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• Strategic Business Unit


  • Narrower strategies for managing grassroots activities and strategically-relevant operating units
  • Add detail to business and functional strategies
• ttT

  • Introduction of better products by rivals
  • Intensifying competitive pressures
  • Onerous regulations
  • Rise in interest rates
• SWOT Analysis


  • Comes as handy tool for putting forward a simplistic approach to strategizing or strategic planning
  • Strategists must endeavor to search and discover for opportunities as window for strategizing
  • Factors considered as threats for the firm should be averted to avoid converting itself into a weakness
• Micro Environment


  Internal environment or the environment within the business organization itself
• Organizational Competencies


  • Competency of a firm evolves around the company's asset or primary strength upon which the conduct of business is anchored upon
  • Competency of business organizations is viewed as the product of organizational experience and represents real proficiency in performing an internal activity
• Core Competency


  • A well-performed internal activity that is central to a company's competitiveness and profitability
  • May be developed along the way as the business accumulates experience and as it employs creative, innovative and experience employees
• Distinctive Competency


  A competitively valuable activity that a company performs better than its rivals
• BGC Matrix


  Four-quadrant diagram showing categorization of products or services handled by the firm
• Four Categories of BGC Matrix

  • Question marks- sometimes called "problem children" or "wild cats"
  • Stars- products/services in this category are market leaders
  • Cash cows- products/services that typically bring in far more money than is needed
  • Dogs- has low market share
• Company Competitive Index


  • Addresses the individual competitiveness of each of the players within the industry
  • Computation of the company competitive index is done by way of listing down a set of parameters or criteria common to the business organizations under consideration
• Steps in developing industry matrix


  1. List key success factors

  2. Assign weight to each factor

  3. Examine a particular company within the industry and rate each factor

  4. Multiply weight and rating to get weighted score

  5. Repeat for another company

  6. Add up weighted scores to determine total
• Strategic Management Models


  • Simply act as guide or frameworks fundamentally aiding or serving as planning tool in the hope that dreams and aspirations can be realized and expectations of stockholders/stakeholders can be achieved in quantitative terms
• Wright, Kroll and Parnell Model


  • Considers analyzing external environment opportunities and threats as the beginning approach
  • Specifically pointed out the need to begin with a corporate strategy followed by a business level strategy down to the functional level strategy
• Thompson and Strickland Model


  Identified five specific tasks that comprise the process of developing the strategy: Develop a strategic vision and mission, Set objectives, Craft a strategy to achieve objectives, Implement and execute strategy, Monitor, evaluate and take corrective action
• F. R. David Model


  Has six tasks: Develop mission statement, Establish long-term objectives, Generate, evaluate, and select strategies, Establish policies and annual objectives, Allocate resources, Measure and evaluate performance
• Wheelen and Hunger Model


  1. Environmental scanning- unique to this model and it is indeed extremely important to consider environmental factors

  2. Strategy formulation

  3. Strategy implementation

  4. Evaluation and control
• Rayport and Jaworski Model


  Consider setting goals premised on a corporate or organizational mission

  A shortcoming of this model is the absence of a system of feedback to allow revision of strategy as necessary
• Pitts-lei Model


  Resembles that of Wheelen and Hunger model that also considers the importance of analysis of external and internal environment before mission and policies are set

  Feedback is encourage at each level or task just like the other models
• The Hybrid Model


  Comes in six tasks and subsumed into the six tasks are the variety of component tasks that need to be addressed as also emphasized by other models

  Important to this mode is the role played by the operating officers and Board of Directors
• What comes with strategic plan?

  • Vision-Mission Statement
  • Strategic Objectives
  • Strategies
  • Strategy implementation/execution plan
  • Monitoring, evaluation, and taking corrective actions
• Short-term strategic plan


  A plan to be carried out or achieved within the ensuing year
• Medium-term strategic plan


  Covers a period beyond the short-term usually ranging from 1to 3 years
• Long-term strategic plan


  Talks about what to achieve beyond the medium term period usually anywhere between 3 to 5 years or even more
• Competitive strategies


  Focus on particular areas of concern the company believes it has the advantage or edge to be able to outrace its competitors in a particular context of doing business

  Consist of specific efforts of the business organization meant to outwit or outcompete direct and indirect competitors
• Objectives of competitive strategies


  May be proactive (offensive strategies) and reactive (defensive strategies)

  Unlike corporate or business level strategy, competitive strategies are generally narrower in scope or focused in their direction
• Generic Competitive Strategies


  • Price-based Strategy- relies on market price of the product as the selling point

  Product-based Strategy- talks about product content and quality as the driver of business competitiveness

  Market-based Strategy- concerns with adopting the product to a particular market are or sector the business seeks to penetrate
• Overall Low-Cost Provider Strategy


  Means having low overall costs, not just low manufacturing or production costs but in other costs as well thus resulting to relatively low market price and hence, competitiveness on the part of the business firm
• Achieving Overall Low-Cost Strategy


  Approach 1: Do a better job than rivals of performing value chain activities efficiently and cost-effectively

  Approach 2: Revamp value chain to bypass cost-producing activities that add little value from the buyer's perspective
• Controlling Cost Drivers


  Are cost components or inputs to a product or services that constitute a large part or portion of the overall cost of producing a product or service

  Any changes, downward or upward of that particular cost component, will drive the cost and market price of the finished product or service which has impacts on its competitiveness in the market
• Differentiation Strategy


  Is biased on the notion that the business exists because of the variety of market or consumers it serves

  Either in products or services context concerns with the process of creating a competitive advantage by designing a variety of products and services to satisfy wants and needs of the customers
• Focused or Niche Strategy

  Focus Strategy- concentrates on serving a particular market niche, which can be geographically, by type of customer, or by segment of the product line

  Niche- term synonymous to focus is used to refer to a different or unique kind of market which is usually limited in number
• Best-Cost Provider Strategy


  Combines strategic emphasis on low-cost and differentiation strategies

  Its basic characteristics are: Make an upscale product at a lower cost, Give customers more value for their money
• Offensive Strategies


  Presumed to have sufficient resources and organizational strength as well as superior product or service to be able to launch and sustain an offensive strategy
• Types of Offensive Strategies

  • Frontal assault- the firm goes head-to-head with its competitor

  End run offensives- dodge head-to-head confrontations that escalate competitive intensity or risk cutthroat competition

  Guerilla warfare- uses the principle of surprise and hit-and-run to attack in locations and at times where conditions are most favorable

  Bypass attack- directly attacking the established competitor frontally or on its flanks

  Flanking attack- a firm may attack a part of the market where the competitor is weak
• Defensive Strategy


  An option taken by business organizations that are reactive to market conditions
• Basic approach to dealing with defensive strategy


  • Block avenues open to challengers

  Signal challengers that vigorous retaliation is likely if the business is under attack or being pursued
• Some Specific Defensive Options

  • Raise structural barrier- raising the walls of the business to avoid being attacked

  Lower the inducement for attack- meant to reduce a challenger's expectations of future profits in the industry

  Increased expected retaliation- any action that increases the perceived threat of retaliation for an attack
• Preemptive Strikes


  Preemptive strategies takes the form of an effort to do something in case of eminent danger or before any perceived untoward incident happens
• Options for Preemptive Strikes Acquire firm which has exclusive control of a valuable technology

  Secure exclusive/dominant access to best distributions

  Tie up best or most sources of essential raw materials

  Secure best geographic locations

  Obtain business of prestigious customers

  Expand capacity ahead of demand in hopes of discouraging rivals from following suit

  Build an image in buyers' minds that is unique or hard to copy
• Competitive strategies consist of specific efforts of the business organization meant to outwit or outcompete direct and indirect competitors.