Chapter 1

Strategic Management the

New Challenge of the New
Century

Prepared by:
Asst. Prof. Nelda A. Rosima, DBA
Faculty-in-Charge
STRATEGIC MANAGEMENT PROCESS
1. CLARIFY THE VISION OF THE COMPANY – (V, M, G, O)
2. GATHER & ANALYZE THE INFORMATION – ENVIRONMENTAL
SCANNING & INTERNAL ASSESSMENT (Understand the need
of the business)
3. STRATEGY FORMULATION
4. STRATEGY IMPLEMENTATION
5. STRATEGIC EVALUATION AND CONTROL
Definition of terms
Business policy – set of rules that guides the
conduct of the business in pursuit of profit and
other objectives of the business organization.
Strategy – referring to top management’s plan to
attain the outcomes consistent with the
organization’s mission and goals.
- also known as “game plan”, set of competitive
moves and business approaches that
management is employing to run the company.
Strategic management is a set of
managerial decisions and actions
that determines the long run
performance of a corporation.
Strategic Management –
Defined

Art & science of formulating,

implementing, and evaluating,
cross-functional decisions that
enable an organization to achieve
its objectives.
Competitive Advantage could be divided into
2 different strategies

1. Industry- based model

2. Resource – based model
TRENDS & CONDITION THAT ALTER
COMPETITION
Increased rate of technological change
Advancement in information linkages
Knowledge- based intensity
External influence in above ROI
1. Availability of fixed assets
2. Economies of scale
3. Barriers to market entry
4. Corporate vertical & horizontal diversification
5. Degree of market concentration
Stages of Strategic Management
1. Strategy formulation
2. Strategy implementation
3. Strategy evaluation and control
Strategy Formulation

Vision & Mission

External Opportunities & Threats

Internal Strengths & Weaknesses

Long-Term Objectives

Alternative Strategies

Strategy Selection
Strategy Implementation

Annual Objectives

Policies

Employee Motivation

Resource Allocation
3. Strategy evaluation – final stage; primary means
for obtaining when particular strategies are not working
well
a. Reviewing internal and external factors that are the
bases for current strategies.
b. Measuring performance
c. Taking corrective actions.
Strategies

Means by which long-term objectives are

achieved
Achieving Sustained
Competitive Advantage

1. Adapting to change in external trends,

internal capabilities and resources

2. Effectively formulating, implementing &

evaluating strategies
Strengths & Weaknesses (Internal)

Typically located in functional areas of the firm

• Management
• Marketing
• Finance/Accounting
• Production/Operations
• Research & Development
• Computer Information Systems
Opportunities & Threats (External)
Analysis of Trends:
• Economic
• Social
• Cultural
• Demographic/Environmental
• Political, Legal, Governmental
• Technological
• Competitors
Benefits of Strategic Management
● Clearer sense of strategic vision for the firm.
● Sharper focus on what is strategically important.
● Improved understanding of a rapidly changing
environment.

Financial Benefits
• Improvement in sales
• Improvement in profitability
• Productivity improvement
Benefits of Strategic
Management

Non-Financial Benefits

• Improved understanding of competitors strategies

• Enhanced awareness of threats
• Reduced resistance to change
• Enhanced problem-prevention capabilities
THANK YOU FOR
LISTENING!