CHAPTER 1 MODDALITIES OR APPROACHES IN STRATEGIC

DECISIONS
EVOLUTION OF BUSINESS POLICY AND STRATEGY
1. ENTREPRENEURIAL MODE
BUSINESS POLICIES – set of rules that guides the
2. ADAPTIVE MODE
decisions and actions
3. PLANNING MODE
STRATEGY – top management’s plan to attain 4. LOGICAL MODE

3 VANTAGE POINTS OF STRATEGY BOARD OF DIRECTORS (BOD)

1. Strategy formulation - Involved in policy and strategy development

2. Strategy Implementation process
3. Strategic Control - Part of top management
- Advisorhip and mentoring
CATEGORIES OF STRATEGY
SPECIFIC ROLES OF BOD
1. Intended Strategy – original strategy
2. Realized Strategy – actual or eventual 1. MONITOR
2. EVALUATE AND INFLUENCE
KEY QUESTIONS of Organizarional Strategies 3. INITIATE AND DETERMINE
1. Where is the organization going? CHAPTER 2
2. What options are open to the organization?
3. What is the best way forward for the MOTIVATORS AND DRIVERS OF STRATEGIC
organization? MANAGEMENT
4. How can this be done
THE DYNAMIC NATURE OF THE MARKET AND THE
STRATEGIC TYPES – category of firms BUSINESS

1. DEFENDERS 1. The ever changing market conditions

2. PROSPECTORS 2. The changing taste of the market
3. ANALYZERS 3. Sociopolitical changes
4. REACTORS 4. The impact of global developments vis-a-vis to
local markets
TACTICS – more operational 5. The changes in the conduct of businesses
BASES OF POLICIES AND STRATEGIES TRIGGERING EVENTS – make the firm competitive or to
1. LEGAL MANDATE achieve certain objectives
2. VISION AND MISSION STATEMENT INTERNAL TRIGGERING EVENTS
3. SPECIFIC OBJECTIVES
4. PROGRAMS AND POLICIES 1. NEW CEO / PRESIDENT
2. PERFORMANCE GAP
APPROACHES TO IDENTIFYING POLICIES AND 3. CHANGE IN OWNERSHIP
STRATEGIES 4. MANAGEMENT TEAM SHAKE
1. POLICY/STRATEGY PROFILE 5. CORPORATE REORGANIZATION
2. GAP ANALYSIS 6. NEW PRODUCTS/SERVICES
3. COMPETITIVE STRATGEY ANALYSIS EXTERNAL TRIGGERING EVENTS
4 APPROACHES (outcomes and process) 1. Overall ecenomic environment
1. CLASSICAL APPROACH 2. Government
2. EVOLUTIONARY 3. Sociopolitical environment
3. PROCESSUAL 4. Legal environment
4. SYSTEMIC 5. Technological envi
6. Global/regional envi
DEVELOPING POLICY AND STRATEGY 7. Market factors
1. TOP-BOTTOM APPROACH 8. Religious envi
2. BOTTOM-TOP APPROACH 9. Calamities and natural phenomena
3. TOP-BOTTOM-TOP THEORY OF THE FIRM – types of market structures
STRATEGIC DECISIONS TYPES OF MARKET STRUCTURES
- Made contrary to existing policies, norms and 1. MONOPOLY
practices 2. OLIGOPOLY
- Lot of external factors and deal with long-run 3. MONOPOLISTIC COMPETITION
future 4. PERFECT COMPETITION
 RARE
 CONSEQUENTIAL TECHNOLOGY – agent of change
 DIRECTIVE BRICK-AND-MORTAR ERA – 8 hour day conduct of
business
CLICK-AND-MORTAR ERA – transcends beyond CORPORATE LEVEL STRATEGIES
traditional business hours
CATEGORIES OF BUSINESS ORGANIZATIONS
FOUR STAGES PRODUCT/SERVICE LIFE CYCLE
1. Corporation
1. Introduction 2. Sole or single proprietorship
2. Growth 3. Partnership
3. Maturity 4. Cooperative
4. Decline
GROUP OF COMPANIES or CONGLOMERATE -
EXPERIENCE CURVE Independently-organized business organizations

- Accumulates body of knowledge  MOTHER / PARENT COMPANY

- Learning curve  SUBSIDIARIES / AFFILIATES
- Based on constant decline  CORPORATE STRATEGY

LEARNING CURVE SLOPE – percentage of learning HIGHLY DIVERSIFIED BUSINESS ORGANIZATION –

registered in approriate agencies
ECONOMIES OF SCALE – decline in the per unit cost of
production CORPORATE LEVEL STRATEGY – broad or corporate-
wide strategy
BEST OPERATING LEVEL – there is an optimum level
3 MAIN CATEGORIES
THEORIES INFLUENCING STRATEGIC MANAGEMENT
1. STABILITY
1. Evolution and revolution theories
2. GROWTH
2. Industrial organization theory
3. RETRENCHMENT
3. Chamberlin’s economic theories
4. Contingency theory 4 E’s to ADDRESSING CORPORATE STRATEGY
5. Resource-based theory
1. EXTEND – going beyond
6. Institution theory
2. EXPAND – adding products/services
7. Organization learning theory
3. EXIT – sacrifing and dropping
8. Transaction cost economics
4. ENHANCE – adding functionality / improving
E-COMMERCE – broader context; inter-business
STRATEGIC CHOICES
organization
1. Business Closure
E-BUSINESS – more specific or focused use of
2. Business Disposal
information
3. Business Acquisition
CHAPTER 3 4. Business Reorganization
5. Business Start-Up
REVISED MODEL
6. The Impact Of Doing Nothing Different
1. Rivalry among existing firms
BASIC MODEL FOR INTEGRATION AND
2. Potential entrants
DIVERSIFICATION OPTIONS
3. Buyers
4. Substitutes 1. VERTICAL INTEGRATION OPTION
5. Suppliers
Components Of Vertical Integration
6. Other stakeholders
1. Full integration
DETERMINANTS OF RIVALRY
2. Taper integration
1. Level of industry’s growth 3. Quasi integration
2. Fixed (storage) cost/value added 4. Long-term contract
3. Intermittent overcapacityproduct differences
2. FORWARD VERTICAL INTEGRATION
4. Brand identity
5. Switching costs 3. BACKWARD VERTICAL INTEGRATION
6. Concentration and balance
4. HORIZONTAL DIVERSIFICATION
DETERMINANTS OF SUPPLIER POWER
5. CONGLOMERATE
1. Differences in inputs
2. Switching costs 6. CONCENTRIC DIVERSIFICATION
3. Substitute inputs 7. STRATEGIC FIT / SYNERGY

3 CATEGORIES / AREAS
SWITCHING COST – amount the buyers can save
o PRODUCT FIT
BARGAINING POWER OF BUYERS – to seek discounts or o OPERATING FIT
better deals o MANAGEMENT FIT
CHAPTER 4
DIRECTIONS OF CORP LEVEL STRATEGIES / 3 GRAND 3. Customers
STRATEGIES 4. Competitive advantage
5. Stakeholders
GROWTH STRATEGY – expands the activities
6. Environments
OPTIONS/ STRATEGIES 7. Resource & Capabilities
8. Markets
1. MERGER – two or more corps in which 9. Process
stock is exchanged or swapped 10. Parenting
2. ACQUISITION – purchase of a company 11. Structure
3. STRATEGIC ALLIANCE – partnership of 12. Synergy & fit
corporations
The Business Level Strategy- more focused and meant
STABILITY STRATEGIES – make no change for the single business concern or a small business unit
FORMS forming part of the family of business concerns.

1. Pause/Proceed With Caution Hierarchy of Strategies

2. No Change Strategy A. Corporate Strategy
3. Profit Strategy B. Business level strategy
RETRENCHMENT STRATEGIES – reduce level of activities C. Functional Level Strategy

FORMS Levels of Strategy-making in a Diversified Company

1. Turnaround Strategy A. Corporate Strategy

2 Ways B. Business Strategies
a. Contraction C. Functional Strategies
b. Consolidation D. Operating Strategies
2. Sell-Out/ Divestment Strategy Example of functional objectives
3. Bankruptcy Strategy
4. Liquidation Strategy a. Human resource strategy
b. Corporate security
INTERNATIONAL AND OTHER ENTRY OPTIONS
Business Level Strategy Options
1. Exporting
2. Licensing 1. Product development
3. Franchising 2. Market development
4. Joint Venture 3. Market penetration
5. Acquisition
6. Greenfield Development
7. Production Sharing
8. Turnkey Operations
9. Management Contract
10. Build-Operate-Transfer Or Bot Concept
11. Outsourcing

STRATEGIC ALLIANCE – achieving mutual advantage

CHAPTER 5

The Strategic Business Unit- a unit that produces

products for which there is identifiable group of
customers.

Understanding the Business and its Environment

1. Direct Competitors
2. Management/Employees
3. Stakeholder groups
4. Business and ethical standards
5. Stockholders/owners
6. Other factors and Consideration
7. Indirect competitors
8. Government
9. Global/Regional forces
10. Religious, cultural and other traditions

Understanding the Business and the Organization

1. Performance
2. Products