Strategic Management: Kolehiyo NG Lungsod NG Lipa

8/6/2020
KOLEHIYO NG LUNGSOD NG LIPA

MARAOUY, LIPA CITY
STRATEGIC
MANAGEMENT
Management
8/6/2020 marie joahnna m. aranda 1

MARAOUY, LIPA CITY
 OBJECTIVES:
 To know basic concepts embodied in

strategic management
 To understand the importance of strategic
management
 To value the benefit of strategic
management in business decision making
8/6/2020
Management
marie joahnna m. aranda 2
1
8/6/2020

MARAOUY, LIPA CITY
8/6/2020
Management

MARAOUY, LIPA CITY
WHAT IS
STRATEGIC
MANAGEMENT?
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Strategic Management is a set of managerial decision and
action that determines the long run performance of a
business. (Wheelen & Hunger)
Also termed as Strategic planning or Business Policy
Includes three phases:
Formulation
Implementation
Evaluation and Control
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Management

MARAOUY, LIPA CITY
Key Terms in Strategic Management
 Competitive Advantage
 Strategists
 Vision and Mission
 External opportunities and threats
 Internal strengths and weaknesses
 Long-term and Annual objectives
 Strategies
 Policies
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Competitive Advantage
 anything that a firm does especially well compared to rival firms
 a firm can do something that rival firms cannot do, or owns
something that rival firms desire
e.g
simply having ample cash on the firm’s balance sheet
having less fixed assets than rival firms
Sustained competitive advantage
 continually adapting to internal and external changes
 effectively formulating, implementing, and evaluating
strategies.
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Strategists individuals most responsible for the success or failure of
an organization.
e.g chief executive officer, president, owner, chair of the board,
executive director, chancellor, dean, or entrepreneur
 help an organization gather, analyze, and organize information
 track industry and competitive trends
 develop forecasting models and scenario analyses,
 evaluate corporate and divisional performance
 spot emerging market opportunities
 identify business threats
 develop creative action plans
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Vision Statement
 answers the question “What do we want to become?”

 considered the first step in strategic planning
 many vision statements are a single sentence.
e.g.
“Our vision is to take care of your vision.”`
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Management

MARAOUY, LIPA CITY
Mission Statements
 enduring statements of purpose that distinguish a business

 identifies the scope of a firm’s operations in product and market
terms
 addresses the basic question “What is our business?”
 describes the values and priorities of an Organization
 about the nature and scope of present operations
 assess the potential attractiveness of future markets and activities
 charts the future direction of an organization.
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External opportunities and external threats
Factors that  benefit  harm Uncontrolled external
 economic factors
 social
 cultural The process of conducting
 demographic research and gathering and
 environmental assimilating external
 Political information is sometimes
 Legal called environmental
 governmental scanning or industry
 Technological analysis.
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Internal Strengths and Weaknesses
 arise from activities of a
business
 management Controllable activities
 Marketing that are performed
 finance/accounting especially well or poorly
 production/operation
 research and development
management information
systems
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Objectives
specific results to achieve in pursuing organization’s mission.
Long-term means more than one year
Annual objectives are short-term milestones Characteristics
Purpose: Specific
 state direction Measurable
 aid in evaluation Attainable
 create synergy Realistic
 reveal priorities Timely
 focus coordination
 basis for effective management
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Strategies
are means by which long-term objectives will be achieved
 potential actions that require top management decisions and

 demand large amounts of the firm’s resources
 affect an organization’s long-term prosperity
 future-oriented
 have multifunctional or multidivisional consequence
 considers external and internal factors.
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Policies
the means by which annual objectives will be achieved
 guides to decision making and address repetitive or recurring
situations
 established at the corporate level and apply to an entire organization
 allow consistency and coordination within departments
include :
 guidelines
 rules
 procedures
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The Business Vision and

Mission
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OBJECTIVES:
1. Describe the nature and role of vision and mission statements
in strategic management.
2. Identify the components of mission statements.
3. Evaluate mission statements of
different organizations and to write good vision and mission
statements.
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What is vision?
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CHARACTERISTICS OF AN EFFECTIVE WORDED STRATEGIC VISION
GRAPHIC Market position
DIRECTIONAL Forward - looking ; strategic course
FOCUSED Guide in decision making and resource allocation
FLEXIBLE May be adjusted to all changes or circumstances
FEASIBLE Within the scope achievable to the organization
DESIRABLE Rouse long term - interest for
EASY TO Explainable in 5-10 minutes
COMMUNICATE
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COMMON SHORTCOMINGS OF
VISION STATEMENT
VAGUE OR INCOMPLETE Short on specifics
NOT FORWARD LOOKING Fails to indicate the focus of the company

TOO BROAD Umbrella like ; headed on many directions
BLAND OR UNINSPIRING No power to motivate
NOT DISTINCTIVE No company identity
TOO RELIANT ON SUPERLATIVES Does not say anything specific but accolades as best
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Expressing Vision in a Slogan

• Levi Strauss & Company : “We will clothe the world by
marketing the most appealing and widely worn casual
clothing in the world”
• Nike : “To bring innovation and inspiration to every athlete
in the world”
• Ford : “ A car in every garage”
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Key elements Explation Identification
Focus /Main  Company focus
theme(to whom) Product/service
Employee performance
Hopes/Aspiration - Goal
Objective
Focus in the Superlative
future Implied future state
Expression of Extent
values/worth Range
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Vision Statement Examples
Tyson Foods’ vision is to be the world’s first choice for
protein solutions while maximizing shareholder value.
General Motors’ vision is to be the world leader in transportation
products and related services.
PepsiCo’s is to continually improve all aspects of the world in
which we operate—environment, social, economic—creating a
better tomorrow than today.
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Key elements Explation Identification
Focus /Main  Company focus Protein solution
theme(to whom) Product/service
Employee performance
Hopes/Aspiration - Goal Maximize value
Objective
Focus in the Superlative First choice
future Implied future state
Expression of Extent world
values/worth Range
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Vision Statement Examples
Dell’s vision is to create a company culture where environmental
excellence is second nature.
Samsonite’s vision is to provide innovative solutions for the
traveling world.
Royal Caribbean’s vision is to empower and enable our employees
to deliver the best vacation experience for our guests, thereby
generating superior returns for our shareholders and enhancing the
well-being of our communities.
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MARAOUY, LIPA CITY
BENEFITS OF A CLEAR VISION STATEMENT
• IT GIVE A CLEAR VIEW OR EXECUTIVES VIEW OF ITS LONG

TERM DIRECTION
• REDUCES RISK OF RUDDERLESS DECISION MAKING
• A TOOL FOR REALIZATION OF OBJECTIVES THRU ORGANIZATION
SUPPORT
• SERVES AS A BECON FOR LOWER-LEVEL MANAGEMENT
• HELPS IN PREPARATION IN THE FUTURE
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What is Mission?
Source : Strategic management 13th edition , by Fred David
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Mission Statement Components
1. Customers
2. Products or services
3. Markets
4. Technology
5. Concern for survival, growth, and
profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
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• Broad in scope; do not include monetary amounts,

Characteristics numbers, percentages, ratios, or objectives
of a Mission • Less than 250 words in length
• Inspiring
Statement • Identify the utility of a firm’s products
• Reveal that the firm is socially responsible
• Reveal that the firm is environmentally responsible
• Include nine components
• Reconciliatory
• Enduring
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Ten Benefits of Having a Clear Mission and Vision
1. Achieve clarity of purpose among all managers and
employees.
2. Provide a basis for all other strategic planning
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations
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7. Project a sense of worth and intent to all stakeholders.

8. Project an organized, motivated organization worthy of
support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees.
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COMPONENTS EXPLANATION IDENTIFICATION
1 Customers Who are the firm’s customers?
2 Products or services What are the firm’s major products or services?
3 Markets Geographically, where does the firm compete?
4 Technology Is the firm technologically current?
Concern for survival,
5 growth, and Is the firm committed to growth and financial soundness?
profitability
What are the basic beliefs, values, aspirations, and ethical
6 Philosophy
priorities of the firm?
What is the firm’s distinctive competence or major competitive
7 Self-concept
advantage?
Concern for public Is the firm responsive to social, community, and environmental
8
image concerns?
Concern for
9 Are employees a valuable asset of the firm?
employees
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We aspire to make PepsiCo the world’s (3) premier consumer products

company, focused on convenient foods and beverages (2).We seek to
produce healthy financial rewards for investors (5) as we provide
opportunities for growth and enrichment to our employees (9), our
business partners and the communities (8) in which we operate. And in
everything we do, we strive to act with honesty, openness, fairness and
integrity (6). (Author comment: Statement lacks three components:
Customers, Technology, and Self-Concept)
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COMPONENTS EXPLANATION IDENTIFICATION
1 Customers N Who are the firm’s customers?
premier consumer products company, focused on convenient

2 Products or services Y What are the firm’s major products or services?
foods and beverages
3 Markets Y Geographically, where does the firm compete? world’s
4 Technology N Is the firm technologically current?
Concern for survival,

5 Y Is the firm committed to growthand financial soundness? to produce healthy financial rewards for investors
growth, and profitability
What are the basic beliefs, values, aspirations, and ethical

6 Philosophy Y we strive to act with honesty, openness, fairness and integrity
priorities of the firm?
What is the firm’s distinctive competence or major

7 Self-concept N
competitive advantage?
Is the firm responsive to social, community, and

8 Concern for public image Y our business partners and the communities
environmental concerns?
we provide opportunities for growth and enrichment to our
9 Concern for employees Y Are employees a valuable asset of the firm?
employees
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Procter & Gamble will provide branded products and services of

superior quality and value that improve the lives of the world’s
consumers. As a result, consumers will reward us with industry
leadership in sales, profit , and value creation, allowing our people ,
our shareholders, and the communities in which we live and work to
prosper.
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Procter & Gamble will provide branded products and services of superior
quality and value (7) that improve the lives of the world’s
(3) consumers. As a result, consumers (1) will reward us with industry
leadership in sales, profit (5), and value creation, allowing our
people (9), our shareholders, and the communities (8) in which we live and
work to prosper
(Author comment: Statement lacks three components: Products/Services,
Technology, and Philosophy)
(Strategic Management 13th edition Fred David)
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ORGANIZATION OBJECTIVE
a top-down process that must extend to

the lowest organizational levels
How much of what kind of performance is

expected , and by when ?
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FINANCIAL OBJECTIVES - relate to the financial performance

targets management has established for the organization to
achieve
STRATEGIC OBJECTIVES – relate to target outcomes that
indicate a company strengthening its market standing,
competitive vitality and future business prospects
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FINANACIAL OBJECTIVES STRATEGIC OBJECTIVES
- AN x PERCENT INCREASE IN ANNUAL REVENUES WINNING AN X PERCENT MARKETSHARE
ANNUAL INCREASE IN AFTER-TAX PROFITS OF x ACHIEVING A LOWER OVERALL COST THAN RIVALS
PERCENT
ANNUAL INCREASE IN EARNINGS PER SHARE OF x OVERTAKING KEY COMPETITORS ON PRODUCT
PERCENT PERFORMANCE OR QUALITY OR CUSTOMER SERVICE
ANNUAL DIVIDEND INCREASE DERIVING X PERCENT OF REVENUES FROM THE SALE OF

NEW PRODUTS INTRODUCED WITHIN THE PAST FIVE
YEARS
LARGER PROFIT MARGINS
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FINANACIAL OBJECTIVES STRATEGIC OBJECTIVES
AN X PERCENT RETURN ON CAPITAL EMPLOYED (roce) ACHIEVING TECHNOLOGICAL LEADERSHIP

OR RETURNE ON EQUITY (ROE)
INCREASED SHAREHOLDERS VALUE – IN THE FORM OF HAVING BETTER PRODUCT SELECTION THAN RIVALS
AN UPWARD TRENDING STOCK PRICE AND ANNUAL
DIVIDEND INCREASES
STRONG BOND AND CREDIT RATINGS STRENGTHENING THE COMPANY’S BRAND NAME
APPEAL
SUFFICIENT INTERNAL CASH FLOW TO FUND NEW HAVING STRONGER NATIONAL OR GLOBAL SALES AND
CAPITAL INVESTMENT DISTRIBUTION CAPABILITIES THAN RIVALS
Management
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Strategic Management: Kolehiyo NG Lungsod NG Lipa

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8/6/2020

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

 To know basic concepts embodied in

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

 answers the question “What do we want to become?”

KOLEHIYO NG LUNGSOD NG LIPA

 enduring statements of purpose that distinguish a business

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

 potential actions that require top management decisions and

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

The Business Vision and

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

NOT FORWARD LOOKING Fails to indicate the focus of the company

KOLEHIYO NG LUNGSOD NG LIPA

Expressing Vision in a Slogan

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

• IT GIVE A CLEAR VIEW OR EXECUTIVES VIEW OF ITS LONG

KOLEHIYO NG LUNGSOD NG LIPA

Source : Strategic management 13th edition , by Fred David

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

• Broad in scope; do not include monetary amounts,

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

7. Project a sense of worth and intent to all stakeholders.

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

We aspire to make PepsiCo the world’s (3) premier consumer products

KOLEHIYO NG LUNGSOD NG LIPA

1 Customers N Who are the firm’s customers?

premier consumer products company, focused on convenient

3 Markets Y Geographically, where does the firm compete? world’s

4 Technology N Is the firm technologically current?

Concern for survival,

What are the basic beliefs, values, aspirations, and ethical

What is the firm’s distinctive competence or major

Is the firm responsive to social, community, and

KOLEHIYO NG LUNGSOD NG LIPA

Procter & Gamble will provide branded products and services of

KOLEHIYO NG LUNGSOD NG LIPA

KOLEHIYO NG LUNGSOD NG LIPA

a top-down process that must extend to

How much of what kind of performance is

KOLEHIYO NG LUNGSOD NG LIPA

FINANCIAL OBJECTIVES - relate to the financial performance