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Jonam Tabuzo-Valeza •It is an expression of what the owner stands

Strategic Management for and believes in.


•The process of developing a game plan to •dream of something that does not exist yet
guide a company as it strives to accomplish and the ability to paint a compelling picture of
its vision, mission, goals, and objectives and that dream for everyone to see.
to keep it from straying off course. & SWOT Decisions,motivation, values
•Competitive Advantage apart from its MISION
competitors and unique image Developing a Elements of a Mission Statement
Strategic Plan •beliefsWhat do we stand for?
•target customers?
•specific geographic market area.
•basic products and services? What customer
•close contact with their customers, giving needs and wants do they satisfy?
them valuable knowledge •Why should customers do business with us
Strategic management process: rather than the competitor down the street (or
•Use a relatively short planning horizon – two across the town, on the other coast, on the
years or less for most small companies. other side of the globe)?
•Be in formal and not overly structured; a •What constitutes value to our customers?
“shirtsleeve” approach is ideal. How can we offer them better value?
•Encourage the participation of employees •What is our competitive advantage? What is
and outside parties to improve the reliability it source?
and creativity of the resulting plan. •In which markets (or market segment) will
•Focus on the customer. we choose to compete?
•Do not begin with setting objectives because •Who are the key stakeholders in our
extensive objective setting early on may company and what effect do they have on it?
interfere with the creative process of strategic
management. *To be effective, a mission statement must
•Focus on strategic thinking, not just become a natural part of the organization,
planning, by linking long-range goals to day- embodied in the minds, habits, attitudes and
to-day operations. Strategic thinking decisions of everyone in the company every
encourages creativity, innovation, and day.
employee involvement in the entire process. Step 2:Core Competencies and target
THE STRATEGIC MANAGEMENT Market
PROCESS •The key to success is building these core
•Step 1: Develop a Clear Vision and competencies (or identifying the ones a
Translate It into a Meaningful Mission company already has) and then concentrating
Statement them on providing superior service and value
•Step 2: Define the Firm’s Core for its target customers.
Competencies and target Market •MARKET SEGMENTATION
•Step 3: Assess the Company’s Strengths A strategy that involves carving up the mass
and Weaknesses market into smaller, more homogeneous units
•Step 4: Scan the Environment for Significant and then attacking certain segments with a
Opportunities and Threats marketing strategy designed to appeal to its
•Step 5: Identify the Key Factors for Success members.
in the Business POSITIONING
•Step 6. Analyze the Competition
•Step 7. Create Company Goals and
•A technique that involves influencing
Objectives customers’ perceptions to create the desired
•Step 8: Formulate Strategic Options and image for a business and its goods and
Select the Appropriate Strategies services.
Step 1: Develop a Clear Vision and Translate
It into a Meaningful Mission Statement
VISION
Step 3: Strength/Weakness Step 7. Create Company Goals and
Step 4: Opportunities and Threats Objectives
Step 5: Identify the Key Factors for Step 8: Formulate Strategic Options and
Success in the Business Select the Appropriate Strategies
KEY SUCCESS FACTORS Strategy
•Relationships between a controllable • a road map of the actions an entrepreneur
variable (e.g. plant size, size of sales force, draws up to fulfill a company’s mission,
advertising expenditures, product packaging) goals and objectives
and a critical factor influencing the firm’s •the mission, goals and objectives are the
ability to compete in the market.*For example, ends, the strategy are the means
one restaurant owner identified the following •master plan that covers all the major parts
key success factors: of the organization and ties them together into
•Tight cost control a unified whole
•Trained, dependable, honest in-store •the plan must be action oriented
managers •a successful strategy is comprehensive and
•Close monitoring of waste well integrated
•Careful site selection
•Maintenance of food quality “ A flawed strategy-no matter how brilliant the
leadership, no matter how effective the
•Consistency
implementation-is doomed to fail. A sound
•Cleanliness strategy, implemented without error, wins
•Friendly and attentive service from well- every time.” – Joseph Picken and Gregory
trained wait staff. Dess (Mission Critical: The 7 Strategic Traps
Step 6. Analyze the Competition That Derail Even the Smartest Companies)
Business is like a battlefield. And if you want THREE BASIC STRATEGIES
to win it, you have to know who you are up (Michael Porter)
against. This style is significant for several Cost Leadership
reasons. One is to avoid surprises from a strategy in which a company strives to be
existing competitors’ new strategies. Two, to the low-cost producer relative to its
identify potential competitors. It will also help competitors in the industry.
you improve your reaction time to –(+) Low-cost leaders have a competitive
competitors’ actions. Lastly, you will be able advantage in reaching buyers whose primary
to anticipate your rivals’ next strategic moves. purchase criterion is price.
Two things are required in this stage. –(-) Sometimes a company focuses
The first one is competitor analysis. This exclusively on lower manufacturing costs w/o
involves gathering information on the situation considering the impact of purchasing,
of your rivals, SWOT analysis, its buyers, distribution or overhead costs
financial resources, etc. These things will be –(-) misunderstanding the firm’s true cost
your comparison or benchmark in developing drivers
your product or service. Differentiation
The cost of gaining rivals’ information a strategy in which a company seeks to build
can be minimal. Look through magazines, customer loyalty by positioning its goods or
Internet, customers, suppliers, libraries and tv services in a unique or different fashion.
are some of the sources you can consult to •(+) A firm strives to be better than its
get what you need to know. With this competitors at something that customers
information, come up with a competitive value.
profile matrix and evaluate how far ahead or
•(-) Sustainability of a product or service’s
away you are from your competitors.
differentiation
•(-) overdifferentiating and charging so much
Focus
a strategy in which a company selects one or
more market segments, identifies customers’
special needs, wants, and interests, and
approaches them with a good or service
designed to excel in meeting those needs,
wants and interest.
•(+) the focusing firm specializes in serving a
specific target segment or niche
•(-) Companies must struggle to capture a
large enough share of a small market to be
profitable
•(-) there is danger of larger competitors
entering the market and eroding it
Step 9: Translate Strategic Plans into Action
Plans
•Implement the strategy by dividing the plan
into projects
•Involving employees and delegating
adequate authority to them is essential
because these projects affect them most
directly.
Step 10: Establish Accurate Controls
Accurate Controls…
•Control the strategy- plans created in the
strategic planning process become the
standards against which actual performance
is measured
•Identify and track key performance
indicators
•Balanced Scorecard: set of measurements
unique to a company that includes both
financial and operational measures and gives
manager a quick yet comprehensive picture
of the company’s performance