DLSU STRATMA course. Frameworks per chapter. Prof. Tito Fred

1. CHAPTER1:STRATEGY,BUSINESSMODELS,AND
COMPETATIVE ADVANTAGE
LO1 – Understand why every company needs a
distinctive strategy to complete successfully,manage
its business operations, and strengthen its prospects
for long – term success
FRAMEWORK:Importance of Strategy
LO2: Learning why it is important fora company to
have a viable business model that outlines the
company’s customer value proposition and its profit
formula
FRAMEWORK:Business Model = CVP + PF
 Charity = CVP + øPF
 Scam = øCVP +PF
LO3 – Develop an awareness of the fivemost
dependable strategic approaches forsetting a
company apart from rivals and winning a sustainable
competitive advantage.
FRAMEWORK:Five (5)Generic Strategies
1. Low – Cost Provider
- cost based advantage
- cost is lower than competitors
2. Broad Differentiation
- differentiate products and service from
rivals through changes in attributes /features
3. Focused Low – Cost Strategy
- niche market focus
cost is lower than competitors
4. Focused Differentiated Strategy
- focused on narrowing buyers and out
competing rivals by offering niche members
customized attributes that meets their taste
and requirements
5. Best Cost Provider
- gives customer more value for the money by
satisfying buyers expectation on key qualities
/ features / performance / service attribute
LO4 – Understand that a company’s strategy tends to
evolveover time because of changing circumstances
and ongoing management efforts to improve the
company’s strategy.
FRAMEWORK:External Environment (Macro
Environment)
 A company’s macro­environment
encompasses all of the relevant factors
making up the broad environmental context
in which a company operates.
 The components of a company’s
macro-environment are the major external
and uncontrollable factors that affect its
operations, decision-making, performance
and strategies.
 The relevance of the macro-environmental
factors can be evaluated using the PESTEL
analysis.
LO5 – Learn the three tests of winning strategy
FRAMEWORK:
 FIT Test
 Sustainability Test
 Profitability Tes
CHAPTER2:CHARTING ACOMPANY’SDIRECTION;
VISION, MISSION,OBJECTIVES,AND STRATEGY
LO1- Grasp why it is criticalfor company managers to
have a clear strategic vision of where a company
needs to head and why.
FRAMEWORK:Mission and Vision
Mission: “ where are we going”
- convey company purpose in a language
specific enough that it gives the company its
own identity
Vision: “whoare we, what wedo, and where
are we”
- an organizations performance targets – the
results management wants to achieve
LO2 – Understand the importance of setting both
strategic and financial objectives
FRAMEWORK:Goals and Objectives
Goals – Long term objectives
Objectives – short term performance target. It is
directional and graphic
Performance Targets to Objectives
 When P.T. are SMART
 Specific
 Measurable
 Attainable
 Result Oriented
 Time Bound
Types of Objectives
1. Financial – money
2. Strategic – operations
3. Social – CSR
4. Environment – stewardship
Def. Stewardship – preserve environment
for future generation
LO3 – Understand why the strategic initiatives taken
at various organizational levels must be tightly
coordinated to achieve companywideperformance
targets.
FRAMEWORK:

2. LO4 – Learn what a company must do to achieve
operating excellence and to execute its strategy
proficiency
FRAMEWORK:Implementing Strategy
CHAPTER3:
LO1 – Identify factorsin a copmany’s broad macro-
environment that may have strategic significance
FRAMEWORK:PESTELD
Macro Environment PESTELD
1. Political
2. Economic
3. Sociocultural
4. Technology
5. Environmental
6. Legal / Regulatory
7. Demographic
LO2 – Recognize the factorsthat cause competition in
an industry to be fierce, more or less, normal or
relatively weak.
FRAMEWORK:Five (5)Competitive Forces
Industry Environment (5 Forces of Competition)
1. Buyer
2. Substitute Products
3. Supplier
4. New Entrants
5. Rivalry among Competing Seller
(strongest force)
Three (3) Pressures
1. Buying Power
a. Buyers
b. Suppliers
2. Threats
a. Substitution
b. New Entrants
3. Rivalry
a. Rivals
Three (3) Intensities
1. Weak
2. Mild
3. Strong
LO3 – Become adept at mapping the market positions
of key groups of industry rivals
FRAMEWORK:Strategic Mapping
LO4 – Learn how to determine whether an industry’s
outlookpresents a company with sufficiently active
opportunities for growthand profitability
FRAMEWORK:Key Success Forces
CHAPTER4:
LO1- Learn how to assess how well a company’s
strategy is working.
FRAMEWORK:Financial Analysis
LO2 – Understand why a company’s resources and
capabilities are central to its strategic approach and
how to evaluate their potential for giving the
company a competitive edge overrivals
FRAMEWORK:Tangible and Intangible
Resources
A. Tangible Resources
 Physical Resources
 Financial Resources
 Technological Assets
 Organizational Resources
B. Intangible Resources
 Human Assets and Intellectual Capital
 Brand Image and reputational assets
 Relationships – alliances or joint
ventures
 Company Culture – norms of behavior,
ingrained beliefs, and business
principles
LO3 – Grasp how a company’s valye chain activities
can affectthe company’s coststructure and customer
value proposition
FRAMEWORK:Value Chain
- a series of activities focused on strategy but not
cost based.
 Primary Activities:
a. Supply Chain Management
- activities that involves the purchasing of
materials from supplies
b. Operations
- activities that involvethe conversion of
inputs to outputs.
c. Distribution
d. Sales and Marketing
- activities that brings output (products)
to sources such as outlets.
e. Service
- activities that support sales and
marketing
f. Profit Margin
- Profitability of Industry
measured based on the balance between
demand and supply
- Profitability of Company
measured based on the balance between
sale and cost of goods sold
SCM O D S&M S PM

3. LO4 – Learn how to evaluate a company’s
competitive strength relative to key rivals.
FRAMEWORK:
LO5 – Understand how a comprehensive evaluation
of a company’s external and internal situation can
assist in managers in making criticaldecisions about
their next strategic moves
FRAMEWORK:
CHAPTER5:THE FIVE GENERIC COMPETATIVE
STRATEGIES
LO1 – Understand what distinguishes each of the
generic strategies and why some of these strategies
workbetter in certain kinds of industries and
competitive conditions than others.
FRAMEWORK:
LO2 – Learn the major avenues forachieving a
competitive advantage based on lowercosts
FRAMEWORK:
LO3 – Gain a command of the major avenues for
doing a competitive advantage based on
differentiating a company’s product or service
offering fromthe offerings of rivals.
FRAMEWORK:
LO4 – Recognize the required condition fordelivering
superior values to customers through the use of
hybrid of low cost provider and differentiation
strategy.
FRAMEWORK:
CHAPTER6:STRENGTHENING ACOMPANY’S
COMPETATIVE POSITION:STRATEGIC MOVES,
TIMING,AND SCOPE OF OPERATIONS
LO1 – Learn whether and when to pursue an
offensiveor defensive strategy moves to improve
company’s market position
FRAMEWORK:
LO2- Recognize when being a first mover or fast
followerof a late mover can lead to competitive
advantage
FRAMEWORK:
LO3 – Be aware of the strategic benefits and risks of
expanding a company’s horizontal scope through
merge and acquisitions.
FRAMEWORK:Merge and Acquisitions
1. Merge – two or more companies merge into a
single company. Often taking a new name.
2. Acquisition – absorption of one companies
operation to another.
LO4 – Learn the advantages and disadvantages of
extending a company’s scope of operations via
vertical integration.
FRAMEWORK:Vertical Integration Strategy
 perform value chain activities along more
than one stage of an industries overall value
chain.
 appeals only if it significantly strengthens a
firm’s competitive position and/or boosts its
profitability
 become a new entrant
a. Backward Integration
- involves performing industry value
chain activities closer to suppliers and
other enterprise involved in earlier stage.
b. Forward Integration
- involves performing industry value
chain activities closer to buyers
c. Vertical Integration
- extends the firm’s competitive and
operating scope within the same industry.
LO5 – Understand the conditions that favorfarming
out certain value chain activities to outside parties.
FRAMEWORK:
LO6 – Gain an understanding of how strategic
alliances and collaborative partnerships can bolster a
companies collectionof resources and capabilities.
FRAMEWORK:
CHAPTER7:STRATEGIESFORCOMPETING IN
INTERNATIONALMARKETS
LO1 – Develop an understanding of the primary
reasons companies choose to compete in
international markets
FRAMEWORK:Why Companies Expand into
International Markets
1. access to new market
2. access to lower cost
3. access resources and capabilities
4. access to lower cost of funds
5. to spread risk across a wider market base
LO2 – Learn why and how differing market
conditions across countries influence a company’s
strategy choicesin international markets
FRAMEWORK:Factors that Shape Strategy
Choices in International Markets
1. The degree to which there are important
country – differences in demographics,
cultural, and market conditions

4. 2. Whether opportunities exist to gain a location
based advantage based on wage rates,
worker productivity, inflation rates, energy
cost, tax rates, and other factors that impact
cost structure.
3. The risks of adverse shifts in currency
exchange rates
4. The extend to which government policies
affect the local business climate.
LO3 – Gain familiarity with the fivegeneral modes of
entry into foreign markets
FRAMEWORK:
LO4 – Learn the three main options fortailoring a
company’s international strategy to cross-country
differences in market conditions and buyer
preferences.
FRAMEWORK:International Strategy: Three
Principal Options
 It is a strategy for competing in two or more
countries simultaneously
1. Multidomestic Strategy: Think Local, Act
Local.
2. Global Strategy: Think Global, Act Global
- are globally standardized in terms of
customer preference, buyer purchasing
habits, distribution channels, or
marketing methods.
3. Transnational Strategy: Think Global, Act
Local.
- employs essentially the same strategic
theme in all country markets, while
allowing some country to country
customization to fit local market
conditions.
LO5 – Understand how multinational companies are
able to use international operations to improve
overall competitiveness
FRAMEWORK:Using International
Operations to ImproveOverall
Competitiveness
1. Can use location to lower cost or help achieve
greater product differentiation
2. Can use cross-border coordination in ways
that a domestic-only competitor cannot.
LO6 – Gain an understanding of the unique
characteristics of competing in developing country
markets.
FRAMEWORK:Strategy Options for
Competing in Developing-Country Markets.
 Prepare to compete on the basis of low
price
 Modify aspects of the company’s business
model or strategy to accommodate local
circumstances (but not so much that the
company loses the advantage of global
scale and global branding
 Try to change the local market to better
match the way the company does
business elsewhere
 Stay away from those emerging markets
where it is impractical or uneconomical to
modify the company’s business model to
accommodate local circumstances.