Strategic

Management
Prayer

Thank you, Lord!

Strategies
in Action
 objectives
Explain and discuss the Long-Term Objective and their
Nature.

Explain and discuss strategies in action and types of

Strategies

Know and apply the guidelines for the different strategies

LONG-TERM OBJECTIVES AND ITS NATURE
 Long-Term Objectives
In the business context, these
are strategic goals that
organization aim to achieve over
an extended period typically
spanning several years.
Nature of a Long-Term Objectives
Ambitious and
Time Horizon Strategic Focus Measurability
Challenging

Risk and
Comprehensive Adaptability Communication
Uncertainty
Scope and Alignment

Stakeholder Strategic Continuous

Consideration Initiatives Evaluation
COMPARISON BETWEEN FINANCIAL AND
STRATEGIC OBJECTIVES
 DEFINITION
Financial Objectives: These are goals related to the
organization's financial performance, such as increasing
revenue, maximizing profits, reducing costs, or improving
cash flow.

Strategic Objectives: These are broader goals that focus on

the overall direction and competitiveness of the organization.
Strategic objectives encompass various aspects like market
position, customer satisfaction, innovation, and
organizational development.
 FOCUS
Financial Objectives:
Primarily focus on monetary
aspects and the bottom line of the organization.

Strategic Objectives:
Encompass a broader range
of goals that go beyond finances, including
market share, brand reputation, and long-term
sustainability.
 TIME HORIZON

Financial Objectives:Often have a shorter time

horizon, typically related to a specific fiscal
period (e.g., quarterly or annually).

Strategic Objectives:
Tend to have a longer time
horizon, focusing on the organization's position
and success over multiple years.
 MEASUREMENT
Financial Objectives: Measured using financial
metrics such as revenue growth, profit margins, return
on investment (ROI), and earnings per share.

Strategic Objectives: Measured using a combination

of financial and non-financial metrics, including
market share, customer satisfaction, employee
engagement, and innovation.
 FLEXIBILITY
Financial Objectives: Can be more rigid and
directly tied to financial performance targets.

Strategic Objectives:
Allow for greater flexibility
and adaptability, considering changes in the
external environment and adjusting the
organization's direction accordingly.
 ALIGNMENT
Financial Objectives: Are often aligned with short-
term financial targets and shareholder
expectations.
Strategic Objectives:
Are aligned with the
organization's mission, vision, and long-term
goals, taking into account various stakeholders,
including customers, employees, and the
community.
 EXAMPLES
Financial Objectives: Increase annual revenue by
10%, achieve a 15% return on investment, reduce
operating costs by 5%.

Strategic Objectives: Expand market presence in a

new geographic region, enhance product innovation,
improve customer satisfaction scores, build a
sustainable and diverse workforce.
 INTEGRATION

Financial Objectives:Are a subset of strategic

objectives, as achieving financial success is often
a component of broader strategic goals.

Strategic Objectives:
Encompass financial goals
but also extend beyond them to cover overall
organizational success and sustainability.
NOT MANAGING BY OBJECTIVES
NOT MANAGING BY OBJECTIVES

Managing
•adheres to the principle
“If it isn’t broke, don’t
Managing
-based on the belief

of a by
that the true measure
by
fix it.” The idea is to
keep doing the same really good
Extrapolation
things in the same ways
because things are going
Crisis
strategist
ability to
is the
solve
well.
problems.
NOT MANAGING BY OBJECTIVES

Managing
• Do your own Managing
•the future is laden
with great uncertainty
by
thing the best
way you know
by
and if we try and do
not succeed, then we
Subjective
how” Hope
hope our second (or
third) attempt will
succeed.
LEVEL OF STRATEGIES
LEVELS OF STRATEGIES
TYPES OF STRATEGIES
TYPES OF STRATEGIES

Integration
Strategies
TYPES OF STRATEGIES

Intensive
Strategies
TYPES OF STRATEGIES

Diversification
Strategies
TYPES OF STRATEGIES

Defensive
Strategies
TYPES OF STRATEGIES
TYPES OF STRATEGIES

Integration
Strategies
Integration Strategies

Forward Backward
Integration Integration

Horizontal
Integration
 Forward Integration
-Gain control over distributors and retailers.
G
U ✓ Present distributors are expensive, unreliable, or incapable
I of meeting firm’s needs;
D ✓ Availability of quality distributors is limited;
E
L ✓ When firm competes in an industry that is expected to
I grow markedly
N ✓ Advantages of stable production are high
E
✓ Present distributor have high profit margins
S
 Backward Integration
- Ownership or control firms’ suppliers
G ✓ When present suppliers are expensive,
U unreliable or
I ✓ When present suppliers are expensive,
D unreliable or
E ✓ Number of suppliers is small and number of competitors
L large
I ✓ High growth on industry sector;
N ✓ Firm has both capital and human resources to manage new
E business
S ✓ Advantages of stable prices are important
✓ Present supplies have high profit margins
 Horizontal Integration
- acquisition of a business operating at the same
level of the value chain in the same industry
R
E ✓To expand internationally
A
S
✓To increase capacity
O ✓To expand brand equity to new
N
S product lines
 Vertical Integration
-a strategy that allows a company to streamline
its operations by taking direct ownership of the
various stages of its production process rather
than relying on external contractors or supplier
R
E ✓ Reduce the company’s costs
A
S
✓ Give greater control to its products
O ✓ Increase the company’s profits
N
S
TYPES OF STRATEGIES

Intensive
Strategies
 Intensive Strategies
These are a set of business strategies that
organizations use to achieve growth and
improve their market positions. These
strategies focus on the existing products
or services offered by a company and
aim to increase market share, revenue,
and profitability within the current market
or industry.
Intensive Strategies

Market Market
Penetration Development

Product
Development
Intensive Strategies

Market
Penetration
 Market Penetration
✓ A market penetration strategy seeks to increase market share for
present products or services in present markets through greater
marketing efforts.
✓ includes increasing the number of
salespersons, increasing advertising
expenditures, offering extensive sales pro-
motion items, or increasing publicity
efforts.
✓ Increased Market share by present
products/ services, present markets and greater
marketing efforts
 Market Penetration
•Objective: Increase market share for existing products or
services in the current market.
•Methods: This strategy involves selling more of the
current products or services to existing customers or
finding new customers within the current market.
•Tactics: Price adjustments, advertising campaigns,
loyalty programs, or improving distribution channels to
reach a wider audience.
 Market Penetration
✓ Current markets not saturated
✓ Usage rate of present customers can be
increased significantly
✓ Shares of competitors declining; industry sales
increase
✓ Increased economies of scale provide
major competitive advantage
Intensive Strategies

Market
Development
Market Development
 Market Development
•Objective: Introduce existing products or services to
new markets.
•Methods: This strategy involves expanding into new
geographic areas, demographic segments, or target
markets the company has not yet reached.
•Tactics: Opening new locations, entering new
international markets, or targeting different customer
segments with tailored marketing approaches
 Market Development
Guidelines for Market Development
strategies:
✓ New channels of distribution – reliable, inexpensive and
good quality
✓ Firm is successful at what it does
✓ Untapped/unsaturated markets
✓ Excess production capacity
✓ Basic industry rapidly becoming global
Intensive Strategies

Product
Development
Product Development
 Product Development
•Objective: Create and introduce new products or
services to existing markets.
•Methods: This strategy focuses on innovation and
the development of new offerings to meet the
changing needs or preferences of existing customers.
•Tactics: Research and development, design
enhancements, and the launch of new product lines or
services.
 Product Development
Guidelines for Product Development
strategies:
✓ Products in maturity stage of life cycle

✓ Industry characterized by rapid technological development

✓ Competitors offer better quality products at comparable

prices
✓ Compete in high-growth industry
✓ Strong R&D capabilities
 Keep
Safe,
Healthy
and
Happy!