Strategic Management - BSMA 4B PDF

GROUP 1 Presentation - Strategic Management - BSMA 4B  CHAPTER 1 Strategic Management: The new challenge of the new century  Objectives: Understand the strategic management process Formulate strategic vision and mission of the company Know the landscape...

GROUP 1 Presentation - Strategic Management - BSMA 4B  CHAPTER 1 Strategic Management: The new challenge of the new century  Objectives: Understand the strategic management process Formulate strategic vision and mission of the company Know the landscape of business in the new century Know how the Philippines will be able to develop competitive advantage for its products Understand the trends and condition after competition Know how the internal and external factors affects the condition of business and Develop environmental scanning strategies of the industry as factor in return on investments  Strategic Management Process Strategic management is the dynamic process that is full of commitment to decisions and actions to deliver strategic competencies to achieve the desired results in terms of corporate profitability and growth. The strategic competitiveness is the result of the internal and external analyses of the corporate environment for the formulation of the strategy and actions plan that are directed to set goals and targets.  Two Different Strategies INDUSTRY BASED MODEL RESOURCE BASED MODEL It refers to the analyses of the It refers to the analyses of the prevailing industry where the prevailing resources available to the firm has its competitive firm that are present in the internal advantages over other firms in environment which could then be the environment utilized in the development of competitive advantage  Strategic Management Challenges Earning above the average return of investments and achieving the desired competencies are challenges that the business must be able to contain in the world of competition. The challenges are substantial in the economic global arena not only for big corporations operating in multi-national environment but also for small firms that need to innovate in order to survive challenges of competition. STRATEGIC VISION AND INTENT STRATEGIC MISSION Strategic mission flows from strategic vision and intent. It is Strategic vision is the advantage the statement of the firms of the firm’s resources and core direction in the pursuit of its competencies to accomplish its operation in the production and goals in the competitive marketing of its products and environment. Strategic vision services. and intent exist when all Strategic mission provides employees and its executives general description of the are committed to the pursuit of product and services that the a specific performance criterion. firm offers to its various stakeholders based on its own core competencies. The 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 industrial boundaries have become challenge as corporate direction change. New opportunities are taken over by big companies as the spread their resources into new ventures that would generate greater return on investments.  The 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 the 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  The New Horizon for the Philippines’ Strategies Competitiveness The Philippines, positioned centrally in Asia, has the potential to become a key hub for the flow of goods and resources in the region. With the development of new infrastructure and trade liberalization, the country could attract significant investments, leveraging its natural and human resources. By enhancing workforce skills and promoting ethical work values, these investments could generate new businesses and job opportunities, thereby improving the economic well-being of the Filipino people. To foster a conducive environment for business development, the country needs to prioritize honest governance and create investment-friendly policies, ensuring growth and competitiveness while upholding transparency and good governance.  The Development of Strategies Competitiveness The development of strategic competitiveness in the Philippines hinges on adapting to globalization, where the borderless flow of goods, services, knowledge, and capital drives economic interdependence among countries. Globalization increases business opportunities but also raises standards in product quality, production costs, productivity, and operational efficiency, requiring companies to continuously innovate and improve. For the Philippines to compete in the global market, it must attract both local and foreign investments, especially in infrastructure, new technologies, and the development of its rich natural resources, particularly in mining, forestry, and agriculture.  The Development of Strategies Competitiveness Key to this competitiveness is the enhancement of human capital through skill training that meets global standards, a role that agencies like TESDA should actively pursue. Additionally, the government must implement bureaucratic reforms to provide efficient services to the industrial and business sectors, encouraging entrepreneurship, particularly in rural areas. By supporting small entrepreneurs with the right incentives and infrastructure, the Philippines can strengthen its economic base and potentially enable these small players to grow into significant competitors in the global market. Sustainable development, particularly in energy and agriculture, is essential for long-term growth and competitiveness. Trends and Condition that Alert Competition 1. THE INCREASED RATE OF TECHNOLOGICAL CHANGE Technology is changing very fast, and companies need to keep innovating or they will fall behind. Products are becoming outdated more quickly, so businesses must introduce new products fast to stay competitive. 2. THE ADVANCEMENT IN INFORMATION LINKAGES New technology like computers and smartphones has made it easier and faster for companies to communicate and do business. Connecting with customers, suppliers, and employees through these technologies is crucial for staying competitive. Trends and Condition that Alert Competition 3. KNOWLEDGE-BASED INTENSITY Companies now rely heavily on knowledge and skills, especially in technology, to stay competitive. Investing in employees’ talents and turning that knowledge into new products and strategies is key to success.  THE EXTERNAL INFLUENCE IN ABOVE RETURN ON INVESTMENTS. The firm's performance is believed to be determined primarily by the range and availability of the resources of the firm in terms of the following: 1.The Availability of Fixed Assets The firm that has a well asset management could compete with other firms within the industry as they have the capital base to mobilize these resources to take advantage of the prevailing opportunities within the business environment. 2.The Economies of Scale The firm that produces more products not only for local market but for the global supply has the greater advantage of the economies of scales.  THE EXTERNAL INFLUENCE IN ABOVE RETURN ON INVESTMENTS. 3. Barriers to Market Entry The competitive advantage is developed by the firm with vast resources to deter other firms from entering the market that they dominate. 4. Corporate Vertical and Horizontal Diversification The strategy for growth and expansion is the major role of competitive major corporations to increase their return of investments. Once they have saturated the market with their products and brands, the next step is to expand horizontally or vertically and integrate the resource base of operation. 5. Degree of Market Concentration Companies that acquire and develop skills needed to implement strategies required to succeed in their chosen field of operation, developed competitive advantage by concentrating on their field of expertise.  THE INFLUENCE OF INTERNAL ABOVE RETURN ON INVESTMENTS The corporate achievement in greater return on investments are the makings of people and executives with an eye for competitive strategic competencies. The following strategies are common to people with higher achievements for greater return on investments: 1. Study the business environment. 2. Locate the industry with high potential or above average returns. 3. Identify the strategy needed by the industry that will generate greater returns. 4. Develop and acquire the needed assets and skills to implement strategy. 5. Use the corporate skills that were developed, and implement the strategy.  Environmental Scanning of Industry The internal environment is managed by executives and managers with an eye for profitability and growth of their firm. Environmental scanning is the process of seeing the whole scenario of business operation in terms of the general business activities prevailing within the industry and the competitor's strategies that may affect the present market share of the firm.  Horizontal and Vertical Expansion This refers to seeing the firm's expansion on related business within the environment that is either making the product inputs related to their operation or new attractive industries where the corporate capabilities have earned the competitive advantage. Horizontal expansion is either the backward integration or forward expansion. On the other hand, forward expansion is taking over the marketing of the products that were produced and used to be channeled to distributors and dealers.  CHAPTER 2 The business environment for competitive strategy  The Business Environment The General Environment The Industry Environment The Competitor Rostata Analysis of the External Environment SCANNING MONITORING FORECASTING ASSESSING Rostata Segmentation of the General Environment Rostata Six Segments that affect the operation of the firm: 1. Demographic segment POPULATION AGE GEOGRAPHIC THE ETHNIC MIX SIZE STRUCTURE DISTRIBUTION Rostata  2. Economic Segment 3.The Political and Legal Segments 4. The Social and Cultural Segments 5.The Advancement on Technology Segments 6. The World of Business Segment  Analysis of the Industrial Environment An industry is made up of companies that produce similar or substitute products and compete for market share. Each company uses different strategies to achieve higher profits. Technology plays a significant role in gaining a competitive edge, not just through product innovation but also by using the internet to reach wealthier customers. The industry environment directly affects a company’s ability to perform well and earn above- average returns. THE FIVE FORCES THAT AFFECT FIRM'S COMPETITIVENESS  The Threat of New Entrants Capital Requirements Economies of Scale Product Differentiation Access to Distribution Government Regulations Channel  The Power of Suppliers Suppliers have the power to influence the price as well as the availability of resources or inputs. Suppliers are most powerful when companies are dependent on them and cannot switch suppliers because of high costs or lack of alternative sources. Bagares The Buyers Bargaining Power The Threat of Substitute Product The consumers group has the bargaining The pressure that power under the following: customers/consumers can A. When they purchase a large volume of put on businesses to get the firms output. B. When there is available substitute of similar them to provide higher quality. C. When the sale are a significant portion of quality products, better the firm’s sales volume. customer service, and/or D. When the buyer or dealer can be threat for backward integration. lower prices. Bagares  The Threat of Substitute Product The threat of substitute products refers to the potential for alternative offerings to replace existing products or services. Companies are concerned about the threat of substitute products (or services) displacing their own. The threat of substitutes is high when rivals or even companies outside the industry offer more attractive and/or lower cost products. Bagares  The Power of Competition Factors that intensify the power refers to the intensity of rivalry competition: among businesses within an industry. 1. The presence of balance competitors. 2. The slow industrial growth in some It increases the demand for a sectors. good or service. 3. Higher fixed cost some firms. finding and developing new 4. High storage cost of some products. 5. Low product differential and switching ideas for products and services cost. that the company can offer. Bagares Industry Analysis & Strategic Analysis of the Industry Actions Competition the process of assessing the competitive landscape of an industry to understand involves examining the competitive the factors that influence profitability landscape of an industry to and competitive advantage. understand the factors influencing Strategic action is the implementation profitability and competitive of specific strategies and tactics to advantage. achieve a company's objectives within enables a company to develop a a given industry. competitive strategy that best It involves making decisions about defends against the competitive resource allocation, market positioning, forces or influences them in its favor. and competitive moves. Bagares Thank you!