NAME: VIVERO, MELISSA JANE D.

COURSE: BSA II

SUBJECT: STRMAN

ASSIGNMENT NO. 5

DATE: JULY 17, 2020

1. Discuss the concept of Strategic Model. (5 pts.)

Basically, a strategy model constitutes a strategic plan, or model, designed to improve a process.
Organizations use strategy models to improve operations and meet their goals. The development of such a
model requires identifying the key goals of an organization, identifying the key components or steps of
the process leading from a starting point to the achievement of those goals and creating ways of
maximizing the process for optimal output and the achievement of the stated goals. Strategy models are of
varying degrees of complexity.

2. Identify the various components or tasks built into the models by various authors. (5 pts
each)
A. Wright, Kroll and Parnell Model

Wright, Kroll and Parnell emphasized that strategic management is a continuousprocess. Indeed it is
considered a continuous and dynamic process in the sense thatbeing externally-oriented and driven by
macro and micro environmental conditions,managers have to be always conscious that business being an
ongoing wealth creation endeavor, appropriate efforts have to be made to ensure profitable operations and
survivein times of trouble. There is an old adage which says that the only thing constant in thisworld is
change; hence, strategic managers should take a cue from such saying and bealways prepared for any
eventualities
D. Wheel and Hunger Model

At the corporate level, the strategic management process includes activities thatrange from
environmental scanning to the evaluation of performance. Topmanagement scans both the external
environment for opportunities and threats,and the internal environment for strengths and weaknesses. The
factors that aremost important to the corporation's future are referred to as strategic factors andare
summarized with the acronym SWOT; standing for strengths, weaknesses,opportunities, and threats.
Once these are identified, top management evaluatesthe strategic factors and determines the corporate
mission. The first step in theformulation of strategy, a statement of mission, leads to a determination
ofcorporate objectives, strategies, and policies. These strategies and policies areimplemented through
programs, budgets, and procedures. Finally, performanceis evaluated, and information is feedback into
the system so that adequatecontrol of organizational activities is ensured;
B. Thompson and Strickland Model 

   The seven factors of the Thompson and Strickland strategic management model are as follows. Such
as:-

Dominant Economic Features of the Industry

Sources of Competitive Pressures and Strengths of Competitive Forces

Driving Forces in the Industry

Market Position of the Competitors

Strategic Moves of the Competitors

Industry’s Key Success Factors

Finally, industry Analysis Plan

An analysis of these factors of Thompson and Strickland strategic management model reveals the
competitive structure of the industry. Let’s discuss the factors one by one. The information generated
through the analysis of these factors of Thompson and Strickland strategic management model would
build an understanding of a firm’s surrounding environment and form the basis for the corresponding
strategy to altering industry situations and competitive principles 
E. Rayport and Jaworski Model

C. F.R. David Model

F. The Hybrid Model
3. The four Categories of Business Organization and discuss each
Corporations

A corporation is considered by law to be a unique entity, separate from those who own it. A corporation
can be taxed, sued and enter into contractual agreements. The corporation has a life of its own and does
not dissolve when ownership changes.

The advantages of the corporation structure are as follows:

 Limited liability. The shareholders of a corporation are only liable up to the amount of their
investments. The corporate entity shields them from any further liability, so their personal assets are
protected.

 Source of capital. A publicly-held corporation in particular can raise substantial amounts by selling
shares or issuing bonds.

 Ownership transfers. It is not especially difficult for a shareholder to sell shares in a corporation,
though this is more difficult when the entity is privately-held.

 Perpetual life. There is no limit to the life of a corporation, since ownership of it can pass through
many generations of investors.

 Pass through. If the corporation is structured as an S corporation, profits and losses are passed
through to the shareholders, so that the corporation does not pay income taxes.

The disadvantages of a corporation are as follows:

 Double taxation. Depending on the type of corporation, it may pay taxes on its income, after which
shareholders pay taxes on any dividends received, so income can be taxed twice.

 Excessive tax filings. Depending on the kind of corporation, the various types of income and other
taxes that must be paid can require a substantial amount of paperwork. The exception to this scenario
is the S corporation, as noted earlier.

 Independent management. If there are many investors having no clear majority interest, the
management team of a corporation can operate the business without any real oversight from the
owners.

Sole proprietorship

The vast majority of small businesses start out as sole proprietorships. These businesses usually are
owned by one person, aka the individual who has day-to-day responsibility for running the business. Sole
proprietors can be independent contractors, freelancers or home-based businesses.

Sole proprietorship advantages

 The owner receives all profits.

 Profits are taxed only once.

 The owner makes all decisions and is in complete control of the company (but this could also be a
disadvantage).

 It is the easiest and least expensive form of ownership to organize.

Sole proprietorship disadvantages

 There is unlimited liability if anything happens in the business. Your personal assets are at risk
(including your home in Kansas City).

 It is limited in raising funds and the owner might have to acquire consumer loans.

 There is no separate legal status.

Partnerships

In a partnership, two or more people share ownership of a single business. Like proprietorships, the law
does not distinguish between the business and its owners. The partners should have a legal agreement that
establishes how decisions will be made, how profits will be shared, how disputes will be resolved, how
future partners will be admitted to the partnership, how partners can be bought out or what steps will be
taken to dissolve the partnership when needed.

Partnership advantages

 It is easy to establish (with the exception of developing a partnership agreement).

 Separate legal status gives liability protection.

 Profits are taxed only once.

 Partners may have complementary skills.

Partnership disadvantages

 Partners are jointly and individually liable for other partners’ actions.

 Profits must be shared with the partners.

 Decision making is divided.

 Business can suffer if the detailed partnership agreement is not in place.

Cooperative

Cooperative organizations are those organizations, which are different from the rest, as they are formed
not for the purpose of making profit but to provide its members goods and services at reasonable rates.
This form of organization primarily protects and safeguards the economic interests of its members.
Thus, cooperatives are voluntary associations, formed with a service motive; the primary source of
income being the members’ shares, they get dividend on trading surplus, if any. The organization
functions as a separate legal entity in a democratic way and is governed by the state regulation.

Advantages of a Cooperative Organization:

1. A cooperative organization is owned and controlled by members.

2. It has a democratic control: one member, one vote.

3. This type of organization has a limited liability.

4. Profit distribution (surplus earnings) to members is carried on in proportion to the use of service;
surplus may be allocated in shares or cash.

Disadvantages of a Cooperative Organization:

1. A cooperative organization entails longer decision-making process.

2. It requires members to participate for success.

3. Extensive record keeping is necessary in this form of organization.

4. It has less incentive, and there’s also a possibility of development of conflict between members.
4. Discuss the following:

a) Group of Companies or Conglomerate;

A conglomerate is a combination of multiple business entities operating in entirely different industries

under one corporate group, usually involving a parent company and many subsidiaries. Often, a
conglomerate is a multi-industry company.

b) Mother or Parent Company;

A parent company is a company that has a controlling interest in another company, giving it control of its
operations. Parent companies can be either hands-on or hands-off owners of its subsidiaries, depending on
the amount of managerial control given to subsidiary managers.

c) Subsidiaries or Affiliates;

A subsidiary company is a company that is controlled and at least majority owned by another company.
The company that controls the subsidiary is called a parent company or sometimes a holding company.

A subsidiary can be structured as one of several different types of corporate entity and is registered with
the state where it resides as a subsidiary of the company that controls it.

d) Diversified Business Group (3 pts each

A diversified company is a type of company that has multiple unrelated businesses or products. Unrelated
businesses are those that:

Require unique management expertise

Have different end customers

Produce different products or provide different services

One of the benefits of being a diversified company is that it buffers a business from dramatic fluctuations
in any one industry sector. However, this model is also less likely to enable stockholders to realize
significant gains or losses because it is not singularly focused on one business.

How a Diversified Company Works

Companies may become diversified by entering into new businesses on its own by merging with another
company or by acquiring a company operating in another field or service sector. One of the challenges
facing diversified companies is the need to maintain a strong strategic focus to produce solid financial
returns for shareholders instead of diluting corporate value through ill-conceived acquisitions or
expansions.