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Mr. Jose Mari M.

Lee, MBA, REB


1. Discuss thoroughly the meaning and relevance
of mission/vision statement;
2. Describe the five power Ps;
3. Enumerate and Explain the business excellent
criteria;
4. Know and understand Porter’s generic
strategic.
• Mission summarizes the purpose or the reason
for the company’s existence. It tells what the
company is now and what it is doing at the
present. It tells what types of customers are
being served, how the company does its
product and services and its desired level of
performance. It defines the products or services
offered and the types of consumers served.
• Vision is what the company wants to become in
the future. It serves as a challenge for the
company. It visualizes the company’s future and
takes a glimpse of what the organization will
be like in a certain period. It becomes the
company’s inspiration and establishes the
framework of action plans to realize it.
Actually, the vision lays down the foundation for
the formulation of the mission statement. It
answers the question: “Where do we want to
go?”
1. Position.
It is the advantage that an organization
gains in the hands of the consumers. It is a
position that a company should not allow to be
snatched by its competitors. Position strategies
are best exemplified by Porter’s Generic
Strategies.
2. Power.
A company should enjoy power over its
competitors. It is a competitive edge, a following
of some sort that a company should not allow
competitors to surpass. There are power
strategies that can be used by a company.
3. Pace.
There is timing and intensity of strategy put
on the ground. It is the right time for a strategy to
work. This includes the adaptive methods.
4. Potential.
It is the probability of the success element
of a particular strategy. It is necessary to know
the important characteristics of a product or
service that will spell success.
5. Performance. It is the effective implementation
of a particular strategy. Excellent performance
relates to growth strategies.
Michael Porter developed three basic competitive
approaches in strategic management.

Cost Approach. It concentrates on keeping costs


low. With lower costs, the company can offer the
product or service lower than the competition. This
strategy has been employed by Chinese
businessman, and coined the Filipino term, tubong
lugaw.
Differentiation Approach. The company makes
its products or services unique and distinct. In this
approach, the customer is willing to buy at a
higher price as long as it can satisfy her/ his taste
based on its quality, uniqueness, and distinct
appeal or feature.
Focus Approach. It is specializing or
concentrating in particular market segment just
like what Rustan’s Department Store is doing for
a high-end market segment.
There are two power strategies available for
organizations.
1. Horizontal Integration is the strategy of the
company to expand its business into different
products that are similar to current lines.
A classic example is the merger of two
companies in the same industry or an acquisition /
buy out of a company by another company.
2. Vertical Integration has two subtypes:
backward integration and forward integration.

Forward integration is strategy of a


company to control the direct distribution of its
products. Example is brewery purchasing a chain
of pubs. This means that the brewery can decide
which beers are sold in the pubs.
Backward Integration is a strategy of a company
to purchase the suppliers in order to reduce
dependency. For example: a car company has a
tire company.
Prospector Approach.
This is based on innovation and at the same
time exploration of new market opportunities.
Creating new prospects or markets is centered on
the development of new products or services so
the company can stand in stronger market base.
Defender Approach.
It is based on making vast improvements in
its present products or services. It is worth
concentrating within a smaller market.
Analyzer Approach.
It is based on making attempts to copy and
thereby make improvements in the success of
product or service offering provided by the
competition.
• Transferability
• Competitive Dominance
• Uniqueness
• Substantiability
• Durabilty
Diversification.
It is the development of new products for new
markets. This is risky because both the product and
market are untested yet.

Market Development.
It is the development of a new market for existing
prodcts and services. This can be in the form of
exporting or tapping an unexplored segment of the
market.
Product Development.
It is the development of new products to existing markets.
It requires some form of creativity or ingenuity to develop new
products.

Market Penetration.
It is the desire to achieve greater percentage of the
market share through the company’s existing products in existing
markets. The company is involved in building competitive edge
through marketing such as pricing, promotion, packaging, etc. It is
also development of customer loyalty and patronage.