[Makati Urban Redevlopment Presentation : Makati City, Philipines]
Univ. of Makati DEM 329 ; 1 st SEM Dr. Amelia P. Paje, Professor Ariel S. San Jo se, reporter...
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Transcript of Univ. of Makati DEM 329 ; 1 st SEM Dr. Amelia P. Paje, Professor Ariel S. San Jo se, reporter...
Univ. of Makati DEM 329 ; 1st SEMDr. Amelia P. Paje, ProfessorAriel S. San Jose, reporter
STRATEGY FORMULATION AND EVALUATION
Ref: Strategic Planning and Management By Eduardo A. Morato, Jr. ©2006
Strategy Formulation and Evaluation
ADAPTIVE STRATEGIZING
naturally grow from existing enterprise activities.
these are natural ways by which enterprise strategies evolve
Adaptive Strategizing:
• Product Line Expansion
Strategy Formulation and Evaluation
• Geographic Expansion
• Organizational Expansion
• Horizontal and Vertical Business Integration
Strategy Formulation and Evaluation
GEOGRAPHIC EXPANSION
An enterprise can naturally expand locally to key cities and major provinces, then to secondary ones.
International expansion to nearby countries or global markets can come next.
Example: The Philippine Banana
Strategy Formulation and Evaluation
PRODUCT EXPANSION
To cater to the other segments of the same industry
Enterprises can likewise expand product line to other industry markets if the manufacturing competencies needed to produce the new productsare the same or similar
Strategy Formulation and Evaluation PRODUCT EXPANSION
Service extensions can be added toenhance the value propositions to customers
the services can be enhanced by product additives.
Strategy Formulation and Evaluation
Adaptive Strategizing:
ORGANIZATIONAL EXPANSION
FRANCHISING
BRANCHING DISTRIBUTING
OUTSOURCING
SUBCONTRACTING
NETWORKING
This range of alternatives can also be calledBusiness Dispersion and Disaggregation.
AdaptiveStrategizing
• The fourth adaptive way is to enter industries that are related to, supportive of and complementarywith the enterprise’s main products or services.
• It can be labeled as Horizontal and Vertical Business Integration.
AdaptiveStrategizing The wheel’s hub and spoke analogy.
• Enterprises like banks, airline companies and hotels take on businesses that naturally spring from main business.
Ex. A hotel may begin to set up its own tour company, transport service, etc.
Hub or main
1,2, 3,4, arethe satellitecompanies
Diagram 1
AdaptiveStrategizing Diagram 2:
The Four Adaptive Strategizing Ranges of Alternatives
Geographic Ranges of Alternatives
Horizontal and Vertical Business IntegrationRange of Alternatives
The Product Or Service andMarket Range of Alternatives
Business Dispersion
or Disaggregation Range
of Alternatives
Creative Strategizing CREATIVE STRATEGIZING:
When the growth and developmentof the enterprise gets stuck and have exhausted all their bright ideas, they need to craft creative strategies.
1. Benchmarking against other Industries• to look at other industries which aresimilar enough to make meaningful comparisons but different enough
to generate creative strategies.
Ex. “McDonalize” its manner of delivering products
CreativeStrategizing
2. Reconfiguring the Product or Service
• Entrepreneur lists down all the attributes of the product or service currently being delivered; size, shape, accessories, amenities, etc. then mix, combine and permutate them into possible reconfiguration until the most exciting ideas come out.
Creative Strategizing
3. Altering Customer Attitudes and Behavior
“ If Mohammed cannot come to the mountain,let the mountain come to Mohammed.”
• If one’s products and services are not attracting customers anymore, change the
customers’ attitudes and behavior or rediscover and fall in love with the product
once again.Ex. Listerine
CreativeStrategizing
4. Metaphoring and Bonsai Method
• The entrepreneur can liken the business to a similar situation or phenomenon that comes from a different world but shares similar characteristics with the enterprise.
• The bonsai is an extended metaphor. In a Japanese garden, the bonsai represents Mother Nature, albeitin a stylized and miniature form.
Ex. Apartments, subdivisions
The 5. Brainstorming and Prototyping
• Originally developed by Alex Osborne, 1938.It has been a term for any form of highly interactive discussion by a group of people in order to offer creative solutions.
• The many ideas generated must be pared down later through an evaluation session, which needs not bedone by the same group
CreativeStrategizing
IdeologicalStrategizing IDEOLOGICAL STRATEGIZING:
• Very few enterprises base their strategieson their philosophies, ideologies or core values.
Ex. Kao corporation: “Human beings can live only by the Universal Truth, in their dignity of living, all are absolutely Equal.” (Kao President Yoshio Maruta)Ex. Ben and Jerry’s ice cream in America:
- stress their tenet on environmental concerns, such that they have the cause to provide livelihood for the homeless people by taking in their farm products.
RationalStrategizing
RATIONAL STRATEGIZING:
The rational strategist should ask these2 basic questions:
(1)In how many feasible ways can the customer, market and financial outcomes be maintained?
(2) What specific product or service outputs will perfectly match to these outcome expectations?
RationalStrategizing
In how many ways can this performance indicator be
achieved?
PerformanceIndicator
Alternative Strategies
Quintuple Sales
1. Branching Nationwide2. Franchising3. Exporting4. Mergers and
Acquisitions5. Product and Service
Expansion or Extension
Table 1: Generation of Alternative StrategiesFrom Performance Indicators
RationalStrategizing Questions for External Assessment:
(1)What are the opportunities presented by the trends, patterns and future directions of the Macro Environment?
(2) What are the Threats or hindrances,obstacles, and challenges found in thefour Levels of the External Environment that would prevent the organizationfrom growing, competing and surviving?
RationalStrategizing
Table 2: Examples of Trends, Patterns and Future Directions of the External Environment and their Relevant Opportunities
Macro Environment Opportunities1. SOCIAL: Increasing population with greater purchasing power
Increased demand for products andServices offered. Greater sales Potentials.
2. POLITICAL: LawsPassed to reduce import tariffs.
Cost of imported raw materials andParts would go down, thus, reducingOverall cost of product.
3. ECONOMIC: Interest rates are decreasing.
Financing cost would go down. Can opt for greater financial leverage for expansion.
4. ECOLOGICAL:Stricter anti-pollution controls and implementation
Fewer incidences of respiratory diseases. (Opportunity for a health insurance company).
5. TECHNOOGICAL:New technology that will increase productivity, reduce manpower requirements.
Easier to meet customer qualityExpectations can increase outputs while reducing cost o productionat the same time.
RationalStrategizing
Macro Environment Threats
1. SOCIAL : Aging population
Less demand for unhealthy products (high cholesterol), sweets,fast cars and amusement parks.
2. POLITICAL:Terrorism on the rise. Political turmoil.
Consumers more fearful and will reduce certain expenditures(e.g. amusement, eating out.)
3. ECONOMICAL:Severe recession
Demand for products and serviceswill go down, affecting sales.
4. ECOLOGICAL:Log ban to preserveForest resources
Wood as construction material will be scarcer. Prices will go up. (not good for furniture industry)
5. TECHNOLGICAL:Technological obsolence
Uncompetitiveness may result In closing down of enterprises if new technologies are not availed of.
Table 3: Examples of Trends, Patterns and FutureDirections of External Environment and Their Relevant Threats.
Analysis of Ten Levels For the Internal Environment, the strategist should
go through the ten levels of Internal Assessmentand ask the following questions:
Q: From the analysis of this level, what are the relative strengths, advantages and
competitiveness of the enterprise in relation to its goals and
in comparison with competitors?
Q: What are the weaknesses , disadvantages and competitiveness of the organization in relation to Its goals and in comparison with its competitors?