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BPAS REVIEWER

PARAGAS, SARAH FAITH D.

Strategy is a plan of action developed to achieve a specific goal or objective.


Strategic Selection is the process of choosing the right strategy in order to form a plan of action in
achieving the organizational goals.
Strategy Formulation Constraints:
Availability of financial resources
Attitude toward risk
Organizational capabilities
Channel relationships
Competitive retaliation

Strategic evaluation is the assessment process that provides executives and managers performance
information about programs, projects and activities designed to meet business goals and objectives.
Strategic Evaluation operates at two levels:
Strategic level - wherein we are concerned more with the consistency of strategy with the environment.
Operational level - wherein the effort is directed at assessing how well the organization is pursuing a
given strategy.

Performance gap analysis helps a business identify how far it has come toward reaching its goals and how
far it still needs to go to attain them, with the objective of developing a concrete strategy to close any
existing gap.

IDENTIFYING PERFORMANCE GAPS


1) Reasons for Not Performing
There are many possible reasons why people don't achieve the required performance standard. Possible
reasons include:
personal problems at home
they may not fully understand their role
physical conditions in the workplace
lack of job knowledge
ineffective management
or leadership structural problems within the organization
2) Conducting a Performance Feedback Session
1. Outline the problem
2. Listen and be sympathetic
3. Restate the explanation in your own words
4. Agree on the source of the problem
5. Involve the staff member in a search for a solution
6. Set a follow up date
3) Preparing for the discussion
4) Planning the discussion
what is the appropriate atmosphere to create at the interview?
what performance criteria will you use?
is the person aware of these criteria?
what information do you have, or need to collect before the discussion?
what steps will you follow when conducting the discussion?
do you think there will be any disagreements, if so where?
what will you do or say to handle them?
how will you evaluate your own performance conducting the discussion?
Adjusting is the process of altering business strategies based on sensed outcomes.
Each company’s approach in strategy transformation falls into one of three categories. These categories in
turn determine the level of transformation — the timing and the magnitude — that the company can
support.
Reactive. This is the default transformation strategy; it is minimal, and has become second nature to most
seasoned executives. A change in circumstances provokes a short-term response, generally an abrupt shift
that requires little cross-company coordination or follow-up.
Programmatic. This strategy is more comprehensive and is appropriate when major change is required
and a company has sufficient lead time.
Sense-and-adjust. This is the most long-term and sustainable strategy, but only a few companies have
successfully implemented it. Unlike the first two approaches, sense-and-adjust is dynamic, constantly and
consistently smoothing out volatility in areas of business subject to swift and dramatic change.

CHANGING BUSINESS STRATEGIES:


1. Examine your key performance indicators.
2. Introduce a new initiative
3. Ask your employees,
4. Conduct market research.
5. Communicate and train your employees on new business strategies
6. Rate your employees on the critical skills needed to adapt to achieving the new business strategies.
7. Evaluate your business strategy adjustment

BOSTON CONSULTING GROUP MATRIX


Back in 1968 a clever chap from Boston Consulting Group, Bruce Henderson, created this chart to help
organizations with the task of analyzing their product line or portfolio.
The matrix assess products on two dimensions. The first dimension looks at the products general level of
growth within its market. The second dimension then measures the product’s market share relative to
the largest competitor in the industry

Products are classified into four distinct groups:


1. Stars - all have rapid growth and dominant market share. This means that star products can be seen as
market leading products.
2. Cash Cows - don’t need the same level of support as before. This is due to less competitive pressures
with a low growth market and they usually enjoy a dominant position that has been generated from
economies of scale. Cash cows are still generating a significant level of income but is not costing the
organization much to maintain. These products can be “milked” to fund Star products.
3. Problem Child - Also sometime referred to as Question Marks, these products prove to be tricky ones
for product managers. These products are in a high growth market but do not seem to have a high share
of the market
4. Dog - have a weak market share in a low growth market. These products are very likely making a loss or
a very low profit at best. These products can be a big drain on management time and resources

Advantages and disadvantages of BCG Matrix


Advantages
1. This planning tool is useful for management to compare products portfolio of four quadrants
2. BCG-Matrix is useful for companies seeking volume and experienced effects
3. This model is easy to understand
4. It is a good starting point for management to decide for future actions
5. If a company is that much capable to use experience curve as advantages, it can either manufacture or
sell new products on low price which leads them to market share leader

Disadvantages
1. Lack of synergic effect between business units, for companies both dogs and cash cows are important
for achieving completive advantage over competitors
2. High market share is only a part of success factor and high market share does not leads to high profits
3. This model overlooks the external factors which are very important
4. Lacking a clear definition of the word “market”
5. Sometimes Dogs and get you more money
6. This matrix overlooks small compatriots who may have noticeable market share.

Planning Grid - This tool, developed by General Electric, maps the external industry vs. the internal firm's
forces using multiple factors to determine grid placement. It is a systematic perception measurement
used to determine the attractiveness of the industry and the business strengths of the firm. The grid can
be used to identify the strategic development of the product and evaluation of market share.

GE nine-box matrix is a strategy tool that offers a systematic approach for the multi business enterprises
to prioritize their investments among the various business units. It is a framework that evaluates business
portfolio and provides further strategic implications.

Two major dimensions – Market Attractiveness and Business Strength.


Market Attractiveness:
vertical axis denotes industry attractiveness, which is a weighted composite rating based on eight
different factors. They are:
1. Market size and growth rate
2. Industry profit margins
3. Intensity of Competition
4. Seasonality
5. Product Life Cycle Changes
6. Economies of scale
7. Technology
8. Social, Environmental, Legal and Human Impacts

horizontal axis: It indicates business strength or in other words competitive position, which is again a
weighted composite rating based on seven factors as listed below:
1. Relative market share
2. Profit margins
3. Ability to compete on price and quality
4. Knowledge of customer and market
5. Competitive strength and weakness
6. Technological capability
7. Caliber of management
PIE chart (circles) denotes the proportional size of the industry the dark segments denote the company’s
respective market share.

Advantages and Disadvantages of GE nine-box Matrix


Advantages
Helps to prioritize the limited resources in order to achieve the best returns.
The performance of products or business units becomes evident.
It’s more sophisticated business portfolio framework than BCG matrix.
Determines the strategic steps the company needs to adopt improve the performance of its business
portfolio.

Disadvantages
Needs a consultant or an expert to determine industry’s attractiveness and business unit strength as
accurately as possible.
It is expensive to conduct.
It doesn’t take into account the harmony that could exist between two or more business units.

Life cycle approaches and tools have been developed, refined, are now more commonplace in the private
and public sector, and are already stimulating and supporting the transition to a green economy.
Life cycle thinking is made operational through Life Cycle Management (LCM).
Life Cycle Management is a management approach that puts the tools and methodologies in the life cycle
thinking basket into practice. It is a product management system that helps enterprises to minimize the
environmental and social burdens associated with their product or product portfolio during its entire life
cycle.
PIMS (Profit Impact of Market Strategy) of the Strategic Planning Institute is a large scale study designed
to measure the relationship between business actions and business results. The project was initiated and
developed at the General Electric Co. from the mid-1960s and expanded upon at the Management
Science Institute at Harvard in the early 1970s; since 1975 The Strategic Planning Institute has continued
the development and application of the PIMS research.
PIMS database is "a collection of statistically documented experiences drawn from thousands of
businesses, designed to help understand what kinds of strategies (e.g., quality, pricing, vertical
integration, innovation, advertising) work best in what kinds of business environments.
Participation in the PIMS study: cost and benefits
PIMS evaluated businesses' market position and suggest possible strategies, based on the data gathered
from participating companies. Businesses wishing to use the service provide detailed information,
including details of their:
• competitors and market
• balance sheet
• assumptions about future sales.

In return, PIMS provides four reports, described by Lancaster, Massingham and Ashford as:
1. A 'Par' report - showing the ROI and cash flows that are 'normal' for this type of business, given its
market, competition, technology, and cost structure.
2. A 'Strategy Analysis' report, which computes the predicted consequences of each of several alternative
strategic actions, judged by information in similar businesses making similar moves, from a similar
starting-point and in a similar business environment.
3. A 'Report on Look-Alikes' (ROLA), which aimed at predicting the best combination of strategies for that
particular company, by analyzing strategically similar business more closely.
4. An 'Optimum Strategy' report, which is aimed at predicting the best combination of strategies for that
particular company, again based on the experiences of other businesses in 'similar' circumstances.

Qualitative Factors are factors about a company that are not purely numbers driven and it is looking in
the intangibles.
1. Business Model - It is how a company makes money. A business model is a company's plan for how it
will generate revenues and make a profit. It explains what products or services the business plans to
manufacture and market, and how it plans to do so, including what expenses it will incur.
2. Competitive Advantage - are conditions that allow a company produce a good or service at a lower
price or in a more desirable fashion for customers.
3. Management - is the most important aspect for investing in a company.
Effects on Present and Future customers
Positive:
Profits, Loyalty, Internal Benefits
Negative:
Loss of current customers, Loss of potential customers, Loss of future customers, Loss of
Reputation, Loss of Employees, Loss of Profit
4. Corporate governance describes the policies in place within an organization denoting the relationships
and responsibilities between management, directors and stakeholders.

Strategic control is a term used to describe the process used by organizations to control the formation
and execution of strategic plans.

4 TYPES OF STRATEGIC CONTROL


1. Premise control allow you to examine whether this assumption still holds true once you actually put
your ideas into action.
2. Special Alert Control is the rigorous and rapid reassessment of an organization's strategy because of
the occurrence of an immediate, unforeseen event.
3. Implementation control is aimed at assessing whether the plans, programmes and policies are actually
guiding the organization towards its predetermined objectives or not.
4. Strategic surveillance aims at a more generalized overreaching control designed to monitor “a broad
range of events inside and outside the company that are likely to threaten the course of firm’s strategy”.

Effective strategic planning communication - The key to developing this understanding at all levels of an
organization
Common Objectives for Your Strategic Plan
Build awareness of the Balanced Scorecard, or strategic plan, at all levels of the organization
Provide education on key Balanced Scorecard concepts to all audiences
Generate the engagement and commitment of key stakeholders in the project
Encourage participation in the process
Generate enthusiasm for the Balanced Scorecard and strategic plan
Ensure that team results are disseminated rapidly and effectively
Key Elements For Your Strategic Plan
Who refers to both the target audience and the communicator.
The why and what in this equation can be understood as the purpose or message.
When should you communicate the message?
Where and how are you supposed to communicate

Structure is how the entire organization operates, not just its organization chart.
functional strategy is the short-term game plan for a key functional area within a company", some others
prefer to regard them "as plans, or tactics, for carrying out the business strategy". It is concerned with
developing and nurturing a distinctive competence to provide a company or business unit with a
competitive advantage.
marketing strategy sets the overall direction and goals for your marketing, and is therefore different from
a marketing plan, which outlines the specific actions you will take to implement your marketing strategy.

Developing a Successful Marketing Strategy


1. Identify your business goals
2. State your marketing goals
3. Research your market
4. Profile your potential customers
5. Profile your competitors
6. Develop strategies to support your marketing goals
7. Use the '7 Ps of marketing'
8. Test your ideas

Production/Operation strategies refers to the methods companies use to reach their objectives. By
developing operational strategies, a company can examine and implement effective and efficient systems
for using resources, personnel and the work process.

Developing a Production/Operation Strategy


Holistic - incorporate all aspects of Operations, and its relationship with the remainder of the
organization
Motivational - it must build high levels of commitment and momentum towards achieving the desired
outcomes
Focused - it must ensure that efforts are focused on progressing those activities with the biggest returns
for effort expended
Measurable - it must permit the identification, measurement, and capture of benefits accruing from
implementation of the operational improvement activities, and
Directive - it should clearly outline the activities, roles, and responsibilities of all involved in the
Operational Improvement effort.
Production/Operation Strategy Development
ADVANCED MANUFACTURING TECHNOLOGY: A revolutionizing operations worldwide and should
continue to have a major impact corporations strive to integrate diverse business activities using
computer-integrated design and manufacturing (CAD/CAM).
MASS PRODUCTION SYSTEM: An excellent method of producing large number of low-cost, standard
goods and services
CONTINUOUS IMPROVEMENT SYSTEM: A system developed by Japanese wherein cross-functional team
is empowered to strive constantly in improving production process.
MASS CUSTOMIZATION: Requires the people, processes, units, and technology reconfigure themselves to
give costumers exactly what they want, when they want it.
MODULAR MANUFACTURING: Preassembled subassemblies are delivered as they are needed to a
company’s line workers, who quickly piece the modules together into a finished product

Organizational leadership is a dual focused management approach that works towards what is best for
individuals and what is best for group as a whole simultaneously. It is also an attitude and a work ethic
that empowers an individual in any role to lead from the top, middle, or bottom of an organization.

Five key components of organizational leadership


1. Worldview - a composite image created from the various lenses through which individuals view the
world
2. Strengths - can be defined as consistent, near perfect performance in an activity.
3. Ethics - a process and a lens by which leaders approach a problem situation.
4. Communication - is a tool for individuals to interface with one another, with groups, and with the rest
of the world.
5. Leadership

3 Major Motivational Strategies:


1. Reward Systems: Incentives can come in 2 forms, Monetary that includes salaries and bonuses and
Non-monetary that includes vacations, travel perks, or vouchers.
2. Moral/Attitude Motivation
3. Social Incentives

Short-term objectives represent the goals an organization sets that are centered on tasks that can be
achieved within the next six months or, at the outset, within one year

Characteristics of Effective Short-Term Objectives


- Clear
- Consistent
- Challenging
- Measurable
- Realistic
The Importance of Short-Term Objectives in a Business Decision
1. Types
2. Verifiable
3. Early Indicators
4. Consideration