CBM 130:

STRATEGIC
MANAGEMENT

IVY CATHCALINE M. CALIG-ONAN

BSBA-3A
 I. Internal Assessment
1. Discuss key interrelationships
among the functional areas of
business.
Firms differ in the organization and responsibilities of
their functional areas. The major functional areas are
purchasing and materials management, production/operations,
marketing, finance, human resources, research and
development, and information systems management. In every
organization, there is a different functional business area. For
instance, in a hospital, functional areas include cardiology,
nursing, physician support, haematology, maintenance and
receivables. Furthermore, overall strategic success requires that
all functional activities be tightly integrated with a business
unit's generic strategy.

2. Identify the basic functions or activities that make up

management, marketing, finance/accounting,
production/operations, research and development, and
management information systems.
Basic functions include planning, organizing,
motivating, staffing, and controlling. Planning and organizing
include all those managerial activities in preparing and defining
those tasks to be done in the future as well as the authority
relationships. Motivating and staffing at the same time involves
recruiting, selecting, training, developing, promoting,
dismissing employees, and managing union relations as well as
influencing people to accomplish specific objectives.
3. Describe the following:
a. Resource-based View
The resource-based view (RBV) is a model that sees
resources as key to superior firm performance. The RBV of the
firm starts from the concept that a firm’s performance is
determined by the resources it has at its disposal. The way
these resources are used and configured enable the firm to
perform and can provide a distinct competitive advantage. It
seeks to understand why firms grow and diversify.
b. Value Chain Analysis
Value chain analysis is a means of evaluating each of
the activities in a company’s value chain to understand where
opportunities for improvement lie. It is a tool that business
owners use to break down each process their business uses.
This analysis can be used to improve the business’s individual
processes, enhancing the company’s efficiency and
establishing a competitive advantage. It can be a highly
effective means of understanding and contextualizing your
business’ processes that’s why it’s very essential to your
business.
c. Internal Factor Evaluation Matrix
Internal Factor Evaluation (IFE) Matrix is a strategy tool
used to evaluate firm’s internal environment and to reveal its
strengths as well as weaknesses. It also provides a basis for
identifying and evaluating relationships among those areas. It
is used as a strategy-formulation tool that can be utilized to
evaluate how a company is performing in regards to identified
internal strengths and weaknesses of a company.
 II. Strategies in Action
1. Discuss the value of establishing long-term objectives.
Setting long-term objectives will force you to organize
your goals and plans. It will enable you to visualize possible
roadblocks and prepare your business for them. Without
setting long-term objectives, a business has nothing to work
toward. Long-term goals induce concentration in the venture
and continuous management of every aspect of the company.
Thus, long-term objectives are a necessity for any business
venture.

2. Describe the Balanced Scorecard

A balanced scorecard (BSC) is defined as a management
system that provides feedback on both internal business
processes and external outcomes to continuously improve
strategic performance and results. It is a strategic management
tool that views the organization from different perspectives. By
bringing together measures around internal processes and
external outcomes, a balanced scorecard supports continuous
improvement at the level of strategic performance and results.
A balanced scorecard can help your organization both articulate
and act upon your vision and strategy and it is very crucial for
better management.
3. Describe the following strategies:
a. Integration
Integration strategies are processes that businesses can
use to enhance their competitiveness, efficiency or market
share by expanding their influence into new areas. These areas
can include supply, distribution or competition. It is a very
important tool in building a competitive business. Businesses
can use various integration strategies to increase their
influence in supply and distribution or lessen competition. This
can help them consolidate and expand their place in the
market and increase their competitiveness.

b. Intensive
Intensive strategies consist of market penetration, market
development, and product development. It is so-called because
it takes intensive efforts to improve the competitive
positioning of a company's existing products. The aim of
intensive strategies is to broaden the market share and to
increase the profit by making the existing products more
effective and by introducing new and various sets of products
in order to increase the market share too.

c. Diversification
Diversification strategy is applied when companies wish
to grow. It is the practice of introducing a new product into
your supply chain in order to increase profits. It is a business
development strategy in which a company develops new
products and services, or enters new markets, beyond its
existing ones. It can also kick-start a struggling business, or it
can further extend the success of already highly profitable
companies.

d. Defensive
A defensive strategy is a marketing tool that management
uses to defend their business from potential competitors. In
other words, it’s a battleground where you have to fight and
protect your market share by keeping your customers happy
and stabilizing your profit. Defensive strategy is about
capitalizing on your strengths and competitive advantages to
push the competitors.
 III. Strategy Analysis and Choice

1. Describe a three-stage framework for choosing among

alternative strategies.
Techniques of strategy formulation can be integrated into
a decision making framework. Strategies can be identified,
evaluated and selected by this framework that includes three
stages, the input stage, matching stage, and decision stage.
Input stage summarizes the basic input information needed to
formulate strategies while matching stage focuses on
generating feasible alternative strategies by aligning key
external and internal factors. Finally, the decision stage part of
strategic management is to choose a strategy. It requires
generating options, comparing them and deciding.

2. Describe the following:

a. SWOT Matrix
SWOT stands for Strengths, Weaknesses, Opportunities,
and Threats, and so a SWOT analysis is a technique for
assessing these four aspects of your business. It is a tool that
can help you to analyze what your company does best now,
and to devise a successful strategy for the future. If you use it
carefully and collaboratively, it can deliver new insights on
where your business currently is, and help you to develop
exactly the right strategy for any situation.
b. SPACE Matrix
SPACE matrix which stands for Strategic Position and
Action Evaluation is one of the tools which have gained high
reliability for considering macroeconomic, microeconomic and
financial factors in the process of determining the position of
the organization. It is used to determine what type of a
strategy a company should undertake. It focuses on strategy
formulation especially as related to the competitive position of
an organization.
c. BCG Matrix
The Boston Consulting Group (BCG) Matrix is a planning
tool that uses graphical representations of a company’s
products and services in an effort to help the company decide
what it should keep, sell, or invest more in. It helps companies
decide how to prioritize their various business activities.
d. IE Matrix
The Internal-External (IE) Matrix is a strategic management tool
which is used to analyze the current position of the divisions
and suggest the strategies for the future. It is based on an
analysis of internal and external business factors which are
combined into one suggestive model.
e. QSPM
Quantitative Strategic Planning Matrix (QSPM) is a high-level
strategic management approach for evaluating possible
strategies. It provides an analytical method for comparing
feasible alternative actions. This approach attempts to
objectively select the best strategy using input from other
management techniques and some easy computations.
3. Discuss the roles of the following in strategy analysis and
choice:
a. Intuition
In various firms, intuitive process is used under the
strategic management to develop effective decisions for
attaining organizational goals and objectives. Intuition indicates
to solve the problem with the help of using sensing and
without using rational process. It can be discussed as a process
to reach at the conclusion with the help of fewer information
those are required for taking appropriate decisions.
b. Organizational Culture
Organizational culture affects formulation of strategy
determining information gathering, perception and
interpretation of the environment. It creates an environment
with a common set of values that helps keep everyone aligned
with the company's business goals and objectives. Thus,
considering the importance of organizational culture and its
impacts in strategic management is very essential.
c. Board of Directors
The board's role in strategic planning entails identifying
priorities, establishing goals and objectives, finding resources,
and allocating funds to support the decisions that need to be
made around strategic planning. The board is also responsible
for monitoring the execution of the strategic plan. Board
directors and managers are equally concerned about where
each of them draws the line between managing strategy and
managing the company. Hence, the board is ultimately
responsible for strategic planning.