CBMEC 2

STRATEGIC MANAGEMENT

MODULE 9
Wednesday

STRATEGIES IN ACTION

Strategies represent the actions to be taken to accomplish long-term objectives.

o Long-term objectives represent the results expected from pursuing certain
strategies.

Objectives
o Objectives should be quantitative, measurable, realistic, understandable,
challenging, hierarchical, obtainable, and congruent among organizational
units.
o Each objective should also be associated with a timeline.
o Objectives are commonly stated in terms such as growth in assets, growth
in sales, profitability, market share, degree and nature of diversification,
degree and nature of vertical integration, earnings per share, and social
responsibility.
Benefits of clearly established objectives
 They provide direction, allow synergy, aid in evaluation, establish priorities,
reduce uncertainty, minimize conflicts, stimulate exertion, and aid in both the
allocation of resources and the design of jobs.

 Objectives
o Provide a basis for consistent decision making by managers whose values
and attitudes differ.
o Serve as standards by which individuals, groups, departments, divisions
and entire organizations can be evaluated.

 Long-term objectives
o They needed at the corporate, divisional and functional levels of an
organization.
o They are an important measure of managerial performance.

Source: David, Fred R. 2011. Strategic Management: Concepts and Cases. Prentice Hall.
http://www.mim.ac.mw
Types of strategies
The model illustrated in Figure 5-1 provides a conceptual basis for applying
strategic management.

Source: David, Fred R. 2011. Strategic Management: Concepts and Cases. Prentice Hall.
http://www.mim.ac.mw
 Defined and exemplified in Table 5-4, alternative strategies that an enterprise
could pursue can be categorized into 11 actions:
o Forward integration
o Back integration
o Horizontal integration
o Market penetration
o Market development
o Product development
o Related diversification
o Unrelated diversification
o Retrenchment
o Divestiture
o Liquidation.

Source: David, Fred R. 2011. Strategic Management: Concepts and Cases. Prentice Hall.
http://www.mim.ac.mw
 Each alternative strategy has countless variations.
o For example, market penetration can include adding salespersons,
increasing advertising expenditures, couponing, and using similar actions
to increase market share in a given geographic area.

Source: David, Fred R. 2011. Strategic Management: Concepts and Cases. Prentice Hall.
http://www.mim.ac.mw