Addu Sea Stratplan

8/12/2019 Addu Sea Stratplan

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The ADDU-DDC Joint MBA Program


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In a region in Spain, there is a village which is

well-known for the uniqueness of the career

choices of its male population: they are either

priests or businessmen.

It is said that one can predict the career choice of

a boy by the choices he makes as a youngster.

When the boy reaches the age of ten, he is givena choice between a fistful of coins or rosary

beads.


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The boy who chooses the fistful of coins, almost

always, becomes a businessman.

The boy who chooses the rosary beads, almostalways, becomes a priest.

The boy who chooses both the fistful of coins andthe rosary beads, almost always,


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becomes a Jesuit!

Welcome to the ADDU-DDC Joint

MBA Program!!!


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THE FUNDAMENTALS OF STRATEGICPLANNING :

A Framework for School

Administrators

An Engagement for the ADDU School of Engineering and

Architecture

Prof. Mike D. Soledad

Prof. Mike Soledad


7/133The ADDU-DDC Joint MBA Program

Strategy

Has its roots in the military. Literally, the act of the general

The root word is the Greek verb stratego, to plan thedestruction of ones enemies through the effective use of

resources

From which came the word strategos, a general leading anarmy

Prominent throughout history, discussed in such classicsas The Art of War (Sun Zu), The Book of the Five Rings(Miyamoto Musashi), Arthasastra (Kautilya)



If we know where we are and

something about how we got there,

we might see where we are trending--- and if the outcomes which

lie naturally in our course are

unacceptable, to make timely change.

Abraham Lincoln



Strategic Planning Process

A systematic step-by-step process by

which an organization charts its course of

action towards a chosen destination.



Strategic Planning

It is:

Sequential, logical, rational

Long-term in perspective

A guide to short-term decisions

Aims for the best results-to-effort, outcome-to-task, output-to-input

Puts together mutually reinforcing activities toattain synergistic effects



Why do Strategic Planning?

Essential to discharging management

responsibility

Simulates the futureon paper

Presents a framework for decision-making

Becomes a channel of communication at all

levels of the organization



Benefits of Strategic Planning

Clearer direction and priorities identificationand understanding of the critical successfactors.

Helps the organization capitalize on

opportunities; leads the organization to actrather than react

More efficient allocation of resources

Ensure acceptance of common goals;increased involvement and commitment of

people Provides a basis for measuring performance

Trains managers to think ahead



Foundations of Strategic Thinking

1. No organization operates in a vacuum.

2. Organizations are motivated by desired outcomes,adhere to deep-seated values and possess

resources.3. Organizations are human inventions. They are

imperfect.

4. The external environment of an organization isdynamic.




5. 5. There are many ways of killing a cat.

6. 6. The organization has to choose the best way to attain its

objective.

7. 7. The best way to attain organizational objectives is that

which exhibits the best possible goodness-of-fit among

its values, its objectives, what it can do well, what it is

deficient in, what it can exploit, and what it must reduce

to irrelevance or avoid altogether.



The Best Way

Objectives

WeaknessesThreats

Values

Opportunities

Strengths

Goodness-of-fit




5. 5. There are many ways of killing a cat.

6. 6. The organization has to choose the best way to attain itsobjective.

7. 7. The best way to attain organizational objectives is thatwhich exhibits the best possible goodness-of fit among itsvalues, its objectives, what it can do well, what it is deficientin, what it can exploit, what it must reduce to irrelevance or

avoid altogether.

8. 8. The best way, once implemented, must be periodicallyreviewed and, if deemed necessary, modified or replaced.




Where are we now?

Where do we

want to go?

How do weget there?

How do we know

that were getting

There?

Personal Property of Prof. Miguel D. Soledad of UP Mindanao. Do not Copy


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The General Situation Review

Basic Question: How did we get to where we arenow?

History: What are the important

milestones?

Objectives: What was it that brought us

together? What are those we value

most? What is our Vision?Mission?

Performance: What have we attained so far?



Internal Analysis

What are we good at?

What are we deficient in?

External Analysis

What future developments can we possibly exploit?

What future developments do we have to prepare

against?

The Strategic Audit

S i h Hi h f



Setting the Hierarchy of

Objectives

Knowing what we know now, are our articulated

Values, Vision and Mission still relevant?

Given our Values, Vision and Mission, what can

we hope to attain in the foreseeable future in

Specific, Measurable, Attainable, Realistic, Time-bound (S.M.A.R.T.) frames?



Formulating Strategic

Options Given the results of our strategic audit and the

objectives we want to attain, what are the various

options open to us so that we can attain those that

we said we want to attain?


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Implementing

What do we need to put in place in order tocarry out the decision we made?

How should we be structured?

What policies should we articulate and enforce? What projects and programs do we put in place?

If we do all these that we said we need to do, how

much do we need, when?



Controlling and Monitoring

How do we know whether the things we said we

want attained are attained?

What are the verifiable indicators that we can use

to measure our performance?

What procedures do we put in place so that the

information needed by the decision-maker/s is

given in a timely fashion?


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GeneralSituationReview

StrategicAudit

Internal AnalysisExternal Scan

ObjectiveSetting

GeneratingStrategicOptions

DecisionMaking

ImplementingPolicies,

Plans,Programs,Projects

and Budgets

MonitoringAnd

Control

Where are we now?

Where dowe wantto go? How do we get there?

How do weknowwere

gettingthere?

Formulation Implementation Evaluation

Personal Property of Prof. Miguel D. Soledad of UP Mindanao. Do not Copy


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The General Situation Review

Basic Question: How did we get to where we arenow?

History: What are the important

milestones?

Objectives: What was it that brought us

together? What are those we value

most? What is our Vision?Mission?

Performance: What have we attained so far?


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The Basic Tool:S.W.O.T Analysis

Strengths - Internal competencies and resources possessedby the organization that enhance its ability toachieve its objectives.

Weaknesses - Internal deficiencies that tend to inhibit theorganizationsability to attain its objective.

Opportunities - External developments that could significantly

benefit the organization.

Threats - External trends and events that are potentiallyharmful to an organizations position.


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Internal Appraisal Process

1. Review by functional area General Management

Human Resources

Marketing Finance

Operations

2. Identify strengths and weaknesses3. Accomplish an Internal Factor Evaluation (IFE)

Matrix


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Academic FunctionalAreas

Instruction

Research

Extension

Administration


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Tools for Internal Appraisal

1. Management Audit Checklists2. Surveys

3. Interviews

4. Financial Ratio Analysis

Tests of profitability, efficiency, liquidity, solvency Horizontal

Vertical

5. MERI Score

6. Variance Analysis7. Profiles

8. Charts


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SW Analysis Worksheet

Functions Historical Performance Indicated Strengths Indicated Weaknesses

General Management

On the brink of disaster in 1992. Turned around in 1993.Profitable. Ratio of income to sales is

increasing

Change of management in 1993. Manager also worker. Low supervision level

No formal papers on ownership. Unclear ownership

Marketing

Turned around via cash only/ domestic only policyLimited market due to cash

only/domestic only policy

Increased customer base from 90 to 210 in 10 yearsCustomer loyalty. Many repeat

customers

Decelerating sales growth from

58.4% to 31.5% pa

Marketing limited to promotion and word of mouth Unfocused marketing effort

Human ResourcesTwo resignations per year High employee turnover

Employees on contract paid on commission Labor is a variable cost

OperationsAsset utilization is decreasing Ratio of sales to assets is dropping

Only two instances of replacements in 11 years

Finance

Ratio of cash and savings to payables is high Liquid

No borrowings Underutilized debt capacity

History of improving profits Ratio of income to equity is dropping

IFE Matrix of Woodlands


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IFE Matrix of WoodlandsCleaning Service

Key Internal Factors Weight Rating Score

Strengths

1. Profitable operations (ROS from 11.2% to 15.6 %) 0.05 3 0.15

2. Loyal customers. Many repeat customers. 0.14 4 0.56

3. Underutilized debt capacity (EM=1.18) 0.04 4 0.16

4. Liquid (CR=3.25:1) 0.15 4 0.6

5. Contractual employees. Variable labor cost 0.07 3 0.21

Weaknesses

1. Low supervision level. 0.09 2 0.18

2. Unclear ownership 0.02 2 0.04

3. Dropping ROE (from 129.5% to 4.5%) 0.04 1 0.04

4. Decelerating sales growth (from 58.4% to 31.5%) 0.13 1 0.13

5. Limited market due to cash/domestic only policy 0.08 1 0.08

6. Dropping asset turnover (from 71.5 to 24.4) 0.04 1 0.04

7. High employee turnover 0.12 2 0.24

8. Unfocused marketing effort 0.03 1 0.03

Total 1 2.46

Since the IFE Score is less than 2.5, the organization is deemed

to be weak.


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Preparing the IFE Matrix

1. List the key internal factors as identified in the internalappraisal. Use a total of 20 internal factors listing internal

strengths first. Be specific by using percentages, ratios and

comparative numbers.

2. Assign a weight that ranges from 0.0 (not important) to 1.0

(all-important) to each other factor indicating the relative

importance of the factor to the organizations success.

Regardless of whether a factor is a strength or a weakness,factors considered to have the greatest effect on

organizational performance should be assigned the highest

weights. The sum of all the weights should be 1.0.


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Preparing the IFE Matrix

3. Assign a rating to each factor according to the following scale:

4. Multiply each factors weight by its corresponding rating to determine

the weighted score for each internal variable.

5. Take the sum of the weighted scores of the various variables to

determine the IFE score for the organization. IFE scores 2.5

indicate a strong internal position.

Description Rating

Major Strength 4

Minor Strength 3

Minor Weakness 2Major Weakness 1


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Exercise

Identify one strength and one

weakness of the SEA

THE FIRM AND STEEP FORCES


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1

2

3

4

5

THE FIRM AND STEEP FORCES

TheFirm

Socio-Cultural Technological

Economic

Ecological

Political

Framework for External


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Framework for ExternalAppraisal

41

Step 1Select Key

EnvironmentalVariables

Step 2Select

KeyInformation

Step 4Prepare a

BroadAssessment

of BasicExternalForces

Step 3Forecast Key


Step 5Construct an

ExternalFactor

EvaluationMatrix


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The ADDU-DDC Joint MBA Program 42

Step 1Select Key


Step 2Select

KeyInformation

orIndicator


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Social Factors


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Technological Factors


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Economic Factors


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Ecological Factors


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Political Factors


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Step 1Select Key


Step 2Select

KeyInformation

orIndicator

Step 3Forecast Key



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GDP

(%)

GNP

(%)

Average

2002-06 4.8 5.4

Actual 2007 7.3 7.8

Best Est

2008 4.5 6

Frcst 2009 5.3 6.2

2010 6.2 7.2

2011 5.5 7

2012 5.5 72013 6 7

0

1

2

3

4

5

6

7

8

9

GDP (%)

GNP (%)

Economic Indicators:


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P/$ Ex Rt Inflation91-Day

TB

Average

2002-06 51.92 5.3 7.1

Actual 2007 46.2 2.8 3.4

Best Est2008 44 9.8 5

Frcst 2009 45 8.1 7.6

2010 46.5 7.5 7.5

2011 47.5 6.5 6.82012 48.25 5.5 6

2013 49 4.5 4.8

0

10

20

30

40

50

60

P/$ Ex Rt

Inflation

91-Day TB



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Fuel

(%) Power (%)

Average

2002-06 20.3 9.6

Actual 2007 5.3 -0.7

Best Est2008 52.5 19

Frcst 2009 22.2 14.4

2010 0.6 3.4

2011 0.4 3

2012 0.3 2.8

2013 0.3 2.7

-10

0

10

20

30

40

50

60

Fuel (%)

Power (%)


Business Outlook and GDP Growth Rate


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Business Outlook and GDP Growth Rate

52

Index %

-30

60

30

0

-2

5

3

0

Q1 Q2 Q3 Q4 Q1 Q2 Q3

GDP

BOIC

BOIN

BOIC= Current quarter business outlook index (Coincident indicator)BOIN= Next quarter outlook index (Leading indicator)

GDP = Actual GDP growth rate


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Step 1Select Key


Step 2Select

KeyInformation

Step 3Forecast Key


Step 4Prepare a

BroadAssessmentof BasicExternalForces


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Socio-Cultural Analysis

Projection

- Continuing lure of overseas jobs

- While the under-30 age group will continue to be the base

of the population pyramid, the growth rate of this age-group will

decelerate

Opportunities Identified

- Offer degree programs intended to produce globally-

employable graduates

- Invest in basic education

Threats Identified- Students that are jobs-oriented rather than knowledge-thirsty

- Dearth of faculty material


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Technological Analysis

Projections- There will be a greater reliance on technology to enhance

productivity. This will be articulated by an increased level of

computerization in the service and the manufacturing sectors and

precision agriculture in the agri-sector

Opportunities Identified

- S&T-led academic institutions

- Technology-driven research

- Vertically-articulated research programs (from basic to

commercial viability)

- All-graduate program institutes

Threats Identified

- iffypolitical support as highly specialized education can be capital

intensive and require huge commitments of public funds


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Economic Analysis

Projections

- The global recession will result in slower growth

- The following will be the growth drivers: BPO, mining, tourism, agriculture

(via higher crop prices)

Opportunities Identified- Overseas market BPO needs

- Inclusion of mining in course offerings

- Engagement in the tourism sector

- Updating course curricula to incorporate precision agriculture technology

Threats Identified- The education business will be highly competitive. Possible price war

- Pressure from employees for more economic benefits


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Ecological Analysis

Projections- There will be a marked preference for the use of green

technology

- The general public will mature from demanding

environmentally-friendly initiatives to ecologically-

responsible activities

Opportunities Identified- Align course offerings towards ecological responsiveness

Threats Identified- Reduced support from donors belonging to the money-laden industrial sector


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Political Analysis

Projections

- Political maturity will be articulated by a

voter preference for development-

oriented public managers Opportunities Identified

- Offer programs on public management


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Step 1Select Key


Step 2Select

KeyInformationor

Indicator

Step 3Forecast Key


Step 4Prepare a

BroadAssessmentof BasicExternalForces

Step 5Construct an

ExternalFactor

EvaluationMatrix

EFE Matrix


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EFE Matrix

Key External Factor Weight Rating Score

Opportunities

1.

2.

3.

4.

...

n.

Threats

1.

2.

3.

4.

...n.

Relativeimportance tosuccessfulperformance Superior = 4

Above

Average = 3Average = 2

Poor = 1

TOTAL 1.00

60

1 2 3 4 5


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Preparing the EFE Matrix

1. List the key external factors as identified in the external appraisal. Use a total of20 external factors. Be specific by using percentages, ratios and comparativenumbers.

2. Assign a weight that ranges from 0.0 (not important) to 1.0 (all important) toeach factor indicating the relative importance of the factor to the organizationssuccess. Regardless of whether a factor is an opportunity or a threat, factors

considered to have the greatest effect on organizational performance should beassigned the highest weights. The sum of all the weights should be 1.0.

3. Assign a rating to each factor indicating the organizations ability to respond toeach key external factor according to the following scale:

Description Rating

Superior 4Above Average 3

Average 2

Poor 1


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Preparing the EFE Matrix

4. Multiply each factors weight by its corresponding rating todetermine the weighted score of the external variable.

5. Take the sum of the weighted scores of the various

variables to determine the EFE score for the organization.EFE scores < 2.5 indicate that the organization may not be

able to effectively exploit opportunities and counter threats.

Conversely, EFE scores > 2.5 indicate that the organization

displays an outstanding ability to effectively respond to itsexternal environment.

External Factor Evaluation Matrix of UP Mindanao Weight Rating Score

O i i


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Opportunities

1. Degree programs intended to produce globally-employable graduates 0.15 2 0.30

2. Involvement in basic education 0.03 1 0.03

3. Upgrading/Course alignment towards becoming a S&T-led academic institution, including

mining 0.10 3 0.30

4. Technology/Ecology-driven research 0.10 3 0.30

5. Vertically-articulated research programs (basic to commercial viability) 0.05 4 0.20

6. All-graduate program institutes 0.02 1 0.02

7. Non-degree programs to fulfill BPO needs 0.03 1 0.03

8. Overseas market 0.05 2 0.10

9. Engagement in the tourism sector 0.05 3 0.1510. Programs on public management 0.08 4 0.32

Threats

1. Students that are job-oriented rather than knowledge-thirsty 0.10 4 0.40

2. Dearth of faculty material 0.09 2 0.18

3. "Iffy" political support. Highly specialized education. Huge commitment of public funds 0.02 2 0.04

4. Education will be highly competitive. Possible price war 0.02 4 0.08

5. Pressure from employees for economic benefits 0.10 2 0.20

6. Reduced support from donors in the money-laden industrial sector 0.01 2 0.02

T O T A L E F E S C O R E 1.00 2.67

Indication: UP Min's ability to respond to anticipated environmental changes is marginally above-average.


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EXERCISE

Identify one opportunity and onethreat to SEA based on what you

know about developments in itsexternal environmental



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Objectives

Knowing what we know now, are our articulated

Values, Vision and Mission still relevant?

Given our Values, Vision and Mission, what can

we hope to attain in the foreseeable future in

Specific, Measurable, Attainable, Realistic, Time-bound (S.M.A.R.T.) frames?

What was it that brought us together?


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What was it that brought us together?What do we commonly desire?

VALUES


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The ADDU-DDC Joint MBA Program68

VISION

MISSION

GOAL

VALUES


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Values

Those that we hold dear in life and are ofgreatest importance to us, so important that

they are beyond compromise.

Emotions, sentiments, abilities, qualitiesconsidered important in everything we do

because they help us do what needs doing get

done better, help us become what we want tobecome faster.

Th Vi i St t t


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The Vision Statement

The statement of the organizations idea of theideal.

Answers the question: If the organization can

be whatever it wants to be, what do I want it tobe?

May be stated separately from the values

statement. May also be stated in such a waythat it subsumes the values statement.

Economic Enterprise


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Economic EnterpriseBureau

ValuesProfessionalism, honesty, efficiency

VisionA model government office leading the way in

community development through professional,

honest, and efficient public service

Vision of the UP School of


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Vision of the UP School ofManagement

The management school of choice in East ASEAN, atpar with the best in this part of the world, the

standard against which other management schoolsin the region may measure themselves.

The Mission Statement


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The Mission Statement

An enduring statement of the organizations raisondetre.

Draws inspiration from the vision statement.

Anchored on an analysis of the organizations

stakeholders, societalelements whose interests

are intertwined with that of the organization.

Answers the question: What must the organization

be, and do, for whom, in order to be what it wants

to be.?

Stakeholder Analysis


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yWorksheet

Example: UP Mindanao

Stakeholder Expectations

(What do our stakeholdersexpect from us?)

Service

Opportunity

(What can we do for ourstakeholders?)

Students Excellent education at

minimum cost

- Provide world-class

instruction

- Motivate them to excel

- Assure them of

academic freedom

Economic Enterprise


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pBureau

StakeholdersCity government

Davao community

Employees

Mission

A corps of professional civil servants managing viableeconomic undertakings; a results-oriented government officedelivering competent, efficient, honest public service to theDavao community; and, a responsible employer who makesemployment a worthwhile and satisfying experience

Mission of the UP School


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of Management

As we pursue our vision, we will:provide our clientele withmanagement education programs

that give them the best value for theirmoney,

become a self-sufficient unit of the

University,ensure a rewarding and fruitfulcareer for our faculty and staff.


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Goals

Measurable end-results thatderive their impetus from themission

Specific, Measurable, Attainable,Realistic, Time-bound (S.M.A.R.T.)target outcomes

Expected achievements within thereasonably foreseeable future

Pointers for Goal Setting


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Pointers for Goal Setting

Set a goal for each stakeholder. State goals in quantifiable deliverables

using understandable metrics.

Ensure that goals are factual and based onindicated capabilities.

Set goals that are doable within theplanning period.

Break down goals by time segments(usually, annually).

Stakeholder-Goal


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Stakeholder-GoalMatrix of WCS

Stakeholders Key Result Areas

Historical

Performance Proposed Goal

Clients/customers Customer

satisfaction

.9 visits per month

210 customers

4 visits per month

500 customers

Employees Quality of worklife 2 resignations per

year

1 resignation per

year

Owners Return on Equity From high of 129%to only 4.5% last

year

10% ROE

Community ComDev initiatives None 1 ComDev initiative

per quarter

SOM Goals (2006-10)


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SOM Goals (2006-10)

Increase student population from 98 in 2006 to 502in 2009

Improve the average teaching performance rating

from Very Goodto Excellent

Double publication per capita by 2009

Double average annual resource generation from

P1.0 million to P2.0 million by 2009


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?


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Tools for Strategic


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83

gFormulation

BCG (Portfolio Analysis) Matrix

Strategic Position and Action Evaluation

(SPACE) Matrix

Grand Strategy Matrix

Internal-External (IE) Matrix

SWOT Matrix

Portfolio Analysis Matrix


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Portfolio Analysis Matrix

Developed by Bruce Henderson of theBoston Consulting Group as a portfolio

planning model

Based on the observation that businessunits can be classified into four when

viewed as to market growth and relative

market share: stars, cows, dogs andquestion marks

Portfolio Components


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85

Portfolio Components

Cow - large market share, mature industry

- little add-on investment, cash generator

Star - large market share, fast-growth industry

- requires cash support, potential cow

Question Marksmall market share, high-

growth industry

- requires resources, iffy chance Dog - small market share, mature industry

- laps-up cash, liquidation candidate


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Strategic Position and Action


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Strategic Position and ActionEvaluation (SPACE) Matrix

A four-quadrant framework that suggeststhe appropriate strategy, whether

aggressive, conservative, defensive or

competitive. Uses the following key determinants of

strategic position as axes: Financial

Strength (FS), Competitive Advantage(CA), Environmental Stability (ES), and

Industry Strength (IS).

87

SPACE M t i f th B k


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SPACE Matrix of the Bank

Vector Cordinates: x-axis: -3+(+3.33)=+.33y-axis: -4.33+(+2.25)=-2.08

Conclusion: The bank has a competitive profile

88

FS

CA IS

ES



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Rapid Market Growth

Slow Market Growth

Weak

Competitive

Position

Strong

Competitive

Position

Market Development

Market Penetration

Product Development

Horizontal Integration

Divestiture

Liquidation

Market Development

Market Penetration

Product Development

Horizontal Integration

Forward Integration

Backward IntegrationConcentric Diversification

Retrenchment

Concentric Diversification

Horizontal DiversificationConglomerate

Diversification

Divestiture

Liquidation

Concentric Diversification

Horizontal Diversification

ConglomerateDiversification

Joint Ventures

Internal External (IE) Matrix


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Internal-External (IE) Matrix

90

I II III

IV V VI

VII VIII IX

IFE Score

Strong Average Weak(3.0-4.) (2.0-2.99) (1.0-1.99)

EFEScore

High

(3.0-4.0)

Medium

(2.0-2.99)

Low(1.0-1.99)

(Grow and Build)(I,II,IV)

(Hold and Maintain)

(III,V,VII)

(Harvest or Divest)

(VI,VIII,IX)

SWOT Mat i


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SWOT Matrix

Tool for generating strategicoptions, that are generated by

juxtaposing S x O, S x T, W x O,

and W x T. Draws its inputs from the Strategic

Audit. The S & W from the IFEMatrix and the O & T from theEFE Matrix.

SWOT Matrix


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SWOT Matrix

Strengths1.

2.

3.

Weaknesses1.

2.

3.

Opportunities1.

2.

3.

Threats1.

2.

3.

S,O Strategies

Strategies that useStrengths to take

advantage ofOpportunities

W,O StrategiesStrategies that

overcome Weaknessesto take advantage of

Opportunities

S,T Strategies

Strategies that useStrengths to avoid

Threats

W,T Strategies

Strategies thatminimize Weaknesses

to avoid Threats

Goals:

1.

2.

3.

Strengths Weaknesses

Pre-American history not given


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Investment incentives program are in-

place

World-class infrastructures

Strategic location

Pre-American history not given

prominenceplants growing in

historicgate indicative of possible

neglect

Commercial/Shopping Centers left out

from promotional materials TourismDirectory

Lack of/Absence of interpretative

signages especially in the jungle trail

Opportunities

Utilities to become 75% cheaper when

solar and wind power generators become

operationalHigh literacy rate (99.6%) ; ready pool of

HR assets --- 39,000 graduates annually

Proximity to an operational international

airport/accessibility to land-sea-air

transpo

S X O

Emphasize the high return-potential by

highlighting incentives, superior infra and

location plus lower utility cost (s2,s3 x o1)

W X O

Enhance/improve promotional materials

and signages to address a wider market,

including history buffs, vacationer-shoppers and ecological/educational

tourists (w1-3 x o3)

Threats

Absence of signed contract on revenue-

sharing with IPs

Susceptibility to impact of change in

political leadership

Decline in tourist traffic due to continuing

STglobal financial crisis

S X T

Formalize sharing mechanism with IPs to

ensure the long-term partnership with IP

community bolstered by a sense of

ownership over the SBF assets (s2 x t1)

Target the price-sensitive but high-volume

MICE market while continuing to adopt a

rifle-approach to the investor market (e.g.,

computer manufacturers and BPO) (s1-3 x

W X O

Fully utilize all possible claims that can

further highlight SBFs edge over other

possible destinations (w1-3 xt3)

Making the Strategic Decision


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Making the Strategic Decision

Among the various strategic options weformulated, which one/s is/are the best?

Decision-Making Tools


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Decision Making Tools

Eyeballingchoosing a strategy basedon educated-guesswork

Simple criteria setchoosing a strategy

based on its goodness-of-fit with a set ofcriteria

Weighted criteria set

Must and Want Analysis

Quantitative Strategic Planning Matrix


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Decision-Making Using a Simple


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Criteria Set

Set-up a criteria set, for example:

Profitability

Stockholder appeal

Alignment with basic objectivesAbility to meet competitive challenge

Assess each alternatives ability to meet the

criteria. The alternative which seems to bestmeet the criteria becomes the chosen alternative

Decision-Making Using a Weighted


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Criteria Set

Assign weights to each criterion.

Rate each option according to each ability to

meet the criterion

Take the product of the weight by the rate toarrive at the score

Take the sum total of the scores

The option with the highest score is the best

option


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Decision-Making Using


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Must-Want Analysis

Set-up two sets of criteria: Musts and Wants

The Mustsset are criteria that an option must

meet in order to be considered

The Wantsset are criteria that are treated as aweighted criteria set

The option with the highest score is the indicated

choice

Develop the Acquire Invest in Expand the


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Develop the

business

market

Acquire

other

companies

Invest in

new

technology

Expand the

product line

Must Criteria

Must not be seen as

directly

confrontational

ok X ok ok

Must be legal ok ok ok ok

Must conform toethically acceptable

practices

ok ok ok ok

Develop the

business

market

Invest in new

technology

Expand the

product line


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market

Want Criteria Weight Rate Score Rate Score Rate Score

Profitability .35 3 1.05 1 .35 2 .7

Appeal to

stockhoders

.30 4 1.2 2 .6 2 .6

Alignment with

objectives

.25 1 .25 3 .75 2 .5

Ability to meetcompetitive

challenge

.10 2 .2 2 .2 4 .4

Total 1.0 2.7 1.9 2.2

Decision-Making Using theQuantitative Strategic Planning


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Q g gMatrix

Use the output of the Strategic Audit (InternalAppraisal and External Environmental Scanning)

to test the attractiveness of the various strategic

options

The option with the highest attractiveness score

is the best choice

The Quantitative Strategic


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The Quantitative StrategicPlanning Matrix

Alternative 1(From SWOT Matrix)

Alternative n(From SWOT Matrix)

Key Factors Weight AS TAS AS TAS

Key Internal Factors

Strengths

From IFEStrength 1Strength 2, etc.

Weaknesses

Weakness 1, etc.

Key External Factors

Opportunities

From EFE

Opportunity 1

Opportunity 2, etc.

Threats

Threat 1, etc.

TOTAL 2.00

Preparing the QSPM


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Preparing the QSPM

1. List the organizations internal strengthsand weaknesses and externalopportunities and threats.

2.

Assign weights to each internal andexternal critical success factor. Theseweights should be identical to those inthe IFE and the EFE matrices.

3. Examine the strategic options generatedby the SWOT Matrix. Group these intomutually exclusive sets, if possible.

Preparing the QSPM


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Preparing the QSPM

4. Determine the Attractiveness Score (AS). TheAS is the numerical value that indicates the

relative attractiveness of each strategy. This is

determined using the following scale:4 - Highly attractive

3 - Reasonably attractive

2 - Somewhat attractive

1 - Questionable attractiveness

If the factor is not relevant to the strategy, do not assign any AS.

Preparing the QSPM


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Preparing the QSPM

5. Compute the Total Attractiveness Score(TAS) by multiplying the weights by the

AS.

6. Compute the sum total of the TotalAttractiveness Scores. The alternative

with the highest Total TAS is the most

likely strategic choice.7. Judgmentally confirm the indicated

choice.

QSPM of WCS


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Key Environmental Factor Weight

Develop business

market

Acquire other

companies

Invest in new

technology

Expand the

product line

AS TAS AS TAS AS TAS AS TAS

Strengths1. Profitable operation .05 4 .20 4 .20 2 .10 4 .20

2. Loyal customers .14 3 .42 3 .42 4 .56 4 .56

3. Underutilized debt capacity .04 3 .12 4 .16 4 .16 3 .12

4. Liquid .15 4 .60 3 .45 3 .45 3 .45

5. Contractual employees .07 3 .21 2 .14 1 .07 2 .14

Weaknesses

1. Low supervision .09 1 .09 2 .18 3 .27 2 .18

2. Unclear ownership .02 0 .00 1 .02 0 .00 0 .003. Dropping ROE .04 4 .16 3 .12 3 .12 4 .16

4. Decelerating sales growth .13 4 .52 4 .52 3 .39 4 .52

5. Limited market .08 4 .32 4 .32 2 .16 4 .32

6. Underexploited sales potential .04 3 .12 3 .12 4 .16 3 .12

7. High employee turnover .12 1 .12 3 .36 2 .24 2 .24

8. Lack of marketing focus .03 4 .12 4 .12 2 .06 3 .09

Opportunities1. Economy to grow 8.1% .14 4 .56 3 .42 3 .42 3 .42

2. Loan rate to go down .13 3 .39 4 .52 4 .52 3 .39

3. Expanding business community .15 4 .60 3 .45 2 .30 3 .45

4. Crackdown on unlicensed .13 2 .26 3 .39 2 .26 2 .26

5. Improvement in office automation .12 3 .36 3 .36 4 .48 2 .24

Threats

1. Competitive activity to intensify .20 4 .80 4 .80 4 .80 4 .80

2. Low entry barriers .13 4 .39 3 .39 4 .52 3 .39

Total 2.0 6.49 6.46 6.04 6.05

STRATEGIC STATEMENT OF THE


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UP School of Management

WEAKNESS:

Inability to maximize growth potential due to

limited funding from the university

x

OPPORTUNITY:

Demand for short-term, non-degree courses to

increase


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Implementing


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Implementing

What do we need to put in place in order to carry outthe decision we made?

How should we be structured?

What policies should we articulate and enforce? What projects and programs do we put in place?

If we do all these that we said we need to do, how muchdo we need, when?

Diagnostic Model for StrategyImplementation


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112

ImplementationArticulate long-term objectives and

strategies.

Identify the kind of functional strategies

that are required to operationalizethe

strategy. Identify the organizational

structure, leadership, systems and

culture that are required toinstitutionalize the strategy.

Determine the existing

functional strategies and

organizational structure,

leadership, systems, and

culture.

GAP?REQUIRED ACTUAL

Decide on what methods to use toclose the implementation gap.

Continue presentcourse of action

Formulate plan of action and

implement the choices.

Institute strategic

controls.

YES NO



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How do we know whether the things we said wewant attained are attained?

What are the verifiable indicators that we can use tomeasure our performance?

What procedures do we put in place so that theinformation needed by the decision-maker/s is given

in a timely fashion?

A Framework for EvaluatingStrategiesE t bli h t d d


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114

StrategiesEstablish standards

Measure actualperformance

Dosignificantdifferences

occur?

Continue presentcourse

Yes

Take corrective action

Compare results vs.expectations (Objectives

and Goals)

No

Suggested Guide Questions onMonitoring


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Monitoring

What information is needed by whom? Why is it needed?

In what form (written? verbal? electronic?)

How will it be presented? When is it needed?

How often is it needed?

Where will it be sourced?

How will it reach the intended recipient?

Point Budget

GANTT Chart of MDP @ Dolefil 1


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116 116

Activity

Point

Person

Budget

/ SpentApr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

1. Review MDP course

and materials. Organize

tentative MDP team

Mike T 0

A 0

2. Meet with Dolefil.

Present proposal

Mike,

Larry

T 5,000

A 5,000

3. Finalize proposal Larry T 0

A 0

4. Produce kits Mike,

Malou

T 5,000

A 6,000

5. Run program Mike,

Malou

T 300,000

A 295,500

6. Graduation Larry,

Mike,

Malou

T 50,000

A 55,000

Total T 360,000

A 361,500


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SWOT-based Strategic Planning Guide


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118

Research Activity Guide Question/s Tool/s Specific Outputs

I. GeneralSituationReview

A. History

B. Present hierarchy ofobjectives

C. Current strategiesD. Highlights of

operations

How did we get towhere we are now?

Interviews

Meetings

Review of reports

Du Pont analysis

Evaluation of V/M

Preliminaryassessment of existingstrats

II. InternalAppraisal

A. General AdminB. Human Resources

C. Marketing

D. Operations

E. Finance

What are weparticularlygood at?

Where are weparticularlydeficient in?

Operations Auditby functional areausing

-audit checklist-surveys

-interviews

-ratio analysis

-variance analysis

-trend analysis

Ordered listing ofstrengths and

weakness



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119


III. ExternalAssessment

A. Socio-culturalB. Technological

C. Economic

D. EcologicaL

E. Political

What events anddevelopments withreasonable likelihoodof occurrence during

the forecasted periodwill:

S.T.E.E.P. Model ofExternal Analysis

enhance ourchances of success

threaten ourchances of success

Ordered listing ofopportunities andthreats

IV. ObjectiveSetting

A. Revisiting the Visionand Mission

B. Goal

Is the existing HO stillrelevant? Whereshould we be goingfrom here?

Values/Vision/MissionExercises

Goal Setting

A set of confirmedand/ or redefined HO



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120


V. Generation ofAlternatives

Knowing what weknow, how should weget to where we wantto go?

SWOT Matrix Set of alternativestrategies as a resultof juxtaposing; SxO,SxT, WxO and WxT

VI. Evaluating theAlternatives

Given the set ofalternative choiceswhich is/ are the beststrategy/ies

Eyeballing

Criteria sets

Must/Want

QSPM

A proposed corestrategy/ies that willbest attain theredefined HO

VII. ImplementingProgram

What functionalpolicies and programsshould we adopt in

order to properlyimplement ourstrategic choice?

Gap analysis

OrganizationalPlanning

Marketing Planning

Operations Planning

Financial Planning

KRAs, policies, plans,programs, projects,budgets, timetables

VIII. Monitoringand ControlSystem

How will we knowwhether we areindeed going to wherewe want to go?

Analysis of infoneeds

KRA/PI identification

Control system

KRA

PIs

Monitoring tools

(e.g., Gantt Chart)


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Developing the Vision, Mission andGoal Statements


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DEVELOP A VALUES SET

Step 1

The Epitaph Exercise


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p p

The things we hold dear are often reflected inthe way we want people to remember us.

One way of identifying our values is by writingour own epitaph, the words we want written on

stone so that people who get to read it will

appreciate the kind of person we are.

Example of an EpitaphExercise


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Exercise

Epitaph of Christy Saavedra:Here lies Christy. Loving wife and mother. Provider

of gifts and good tidings. Whose heart and mind were

always in the right place and whose mouth spoke

with the confidence of babes.

Self-interpretation by Christy:

She values loyalty, honestly-acquired wealth,

integrity, rationality, courage.


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CRAFT A VISION STATEMENTIF YOU CAN BE WHATEVER IT IS YOU

WANT TO BE, WHAT DO YOU WANT TO

BE?

Step 2


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IDENTIFY AND ANALYZEYOUR STAKEHOLDERS

Step 3

Stakeholder AnalysisWorksheet


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Worksheet

StakeholdersExpectations

(What do our stakeholders expect

from us?)

Service Opportunity(What can we do for our

stakeholders?)

Clients/customers Best cleaning service at the most

reasonable cost

Give them service in a manner that

will make them feel that they got the

best value for their money

Workforce A pleasant work environment and a

payscale that gives them

commensurate compensation for the

effort they put in to their work

Help them to develop and grow as

persons and as professionals

Stockholders/owners A satisfactory return on their

investment

Ensure a profitable operation without

necessarily compromising the safety of

their investment in the enterprise

Community To be generous with its resources by

contributing to the general uplift of

the quality of life in the locality

Operate responsibly, making sure that

all actions are acceptable to the

community not only in the letter but

also in the spirit


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SET YOUR GOALS FOR EACHSTAKEHOLDER

Step 5

Stakeholder-GoalMatrix


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Matrix

Stakeholders Key Result AreasHistorical

Performance Proposed Goal

Clients/customers Customer

satisfaction

.9 visits per month

210 customers

4 visits per month

500 customers

Employees Quality of worklife 2 resignations per

year

1 resignation per

year

Owners Return on Equity From high of 129%to only 4.5% last

year

10% ROE

Community ComDev initiatives None 1 ComDev initiative

per quarter


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Documents

Addu Sea Stratplan