CHAPTER 5 TWO POPULAR FRAMEWORKS

1. BCG growth-share paradigm

 Integrative growth strategies – are essentially external 2. General electric Model
growth strategies, involve investing the resources of the
organization THREE MAIN AREAS IN GLOBAL STRATEGIES
- Corporate in nature 1. International strategies- sell their excess products outside
TYPES OF INTEGRATIVE GROWTH STRATEGIES their home markets
1. Horizontal Integration- a strategy where the organization 2. Multinational strategies- involved in a number of markets
acquires another competing business outside the home country
2. Vertical Integration- the process of consolidating into an 3. Global strategies- treats or considers the world as a whole,
organization one market and one source of supply
a. Backward integration- where the organization buys NECESSARY RESOURCES TO ESTABLISH ALEVEL OF COMPETIVENESS
one of its suppliers 1. Substantial capitalization
b. Forward integration- carried out when the 2. Managerial and strategic leadership
organization buys distribution companies that are part 3. Expertise and capabilities
of the distribution chain 4. Quality and differentiated products and services
THE BOSTON CONSULTING GROUP The 21st century- an epoch of borderless reality
- Classifies the products or business units of the
organization in terms of two parameters: market share CHAPTER 6
and market growth
- Developed by Bruce Henderson  Organizational structure- refers to the system or mode by
 Market share- the relative sales percentage of a company which a group of individuals are able to achieve its desired
in relation to the sales percentage of the market in goals
consideration INTERNAL FACTORS THAT SIGNIFICANTLY AFFECT ORGANIZATIONS
 Market growth- an increase in demand over time it maybe 1. Management 4. Customers
high or low 2. Employees 5. Government
BCG MODEL FOUR BROAD CATEGORIES 3. Suppliers 6. Society
1. Stars- high market share, high market growth TYPES OF ORGANIZATIONAL STRUCTURES
PRIORIIZE 1. Functional organizational structures- organizations adopt a
2. Cash cows- high market share, low market growth specific structural arrangement for a reason
INVEST o Marketing department- interact and coordinate
3. Question marks- low market share, high market with personnel
DIVEST o Production/operations department- follows the
4. Dogs – low market share, low market growth requirements set by the marketing department
KILL o Financial department- efficiently allocates funds
THE GENERAL ELECTRIC MODEL to achieve the organizations set of objectives
- Conceptualized by Mckinsey 2. Territorial organizational structure- organization begins to
- An improvement of the BCG MODEL serve its customers who are spread over a growing
- Used to assess the strength of a strategic business unit geographical area
- 9 cells and circle represent the organization o Personnel familiar with the history of customer
TWO PARAMETERS: a. Market attractiveness o Company and sales force can respond quickly to
b. Business strength changes
EXTERNAL FACTORS AFFECTING MARKET ATTRACTIVENESS o Closer contact between managers familiar with
1. Market size and growth territory and subordinates
2. Market niche and segmentation o Management is familiar with local conditions
3. Demand 3. Product organizational structure- sub-businesses are
4. Overall risk assigned to product group managers, each of them are
INTERNAL FACTORS AFFECTING BUSINESS STRENGTH given key operating and staff functions
1. Brand strength FOUR COURSES OF ACTION
2. Staying power a. Conducting training programs
3. Profit margins b. Switching from a marketing manager to a
4. Quality marketing team
5. Customer patronage c. Eliminating product managers of minor brands
and consolidating them with other products
d. Establishing divisions around the major products
4. Market-centered organizational structure- describes the
wide range of structural forms that center on a group of
customer needs
 Market-centered organization is decentralized by market
 Market center is a profit center
5. SBU organizational structure- raises the issue of whether
any marketing functions should be performed at the
corporate staff level
6. Matrix organizational structure- efficient for establishing
specialist resources but is best for integrating functions
 Matrix- any organization that employs a multiple “boss”
arrangement
CHOICE OF AN ORGANIZATIONAL STRUCTURE
 Size of the firm- indicate the complexity of its organization
 The products- another factor that influences the choice of
an organizational structure
 The market- characteristics of the market like geographic
dispersion, income class, and buyer behaviour need to be
considered in organizing the marketing unit
 Competition- A firm may find it necessary to organize its
marketing efforts following the requirements of
competition
 Philosophy and management- a final factor that affects the
structure of an organization
EVALUATION OF AN ORGANIZATIONAL STRUCTURE
 Facilitating control- involves a comparison of actual
performance with pre-established standards or plans
 Coordination- “team effort” he presence of effective
teamwork is usually indicative of an efficient and well-
organized marketing operation
 Providing information- it is essential for managers to gather
information in order to anticipate changes and make
decisions accordingly
 Cost of the system- A firm can choose from the simplest to
the most complex type of organization
THREE IMPORTANT FACTORS
1. Organizational information
2. Organizational control
3. Cost of organizing personnel
 Flexibility- to be able to cope with the dynamic and
changing environment and can adjust to changes
 Necessary to attain good performance
Organization- an entity composed of people that is structured and
managed in such a way that it is able to achieve its set goals and
objectives
ORGANIZATIONAL COMPONENTS
1. Management- refers to the administrative supervision of an
organization
Includes;
o Leadership- foremost in the management of any
business
- Task of a leader- planning where he
sets the objectives to be attained and
the means to achieve them
- Roles of a leader- a leader who inspires
and motivates his employees to attain
quality and productivity
 Liaison officer- serves as a conduit for the
employees
 Mediator- settles concerns, issues and other
problem between labor and mgt.
 Facilitator- negotiates the allocation of resources
 Delegator- assigns responsibilities, empowers
employees, and monitor them
 Problem-solver- tackles organizational concerns
and provide adequate solutions
 Decision-maker- makes appropriate decision,
both qualitative and quantitative
- Skills of a leader
 Technical skills- being
competent in his respective
field
 Human relation skills- being
adept in dealing with
personal and interpersonal
employee
o Vision- refers to the image that the organization
aims to establish
o Mission- refers to the purpose of the organization
o Goals- refers to what the organization aims to
attain
- General, macro and long-term in nature
o Objectives- refers to what the organization aims
to attain
- Specific, micro and short-term in nature
2. Employees- constitute a significant part of the
organizational milieu
THREE LEVES OF RELATIONSHIP
a. Employee satisfaction- an emotional state where
the employee experiences a feeling of content in
workplace
b. Employee involvement- am employee may
graduate to a higher level of organizational
relationship
c. Employee commitment- further heightened
when the employee reaches the highest level
3. Facilities and equipment- simple and crude as long as they
are functioning and producing the desired output
o Management buildings and site maintenance-
needs to be appropriate for the type of business
the organized is engaged in
o Management of machinery- making sure that the
right equipment or machinery are in place
o Management of facilities- amenities such as
washrooms and canteens need to be in good and
healthy
o Application of technology- the unifying force in
facilities and equipment management
Technology Asset management- refers to the business processes and
enabling information systems
4. Financial resources- determine the direction the
organization will take and affect its capability to realize its
goals and objectives
5. Organizational policies- the lifeblood of the organization
CHAPTER 7
 Competitive assets- are the talents, abilities, resources,
properties and other endowments that provide plus points
to organizations
 Intellectual property assets- assets that result from the
activities of the mind
o Trademarks- include all service marks, trade names,
designs, logos and seals that are uniquely developed
o Software- organized information in the form of
operating system
 System software- control the basic functions of
the computer
 Application software- handle common and
specific tasks
o Trade secrets- all types of information, technical, or
otherwise, like organizational philosophy…..

 Organizational monopoly- when an org possesses
intellectual property assets, the entity is said to have
created a competitive edge
 Human resources assets- are the strength of the
organizations that consists of collective expertise, personal
traits, creative and problem-solving capabilities
 Collective expertise:
a. Impressive educational attainment
b. Unique and cutting-edge professional
competence
c. Relevant and intelligent environmental
knowledge
d. Adept but creative and highly differentiated
work-related knowledge
e. Inclusive, complete but objective historical
knowledge
 Personal trait:
a. Transformational leadership
b. Ingenuity to differentiate
c. First rate problem-solving capabilities
d. Self-motivated and vibrant
e. Sustained energy
f. Adaptability, proactivity, initiative
 Managerial, entrepreneurial and competency asset:
a. Planning, organizing, delegating, staffing and
monitoring skills
b. Cutting-edge business expertise, critical and
reliable business intelligence
c. Skills in communication, expertise in information
technology, practical and vocational qualifications
 Human resource leverage- possession of human resource
assets
 Marketing assets- results in marketing related intangibles:
a. Brands
b. Company names
c. Customer loyalty- help org attain bigger MS
d. Repeat business
e. Distribution channels
f. Contracts
g. Agreements
 Market dominance
a. An effective but less expensive medium for
product and service identification
b. A company name that is well-known, recognized,
and reputable significantly increases the financial
worth of an or organization
c. Repeat business is a by-product of customer
loyalty
d. Increased product and service sales result from
efficient and well-organized modes of bringing
goods and services to the public
 Infrastructure assets
a. Organizational structure
b. Management philosophy
c. Organizational culture
d. High involvement practices
e. Quality standards
f. Technology
 Comparative advantage
ASSET MANAGEMENT STRATEGIES
1. Competency learning: “Laying the groundwork”
2. Strategic enhancement: “Widening the horizon”
3. Competitive innovation: “ Creating bargaining power”
Competency- refers to the knowledge, attitudes and skills expected
of an individual in carrying out his job tasks
CLASSIFICATION OF COMPETENCIES
1. Core competencies- basic, include all fundamental
competencies expected of every employee
2. Functional competencies- are expected of employees
performing job functions in marketing, productions human
resources, technology and finance
3. Managerial competencies- are administrative and
attitudinal in nature
TEN DIFFERENT WAYS IN STRATEGIC ENHANCEMENT
1. Maximize the reach of the organization infrastructure
technology
2. Corporate entities need to appreciate the business value of
knowledge, information, and communication technology
3. Continuously conduct formal and informal types of training
4. Systematize a process of enriching job pathing of
employees beginning from being starters with zero or
negligible knowledge to becoming learners through
supervised apprenticeship
5. Empower employees to reach sustainable self-
development by promoting valuable knowledge, rewarding
those who unselfishly share their knowledge to others and
the organization
6. Interact with experts who have proven their worth and
expertise in their specialized fields
7. Prepare programs for employees leading to attitudinal
change
8. Provide access to needed resources
9. Broaden networking through strategic alliances, which can
come from within and from the outside
10. Analyse culture
Innovation- the best assurance in achieving business sustainability,
competitive advantage and creating bargaining power
INNOVATION SCENARIOS
1. Differentiating existing products and services
2. Reinventing products and services
3. Continuously experimenting
4. Applying recent and new technologies in information or
communication that will significantly change organizational
structures and systems for optimality
5. Changing business models
6. Creating new products and services to futurize the
organization
7. Widening the breadth and depth of intellectual capital
found in individuals, teams, and departments, particularly,
intellectual property assets and ownership