STRATEGIC MANAGEMENT

"Most of us fear change. Even when our minds

say change is normal, our stomachs quiver at
the prospect. But for strategists and managers
today, there is no choice but to change."
Robert Waterman Jr.

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
LEARNING OBJECTIVES

• Know basic concepts embodied in

strategic management
• Understand the importance of strategic
management
• Value the benefit of strategic management
in business decision making

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS

Definition of Strategic Management

Strategic management can be defined as the art and

science of formulating, implementing, and evaluating
cross-functional decisions that enable an organization
to achieve its objectives.

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS

Stages of Strategic Management

• Strategy Formulation
• Strategy Implementation
• Strategy Evaluation

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS

Key Terms in Strategic Management

• Competitive Advantage
• Strategists
• Vision and Mission Statements
• External opportunities and threats
• Internal strengths and weaknesses
• Long-term and Annual objectives
• Strategies
• Policies

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS

Competitive Advantage
• anything that a firm does especially well
compared to rival firms
• a firm can do something that rival firms cannot
do, or owns something that rival firms desire

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS

Strategies
• individuals most responsible for the success or failure of an organization.
• e.g chief executive officer, president, owner, chair of the board,
executive director, chancellor, dean, or entrepreneur
• help an organization gather, analyze, and organize information
• track industry and competitive trends
• develop forecasting models and scenario analyses,
• evaluate corporate and divisional performance
• spot emerging market opportunities
• identify business threats
• develop creative action plans

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS

Vision Statement

• answers the question “What do we want to

become?”
• considered the first step in strategic planning
• many vision statements are a single sentence.

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS
Mission Statement
• enduring statements of purpose that distinguish a business
• identifies the scope of a firm’s operations in product and
market terms
• addresses the basic question “What is our business?”
• describes the values and priorities of an Organization
• about the nature and scope of present operations
• assess the potential attractiveness of future markets and
activities
• charts the future direction of an organization.
Batangas State University
College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS
External Opportunities and Threats
Factors Uncontrolled external
• economic factors
• social
• cultural The process of conducting
• demographic research and gathering
• environmental and assimilating external
• Political information is sometimes
• Legal called environmental
• governmental scanning or industry
• Technological analysis.
Batangas State University
College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS
Internal Strengths and Weaknesses
• arise from activities
of a business
• management Controllable activities that
• Marketing are performed especially
• finance/accounting well or poorly
• production/operation
• research and
development
• management
information systems
Batangas State University
College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS
Objectives
specific results to achieve in pursuing organization’s mission
Long-term objectives means more than one year
Annual objectives are short-term milestones
Purpose
• state direction Characteristics
• aid in evaluation Specific
• create synergy Measurable
• reveal priorities Attainable
Realistic
• focus coordination Timely
• basis for effective management
Batangas State University
College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS

Strategies
are means by which long-term objectives will be achieved

• potential actions that require top management decisions

• demand large amounts of the firm’s resources
• affect an organization’s long-term prosperity
• future-oriented
• have multifunctional or multidivisional consequence
• considers external and internal factors

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS
Policies
the means by which annual objectives will be achieved
• guides to decision making and address repetitive or
recurring situations
• established at the corporate level and apply to an entire
organization
• allow consistency and coordination within departments
include :
• guidelines
• rules
• procedures
Batangas State University
College of Accountancy, Business, Economics and International Hospitality Management
BASIC CONCEPTS

- end -

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Strategic Management Process
Is used to match the ever-changing market environment
and the competitive structure of the business involving
material and production resources.

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Competitive Advantage
Strategies
Indutry – Based Model
◦ Refers to the analyses of the prevailing industry where the firm has its
competitive advantages over other firms in the environment.

Resource – Based Model

◦ Refers to the analyses of the prevailing resources available to the firm that
are present in the internal environment which could then be utilized in the
development of competitive advantage.

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Strategic Management
Challenges
Earning above the average return on investments and
achieving the desired competencies are challenges that the
business must be able to contain in the world of
competition.
◦ Innovation
◦ Policies and Programs
◦ Research and development
◦ Customer satisfaction

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Landscape of Business in the
New Century
The competitiveness of the world’s market is in the continuous process
of change whose pace is relentless and increasing over time. The
industry boundaries have become challeneges as corporate directions
change. New opportunities are taken over by big companies as they
spread their resources into new ventures that would generate greater
return on investments.

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Landscape of Business in the
New Century
Hyper-competitive market, companies are aggressively
challenging their competitors in the hope of improving their
competitive advantage and product positioning, thereby
ultimately improving their performance. This rapid hyper-
competitive environment is the result of the rapid change in
technology that is usually the monopoly of the big
industries and innovative young corporations with new
vision and foresight.

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Global Economic Scenario
The new global economic scenario is the result of the new
borderless flow of goods, services, people, skills and ideas
that are relatively unfettered by artificial constraints. The
global economy significantly expands across borders and
complicates the corporate competitiveness as opportunities
and challenges become new playing fields for those with
foresight and vision for expansion.

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
The New Horizon for the PH’s
Strategic Competitiveness

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Development of Strategic
Competitiveness
Factors
◦ Globalization
◦ Global competition
◦ Quality, cost, productivity and efficiency
◦ Continuous Improvement
◦ Sustainable development

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Trends and Condition that
Alter Competition
oTechnological Change
oInformation Linkages
oKnowledge – Based Intensity

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
External Influences in Above
Return on Investment
oAvailability of Fixed Assets
oEconomies of Scale
oBarriers to Market Entry
oCorporate Vertical and Horizontal Diversification
oDegree of Market Concentration

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management
Strategies to greater return on
investment
Study business environment
Locate the industry with high potential for above average returns
Identify the strategy needed assets and skills to implement the strategy
Use the corporate skills that were developed, and implement the
strategy

Batangas State University

College of Accountancy, Business, Economics and International Hospitality Management