CHAPTER 5: CORPORATE market growth in relation to the marketing

STRATEGIES leader.
•Market share is the relative sales percentage
INTEGRATIVE GROWTH STRATEGIES of a company in relation to the total sales
percentage of the market in consideration.
• essentially external growth strategies
• involve investing the resources of the •Market growth refers to an increase in
organization in another company or business demand over time. It may be high or low.
to achieve growth goals
• essentially acquisition strategies • The BCG Model illustrates four broad
categories in relation to market share (low,
TYPES OF INTEGRATIVE GROWTH high) and market growth (low, high).
STRATEGIES:
- A high market share in a high market growth
 Horizontal integration is a strategy where defines stars. They are the market leaders and
the organization acquires another if the market continues to grow, they are likely
competing business. to become cash cows.
 Vertical integration is the process of
consolidating into an organization other - A high market share in a low market growth
companies involved in all aspects of a defines cash cows. Since they are the market
product's or service's process from raw leaders in a mature market growth,
materials to distribution. establishing a competitive advantage can
generate a lot of cash flow and bring about
Vertical integration can either be backward or high profit margins.
forward:
- A low market share in a high market growth
- Backward integration is when the defines question marks. These essentially new
organization buys one of its suppliers. An products need promotional strategies.
organization may carry out backward
integration to better control its supply chain - A low market share in a low market growth
and ensure a more reliable or cost-effective defines dogs. They should essentially be
supply of input; eliminate inefficiencies; minimized, if not avoided. They can be
secure quality outputs or according to set expensive to the company.
conformance standards; help increase the
profitability of an organization; and thus, THE GENERAL ELECTRIC MODEL
create competitive advantage.
• McKinsey conceptualized the General
-Forward integration is when the organization Electric (GE) Model for the company.
buys distribution companies that are part of its
distribution chain. • This model is an improvement of the BCG
Model, in that it is used to assess the strength
THE BOSTON CONSULTING GROUP of a strategic business unit (SBU) of an
organization.
• The Boston Consulting Group Growth/Share
Paradigm started to make its impact on • It takes into consideration two parameters to
corporate strategy in the early 1970's. determine the overall strength of an SBU:
market attractiveness and business strength.
• Bruce Henderson of the Boston Consultant
Group developed this model, called the BCG GLOBAL STRATEGIES
model.
• Organizations pursue global strategies for
• The BCG model classifies the products or external business expansion. Global strategies
business units of an organization in terms of cover three main areas: international,
two parameters, namely, market share and multinational, and global.
- Companies who might want to sell their
excess products outside their home markets
pursue international strategies. ORGANIZATIONAL STRUCTURE

- A company can engage in multinational • The organizational structure of an

strategies when it is involved in a number of organization/company is subject to many
markets outside the home country. The factors like technological breakthroughs by
challenge in undertaking multinational competitors, changes in customer lifestyles,
strategies is to sell competitive and distinct and those that are environmental in nature.
products and services that are suited to the
customer demands of different countries. • Management, employees, suppliers,
customers, government, and society are
- In global strategies, the company treats or examples of internal factors that significantly
considers the world as a whole, one market affect organizations one way or another.
and one source of supply with slight local CHAPTER 6: ORGANIZATIONAL
variations. SYSTEM

Benefits of Global Strategies • Types of organizational structures range

from functional to territorial, or from product
• In pursuing global strategies: to market- centered to matrix.

- companies can enjoy larger sales and Functional Organizational Structure

earnings;
 General Manager
- they can benefit from the global branding of
their products and services, not to mention, the  Human Resources
earnings from economies of scale;  Marketing
 Production/ Operations
- higher production volume with efficiency  Finance
increases savings and creates greater
advantage for companies; and • Organizations adopt a specific structural
arrangement for a reason. Management needs
- sourcing of labor can be studied to optimize to bring together the human, technical,
labor costs. marketing, and financial resources of the
organization.
Resources Required • Particularly, human resources are brought
together in units, teams, or projects so that job
 Substantial capitalization specialization can be optimized while special
skills can be best managed.
 Managerial and strategic leadership. • There is a need for the marketing department
to interact and coordinate with personnel in
 Expertise and capabilities on the part of other major functional areas.
management and employees • The production/operations department
follows the requirements set by the marketing
 Quality and differentiated products and department.
services • The financial department efficiently allocates
funds to achieve the organization's set
objectives. All these departments need to act
together.
Territorial Organizational Structure 3. Eliminate product managers of minor
brands and consolidating them with other
 General Manager products.

 Luzon 4. Establish divisions around the major

 Visayas company products and use functional
 Mindanao structural arrangements within divisions.
 NCR
Market-Centered Organizational Structure
 As an organization begins to serve its
customers who are spread over a growing  It describes the wide range of structural
geographical area, a territorial structure forms that center on a group of customer
becomes a viable design. needs rather than a region, product line,
 In this system, the target market is or function. It is decentralized by market;
divided into geographical units according a profit center.
to certain criteria.  The following situations are suited for
 Territorial structural arrangements have the market- centered structure:
several advantages:
- When a competitor threatens market
1. Local markets can be cultivated by leadership, market centering can restore a
personnel familiar with the history of competitive advantage.
customers in the area and their culture.
- When a new-product is introduced, a market-
2. The company and its sales force can centered approach can stimulate new ideas.
respond quickly to changes in the competitive
environment. - When a product manufacturer wants to
diversity into high profit margin services
3. There is closer contact between managers
familiar with the territory and their - When marketing related products or services
subordinates. requires market intelligence

4. Because management is familiar with local - When a manufacturer shifts to feature the
conditions, it can make quicker strategic financial benefits of customer profit
decisions. improvement, market centering makes it easier
to gather information on how customers make
Product Organizational Structure their profits.

• Traditionally, organizational divisions follow - When a marketer wants to attract more

a product structure. In some companies, the entrepreneurial managers, market centering
sub- businesses are assigned to product group offers managers wide responsibilities and a
managers, each of whom are given key variety of supervisory duties.
operating and staff functions.
• There are four courses of action that an SBU Organizational Structure
organization can implement to improve or
replace any product management structure:  CEO

1. Conduct training programs in forecasting,  Small Business Unit A

interpersonal skills, planning, motivation, and  Small Business Unit B
control.  Small Business Unit C
 Smail Business Unit D
2. Switch from a marketing manager to a
marketing team that implements activities to  This division structure raises the issue of
effectively market the product. whether any marketing functions should
be performed at the corporate staff level.
 The decision whether to maintain some • The Market. Characteristics of the market
corporate level marketing staff services like geographic dispersion, income class, and
depends primarily on the size of the buyer behavior need to be considered in
division. organizing the marketing unit.

 If a division is large enough to afford its • Competition. A firm may find it necessary to
own marketing structure, it will usually organize its marketing efforts following the
have one. requirements of competition.

 The figure shows an SBU structural • Philosophy of Management. A final factor

arrangement. A group vice-president that affects the structure of an organization is
who is directly responsible to the chief the management philosophy prevailing in the
executive officer of the company heads company.
each SBU.
ORGANIZATIONAL COMPONENTS
 This type of structure places emphasis on
planning and analysis of company These are management, employees, facilities
strategies. and equipment, financial resources, and
organizational culture.
Matrix Organizational Structure
 Management refers to the administrative
• This division structure raises the issue of supervision of an organization. It
whether any marketing functions should be includes leadership, the organization's
performed at the corporate staff level. vision-mission, business definition,
• A matrix structure cuts across departmental goals, objectives, and strategies adopted
boundaries to get a job done. to attain organizational success.
• A team working on a job is comprised of a  Leadership is foremost in the
group of specialists, so the ability to work management of any business. A good
together is very important. leader, regardless of whether he owns or
• The figure illustrates how teamwork among works for the organization, is someone
production, marketing, and finance specialists who inspires his employees and stretches
is required to complete projects. them to their optimum productivity. He is
• The key feature is that both the functional the prime mover and is expected to lead
and product lines of authority overlap where his employees in the attainment of the
both product and functional managers share organization's set goals.
managerial authority over the people in each
cell Task of a Leader

Choice of an Organizational Structure - planning where he sets the objectives to be

attained and the means to achieve them
• Size of the Firm. A firm producing and
selling in a restricted territory may find the - organizing where he identifies, divides,
functional organization the best form for their groups and coordinates various activities to
purposes; whereas, a larger firm that produces achieve set goals
several products and sells to a wider market
may opt for a regional form of organization to - staffing where he recruits, selects, hires, and
maximize selling efforts. develops human resources

• The Products. Consumer and industrial -directing where he leads and communicates
goods may require different types of services with his employees to attain objectives
from the producer. Some products require
extensive after- sale servicing to customers -controlling where he monitors processes and
and the marketing organizational structure can functions and institutes corrective actions
take care of this task. when needed
Roles of a Leader Employees

- a strategist, a facilitator, and an administrator Employees constitute a significant part of the

organizational milieu. They are the very
-a leader who inspires and motivates his people who work, support, and earn profits for
employees the organization.

-an information man who understands critical  Employee Satisfaction. This is an

facts, issues, problems, and other concerns emotional state where the employee
about the industry and the business experiences a feeling of content in the
environments workplace. It is generally brought about
by acceptable salary, fringe benefits, and
-a conceptualizer who concretizes the vision, incentives, positive interpersonal
mission, and plans relationships between and among
management and employees, and
-a liaison officer who serves as conduit for the acceptable conditions in the workplace
employees  Employee involvement. Satisfied with
his work conditions, the employee
-a mediator who settles concerns, issues, and becomes more participative in company
other problems between labor and activities and essentially aims to
management contribute to the growth of the company.
 Employee commitment. In this degree of
-a facilitator who negotiates the allocation of employee relationship, the employee
resources cultivates within himself an attitude and
a "sense of owning."
-a delegator who assigns responsibilities,
empowers employees, and monitors them Facilities and Equipment
periodically and efficiently
Facilities include management of buildings
-a problem-solver who tackles organizational and site maintenance, management of
concerns and provides adequate solutions machinery and facilities, and application of
technology.
-a decision-maker who makes appropriate
decisions, both qualitative and quantitative,  Management of buildings or location
and as needed by the organization sites need to be appropriate for the type
of business. Physical structures have to
Skills of a Leader be maintained properly, secured for
safety, and optimized when it comes to
- technical skills or being competent in one's layouts.
respective field  Application of technology where
information technology digitally and
- human relations skills or being adept in efficiently integrates financial, inventory,
dealing with personal and interpersonal purchasing, accounting. marketing, and
employee relationships other aspects of an organization.
 Management of machinery means
- other skills that are required to attain making sure that the right types of
organizational SUCCESS. equipment or machinery are in place,
including the right quantities as needed
by the organization. This is another
important aspect of facility management.
 Management of facilities means that
washrooms and canteens need to be in
good and healthy working conditions as
these amenities are important to the
workforce.
Financial Resources CHAPTER 7: STRATEGIC ASSET
MANAGEMENT
• The financial resources of the organization
determine the direction the organization will International Property Assets
take, and affect its capability to realize its set - It refer to assets that result from the activities
business goals and objectives which include: of the mind
- These properties may be products of
- spending on other promotional strategies; purposive research like outcomes of a person’s
ingenuity, brilliance, and creativity, or may
- upgrading or purchasing new facilities and just be discovered accidentally, which include:
equipment;  Trademarks including all service
marks, trade names, designs, logos,
- experimenting and developing new products; seals, and symbols that are uniquely
developed by an individual, a group
- hiring additional manpower, increasing of individuals, or an organization.
salaries and wages, and training employees;  Original literary, music, and art
and compositions that are unique and
distinct.
- most significantly, ensuring continued  Trade secrets referring to all types
existence of the organization. of information technical or
otherwise, like organizational
Organizational Policies philosophy, programs, strategies,
processes, financial data,
• the lifeblood of an organization transaction data, and lists of
customers and suppliers.
• put organizational structure and system in  Software, organized information in
place the form of operating systems,
utilities, programs, and applications
• ensure order, hierarchy of authority, clear that enable computers to work.
delineation of functions, efficiency, They are commonly divided into
productivity, and good interpersonal two main classifications: system
relationships software that control the basic
functions of a computer and
• make possible the smooth actualization of application software that handle
operations and functions and facilitate the common and specific tasks like
attainment of set goals and objectives, whether word processing and others.
measurable or otherwise Software also include all
programmed manuals, operational
instructions, methodologies, and
techniques.

Organizational Monopoly
When an organization possesses intellectual
property assets, the entity is said to have
created a competitive edge called
organizational monopoly. By virtue of this so-
called monopoly of ownership -
 The organization solely enjoys the
opportunity to use this intellectual
property to optimize its worth and
enjoy the benefits akin to it.
 This allows organizations to enjoy
low-cost leadership and increase its
competitive strength
  It safeguards corporate assets by  competency assets like skills in
providing a legal mechanism for communication, expertise in
brand protection, protection of trade information technology, practical
secrets by non-disclosure and vocational qualifications, and
agreements, and provision for other allied abilities that can create
patents and copyrights. a competitive advantage in the
individual and the organization
Human Resource Assets
- Are strengths of organizations that consist of HUMAN RESOURCE LEVERAGE
collective “expertise”, personal traits, creative
and problem-solving capabilities, managerial, - Possession of human resource assets creates
entrepreneurial, competency asset skills, and both leverage and a competitive edge. An
organizational human-centered assets. organization greatly benefits from ownership
- More specifically, collective ‘expertise’ in an of these assets.
organization can result from any of the
following: - A fusion and symbiotic interplay of
impressive educational attainment, unique and
 Impressive educational attainment cutting-edge professional competence,
 Unique and cutting edge relevant and "intelligent" environmental
professional competence knowledge, creative and highly differentiated
 Relevant and “intelligent” work-related knowledge, and an inclusive and
environmental knowledge objective historical knowledge will no doubt
 Adept but creative and highly put an organization in the forefront.
differentiated work-related
knowledge - Good personal qualities can create a
 An inclusive, complete, but convergent impact on the organization. Traits
objective historical knowledge like transformational leadership, ingenuity,
first- rate problem-solving capabilities,
- Personal traits assets include these qualities: sustained energy, and attributes like
adaptability, proactivity, initiative, industry,
 Transformational leadership and integrity can impact organizational
 Ingenuity to differentiate existing temperament and nurture a climate of
ideas, products or services, and enthusiasm and drive.
conceptualize new ones
 First-rate problem-solving - Managerial, entrepreneurial, and competency
capabilities asset skills shore up effectiveness and
 A personality that is self-motivated organizational success, thus creating
and vibrant comparative advantage in relation to other
 Sustained energy organizations.
 Other essential attributes like
adaptability, proactivity. initiative, - Organizational human-centered assets like
industry, and integrity the presence of employees with "high"
emotional quotients, synergy, and employee
- Managerial, entrepreneurial, and competency involvement open more windows to
asset skills include: organizational opportunity, realization, and
achievement.

 planning, organizing, delegating,

staffing, and monitoring skills that
do not simply emphasize efficiency
but rather effectiveness
 cutting-edge business expertise,
critical and reliable business
intelligence, and a "futuring"
business outlook of the environment
MARKET ASSETS MARKET DOMINANCE

- Market assets are results of market-related - The competitive edge or dominance brought
intangibles such as brands, company names, about by market assets includes:
customer loyalty, repeat business, distribution
channels, contracts, and agreements.  An effective but less expensive
medium for product and service
- Brands are considered as effective means to identification. Aside from denoting
attain market supremacy. Marketing experts ownership. branding creates
believe that if a product or service is not a popularity and product awareness.
recognized brand, then it is not a commodity Its inherent advertising advantage
after all. Many organizations do carry brand effectively promotes the
names but they do not necessarily create organization's products and services
market dominance, Brand names that promote at minimum costs or no costs at all.
substantial sales are considered market assets.  A company name that is well-
known, recognized, established, and
- Some company names are considered market reputable significantly increases the
assets. Their names ring a bell. They are financial worth of an organization.
popular. They have gainfully created an Its value becomes more than its
impression to the consumers. They need not physical assets, ranging from 50 to
advertise. Their "names" simply "SELL." more than 100%. Some call it
Many of these organizations have withstood "goodwill." This is monetarily
the tests of time. valuated when deals like sales,
mergers, and joint ventures are
- Organizational alliances and linkages need to closed.
be strategic and collaborative. They should  Repeat business is a by-product of
look into the best practices of each of their customer loyalty. Suppliers who
organizational partners, benchmark on them, have nurtured a degree of affinity
and be even better, if possible. and intimacy with their customers
create a unique form of market
- The market benefits derived from customer advantage. There is an assurance of
loyalty are many. Customer loyalty helps continuing customer loyalty and
organizations attain a bigger market share. It is mutually profitable collaboration.
a result of the intimate relationship between  Increased product and service sales
the customer and the supplier and is result from efficient and well-
characterized by sustained concern and organized modes of bringing goods
support. Support may be in the form of and services to the public. They
financial, technical, marketing, and minimize scheduling and
managerial assistance. transportation costs on the one
hand, and optimize market sales on
- What is important is the presence of efficient the other hand. In both cases, the
distribution channels that are structured, sum of the market asset benefits is
systematized, and comprehensive. This heightened.
enables organizations to extend beyond their
existing reach.

- Organizational alliances and linkages need to

be strategic and collaborative. They should
look into the best practices of each of their
organizational partners, benchmark on them,
and be even better, if possible.
INFRASTRUCTURE ASSETS COMPARATIVE ADVANTAGE

- Infrastructure assets include positive - Possession of infrastructure assets brings

organizational features like structure, about a comparative advantage to
management philosophy, organizational organizations.
culture, high involvement practices, quality - A streamlined organizational structure makes
standards, and technology. communication between management and
- A lean organizational structure is considered employees easier because it eliminates
an infrastructure asset when a flat framework bureaucracy. As a result, job tasks and
is able to beneficially lessen bureaucracy, projects are completed faster.
streamline job tasks, and simplify mode of - Organizational cultures aptly create
administration. infrastructure advantage.
Dynamic organizational cultures are - With high involvement work practices,
characterized by the following: managerial and functional processes that are
guided by quality management systems, the
 personal and organizational values organization inevitably possesses intellectual
that translate into unswerving capital.
beliefs and positive attitudes: - As the principal catalyst of change,
 interests and expectations of information technology has brought about
members that are linked to radical transformations in the global skyline.
organizational goals while pursuing Its impact and influence are greatly felt in
personal objectives: every facet of life.
 emotionally balanced intra-
relationship of individuals that are ASSET MANAGEMENT STRATEGIES
characterized by self-confidence;
and - Considered as pillars of effective competitive
 organizational philosophies that are asset management, three distinct but
zealously embodied, management interrelated approaches are competency
styles that are genuinely learning, strategic enhancement, and
participative and highly competitive innovation.
transformational, and ethical
practices that are observed to the Competency Learning: "Laying the
highest standards. Groundwork"

- Competency is a necessary tool for the

- Managerial and functional work practices actualization of organizational plans and the
typified by high involvement reinforce implementation of strategies.
competitiveness and are further enhanced - It puts emphasis on evaluation and
when the organization faithfully adopts quality accountability of performance.
standards. They are likewise regarded as - It is essential in the attainment of optimum
infrastructure assets. productivity.
- Technology, being the application of
knowledge, is broad in scope and perspective. Strategic Enhancement: "Widening the
Its applications are in the fields of agriculture, Horizon"
business, science, and education, among
others. It is an infrastructure asset when its - Another facet of successful intellectual
impact produces phenomenal outcomes. capital management is strategic enhancement.
- Given a dynamic environment where product
cycles are shorter and where the need to be
efficient and cost-effective has never been that
critical, organizations of today have no other
alternative but to be uniquely knowledgeable
to survive and compete.
STRATEGIES FOR STRATEGIC Innovation Scenarios
ENHANCEMENT
1. Differentiating existing products and
1. Maximize the reach of the organization's services
infrastructure technology. 2. Reinventing products and services
2. Corporate entities need to appreciate the 3. Continuously experimenting
business value of knowledge, information and 4. Applying recent and new technologies in
communication technology. and manage information or communication that will
infrastructure capabilities. significantly change organizational structures
3. Continuously conduct formal and informal and systems for optimality
types of training. 5. Changing business models
4. Systematize a process of enriching 'job 6. Creating new products and services to
pathing' of employees beginning from being "futurize" the organization
starters with zero or negligible knowledge to 7. Widening the breadth and depth of
becoming learners through supervised intellectual capital found in individuals, teams
apprenticeship. and departments, particularly. intellectual
5. Empower employees to reach sustainable property assets and ownership
self-development by promoting valuable
knowledge, rewarding those who unselfishly
share their knowledge to others and to the
organization.
6. Interact with experts who have proven their
worth and expertise in their specialized fields.
7. Prepare programs for employees leading to
attitudinal change.
8. Provide access to needed resources.
9. Broaden networking through strategic
alliances.
10. Analyze cultures.

Competitive Innovation: "Creating

Bargaining Power"

- The term innovation is the best assurance to

achieving business sustainability, competitive
advantage, and consequently, creating
bargaining power.

Strategies for Competitive Innovation

1. Creating, conceptualizing, or inventing new

ideas
2. Bringing a paradigm shift from the usual
conservative mindset to that of openness,
willingness, aggressiveness, initiative, focus,
and adaptability to needed changes in the
context of changing environmental and
organizational variables
3. Revolutionizing a synergistic outlook and
willingness to invent a spectrum of new
perspectives, unique insights, and knowledge
between and among organizational units and
departments
CHAPTER 8: STRATEGIC CONTROL Types of Strategic Control According to
MECHANISMS Approach

STRATEGIC CONTROL 1. Sequential strategic control is the traditional

- the process of monitoring the various way of looking at strategic monitoring. It is
strategies of the organization and determining sequential, in that the strategy formulation is
whether there is a parallelism between the followed progressively by the designed
organizational milieu and that of the strategy implementation. Once the strategies
environment have been employed, it is only then that
- can be categorized from two different strategic monitoring is carried out.
perspectives: 2. Interactive strategic control is an approach
 according to purpose that shows the communicating and
 according to process collaborative nature of the processes of
strategy formulation, strategy implementation,
Types of Strategic Control According to and strategic control. The interactive strategic
Purpose control presents the interrelationships of each
of these processes with each other. In other
1. Presupposition control is designed to check words, as strategies are being formulated,
systematically and regularly whether the strategy implementation is constantly being
arguments set during the planning and evaluated.
implementation processes are still binding. 3. Feedback strategic control is a combination
When strategies are formulated, these are of the sequential and interactive approaches.
based on certain premises or assumptions. Although strategy formulation, strategy
However, since the external environments are implementation, and strategic monitoring
continuously changing, there is a need to appear to be sequential, the feedback loop is
closely monitor the set strategies and make the essentially interactive. Constant feedback are
necessary change or changes when needed. effected with respect to the formulated and
2. Implementation control is applied to implemented strategies.
evaluate whether the intermediate strategies
are consistent with the overall strategy. In PERFORMANCE METRICS
many instances, a strategy consists of small - Performance is the ratio of the results
activities that complement each other and lead derived from the resources invested by an
to the ultimate attainment of the mother organization, or Performance = Results /
strategy. In cases when these transitional Resources
activities become misaligned for one reason or
another, then there is a need to review the Four parameters categorize performance:
reasons for such occurrence. 1. Financial Performance
3. Strategic surveillance is a monitoring 2. Market Performance
system whereby a broad range of occurrences 3. Efficiency/Productivity Performance
inside and outside the organization threatens 4. People Performance
the implementation of an organization's
strategy. Surveillance means shadowing, Financial Performance
observing, and scrutinizing the milieu. It
demands constant awareness, consciousness, - There are different ways of measuring
and knowledge of how the strategy financial performance. These include
implementation is faring. profitability measures, liquidity measures,
4. Vigilance control is a special type of gearing (risk) measures, and other investor's
strategic control that is applied when measures.
immediate reconsideration of an organization's Profitability metrics show the organization's or
strategy/strategies is pursued. This is called company's ability to generate earnings as
for when unusual events happen and there is compared to its expenses and other relevant
no choice but for the organization to attend to costs incurred during a specific period. These
it and do the corresponding changes profitability metrics are gross profit margin,
net profit margin, return on capital employed
(ROCE), and asset turnover.
Liquidity measures show the extent to which a
company has money to meet immediate People Performance
obligations. Current ratio, inventory holding
period, receivables (debtor) collection period, - Because of the hypercompetition permeating
and payables (creditor) period are forms of in the environment, not to mention, the
liquidity measures. dynamic outlook of organizations in dealing
Gearing measures are determinants of with their products and services and against
financial leverage. The gearing ratio measures one another, effectiveness has incorporated
the percentage of capital employed that is today challenging orientation. a deeper and
financed by debt and long-term financing. The more
higher the gearing ratio, the higher the - It has adopted a renewed, emphatic, and
dependence on borrowing and long-term broader perspective, concentrating and
financing: and the lower the gearing ratio, the focusing more on people and how they
higher the dependence on equity financing. operationally and uniquely do things.
Another gearing measure is interest cover. - Gauging and analyzing differentiated people
Other investor's measures include earnings per performance are expressed through indices.
share (EPS). dividend cover, and dividend
yield. STRATEGIC MANAGEMENT
REVISITED
Efficiency/Productivity Performance
• The external and internal environments and
- Efficiency and productivity are the emphasis organizational components are important to
of every organization that aims to achieve any organization.
success.
- Measures of success are quantitative. - The external environment includes a
Efficiency and productivity are measurable confluence of social, political, technological,
concepts. economic, environmental, and legal forces that
- Efficiency/productivity is normally defined influence organizational direction and
as the ability to do something or produce strategic decision-making.
something without wasting materials, time, or - The internal environmental variables consist
energy. It is employing the least amount of of the government, culture, the stakeholders,
input to create the maximum amount of competitors, suppliers, customers, and the
output. community.
- They are used interchangeably and may be - In addition, management, employees,
expressed in the form of number of units facilities and equipment, financial resources,
produced, number of hours consumed, number and organizational culture are referred to as
of defects reduced, time saved, amount of organizational components.
pesos earned, amount of savings made, and
others. These measures are determinants of • Given the awareness and cognizance of the
efficiency/productivity. impact of these independent and internal
factors, an organization can undertake
Market Performance strategic planning in the context of their
vision, mission, goals and objectives.
- In addition to financial performance,
feedback can be adequately actualized through • Unique to their thrust and industry
market performance metrics. orientation, organizations can determinedly
- Examples include market growth rate, craft their business and corporate strategies.
market share, net marketing contribution,
marketing return on sales (ROS), marketing • Strategies are activities that organizations
return on investment (ROI), and customer prepare and articulate to achieve their desired
retention. intents, of which are significant to their
organizational existence.

• Today, strategies cannot be framed as

ordinary and prosaic.
• To help companies stay competitive and • Performance metrics are important to
achieve a high degree of organizational measure the extent or degree of
success, strategies need to outsmart accomplishment. Otherwise, the entire process
competitors. of strategic management becomes arbitrary,
unproductive, and futile.
• Speed in implementing these strategies is
likewise necessary because this oftentimes
makes the much needed difference.

• Another important feature of strategies is

flexibility or the ability to adapt to the changes
in the industry milieu.

• While competition is that much talked about

commonality reference, organizations should
continue to possess and demonstrate a
differentiated mindset that can help create
both their comparative and competitive
advantages.

• These can be demonstrated though the

products and services they supply, the prices
they offer, and the branding image they
promote.

• Organizations can similarly come up with

products that are new when possible or create
distinct market niches in a hypercompetitive
environment. In this manner, they can initiate
new customer bases to generate better
business opportunities.

• Strategy implementation almost always

presents the premise for success.

Organizations can apply varied but ingenious

modes of executing their well-planned
strategies.

• This is the challenge to organizations and the

reality is many organizations succeed while
others do not.

• Lastly, but more importantly, is strategic

control.

• The best-laid plans can end up in disarray

and failure when strategic monitoring is left
unattended.

• Strategic monitoring is effectively assessed

through the use of quantifiable measures or
performance metrics.