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STRAMAN Reviewer 3. Vision-Mission

Strategic Management
- involves developing and implementing plans to help an
organization achieve its goals and objectives.
1. Formulate – Most Analytical
2. Implementation – Most Inclined to Success
3. Evaluate – Most Inclined to Statistics
- It only provides clear directions
- We CAN measure vision-mission
4. External Opportunities & Threats
- Most easy to identify/analyze
- Input Stage

INPUT STAGE 5. Internal Strengths & Weaknesses

EFE, CFM, IFE - Most difficult to identify/analyze
MATCHING STAGE - Input Stage
SWOT/TOWS, SPACE, BCG, IE, GRAND 6. Long-term Objectives
DECISION STAGE - Strategic Objectives
QSPM Financial Objectives
- Pattern to Annual Objectives

TOPIC 1: 7. Annual Objectives

EFE = uncontrollable - 5 years to implement
IFE = controllable - 3rd year – know whether to push thru or not
- Corporate or Functional
STRONG ESSENTIALS - Represent the basis for allocating resources
1. Competitive Advantage
- What others don’t have but the company possess. 8. Strategies
- “We prepare strategy plan at a minimal cost” - 11 Strategies
- Strategic management envisions long-term - Formulate (Analytical)
- Indicator of what is your competitive advantage Implement (Inclined to Succeed
Evaluate (Inclined to Statistics
2. Strategists
- Who is the decision maker? 9. Policies
- Decisions -> implications - We decide based on policies
- Top management are the decision-makers - Guidelines, methods, rules & forms to support & encourage
work toward stated goals
- “Maximize profit minimize cost”
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TOPIC 2: o Accounting Ratios

(1) INPUT STAGE § Solvency Ratio
- External Factor Evaluation Matrix (EFE – External § Profitability Ratio
Audit) § Liquidity Ratio
o SWOT Analysis (pick the most relevant factor to
your study)
o PESTLE
§ how external factors influence their
operations & make them competitive in the
market
§ macro-environmental factors may affect the
org.
§ Political, Economic, Social, Technological,
Legal, Natural Environment, Global
o Michael Porter’s 5 Forces
§ industry’s structure to determine corporate
strategy
§ examines where power lies in a competitive
situation
§ competitive standing
- Competitive Profile Matrix (CPM Matrix)
o Blue Ocean Strategy
§ Creating uncontested market space
§ Create new demand
o Competitor Analysis
§ Competitor vs You
o Competitor’s Profile
§ Products, services, prices, and information
about direct and indirect competitors
- Internal Factor Evaluation (IFE Matrix)
o Internal
§ Strengths and Weaknesses only
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(2) MATCHING STAGE - I.E Matrix (Internal External Matrix)

- SWOT/TOWS

- SPACE (Strategic Position Action Evaluation)

- BCG

o FINANCIAL – IFE
o COMPETITIVE – CPM
o ENVIRONMENTAL – EFE
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o IDUSTRY/INTERNAL - SPACE o to evaluate firm’s external environment & reveal its

- GRAND Matrix strengths & weaknesses
o helps to analyze & evaluate
o anticipates the future
o ratings = importance, weights = confidence
o 0 to 1, 1 to 4 (1 = lowest, 4 = highest)

Factors Weight Ratings Weighted Scale

Opportunities
Threats
Total Score

- Competitive Profile Matrix (CPM)

o constitute
o specific
o Summary of strategies
o CSF – Critical Success Factor
o Derive from SWOT – IE
o Q2: CONSERVATIVE – MP, MD. PD, RP
CPM C1 C2 C3
o Q1: AGGRESSIVE – BI, FI, HI, MP, MD, PD
o Q3: DEFENSIVE - Retrench, Divest, Liquidate CSF W R S R S R S
o Q4: COMPETITIVE – BI, FI, HI, MP, MD

(3) DECISION STAGE 3.50 2.50 4.50

- Quantitative Strategic Planning Matrix

TOPIC 3:
• PESTLE & Porter’s 5 Forces – narrative
• EFE - summarized
- External Factor Evaluation Matrix (EFE – External
Audit)
o provides information about opportunities and threats
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TOPIC 4: Integrating Strategy and Culture

- Internal Audit Assessment (Internal Factor Evaluation - Culture = one stakeholder
IFE Matrix)
o raw data Value Chain Analysis (VCA)
o most difficult stage in gathering information because - determines the costs associated with organizational activities
no company will reveal its strategies from purchasing raw materials, to manufacturing product(s)
o we scan info. & look for data to marketing those products.
o KIF = Key Internal Factor - Top management only knows the costing
KIF W R - Channel of merchants
Strengths 0.05 3 0.15
Weaknesses 0.03 2 0.06
Total Score 1.00 2.50 TOPIC 5:
Strategies to Action
Distinctive Competencies (DC) 1. Forward Integration Ex: Magnolia Chicken (KFC,
Jollibee, McDo)
• Weaknesses → Strengths → D.C → Competitive 2. Backward Integration Ex: Jollibee – Magnolia Chicken
Advantage 3. Horizontal Integration Ex: Golden ABC (Penshoppe,
MEMO, Regatta)
4. Market Penetration Ex: Xiaomi INTENSIVE
David’s Internal Audit 5. Market Development
Ex:
Ex: Apple
1. Marketing 6. Product Development
2. Management 7. Related Diversification Ex: Jollibee Food Corp.
3. Operations (Concentric)
4. Finance/Accounting – public info. /Document 8. Unrelated Ex: Lucio Tan Group of Co.
5. MIS Diversification
6. R+D (Conglomerate)
7. Other Functional Units (i.e. HR, Customer service, etc.) 9. Retrenchment Ex: Regroups through cost &
10. Divestiture asset reduction
Resource-Based View (RBV) 11. Liquidation Ex: Selling a part of the org.
3 Sources: Ex: Selling a company’s asset

1. Physical
2. Human
3. Organizational
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TOPIC 6:
• Fred David developed 9 criteria to evaluate/measure a
vision-mission statement
• Vision-Mission is a guide & direction for the organization
• Less than 250 words
• Vision-Mission does NOT guarantee success
1. Customers
o Does the V&M include their target market?
2. Market
o Scope of operations?
3. Technology
o Special processes
4. Philosophy
o Convey their beliefs, values, ethics
5. Self-concept
o How do they perceive themselves?
6. Products/Services/Concern for public responsibility
7. Concern for public image
o How does the public perceive the company?
8. Concern for employees
o Organizations’ attitude/treatment towards their
employees
9. Concern for survival, growth, profitability
o Commitment to long-term success
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TOPIC 7: TOPIC 8:
SPACE Matrix
3 Strategic Management Process
1. Strategy Formulation
- Start with a purpose
- Consider current events
- Consider data, case studies & trends
- Effectively communicate goals
- Think of strategy as an on-going process
- Analytical Stage
2. Strategy Implementation
- Turning plans into action
- Action stage
- relies most on empowerment to be successful?
3. Strategy Evaluation
- Relies most on statistics
o FINANCIAL & INDUSTRY - +1 (WORST) +7
(BEST) Implementation Strategy Issues
o STABILITY & COMPETITIVE - -1 (BEST) – 7 • Organizational Structure
(WORST) o Can remove or add
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Quantitative Strategic Planning Matrix (QSPM MATRIX)

KEY S1 S2
FACTORS
W AS TAS W AS TAS
Opportunities .10 4 .4 .20 4 .8
Threats .10 2 .2 .10 2 .2
ST (Subtotal) 1.00 1.00
Strengths .10 4 .4 .10 4 .4
Weaknesses .10 2 .2 .10 2 .2
ST (Subtotal) 1.00 1.00
TOTAL 2.70 3.45

- ONLY 2 STRATEGIES
- Count the number of factors per SWOT
- Used in top-level management
- Used to formulate marketing strategies
- Evaluates strategic options and most appealing strategies
available