides a ●​ LOW Market Share
measure of how well returns ●​ HIGH Market Growth
compare to the inherent
investment risk. DOG

●​ LOW Market Share

●​ LOW Market Growth
TOOLS USED IN PORTFOLIO
ANALYSIS CASH COW

1.​ Portfolio Positioning ●​ HIGH Market Share

2.​ Style Box ●​ LOW Market Growth
3.​ POrtfolio Characteristics
4.​ Attribution Analysis Market Share

Portfolio attribution is a quantitative -​ Percentage of sales company over

analysis used to assess the sources of the total industry sales
portfolio returns.
CORPORATE PLANNING (CORPORATE
BCG GROWTH-SHARE MATRIX PARENTING STRATEGY)

-​ The Boston Consulting Group Corporate Planning

(BCG) Matrix
-​ creating a strategy for meeting
-​ developed by Bruce Henderson,
business goals and improving your
-​ strategic tool used by businesses
business.
to assess their product portfolio.
-​ used to provide a graphic
ROLE OF CORPORATE PARENTING IN
representation of the products and
CORPORATE PLANNING
services of the organization and to
decide what the organization ●​ Corporate parenting focuses on
should own, sell and invest in. how a parent company manages
and adds value to its subsidiaries.
 ●​ Involves strategic management BALANCED SCORECARD
decisions across the business
portfolio. ●​ The Balanced Scorecard (BSC) is
a performance management tool
Corporate Parenting Strategy ●​ It aligns business activities with the
organization’s vision and strategy.
●​ how a parent company adds value ●​ Introduced by Robert Kaplan and
to its subsidiaries. David Norton in the early 1990s.
●​ involves guiding, supporting and
managing business units to create PURPOSE OF BALANCED SCORE
synergies, optimize resources, and
align them with corporate goals ●​ Provides a balanced view of
●​ The goal is to maximize organizational performance.
performance profitability, and ●​ Enhances strategic
long-term growth. decision-making.
●​ Tracks financial and non-financial
TYPES OF CORPORATE PARENTING metrics.
STRATEGIES ●​ Encourages continuous
improvement.CARD
1.​ Financial Control- parent
company’s role is to provide 4 PERSPECTIVE OF BSC
funding and oversee financial
performance of subsidiaries. 1.​ Financial Perspective –
2.​ Strategic Planning- the parent Measures profitability, revenue
company plays a significant role in growth, and cost efficiency.
defining the strategic direction of 2.​ Customer Perspective –
subsidiaries. Assesses customer satisfaction,
3.​ Strategic Control- the corporate retention, and market share.
parent leverages its resources and 3.​ Internal Business Processes –
competences to build value for its Focuses on operational efficiency
businesses. and innovation.
4.​ Management Control- parent 4.​ Learning and Growth – Evaluates
company provides managerial employee development, skills, and
expertise and leadership to organizational culture.
subsidiaries.
BENEFITS OF USING BSC
ADVANTAGES
●​ Aligns short-term actions with
●​ Envisioning long-term goals.
●​ Central Services and Resources ●​ Improves communication and
●​ Intervening accountability.
●​ Encourages a holistic approach to
DISADVANTAGES strategy implementation.
●​ Provides a structured way to
●​ Buffer from reality measure success.
●​ Diversity and Size
●​ Managerial Ambition HOW TO IMPLEMENT BSC

1.​ Define the organization’s vision

and strategy.
2.​ Develop objectives under each
perspective.
3.​ Identify key performance indicators
(KPIs).
4.​ Set measurable targets.
 5.​ Monitor progress and adjust PROCEDURES
strategies as needed.
Step-by-step instructions or guidelines that
R GROUP 3
outline the specific actions to be taken to
carry out a particular task or process.
WHO IMPLEMENTS STRATEGY?
●​ Top Management (Executives and Importance of Procedures:
Board of Directors)
●​ Middle Management (Department ●​ Consistency
heads and managers) ●​ Efficiency
●​ Operational Managers & ●​ Accountability
Employees
●​ External Stakeholders (Partners,
Investors, Suppliers)
LEVELS OF STRATEGY

HOW TO IMPLEMENT A STRATEGY? ●​ Corporate Strategy

●​ Business Strategy
1.​ Set Clear Objectives ●​ Functional Strategy
2.​ Develop a Detailed Action Plan ●​ Operational Strategy
3.​ Allocate Resources
4.​ Establish Strong Leadership and
Communication CORPORATE STRATEGY
5.​ Monitor Progress and Adapt
●​ Formed at the top of the company.
6.​ Encourage a Culture of Continuous
●​ Typically focused on long-term
Improvement
objectives but may influence
near-term activities.
DEVELOPING PROGRAMS

Programs are structured initiatives BUSINESS STRATEGY

designed to guide and support the
●​ Defined at the segment level and
implementation of strategic goals.
emphasizes products or services
●​ Marketing Campaign and attaining competitive
●​ Training Program advantage
●​ Process Improvement Project ●​ Focused on specific business
segments and their competitive
positioning.
BUDGETS

Budgets are financial plans that allocate FUNCTIONAL STRATEGY

resources to specific programs and
activities. ●​ Designs the approach for functions
or departments (e.g., supply chain,
engineering) to run their operations
Importance of Budgets:
efficiently.
●​ Resource Allocation
●​ Cost Control
OPERATIONAL STRATEGY 3.​ Maturity​
Business becomes more
●​ Outlines the tactical steps or organized with clear goals &
actions needed to run businesses management levels.​
and implement changes.
4.​ Renewal​
Organization changes its structure
CORPORATE DEVELOPMENT to be more flexible and creative.​

Stages of Corporate Development 5.​ Decline​

Business eventually shuts down
●​ Development:​
Every company starts with an idea. R GROUP 4
Whether that's an idea for a
product or to provide a service, the REENGINEERING
first stage of corporate
-​ radical redesign of business
development is ideation, and then processes to achieve major gains
research. in cost, service, or time.
●​ Startup:​ -​ Also called process management,
Once the development stage is process innovation, or process
concluded and all stakeholders redesign
agree the viability of the company -​ Involves reconfiguring or
redesigning work, jobs, and
is sound, it's time to actually create
processes for the purpose of
the company. improving cost, quality, service,
●​ Expansion:​ and speed.
Startups that successfully exit the
"survival" stage and look to build a PRINCIPLES FOR REENGINEERING
more stable growth pattern then
turn to expanding their business. 1.​ Organize around outcomes, not
tasks​
●​ Maturity:​
When companies have steady ○​ Design a job around an
growth, a strong brand, and are a objective or outcome
force in their market, they're instead of a single task or
considered to have reached the series of tasks.
maturity stage. 2.​ Have those who use the output
of the process perform the
ORGANIZATIONAL LIFE CYCLE​ process​
Phases of Organizational Life Cycle
○​ Processes can be
reengineered so that
1.​ Existence​ people who need the result
Business starts and works hard to of the process can do it
get enough customers.​ themselves.
3.​ Subsume information
2.​ Survival​ processing work into the real
Focus on making enough money work that produces the
information​
to keep going & grow.​
○​ People or departments that
produce information can
 also process it for use WHAT IS SIGMA?
instead of just sending raw
data to others in the DPMO
organization to interpret.
4.​ Treat geographically dispersed -​ Defects Per Million Opportunities
resources as though they were -​ A key metric in Six Sigma used to
centralized​ measure how many defects occur
in a process per one million
○​ With modern technology, opportunities.
companies can provide
flexible service locally while DPMO=(Total OpportunitiesTotal
keeping the actual Defects​)×1,000,000
resources in a centralized
location for coordination SIX SIGMA STEPS OVERVIEW
purposes.
5.​ Link parallel activities instead of 1.​ DEFINE – Understand the problem
integrating their results​ 2.​ MEASURE – Quantify the problem
3.​ ANALYZE – Identify the root cause
○​ Instead of having separate 4.​ IMPROVE – Develop solutions
units perform different 5.​ CONTROL – Maintain
activities that must come improvements
together, have them 6.​ STANDARDIZE – Ensure
communicate while they consistency
work so that they can do
the integrating.
6.​ Put the decision point where the
BENEFITS OF SIX SIGMA
work is performed and build
●​ Operational efficiency​
control into the process​
●​ Quality improvements​
○​ The people who do the
work should make the
●​ Cost reduction​
decisions and be
self-controlling.
●​ Customer satisfaction​
7.​ Capture information once and at
Innovation
the source​

○​ Instead of having each unit SUMMARY

develop its own database
and information processing ●​ Six Sigma is a structured approach
activities, the information to process improvements.
can be put on a network so ●​ Key Takeaways: Define, Measure,
that all can access it. Analyze, Improve, Control,
Standardize.
●​ Apply these steps to achieve
SIX SIGMA strategic goals.

-​ A methodology for process DESIGNING JOBS TO IMPLEMENT

improvement. STRATEGY
-​ Focuses on reducing defects and
variability. WHAT IS JOB DESIGN?
ORIGIN: Developed by Motorola in the -​ Process of organizing job duties,
1980s tasks, and responsibilities to
maintain job satisfaction and
employee engagement. It is an
 ongoing process because the ●​ Niche Focus – Target a specific
global environment of roles, customer group.
responsibilities, employee needs,
and the market is constantly Example:
changing.
●​ Cebu Pacific – Uses cost
IMPORTANCE OF JOB DESIGN leadership by offering low-cost
flights.
●​ Job Enlargement – Combining ●​ Bench – Uses differentiation
tasks to give a worker more of the through celebrity branding and
same type of duties to perform. trendy fashion.
●​ Job Rotation – Moving workers
through several jobs to increase 3. Functional Strategy – The day-to-day
variety. strategies implemented in different
●​ Job Enrichment – Altering jobs by departments to support business strategy.
giving workers more autonomy and
Example:
control over activities.
●​ Jollibee’s Marketing Strategy –
JOB CHARACTERISTICS MODEL Uses emotional ads to connect
(by Hackman and Oldham) with customers.
●​ Shopee’s Operations Strategy –
Five Core Job Characteristics: Provides cash-on-delivery and free
shipping to attract buyers.
1.​ Skill Variety
2.​ Task Identity HOW THESE STRATEGIES WORK
3.​ Task Significance TOGETHER
4.​ Autonomy
5.​ Feedback ●​ Corporate strategy sets the overall
vision.
THREE LEVELS OF ●​ Business strategy determines how
STRATEGY: to compete.
●​ Functional strategy ensures daily
1. Corporate Strategy – The highest level operations support business goals.
of strategy that defines the overall
direction of a company. Focuses on
long-term growth, industry selection, and
market expansion.

Example:

●​ Jollibee Foods Corporation –

Expands by acquiring Mang Inasal
and Coffee Bean & Tea Leaf.
●​ SM Investments Corporation –
Diversifies by operating in retail,
banking, and real estate.

2. Business Strategy – Strategy used to

compete in a specific market or industry.

●​ Cost Leadership – Compete by

offering lower prices.
●​ Differentiation – Compete by
offering unique products.
​