Chapter

1: A Strategic Management Model

• The 21st century epitomizes the Reality of Dynamism
• Hypercompetition occurs when product/ service offerings and technologies are so new
that standards become unstable and competitive advantage is not sustainable.
• Competitive Advantage is a firm’s resources and capabilities that enable it to overcome
the competitive forces in its industry(ies)
• Operational Effectiveness is performing similar activities better than rivals.
• Strategic Management:
-a continuous process of strategy creation
-the science of creating, executing, and evaluating cross-functional decisions to
enable an organization to achieve its goals and objectives.

The Strategic Management Process
• Strategic Analysis- consists of a systematic evaluation of variables currently existing in
the external and internal environments.
• Strategy Formulation- designing strategies on the business and corporate levels
• Strategy Implementation- employing these crafted strategies to achieve organizational
set goals and objectives.

1. Strategic Analysis àStrategic Intelligence
2. Strategy Formulation à Organizational Competitiveness
3. Strategy Implementation à Comparative Advantage

• If Strategic Analysis is accurately conducted, organizations can develop Strategic
Intelligence. Like antenna, strategic intelligence is the capability of an organization to
possess relevant and related knowledge, abilities, foresight, and systems thinking such
that is able to assess its own strengths and vulnerabilities.
• If Strategy Formulation is uniquely designed and effectively communicated, organizations
have greater possibilities of attaining Organizational Competitiveness. Organization
competitiveness pertains to the ability of any business/company to utilize its resources
optimally and sustainably for maximum performance and productivity.
• If Strategy Implementation is efficiently employed, organizations can achieve
Comparative Advantage. Comparative advantage refers to the ability of an organization
to produce a good or service at a lower marginal and opportunity costs than its
competitors.

Ø Strategic Planning: continuous, repetitive, and competitive process of setting the goals
and objectives that an organization aims to attain, defining the means to achieve them,
and assessing the best way to realize them in the context of the prevailing environment
while measuring performance through set standards, and periodically but continuously
conducting reassessments.

Chapter 2: Challenges in the External Environment

Scanning the Environment
• Organization Intelligence refers to the expertise, insight, and wisdom possessed by an
entity. It serves as a valuable guide to its journey to becoming competitive.
• Environment Scanning is the study and interpretation of the forces existing in the external
and internal environments.
• Strategic Information consists of the facts and data used by organizations to assist them
in achieving their vision, mission, and goals.
-Primary data: are gathered through personal experience, observation, and
experimentation.
-Secondary data: information collected from reports, internet sources, and other
published materials.

Modes of Environmental Scanning
1) Undirected Viewing: The individual is exposed to information with no specific
informational need in mind. The sources of information are wide-ranging and large
chunks pf information are quickly dropped from the individual’s attention. Thus, the
individual ends up with general information that may be helpful for him in spotting early
signals of change.
2) Conditioned Viewing: The individual directs viewing of information to specified facts and
data to be able to assess their general impact on the organization. It is not an active search
but a mere viewing of information.
3) Informal Search: The individual actively looks for information to increase knowledge of a
particular issue. It essentially involves a relatively unstructured effort where the objective
is to gather information to expound on the issue, thus, determining whether a strategic
move is needed by the organization.
4) Formal Search: the effort exerted by the individual is deliberate and planned. The search
is both focused and structured and the research methodology is clearly enumerated and
followed. The search approaches can include industry analysis, market studies, and
competitor and customer analyses, among others.

The SWOT Matrix Analysis
Ø Strengths: are features that organizations possess, thus, giving it significant advantage
over others.
Ø Weaknesses: are characteristics that place organizations at a disadvantage relative to
others, and may just be limitations or vulnerabilities or organizations.
Ø Opportunities: are possibilities in the external environment that organizations can exploit
to their advantage.
Ø Threats: are challenges in the external environment that can cause problems to
organizations.



Chapter 3: Challenges in the Internal Environment

Ø Government: The Business Caretaker
Ø Culture: A Communal Convergence
Ø Stakeholders: The Business Investors
Ø Competitors: The Business Threats
Ø Customer: The Business Challenge
Ø Suppliers: The Business Partners
Ø Community: The Business Concern










At the very least, any product or service should provide customer satisfaction. In other
words, any product must fulfill its intended use, and that is to attract customers and gain
customers approval.
However, customer satisfaction is not enough. More than this, emphasis is now on
customer delight, a condition where customers become excited over the products or the services
offered. Customer delight may come from experiencing quality service, product excellence,
product versatility, or any attribute that will greatly gratify and create distinct impact on them.
Attaining this level will assure customer patronage.
The last level of change in customer behavior is customer intimacy. Customer intimacy
refers to the relationship between the company and the customers. This is best described as
warm, complimentary, supportive, and “businessly” personal.
In addition to being pleased about the product, customers continue supporting the
product. Customer intimacy seals customer patronage or better referred to as customer loyalty.

Customer relationship management (CRM) is the emphasis of most companies. In essence, it
revolves around the interplay of three significant variables, namely, the company that produces
the product, the product produced, and the customers who buy the product. To achieve optimum
level of gain and patronage, products should be competitively priced, of good quality, accessible,
and ideally the best. Companies should do their part in satisfying customer expectations and
delighting them with quality, innovations, and personalized business relationship.