Winnie M. Constantino
AGSB

I. Session Objective
II. The LEC/Service-Learning Project: An Overview
III. A Review of the Strategic Management Process
IV. The Service-Learning Paper: Outline and Contents
V. The Conduct of Research and Planning Process
VI. Milestones and Timetable

To discuss the LEC and Service-Learning Project and
Paper in the context of Strategic Management:
• Review the strategic planning process and discuss its application in the formulation of the
Service-Learning plan
• Agree on the outline and expected contents of the Service-Learning paper

Strategy Formulation
Strategy Implementation
Strategy Monitoring/Control

STRATEGY FORMULATION IMPLEMENTATION MONITORING
Dev’t of
Vision/
Mission
Statement
External
Analysis
Establish
Long-term
Objectives
Generate
Evaluate,
And
Select
Strategies
Implement Strategies:
Set & execute action plans by functional units
Measure and
Evaluate
Performance
Internal
Analysis
Note that there is an iteration process involved, thus the arrows can go back to the opposite direction.

Business (For Profit)
 Multinational companies
 Domestic Companies
 Multi-business; Single-business
 Small, medium, large
 Various industry sectors
 Public; Family-owned
 Start-up, Mature
Non-Profit
 Government
 NGO’s
 Cooperatives
 Schools/Universities
 Foundations

Part A: BACKGROUND AND ANALYSIS
I.
II.
III.
IV.
V.
Background on the Partner-Organization
Research Methodology
Community Assessment (External Analysis)
Organizational Assessment (Internal Analysis)
Analysis of Issues and Generation of Alternative
Strategies/Programs
Part B: STRATEGIC PLAN/PROJECT PLAN
III.
IV.
V.
VI.
I.
II.
VII.
VIII.
Strategic Thrust and Overall Objectives
Strategies and Major Programs
Scope of Proposed Program and Justification
Specific Objectives for 2010-2011
Action Plan
Other organizational Support Needed
Financial Requirements/Fund Sources
Monitoring System: Performance Measures and Targets

OUTLINE: I. Background on the Partner
Organization






Basic information: Name, when established, location and area of operation
Vision/Mission/Goals
Example: To improve the well-being of the poor families in the municipality of San Jose
Major programs and Projects
Examples: Livelihood Program, Credit Program, Feeding
Project, Education and Training
Number of People
Funding sources
Examples: Internally-generated revenues, UN, USAID,
Corporate and Individual donors, Local government
Other relevant information

 An explanation of the research methods or design used


Examples:
 Interviews (Identify)
 Focused Group Discussions (FGD)
 Survey
 Data gathered from public data
 Past studies
Data sources
Examples: NSO, NEDA, Municipal government, NGO data
Limitations, if any

OUTLINE: III. Community Assessment (External
Analysis)
1. Geographic area (description)





2. Profile of Potential/Target beneficiaries
Population size: number of poor families
Incomes/Sources or means of livelihood
Housing conditions
Health and nutrition status
Educational attainment

OUTLINE: III. Community Assessment (External
Analysis)







3. Relevant External Factors
Income or employment opportunities (e.g.,
Agriculture/farming, manufacturing, services)
Availability of government services (e.g., public schools, health clinics, etc.)
Cost of living (i.e., prices of food, transport, etc.)
Environmental and sanitation conditions (e.g., availability of potable water, toilets)
Cultural beliefs and practices
Political factors (LGU and Barangay participation, institutions/structure, decision-making process)
External stakeholders (e.g., cooperative, local government, church group, local associations)

OUTLINE: III. Community Assessment (External
Analysis)
4. Opportunities and Threats



Opportunities/Or Favorable factors
Presence of public schools and health clinics
On-going construction of some houses by GK
Current mayor supportive of anti-poverty programs
 Some private companies are carrying our some Corporate
Social Responsibility (CSR) projects
Threats/Or Unfavorable factors



Lack of access to potable water
Poor roads and lack of transport facilities
High prices of basic commodities

OUTLINE: IV. Organizational Assessment
(Internal Analysis)
1. Historical performance (based on success measures);
Program accomplishments
2. Factors affecting performance





Leadership/Management
Funding/Financial Resources
Organizational structures
Manpower (size, skills, attitudes and motivation
Systems, policies and procedures (e.g., project approval, release of funding, monitoring system)
3. Strengths and Weaknesses

OUTLINE: V. Analysis of Issues and Generation of Alternative Strategies/Programs
A. Analysis of Issues (Problems/root causes)
 An analysis of the causes of why some people are poor in
San Jose, based on the analysis of external factors.
 A summary of the organizational factors that need to be addressed to improve the organization’s effectiveness in achieving its objectives.
B. Generation and evaluation of strategy choices and possible programs that can address the issues:
• SWOT Analysis
• Problem-tree/Decision-making analysis

Opportunities
1.
2.
3. ...
Threats
1.
2.
3. ...
SWOT ANALYSIS
Strengths
1.
2. ...
Weaknesses
1.
2. ...
SO Strategies:
Use a firm’s strengths to take advantage of opportunities
WO Strategies:
Improve weaknesses by taking advantage of opportunities
ST Strategies:
Use a firm’s strengths to avoid or reduce the impact of threats.
WT Strategies:
Defensive strategies directed at risking weaknesses and avoiding threats

Evaluating Alternative Strategies/Programs
Criteria:



Acceptability
Suitability
Feasibility

STRATEGY FORMULATION
Strategies are the management decisions and programs needed in order to:
1.
2.
3.
4.
Take advantage of the opportunities and counter the threats in the business environment
Address the entity’s weaknesses and protect its strengths
Resolve the strategic issues facing the entity/organization
Achieve the entity’s strategic objectives

Part B: STRATEGIC PLAN/PROJECT PLAN
I.
II.
III.
IV.
Strategic Thrust and Overall Objectives
Strategies and Major Programs
Proposed Project
Specific Objectives for 2011-2012
V.
VI.
Action Plan
Other Organizational Support needed
VII.
Financial Requirements/Fund Sources
VIII.
Monitoring System: Performance
Measures and Targets

Note: Hierarchy of Strategies/Objective s



Vision/Mission
Long-term Objectives
Strategic Objectives/Strategic Thrust
 Strategies and Programs
 Sub-strategies/Projects
 Action Plans (Activities)

Activities Milestones/
Expected
Output
Timetable Person/s
Responsible
Resource
Requirements

•
•
•
•
•
VI. Other Organizational Support Needed
Examples:
Resource allocation
Training
Equipment
Manpower
Changes in policies and procedures
VII. Financial Requirements
• Estimate how much is needed to carry out the plan or the project

VIII. Monitoring System
•
•
Performance Measures/
Success Indicators
Monitoring mechanism

Guidelines on Grouping and Scope of Project
Big Group can work on Common Chapters of the Analysis and Planning for the whole
Partner Organization
Small Groups to work on Different Projects

2.



1.
Community Assessment
 Discuss with partner organization
 Talk to potential/target beneficiaries
 Proper handling of family and community meetings
 Gather data
 Do field work
3.


Internal Assessment
Do this in collaboration with partner organization
Conduct surveys, interviews or focused group discussions
Use strategies for collaboration learned in other modules
 Facilitating and listening skills

Giving feedback
Strategy Formulation/Action Planning
Participative planning
Involve people in the organization

Meeting with Partner
Org/
Fieldwork
Submission of Draft
Reports
Dec.14, 2010
Consultation w/Advisers
(Indicative Dates)
Dec. 2, 2010
Jan.4, 2011 Jan. 8, 2011 Jan. 13, 2011

March, 2011 – Submission of Final Service-
Learning Paper
April, 2011 – Oral Defense

PART I: Sem I YL 7 (One whole-day Session)


Introduction and Overview: Strategic Management
Strategy Formulation
PART II: Sem II YL7



Consultations
Research/ Field Work
Submission of LEC paper and Oral Defense
PART III: Sem I YL 8 (Six sessions of 4-hrs each)




Recap: Strategic Management Process
Strategy Formulation & Strategy Choices: Business Setting
Strategy Implementation
Strategy Monitoring & Control

 Class Activities
◦
Group Projects
◦
Individual Assignment
◦
Class Participation
◦
Midterms
◦
Final Exam
70%
 Strategy (LEC) Paper 30%
◦
Written Document
◦
Oral Defense
Note: Evaluation of group projects/reports to incorporate “peer grading”
Winnie M. Constantino
AGSB

END OF SESSION

Assessment of the external factors that impact on your organization’s performance.
OPPORTUNITIES - created by favorable events, trends or possibilities for action that promise to:









Enable you to achieve your organization’s mission/Objectives
Expand the size of your customer base.
Give new avenues for customer access
Increase the appeal of your product/service
Exploit a weakness of a competitor
Gain better access to resources
Reduce your costs
Improve your cost efficiencies and productivity
Improve your profitability/financial position
THREATS – unfavorable events that have the opposite impact.

What decisions facing a business are strategic and therefore deserve strategic management attention?
1.
2.
3.
Strategic issues require top management decisions and involvement
they involve several areas of a firm’s operations
Strategic issues require large amounts of the firm’s resources
- they require substantial allocation of people, physical assets or financial resources that must be obtained
- they need to commit the firm to actions over an extended period
Strategic issues affect the firm’s long-term prosperity
- Pearce and Robinson
Strategic Management, 9 th Ed. 2005
Winnie M. Constantino
AGSB

STRATEGY FORMULATION IMPLEMENTATION MONITORING
Dev’t of
Vision/
Mission
Statement
External
Analysis
Establish
Long-term
Objectives
Generate
Evaluate,
And
Select
Strategies
Implement
Strategies:
Mgt. Issues
Implement
Strategies:
Functional
Units
Measure and
Evaluate
Performance
Internal
Analysis
Note that there is an iteration process involved, thus the arrows can go back to the opposite direction.

 A comprehensive and thoughtful examination of the current state of an organization which defines its capacity for succeeding in its environment.
 Identification of the organization’s strengths and weaknesses
.

THIS INVOLVES:

An assessment of the organization’s business performance


A closer analysis (probing) of the reasons behind the organization’s favorable or unfavorable performance
An analysis of the various elements of the organization that affect its performance
Analysis should focus on the organizational elements that are directly or indirectly related to the critical success factors of the business or industry

To assess how well is the company’s present strategy working, review the company’s performance based on its defined success measures.
Examples:
 Revenue/Sales growth in the past few years
 Market Share and how the company’s growth compares with that of the industry and other players
 Company’s costs and cost structure
 Company’s operating efficiencies
 Company’s net profit margins and rate of return on assets or equity investment
For non-profit oriented enterprises , evaluate the company’s performance visà-vis its mandate.

IDENTIFICATION OF CRITICAL SUCCESS FACTORS
 The internal factors and capabilities that an entity needs to have in order to succeed in its industry
Examples:
 Company reputation and image
 Price competitiveness

Management capability
 Cost efficiency

Quality of products and services
 Range of product and service offerings

Skilled workers (availability of good doctors)
 Strategic location

Capacity; Facilities and equipment
 Marketing efforts
 R & D capability
 Financial resources/strength

The enterprise can be assessed in the various elements of organizational effectiveness. From this assessment, the important strengths and weaknesses can be identified.
The following frameworks may be used for a systematic analysis:
 McKinsey’s 7-S
 Weissboard Model
 David’s Functional Audit








Management
Marketing
Finance
Human Resource Management
Production
Research & Development
Computer Information Systems
Note that the functional units can vary from one entity to another depending on how it is organized and depending on its business.

STRUCTURE
STRATEGY
SYSTEMS
SHARED
VALUES
SKILLS
STYLE
STAFF

VISION
RELATIONSHIPS
LEADERSHIP
STRUCTURE
- skills
- technology
HELPING MECHANISMS
- culture / mindsets
- resources
REWARDS / MOTIVATION
- intrinsic
- extrinsic

• Mission, Goals, Objectives and Targets
• Strategies, Thrusts and Directions
Guide Questions:
1.
Is the organization’s set of vision/mission and strategy clear to all the employees in the organization?
2. Are these appropriate given current situation?

• Top Management
• Middle-Management
• First-Line Supervisors
Guide Questions:
1. How would you describe the leadership style in the organization?
2. How effective is this in steering the organization towards its goals?
3. What can you say about the level of competence of the leaders
( i.e. top, middle and first line ) in managing the organization?
4. What are the most important areas for improvement and strengths?

• Tasks and Work processes
• Skills
• Technology
• Organization Structure
• Job Design
• Work Distribution and Load
• Physical Structures and
Facilities
Guide Questions :
1.
Is the current organization structure aligned to the requirements of the environment? If not why? What features of the structure are helpful and which ones interfere with efficient functioning?
2. What are the work flow processes that are most critical to organizational functioning? Pinpoint strengths and weaknesses.
3. Does the organization have the needed technical and managerial skills?
Identify the areas where skills and competencies are inadequate.
4. Are the physical structures and facilities appropriate for the effective functioning of the organization?

• Intrinsic Rewards
• Extrinsic Rewards ( Pay, Benefits, Incentives )
• Recognition Programs
Guide Questions:
1 . What are the intrinsic rewards, if any, to working in the organization?
2. What can you say about the pay, benefits and incentives in terms of fairness, competitiveness and responsiveness to employee needs?
3. What non-financial motivation programs does the organization undertake? How responsive are these?

• Management Systems
• Information Systems
• Culture ( Values and Norms )
• Policies and Rules
• Procedures and Guidelines
Guide Questions :
1. How clearly are the organization’s values and norms enunciated and practiced in the entire organization?
2. What can you say about the effectiveness of the company’s management and information systems, such as : planning system, performance management system, decision-making process, Finance, HR and
Administrative systems, in terms of driving and supporting business performance?
3. Are policies, rules and procedures clear, adequate, consistently applied and supportive of organization’s goals?

• Subordinate-Superior
• Superior-Subordinate
• Peers
• Inter-Department
Guide Questions:
1. Does the organization have the appropriate level of coordination or team-work to accomplish the task ? Within each department?
Among departments?
2. What can you say about the communication channels between subordinates and superiors? Among peers?
3. Identify the most important areas for improvement and strengths.

1.
Review the company’s performance in terms of key performance measures
Examples:
 Revenue/Sales growth in the past few years
 What products/services/market segments are growing fast, and which are growing slowly
 Company’s costs and cost structure
 Company’s operating efficiencies
 Company’s net profit margins and rate of return on assets or equity investment
For non-profit oriented enterprises, review performance visà vis its mandate.

2.
Look for favorable and unfavorable trends and analyze possible reasons for these by identifying strengths and weaknesses
(use any of the organizational analysis frameworks)
3.
Identify the major strategic issues that the company must address

 Developing a strategic VISION and business MISSION
“Effective strategy-making begins with a concept of what a company should and should not do and a vision of where the organization needs to be headed.”
 Setting performance OBJECTIVES
“Objectives represent a managerial commitment to achieving specific performance targets within a specific time frame.”
 Crafting a STRATEGY to produce the desired results
“A strategy deals with the game plan for moving the company into an attractive business position and building a sustainable competitive advantage.”
* Thompson and Strickland

A MISSION states an enterprise’s fundamental reason for being and its primary commitments to its stakeholders. It guides an organization in terms of how it must do business.
It usually states an enterprise’s:

Primary purpose
 Commitments to its stakeholders
 Basic philosophy
 Core values

A VISION is a shared image of what the people in an enterprise aspire for it to be or to become. It conveys a desired future state.
A good vision must be:
 Inspiring and worthy of one’s commitment
 Clear and compelling; must serve as a unifying focal point of effort
 Something vivid that the people can picture in their minds
 Aspirational yet something that the people can believe to be realistically possible

Establishing Financial and Strategic Objectives:
The second direction-setting task
Setting objectives converts the strategic vision and directional course into specific performance targets.
Objectives represent managerial commitment to achieving specific outcomes and results.

The General Electric/Mckinsey Industry Attractiveness
Business Strength Matrix
High
Industry Attractiveness
Medium Low
High
Investment &
Growth
Selective
Growth
Selectivity
Business
Strength
Medium
Selective
Growth
Selectivity
Harvest
Divest
Low
Selectivity
Harvest
Divest
Harvest
Divest

rriving at a clearer definition of where we want to go and what we want to achieve in a given planning horizon.
Long-term objectives represent the results expected from pursuing certain strategies
-- Fred David

rriving at a clearer definition of where we want to go and what we want to achieve in a given planning horizon.
An Objective must be:
• S pecific
• M easurable
•
A chievable
•
R ealistic
•
T ime-bound
It must also be:
•
Challenging
•
Hierarchical
• Understandable

TYPES OF OBJECTIVES: STRATEGIC & FINANCIAL
Every company needs both strategic objectives and financial objectives
STRATEGIC INTENT
• Better product/service quality
• Lower costs relative to competitors
• Broader or more attractive product/service line
• Superior customer service
• Wider geographic coverage
FINANCIAL OBJECTIVES
• Growth in revenues
• Growth in earnings
• Wider profit margins
• Higher returns on invested capital
• Bigger cash flows

HOW MUCH STRETCH SHOULD OBJECTIVES
ENTAIL?
• Objectives should be high enough to produce outcomes at least incrementally better than current or past performance
• Ideally, objectives ought to serve as a managerial tool for truly stretching an organization to reach its full potential ; this means setting them high enough to be challenging - to energize the organization and its strategy.

THOMPSON AND STRICKLAND

STRATEGY FORMULATION
Strategies are the management decisions and programs needed in order to:
1.
2.
3.
4.
5.
Take advantage of the opportunities and counter the threats in the business environment
Address the entity’s weaknesses and protect its strengths
Develop and sustain a competitive advantage
Resolve the strategic issues facing the entity/organization
Achieve the entity’s strategic objectives

STRENGTHS - S WEAKNESSES - W
OPPORTUNITIES -
O
SO STRATEGIES
Use strengths to take advantage of opportunities
WO STRATEGIES
Overcome weaknesses by taking advantage of opportunities
THREATS - T ST STRATEGIES
Use strengths to avoid threats
WT STRATEGIES
Minimize weaknesses and avoid threats
- Fred David

STRATEGY FORMULATION
GENERIC STRATEGIES:
A longterm strategy should derive from a firm’s attempt to seek competitive advantage based on one of three generic strategies:
1.
2.
3.
Striving for overall low-cost leadership in the industry.
Striving to create and market unique products for varied customer groups through differentiation.
Striving to have special appeal to one or more groups of customer or industrial buyers, focusing on their cost or differentiation concerns.

STRATEGY FORMULATION
GENERIC STRATEGIES:
1.
2.
3.
4.
5.
6.
Required skills and resources for low cost leadership:
Sustained capital investment and access to capital
Process reengineering skills
Intense supervision of labor
Products designed for ease of manufacture
Low cost distribution system
Tight cost control.

STRATEGY FORMULATION
GENERIC STRATEGIES:
1.
2.
3.
4.
5.
Required skills and resources for differentiation:
Strong marketing abilities
Product engineering
Creative flare
Strong R & D
Reputation for quality or technological leadership.

STRATEGY FORMULATION
GENERIC STRATEGIES:
Focus Strategy: Attempts to attend to the needs of a particular market segment .
**Can be based on either low cost or differentiation strategy.

STRATEGY FORMULATION
VALUE DISCIPLINES:
Strategies must deliver superior customer value through
1.
2.
3.
one of three value disciplines:
Operational excellence – strategies focus on lean and efficient operations.
Customer intimacy – strategies focus on tailoring and shaping of products and services to fit an increasingly refined definition of the customer. Needs detailed customer knowledge and operational flexibility.
Product leadership – strategies aim to produce a continuous stream of state of the art products and services. Requires: creativity, innovation, continuous improvement.

STRATEGY FORMULATION
GRAND STRATEGIES:
Strategies that provide basic direction for strategic actions.
1.
2.
3.
Market Penetration – strategies aim at increasing use of present products in present markets
Market Development – strategies aim at selling present products in new markets.
Product development – strategies aim at developing new products for the present market.

STRATEGY FORMULATION
1.
2.
3.
4.
OTHER GRAND STRATEGIES:
Strategies that provide basic direction for strategic actions.
Horizontal/Backward/Forward integration
Concentric/Conglomerate diversification
Turn-around/Cost reduction/Retrenchment
Divestiture/Liquidation

STRATEGY EVALUATION
1.
2.
3.
TESTS OF A WINNING STRATEGY:
Goodness of fit test – A good strategy is tailored to fit the company’s external and internal situation.
The competitive advantage test – A good strategy leads to sustainable competitive advantage.
The performance test – A good strategy boosts company performance.

FINANCIAL OBJECTIVE: To grow revenues from P100 m in 2007 to P200 m by 2012.
STRATEGIC INTENT: To develop/tap new markets through a wider range of product and service offerings.
STRATEGIES:




Provide products and services that will serve the market for medical tourism.
Upgrade facilities to bring them to world-class standards.
Enhance the skills and service level of the medical staff through the conduct of appropriate training programs.
Build the company’s image in the Asia-Pacific region through advertising and promotional campaigns.

FINANCIAL OBJECTIVE: To improve profit margin from
3% of sales in 2007 to at least 10% of sales by 2012.
STRATEGIC INTENT: To improve cost efficiencies and productivity and focus on high margin products and services.
STRATEGIES:





Eliminate/Phase out low-margin product and services.
Review staffing and organization structure to make it more “lean and mean”.
Improve operational procedures for manufacturing.
Outsource non-core services (examples: repairs and maintenance, cleaning/janitorial, laundry) to low-cost providers.
Re-engineer information systems and business processes.

OBJECTIVES:


To apply some of the concepts learned in STRAMA
To integrate learnings in Public Health, Management, & Clinical
Medicine; through:
The development of a strategic plan for a Community Project that will be along the partnerorganization’s mission/vision
Learning Activities: Research and field work, consultation with partnerorganization and professor-advisers
Deadline for LEC paper submission:
> Project Proposal: ??
> Draft Report: Middle of 2 nd Sem
> Final Report: End of 2 nd Sem
 Oral Defense: within 30 days after report submission