CITY COLLEGE OF SAN JOSE DEL MONTE

School of Business Administration and Accountancy

Bachelor of Science in Entrepreneurship
1st Semester | 2023-2024

Lesson 2

Strategic Management Model

Prepared by:

Group 2

Bayaras, Elgyne Miesha C.

Buena, Carl Anthony B.

Casaljay, Mica Ella D.

Cabrera, Dave P.

Caranto, Jo-ann D.

Centillas, Erica A.

A Presentation Report

Submitted to Prof. Karen Absalon

In Partial Fulfillment of the Requirements

For the Course CB201 Strategic Management

Date

January 29, 2024

 CITY COLLEGE OF SAN JOSE DEL MONTE
School of Business Administration and Accountancy
Bachelor of Science in Entrepreneurship
1st Semester | 2023-2024

Lesson 2: Strategic Management Model

Learning Outcomes:

1. Discuss the strategic management model.

2. Explain the different strategic management techniques and examples.

Strategic Management Model

The strategic management model identifies concepts of strategy and the elements necessary for the
development of a strategy enabling the organization to satisfy its mission.

Significance of Developing Strategic Management Models

In life, we need effective strategies to meet our goals. Similarly, organizations need a strategic
management process in place to survive in a dynamic world—full of social, economic, political and
technical changes.

The need for strategic management can be understood by looking toward the future of a company.
Management is responsible for planning and preparing for continuous changes to navigate any
undesirable situation. A clear and focused effort by upper management goes a long way in calibrating
internal strengths with external deviations. Even the most basic model of strategic management can
help businesses keep pace with internal and external changes.

Here’s why you should focus your efforts on creating an effective strategic management process
model:

● You’ll be able to tap into opportunities and identify strengths and weaknesses by studying
the internal structure of your organization. Within every team, there’s unrealized potential
that needs your attention.
● A business environment is dynamic and fast-paced. By evolving and adapting your strategies,
you can keep abreast of vital changes in the business sphere. Goal-setting is a key element
while preparing for the future.
● You can reflect on your organization’s internal structure and make changes wherever you feel
necessary. Only a strong organizational structure can endure testing times.

Elements of Strategic Management Models

Several theories and models of strategic management have emerged over time, each instrumental in
informing organizations how to plan for growth and profitability. However, a review of the strategic
management models indicates that they include the following elements:

● Performing an environmental analysis.

● Establishing organizational direction.
● Formulating organizational strategy.
● Implementing organizational strategy.
● Evaluating and controlling strategy.
 CITY COLLEGE OF SAN JOSE DEL MONTE
School of Business Administration and Accountancy
Bachelor of Science in Entrepreneurship
1st Semester | 2023-2024

Performing an Environmental Analysis

An environmental analysis is a strategic technique used to identify all internal and external
factors that could affect a company’s success. Another name for this is environmental scanning.
Internal components reveal the strengths and shortcomings of a company, while external
components represent the opportunities and risks. This exists outside of the company.

Using environmental factors analysis has several advantages, including the following:

● Predicting the future

● Recognizing threats and allowing them to develop a response strategy
● Assisting in the achievement of business goals
● Increasing organizational effectiveness

Establishing Organizational Direction

Strategic direction focuses on the plans and actions you need to implement in order to
progress toward a vision for the organization's future. To gain the most value from having a strategic
direction, you need to analyze every area and process of an organization.

Use these steps to set a strategic direction:

1. Consider your vision for the company. Think of why you want this business to exist.
2. Reflect on your company's mission. How do you plan to make your vision come true?
This may include information about a company's products and services.
3. Develop a plan. Identify your future direction.
4. Set periodic and quantifiable goals. Create short-, medium- and long-term goals.

Formulating Organizational Strategy

Strategy formulation process is an integral part of strategic management, as it helps in
framing effective strategies for the organization, to survive and grow in the dynamic business
environment.

There are three levels of strategy formulation used in an organization:

1. Corporate level strategy: This level outlines what you want to achieve: growth and
stability.
2. Business level strategy: This level answers the question of how you are going to
compete.
3. Functional level strategy: This level concentrates on how an organization is going to
grow. It defines daily actions including allocation of resources to deliver corporate and
business level strategies.

Implementing Organizational Strategy

Strategy implementation is crucial because it concerns action rather than just brainstorming
ideas. It enables a team to understand that the strategies presented are viable. Strategy
implementation serves as a great tool for team development as every member can participate in the
process. It relies on thorough communication and the right tools.
 CITY COLLEGE OF SAN JOSE DEL MONTE
School of Business Administration and Accountancy
Bachelor of Science in Entrepreneurship
1st Semester | 2023-2024

There are seven key steps for an organization to achieve success in their strategy formulation
and implementation process.

1. Set Goals
2. Determine Roles
3. Assign Work
4. Execute and Monitor
5. Adjust and Revise
6. Complete the Job
7. Review and Reflect

A team reaches its end goal prior to the deadline while learning more about the project, the
company, and its capabilities only with effective strategy implementation. The following tips
help in strategy implementation:

● Establish Systematic Communication

● Equip with Right Tools for Job
● Foster Honesty
● Ensure Clarity
● Extend Support

Evaluating and Controlling Strategy

Strategy evaluation and control is the final stage in the process of strategic management. It
makes a comparison of the actual result with the intended ones. Also, it provides feedback which is
essential for the firm’s management for implementing corrections.

Strategic Management Techniques and Examples

There exists a variety of models and methods for strategic management. Some of the most
commonly used techniques are:

1. Balanced Scorecards (BSCs)

Accounting academic Dr. Robert Kaplan and business executive and theorist Dr. David
Norton first introduced the balanced scorecard. It is meant to measure the intellectual capital
of a company, such as training, skills, knowledge, and any other proprietary information that
gives it a competitive advantage in the market.

The balanced scorecard involves measuring four main aspects of a business:

● Learning and Growth

● Business Processes
● Customers
● Finance.

A few companies that use BSCs are Volkswagen, Citibank, Apple, and the Federal Bureau of
Investigations (FBI).
 CITY COLLEGE OF SAN JOSE DEL MONTE
School of Business Administration and Accountancy
Bachelor of Science in Entrepreneurship
1st Semester | 2023-2024

2. SWOT Analysis Model

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework
used to evaluate a company's competitive position and to develop strategic planning.

A SWOT analysis is used to strategically identify areas of improvement or competitive

advantages for a company. In addition to analyzing things that a company does well, SWOT
analysis takes a look at more detrimental, negative elements of a business. Using this
information, a company can make smarter decisions to preserve what it does well, capitalize
on its strengths, mitigate risk regarding weaknesses, and plan for events that may adversely
affect the company in the future.

3. PEST Model
PEST analysis (political, economic, social, and technological) is a management
method whereby an organization can assess major external factors that influence its
operation in order to become more competitive in the market. It is good to perform a PEST
analysis when there have been significant changes that may impact a business, such as a
change in interest rates, new government policies, or the introduction of new technology. It
should be done often so as not to become outdated.

A popular variation on the PEST analysis format, especially in the U.K., is the PESTLE strategic
planning approach, which includes the additional aspects of legal and environmental.

4. Porter’s Five Forces Model

Porter's five forces are used to identify and analyze an industry's competitive forces.
The five forces are:

● Competition;
● The threat of new entrants to the industry;
● Supplier bargaining power;
● Customer bargaining power; and
● The ability of customers to find substitutes for the sector's products.

Today, while the five-force model may require adapting it to rapid technological change and
the importance of collaboration across many industries, it's a reliable way to help guide
companies needing to navigate industry-specific challenges in their competitive strategy.
 CITY COLLEGE OF SAN JOSE DEL MONTE
School of Business Administration and Accountancy
Bachelor of Science in Entrepreneurship
1st Semester | 2023-2024

References

Villegas, F. (n.d.) What is Environmental Analysis? Steps, Benefits & Tools. QuestionPro.

https://www.questionpro.com/blog/environmental-analysis/

Indeed Editorial Team. (2022, July 22). 7 Types of Strategic Direction. Indeed.

https://www.indeed.com/career-advice/career-development/strategic-direction

Business Jargons. (n.d.) Strategy Formulation. https://businessjargons.com/strategy-formulation.html

Kelly, K. (2023, May 24). What is Strategic Implementation? Aspects & Key Steps. Simplilearn.

https://www.simplilearn.com/strategic-implementation-process-article

Tarver, E. (2023, March 10). What Is a Balanced Scorecard (BSC), How Is It Used in Business?

Investopedia. https://www.investopedia.com/terms/b/balancedscorecard.asp

Kenton, W. (2023, October 30). SWOT Analysis: How To With Table and Example. Investopedia.

https://www.investopedia.com/terms/s/swot.asp

Kenton, W. (2023, June 13). What Is PEST Analysis? Its Applications and Uses in Business.

Investopedia. https://www.investopedia.com/terms/p/pest-analysis.asp

Gratton, P. (2024, January 22). Porter's Five Forces Explained and How to Use the Model.

Investopedia. https://www.investopedia.com/terms/p/porter.asp