UB VISION

We envision the University of Batangas to be the center of excellence

committed to serve the broader community through quality education.

UB MISSION
The University of Batangas provides quality education by promoting
personal and professional growth and enabling the person to participate
in a global, technology- and research-driven environment.

UB PHILOSOPHY
The University of Batangas, a stock non-sectarian, private educational
institution, believes in the pursuit of knowledge, values and skills
necessary for the preservation and improvement of the Philippine
society. It has faith in the dignity of the human person, in the democratic
process, in the reward for individual excellence, and in the freedom of a
person to worship God according to his conscience. Thus, the institution
believes that the development of the individual as a person and worker
is an effective means in building a better family, community and nation,
and a better world.

UB Objectives
 Pursue academic excellence through continuing search for the
application of truth, and knowledge and wisdom via traditional and
alternative modes of instructional delivery.
 Promote moral and spiritual development through an integrated
educational process that will enhance human character and dignity;
 Develop cultural, economic and socio-civic conscience through
an educational content relevant to national development needs,
conditions and aspirations;
 Strengthen involvement in community services through varied
economic and environmental projects;
 Attain institutional self-reliance through responsive programs for
staff, facilities and systems development;
 Ensure financial viability and profitability
 Adopt internationalization to meet the shifting demands in the
national, regional and global labor environment; and
 Increase the University's productivity and innovation in research,
scholarship and creative activities that impact economic and societal
development.

Stages of Strategic Management

Strategy Formulation

- mission and vision, SWOT analysis, long-term objectives, alternative strategies,

choosing particular strategies

Strategy implementation

-strategy-supported culture, effective organizational structure, marketing efforts,

preparing budgets, information system, compensation to organizational
performance.

Strategy Evaluation

- reviewing external and internal factors that are the bases for current strategies

- Measuring performance

- taking corrective actions

Strategic Management

Art and science of formulating, implementing, and evaluating cross-functional

decisions that enable an organization to achieve its objectives.

Strategic-management process

An objective, logical, systematic approach for making major decisions in an

organization.

Key Terms in Strategic Management

Competitive advantage – any activity a firm does especially when compared to activities done by
rival firms, or any resource a firm possesses that rival firms desire.

strategists– individuals most responsible for the success or failure of an organization.

Vision statement– what do we want to become?

Mission statement– enduring statements of purpose that distinguish one business from other
similar firms.

Internal strengths and weaknesses– organization’s controllable activities that are performed
especially well or poorly.

External opportunities and threats– economic, social, cultural, demographic environmental,

political, legal, governmental, technological, and competitive trends and events that could
significantly benefit or harm an organization in the future.

Long-term objectives – long term means more than one year. Objectives are essential for
organizational success because they provide direction; aid in evaluation; create synergy; reveal
priorities; focus coordination; and provide a basis for effective planning, organizing, motivating
and controlling activities.

Strategies – means by which long-term objectives will be achieved.

Annual objectives – short-term milestones that organizations must achieve to reach long-term
objectives.

Policies – means by which annual objectives will be achieved.

Cohesion case -

The Strategic-Management Model

1. Where are we now?

2. Where do we want to go?

3. How are we going to get there?

Benefits of Engaging in Strategic Management

Strategic management allows an organization to be more proactive than reactive in shaping its
own future; it allows an organization to initiate and influence (rather than just respond to
activities – and thus to exert control over its own destiny.

Financial Benefits

Nonfinancial benefits
Ethics, Social Responsibility, and Sustainability

Business ethics can be defined as principles of conduct within organizations that guide decision
making and behavior.

Social responsibility refers to actions an organization takes beyond what is legally required to
protect or enhance the well-being of living things.

Sustainability refers to the extent that an organization’s operations and actions protect, mend and
preserve rather than harm or destroy the natural environment.

Code of ethics

- a document that provides behavioural guidelines that cover daily activities and decisions within the
organization.

Ethics training should include:

 A message from the CEO

 Development and discussion of codes of ethics

 Procedures for discussing and reporting unethical behavior

To align ethical and strategic decision making:

1. Incorporate ethical considerations into long-term planning.

2. Incorporate ethical considerations into performance appraisals.

3. Encourage whistle-blowing

4. Monitor department and corporate. performance regarding ethical issues.

Whistle-blowing, bribery, and workplace romance have become important strategic issues facing
companies.
Whistle-blowing refers to employees reporting any unethical violations they discover or see in the
firm.

Bribe is a gift bestowed to influence a recipient’s conduct.

Social policy concerns what responsibilities the firm has to employees, consumers,
environmentalists, minorities, communities, shareholders and other groups.

It should be considered during each stage of strategy formulation, implementation and evaluation.

Social Responsibilities on Retirement

some countries around the world are facings severe workforce shortages associated
with their aging populations.

• Strategies of companies are scrutinized and evaluated from a natural environment

perspective.

• Employees, consumers, governments and society are resentful of firms that harm rather
than protect the natural environment.

Sustainability reports

reveals how a firm’s operations impact the natural environment. This document
discloses to shareholders information about the firm’s labor practices, product sourcing, energy
efficiency, environmental impact, and business ethics practices.

Environmental strategies could include:

1. Developing or acquiring green businesses

2. Divesting or altering environment-damaging businesses

3. Striving to become a low-cost producer through waste minimization and energy

conservation

4. Pursuing a differentiation strategy through green product features

Why Firms should be green?

1. Consumer demand

2. Public opinion

3. Environmental advocacy groups

4. Government environmental regulations

5. Lenders
 6. Consumers, suppliers distributors, and investors

7. Liability suits and fines

ISO14000/14001 Certification

ISO14000 refers to a series of voluntary standards in the environmental field.

ISO14001 is a set of standards adopted by thousands of firms worldwide to certify to their

constituencies that they are conducting business in an environmentally friendly manner.

Long-Term Objectives

• Results expected from pursuing certain strategies.

• It should be quantitative, measurable, realistic, understandable, challenging, hierarchical,

obtainable, and congruent among organizational units.

• Each objective should be associated with timeline.

• It is commonly stated in terms such as growth in assets, growth in sales, profitability,

market share, degree and nature of diversification, degree and nature of vertical integration,
earnings per share and social responsibility.

Eight Desired Caharcteristics of Objectives

• Quantitative

• Measurable

• Realistic

• Understandable

• Challenging

• Hierarchical

• Obtainable

• Congruent across department

Benefits of having clear objectives

1. Provide direction by revealing expectations

2. Allow synergy

3. Assist in evaluation by serving as standards

4. Establish priorities
5. Reduce uncertainty

6. Minimize conflicts

7. Stimulate exertion

8. Aids in allocation of resources

9. Aids in design of jobs

10. Provide basis for consistent decision making

Two types of objectives:

Financial objectives – include those associated with growth in revenues, growth in earnings, higher
dividends, larger profit margins, greater return on investments, higher earnings per share, a rising
stock price, improved cash flow, and so on.

Strategic objectives – include things such as larger market share, quicker on time delivery than
rivals, shorter-design to market times than rivals, lower costs than rivals, higher product quality
than rivals, wider geographic coverage than rivals, achieving technological leadership, consistently
getting new or improved products to market ahead of rivals, and so on.

Types of Strategies

Most organizations simultaneously pursue a combination of two or more strategies, but a

combination strategy can be exceptionally risky if carried too far.

Strategy Definition Example

Forward Integration Gaining ownership or Amazon began rapid delivery

increased control over services in some US Cities.
distributors or retailers

Backward Integration Seeking ownership or Starbucks control a coffee

increased control of a firm’s farm.
suppliers

Horizontal Integration Seeking ownership or BB&T acquired Susquehana

increased control over Bancshares
competitors
Market Penetration Seeking increased market
share for present products or
services in present markets
through greater marketing
efforts.
Strategy Definition
Market development Introducing present products
or services into new
geographic area
Product development Seeking increased sales by
improving present products or
services or developing new
ones.
Related diversification Adding new but related
products or services
Unrelated diversification Adding new, unrelated
products or services
Strategy Definition
Retrenchment Regrouping through cost and
asset reduction to reverse
declining sales and profit.
Under Armour signed tennis
champion Andy Murray to a
4-year,$23 million marketing
deal.
Example
Gap opened its first five stores
in China.
Amazon just began offering its
own line of baby diapers and
wipes.
Facebook acquired the text-
messaging firm WhatsApp for
%19 billion.
Kroger and Whole Foods
Market are cooking meals,
becoming restaurants.
Example
Staples closed 250 stores and
reduced by 50% the size of
other stores.
 Divestiture Selling a division or part of an Sears Holdings divested its
organization Land’s End division to Sear’s
shareholders.

Liquidation Selling all of a company’s The Trump Taj Mahal in

assets, in parts, for their Atlantic City, New Jersey,
tangible worth. faces liquidation.

The persons primarily responsible for having effective strategies at the various levels include the CEO
or business owner at the corporate level; the President or Executive Vice-president at the divisional
level; the Chief Finance Officer(CFO), Chief Information Officer(CIO), Human Resource Manager,
Chief Marketing Officer, and so on at the functional level; and the plant manager, Regional Sales
Manager, and so on at the operational level.

Levels of Strategies

INTEGRATION STRATEGIES

1. Forward integration – gaining ownership or increased control over distributors.

2. Backward integration – seeking ownership or increased control of a firm’s suppliers.

3. Horizontal integration – seeking ownership or increased control over competitors.

INTENSIVE STRATEGIES

4. 4. Market penetration – seeking increased market share for present products or services in
present markets through greater marketing efforts.

5. 5. Market development – introducing present products or services into a new geographical

area.

6. 6. Product development – seeking increased sales by improving present products or services

or developing new ones.

DIVERSIFICATION STRATEGIES

7. 7. Related diversification – adding new but related products or services.

 8. 8. Unrelated diversification – adding new, unrelated producst or services.

DEFENSIVE STRATEGIES

9. Retrenchment – regrouping through cost and asset reduction to reverse declining sales and profit.
Example: staples closed 250 stoes and reduced 50% the size of other stores.

10. Divestiture – selling a division or part of an organization. Example: Sears Holdings divested its
Land’s End Division to Sear’s shareholders

11. Liquidation – selling all of company’s assets, in parts, for their tangible worth. Example: The
Trump Taj Mahal in Atlantic City, New Jersey , faces liquidation.

Michael Porter’s Five Generic Strategies

According to Porter, strategies allow organizations to gain competitive advantage from three
different bases: cost leadership, differentiation and focus. Porter calls these three bases generic
strategies.

Cost leadership emphasizes producing standardized products at a low per-unit cost for consumers
who are price sensitive.

Two alternative types of cost leadership strategies can be defined, Type 1 is a low cost strategy that
offers products or services to a wide range of customers at the lowest price available in the market.

Type 2 is a best value strategy that offers products or services to provide a wide range of customers
at the best price value available on the market.

Porter’s Type 3 generic strategy is differentiation, a strategy aimed at producing products and
services considered unique to the industry an directed at consumers who are relatively price
insensitive.

Focus means producing products and services that fulfil the needs of small groups of consumers.
Two alternative types of focus strategies are Type 4 and Type 5.

Type 4 is a low cost focus strategy that offers products or services to a small range (niche group) of
customers at the lowest price available on the market.

Type 5 is a best value focus strategy that offers products or services to a niche group at higher prices
but loaded with features so the offerings are perceived as the best value.

Porter’s five strategies imply different organizational arrangements, control procedures, and
incentive systems.
Means for Achieving Strategies

1. Cooperation among competitors – strategies that stress cooperation among competitors are
being used more. For collaboration between competitors to success, both firms must
contribute something distinctive, such as technology, distribution, basic research, or
manufacturing capacity.

2. Joint venture and partnering – joint venture is a popular strategy that occurs when two or
more companies form a temporary partnership or consortium for the purpose of capitalizing
on some opportunity.

3. Merger and acquisition – merger consists when two organizations of about equal size unite
to form one enterprise. An acquisition occurs when a large organization purchases a smaller
firm or vice-versa. If a merger or acquisition is not desired by both parties it is called hostile
takeover, as opposed to a friendly merger.

4. Private-equity acquisitions acquiring and taking private wide variety of companies.

Nine reasons why many mergers and acquisition fail

• Integration difficulties

• Inadequate evaluation of target

• Large or extraordinary debt

• Inability to achieve synergy

• Too much diversification

• Managers overly focused on acquisitions

 • Too large an acquisition

• Difficult to integrate different organizational cultures

• Reduced employee moral due to layoffs and relocations

Eleven potential benefits of merging with or acquiring another firm

To provide improved capacity utilization

To make better use of the existing sales force

To reduce managerial staff

To gain economies of scale

To smooth out seasonal trends in sale

To gain access to new suppliers, distributors, customers, products and creditors

To gain new technology

To gain market share

To enter global markets

To gain pricing power

To reduce tax obligations

Tactics to Facilitate Strategies

1. First mover advantages – refer to the benefits of a firm may achieve by entering a new
market or developing a new product or service prior to rival firms.

2. Outsourcing– outsourcing involves companies hiring other companies to take over various
parts of their functional operations, such as human resources, information systems, payroll,
accounting, customer service and even ,marketing.

13 Potential benefits of outsourcing

1. Cost savings

2. Focus on core business

3. Cost restructuring

4. Improve quality

5. Knowledge

6. Contract
7. Operational expertise

8. Access to talent

9. 9. Catalyst for change

10. 10. Enhance capacity for innovation

11. 11. Reduce time to market

12. 12. Risk management

13. 13. Tax benefit