WEEK 1 - MIDTERMS
Aligned with goals and objectives - A
Corporate Level Strategy
The term "strategy" comes from the Greek
word strategia, meaning the art of a troop
leader or general. A good and effective strategy
is based on critical analyses of a company's
environment, supported by relevant data, and
aligned with the company's goals and
objectives. Different strategic types exist,
including defenders, prospectors, analyzers, and
reactors. The hierarchy of strategies consists of
corporate strategy, business strategy, and
vertical integration. Diversification strategy I
used for growth when the original industry has
matured, while stability strategy continues
current activities without substantial change.
Retrenchment strategy is adopted when a
company has a poor competitive position and
operating performance.
Concept and Nature of a Strategy
Strategy is the analysis, decision, and action that
leads to a company's success. It is a
comprehensive plan that outlines how a
company will achieve its mission and objectives.
Strategy involves a critical analysis of a
company's resources and is implemented to
effectively achieve its mission and objectives.
1. Strengths - Identify where your
strengths lie
2. Goal Setting - Set achievable goals
3. Tools & Resources - Gather the tools
and resources you need.
Characteristics of a Good and Effective Strategy
1. Based on critical analyses - A good and
effective strategy is based on critical
analyses of a company's environment.
2. Supported by relevant data - A good
strategy is supported by relevant data
from reliable sources.
3.
good strategy is aligned with the
company's goals and objectives.
4. Clear and realistic - A good strategy is
clear and realistic.
5. Considers limitations - A good strategy
considers the company's limitations in
resources and capabilities.
6. Provides operational directions - A
good strategy provides operational
directions and guides decision-making.
7. Covers a long-term period - A good
strategy covers a long-term period.
8. Uses realistic key indicators - A good
strategy uses realistic, measurable, and
attainable key indicators.
9. Based on reasonable assumptions - A
good strategy makes use of reasonable
assumptions based on available
information.
10. Depicts nature of the business - A good
strategy depicts the nature of the
business and its priorities.
Strategic Types of Businesses
1 Defenders - Businesses with few product lines
that focus on cost reduction and improving
operating activities rather than innovation and
expansion.
2 Prospectors - Companies with broad product
lines that prioritize product development,
innovation, and exploring new markets.
3 Analyzers - Multi-divisional companies that
compete in stable and variable industries,
maintaining stability and flexibility.
4 Reactors - Businesses without consistent
strategic orientations, adopting ineffective
piecemeal or quick-response strategies.
CORPORATE STRATEGY
The formulation of a corporate strategy is
conducted by the top-level management, with
inputs from the middle- and lower-level
management and other stakeholders in the
form of quantitative or qualitative information.
It is concerned with the overall direction of a
company and is considered the general or grand
strategy of the company. This strategy is broadly
categorized into three general orientations as
follows
A. Growth Strategy
A growth strategy is a corporate strategy that a
company may adopt if it aims to expand its
present operating activities. In short, the
company intends to grow. Growth may happen
internally or externally. Internal growth occurs
when a company expands its operation
domestically or globally. On the other hand,
external growth happens when a company
enters into mergers, acquisitions, or strategic
alliances. Growth strategies are broadly
classified into two as follows:
1. Concentration strategy - A
concentration strategy is appropriate to
adopt when a company can reasonably
determine that its
current product lines have real growth
potentials. This strategy works
effectively when an industry is growing
and attractive.
The two types of concentration
strategies are as follows:
1. Horizontal growth strategy
1. By entering into other geographic
locations
2. By increasing the range of
product lines for the current market
1 Exporting - A company ships
goods to other foreign countries.
2. Licensing - A company enters into
an agreement with another
company from another country to
produce or sell the product/s of the
former.
3. Franchising - A company enters
into an agreement with a franchiser
to
use the name and system of the
latter.
4. Joint venture - A company
combines its resources with other
companies from foreign countries
to new
5. Acquisition - A company
purchases a foreign company.
6. Green-field development - A
company constructs its own plant
and
invests with other assets in a
foreign country.
7. Turnkey operations - A company
constructs operating facilities and
transfers the same to the host
country when completed.
8. BOT (build, operate, transfer)
scheme - A company constructs
facilities, operates them when
completed, and turns them over to
the
host country.
2. Vertical growth strategy - A company
takes over the functions of a supplier
and a distributor in a vertical growth
strategy. It results in a vertical
integration where a company takes full
responsibility of all activities in the
value chain (e.g., from the acquisition of
raw materials up to the delivery to final
customers). The degrees of vertical
integration are categorized as follows:
1. Full integration - A company
takes 100% control of the value
chain.
2. Taper integration (backward
integration) - A company
 acquires not more than 50% of C. Retrenchment Strategy
its requirements from outsiders.
1. Turnaround Strategy - Improving
3. Quasi-integration (forward
operational efficiency through cost
integration) - A company
reduction, divesting unprofitable
purchases most of its
businesses, and consolidating resources.
requirements from outsiders.
2. Captive Company Strategy - Weak
4. Long-term contracts - A
company becomes dependent on strong
company enters into an
company through long-term contracts.
agreement with other
3. Sell-out or Divestment Strategy - Selling
companies to provide goods to
the entire company or unprofitable
each other over a specified
divisions.
period of time.
4. Bankruptcy or Liquidation Strategy -
2. Diversification strategy
Terminating operations due to heavy
 Concentric Diversification
losses.
Strategy - Suitable for a less
attractive industry and
company with a strong
competitive position. The
company uses its core
competency to exploit a
related industry.
 Conglomerate
Diversification Strategy -
When a company enters an
unrelated industry because
its current industry is no
longer attractive.

B. Stability Strategy

1. Pause or Proceed- with-Caution

Strategy - Temporary timeout to
observe changes in the external
environment. Company does not make
significant moves until the environment
becomes favorable.
2. No-Change Strategy - Company
continues implementing its current
activities when the industry is stable
with little expected growth.
3. Profit Strategy - Temporary plan to
increase profits when revenues are
declining. Company cuts costs and
reduces discretionary expenditures.
WEEK 2 - MIDTERMS
Business Strategy
Business strategy is the key to achieving and
maintaining a competitive advantage in the
market. In this presentation, we'll explore
different business level strategies and what it
takes to craft one.
Competitive Strategy
Competitive strategy is the key to
outperforming competitors and gaining market
share. Companies consider cost, differentiation,
target market, and competition to select a
strategy.
1. Lower Cost Strategy - The company
offers similar products more efficiently
than competitors. There are two types:
cost leadership and cost focus.
2. Differentiation Strategy - The company
offers unique products that stand out in
terms of value, quality, features and
services. There are two types:
differentiation and differentiation focus.
Cooperative Strategy
Cooperative strategy is the key to gaining a
competitive advantage by collaborating with
other companies in the industry. There are two
types of cooperative strategies: collusion and
strategic alliances.
1. Collusion - Companies cooperate to
reduce competition and gain market
power.
2. Strategic Alliances - Companies
collaborate to achieve mutual benefits.
There are three types: joint venture,
licensing, and value chain partnership.
 Joint Venture - Joint ventures
are partnerships between two
or more companies that
undertake a specific project
together. The responsibilities,
ownership, and financial
rewards are shared among the
partners.
i. Sharing resources helps to
mitigate risks.
ii. Allows companies to access
new markets.
iii. Equal division of responsibilities
limits control.
iv. Disagreements can lead to
project delays.
 Licensing - Licensing occurs
when a company grants rights
to another company in a
different country to produce or
sell their products or services.
This is a cost-effective way for
companies to expand globally.
i. Requires little initial investment
and is a low-risk way of
expanding globally.
ii. The licensee has little control
over the licensed product and
its availability in the market.
iii. Licensing agreements can be
complex and challenging to
enforce.
iv. Licensees can become
competitors in the future.
 Value Chain Partnership - Value
chain partnerships are long-
term agreements between a
company and its key supplier or
distributor. Both companies
work closely together to align
their processes and goals,
resulting in a stronger and more
sustainable relationship.
i. Improved collaboration leads to
better quality, customer service,
and cost savings.
ii. Involving suppliers in research
and development can lead to
 innovation and the creation of
new products.
iii. Dependency on one partner can
lead to supply chain disruption
if one partner fails or decides to
leave the partnership.
iv. The partnership can limit
flexibility and autonomy for
both companies.
Factors in Selecting a Business Level Strategy
Business level strategies are formulated to gain
a competitive advantage in the market.
Companies select their strategy based on their
target market, the competition, and their
internal resources.
Required Skills and Resources
Certain skills and resources are required to
implement each business level strategy and
achieve a competitive advantage in the market.
Issues in Business Level Strategy Formulation
The formulation process in business level
strategy involves resolving three issues:
assessing the company's strengths, weaknesses,
opportunities, and threats; understanding the
competitive forces in the industry, and
determining the market location in which the
company will compete.
 The company must evaluate its internal
resources and assess its competitive
environment when selecting a strategy.
 The process involves assessing
competitive rivalry, bargaining power of
suppliers, bargaining power
 of customers, threat of new entrants
and threat of substitute products.
 The company evaluates various industry
segments to determine the best target
location for its business level strategy.
Crafting a Business Level Strategy
The systematic process of formulating business
level strategy starts with evaluating the industry
or market identified at the corporate level,
assessing internal resources and capabilities of
the company, defining the specific business level
strategy that aligns with resources and industry
opportunities, and determining whether an
offensive or defensive strategy is best suited.
 Porter's five forces of competition
model provides the initial industry
assessment by analyzing supplier power,
customer power, competition, threat of
substitute products, and threat of new
entrants.
 Internal resources and capabilities can
be better understood through
frameworks like SWOT analysis and
value chain analysis.
 It is important to select a business level
strategy that aligns with resources and
industry opportunities for a competitive
advantage.
 An offensive strategy targets the
strategic weaknesses of competitors
while defensive strategies target a
competitor's strengths.

WEEK 3 - MIDTERMS
Functional Level Strategies
Functional units and their structures vary
among companies based on their nature,
products, scope, and structure. In this book, we
will discuss functional level strategies based on
a typical company with four functional units:
Marketing, Finance, Human Resources, and
Production and Operation. Although some
strategies on research and development (R&D)
and technology will also be explained, these two
areas have not yet been elevated to functional
units in most companies. All functional units
have equal importance in achieving a company's
goals and objectives.
Marketing Strategy
1. Competitive Position Strategy - A
competitive position strategy dictates
the marketing strategy that is adopted
by a company used on its competitive
position in a market. The following are
the broad classifications of this strategy
 Market Leader Strategies - The
market leader is the company
that has the largest share in a
market. The following are the
variations of market leader
strategies: expand total demand
strategy, protect market share
strategy, and expand market
share strategy.
i. Expand total demand strategy -
In this strategy, the market
leader expands the demand by
developing new users or
promoting new usage of a
product.
ii. Protect market share strategy –
The protect market share
strategy is adopted by the
market leader when it
continuously innovates and
fixes its weaknesses to avoid
competitors from taking
opportunities.
iii. Expand market share strategy –
It is the desire of the market
leader to expand its market
share when it offers superior-
quality
iv. products, builds close customer
relationships, and creates good
service experiences with
customers.
 Market Challenger Strategies -
The market challenger is a
company that has a market
share lower than that of the
market leader. It can adopt
either of the following
strategies: full frontal attack
strategy and indirect attack
strategy.
i. Full frontal attack strategy -
When the market challenger
adopts the full frontal attack
strategy to each of the market
leader's product, price, and
distribution system. The market
challenger attacks the strengths
of the market leader and other
competitors, not their
weaknesses
ii. Indirect attack strategy - In this
strategy, the market challenger
avoids attacking the strengths
the market leader. Instead, it
works against the weaknesses
of the market leader.
 Market Follower Strategies -
The market follower is a
company that simply follows
the market leader or challenger
 instead of attacking them. It
holds a market share lower than
that of the market challenger. It
can maintain market share by
adopting follow closely strategy
and follow at a distance
strategy.
i. Follow closely strategy - In this
strategy, the market follower
studies and learns from the
experiences of the market
leader by improving the market
leader's products and programs
at a lower cost.
ii. Follow at a distance strategy -
The market follower in this
strategy simply holds on to its
current customers and tries to
win new customers fairly as a
way of avoiding retaliation from
the market challenger.
 Market Nicher Strategies - A
market nicher is a company that
provides the needs of a small
segment in a market which has
not been given preference yet
by the market leader or
challenger. It adopts
specialization niching strategy
and multiple niching strategy
for its competitive position in an
industry.
i. Specialization niching strategy -
In this strategy, a market nicher
can specialize in one type of
end user group or specific
customers.
ii. Multiple niching strategy - A
market nicher with multiple
niching strategy as its
competitive position strategy
serves two or more market
niches.
2. Market Strategy - This strategy is
intended to determine the growth in a
target market. Market strategy is
broadly classified as follows:
 Market Identification Strategy -
In this context, the term
"market" refers to the buyers of
a product or service, not the
place where a seller and a buyer
meet. They can be actual or
potential buyers. This strategy is
intended to determine the
growth in a target market. This
strategy is designed to
determine the customers to be
served and the manner in which
they are to be served. The
following are variations of this
strategy:
i. Segmentation strategy - This
strategy aims to divide the
market into distinct groups of
buyers who have different
behaviors, characters, and
needs. Each distinct group
requires different products to
satisfy its needs and wants. The
customers can be segmented
according to geographical,
income, or behavioral factors.
ii. Targeting strategy - This
strategy is designed to identify
the particular group of
customers to be served. It
involves two processes. The first
process is the evaluation of the
target market, and the second is
the selection of the market to
be served.
iii. Positioning strategy – The
positioning strategy is
concerned with the way
customers are served. It can be
achieved by placing a product in
 the minds of the customers
relative to competing products.
A product can be a market
leader or follower, primary or
substitute, and consumer or
industrial.
 Market-Product Growth
Strategy - This strategy focuses
on the growth of both the
market and the product. It aims
to identify and capitalize on
opportunities for growth by
expanding the product's reach
in the target market. The
market-product growth strategy
has two dimensions, namely,
the market and the product
dimensions. In this strategy, the
markets and the products are
classified either as existing or
new. The objective of this
strategy is to determine which
product should be sold in a
particular market for a business
to grow relative to the product
and the market. The following
are the four variations of this
strategy:
i. Market penetration strategy -
This strategy is adopted by a
marketing functional unit when
it seems to improve a
company's sales through the
rigorous selling of existing
products to the current market
segment. In this strategy, the
market segment is not changed
as well as the product lines.
ii. Market development strategy -
This strategy aims to improve a
company's sales through the sa
of existing products to new
markets. In other words, a
company sells the same product
lines to market segments
without abandoning it sold
market segments
iii. Product development strategy -
In this marketing strategy, a
company plans to grow by
selling products. For example, a
company that offers office
shoes to its market segment will
offer athlete shoes.
iv. Diversification strategy - In this
strategy, a company plans to
grow by entering a new mark
with new product lines. This can
be achieved by starting a new
business or buying other
businesses new products to
existing market segments. The
new product must be similar to
the existing.
3. Pricing Strategy - The pricing strategy is
an important factor in the struggle of a
company to achieve competitive
advantage in an industry. Similar to
other strategies, the pricing strategy is
not fixed, but it changes as a product
moves in its life cycle. The objective of
the pricing strategy is to set a
competitive price in the market that will
give a fair return on investment. Pricing
strategies are broadly classified as
follows:
 New Product Pricing Strategy
This pricing strategy is used for
new products that are being
introduced to the market. It
involves setting an initial price
that is expected to attract
customers and gain market
share. Introducing new
products to the market means
having to set their prices for the
 first time. The pricing strategies
for new products are as follows:
i. Skim pricing strategy
This strategy allows a company
to set a high initial price for its
product to obtain the highest
possible revenue. This pricing
strategy works effectively when
competitors can hardly enter
the market to offer a lower
price for the product.
ii. Penetration pricing strategy
In this strategy, a company sets
a low initia price for its product
so that it can easily penetrate
and gain a considerable share in
the market.
 Product-Mix Pricing Strategy
This pricing strategy involves
setting prices for a range of
products offered by a company.
It takes into account the pricing
of different products within the
product mix and aims to
maximize overall profits.
Product-mix or product
portfolio is a set of product lines
or items offered by a seller for a
single price. The different
variations of product-mix
pricing strategies are as follows:
i. Product line pricing strategy
The product price in this pricing
strategy is set across an entire
product line. The price between
various products in a product
line is set based on cost
difference customer evaluation,
and competitor's price
ii. Optional product Line pricing
strategy
This pricing strategy is adopted
when there are accessories that
can be added to the main
product. It is the primordial task
of a company to determine
which items are included in the
base price and which are to be
added as accessories with
separate price
iii. Captive product pricing
strategy
It is the pricing strategy that is
employed when a certain
product must be used with
other products. For example, a
razor cannot function without a
blade. Setting the price of the
blade, whether high or low,
illustrates captive product
pricing
iv. By-product pricing strategy
This pricing strategy can be
adopted when producing the
main product results in a by-
product with a saleable value
Setting prices to by-products
reduces production cost and
makes the product competitive
in the market.
v. Product bundle pricing strategy
It is the pricing strategy used
when products are offered to
the market as a bundle with
one collective price. Prices of
food in the fastfood industry is
usually offered to customers
using this pricing strategy
 Price Adjustment Strategy
This pricing strategy involves
adjusting prices based on
factors such as market
conditions, competition, and
customer demand. It allows a
company to respond to changes
in the market and maintain a
competitive edge. When a
 market situation changes as the
demand, taste preferences and
other variables change the price
in the market also changes. In
other words, the market price
of goods rises and falls. This
requires adjustments. The
different price adjustment
strategies are as follows:
i. Discount and allowance pricing
strategy
ii. Segmented pricing strategy
iii. Psychological pricing strategy
iv. Promotional pricing strategy
v. Geographical pricing strategy
vi. Dynamic pricing strategy
vii. International pricing strategy
4. Promotion and distribution strategy –
The promotion and distribution
marketing strategies are the plans for a
company's activities intended to
communicate its products to target
customers and persuade them to
purchase them. This marketing strategy
is broadly classified as follows:
 Promotion Mix Strategy
The promotion mix strategy
involves determining the
optimal mix of promotional
activities to reach and persuade
target customers. It includes
elements such as advertising,
sales promotions, public
relations, and personal selling.
The promotion mix strategy
consists of the following
strategies:
i. Push strategy
This is a promotion strategy that
makes use of distribution
channels in promoting and
selling a product. In other
words, the sales force and trade
promotions push the product
through channels.
ii. Pull strategy
This is a promotion strategy that
is used when a company heavily
engages in advertising and
customer promotion to
influence a buyer to purchase a
product. In other words, a
company is pulling its customers
to buy its product.
 Distribution Strategy
The distribution strategy
focuses on the efficient and
effective distribution of a
company's products to target
customers. It involves decisions
related to channels of
distribution, logistics, and
inventory management. The
distribution strategy includes
the following:
i. Personal selling strategy
In this distribution strategy, the
sales force presents the
products to customers to make
sales and, at the same time,
build strong customer
relationships.
ii. Retailing strategy
In the retailing strategy, a
company distributes or sells
goods or, services directly to
final consumers for their
personal use.
iii. Wholesaling strategy
A company may adopt the
wholesaling strategy when it
plans to distribute or sell goods
and services to companies that
are buying for resale.