STRATEGIC MANAGEMENT PAPER

Proposed Improvement Plan for Company A.

OUTLINE

Overview:
You are a consultant hired to recommend improvements to a company’s strategies and strategic-management practices.

As such, you will evaluate the company’s overall performance, review its current strategies, identify problems and weak
areas, and come up with recommendations for improvement. Your recommendations will be sent to top management for
evaluation and consideration.

Deliverables:
Midterm –Strategic Analysis (Section I - VI of your paper).
Finals – Final paper / Defense of paper

Grading Criteria

• Logic and problem solving

• Understanding of the strategic management process
• Analytical ability
• Mastery of tools

EXECUTIVE SUMMARY (1 -2 pages)

Provide a quick overview of the paper to cover the following

• The company being studied, the business it’s in
• Main findings from the external and internal analysis
• Overall results of strategy formulation tools used
• Key strategic management issues observed
• Recommended strategic objectives /changes
• Financial goals (at least for the next three years
• Strategies and significant action plans
I. INTRODUCTION
• Short background of the company
• Mission and vision statements
• Nature of business/products/services
• Current revenue size and profit
• Major markets served
• Number of employees
• Other relevant basic information

II. RESEARCH DESIGN AND METHODOLOGY

• Data and information sources

• How information was obtained & methodologies used
• Major assumptions

III. REVIEW OF THE COMPANY’S VISION AND MISSION

• State the current vision, mission and objectives of the company

• How effective are the current mission and vision statements of the company?
• Are the strategies of the company aligned with its mission and vision statements?
• Comment or evaluate the vision and mission statements using David’s framework and other criteria discussed in
class. Interview stakeholders if the mission and vision statements are understood well by everyone in the
organization.
• Recommend changes if needed. Or, develop new vision and mission statements. Explain how the recommended
vision and mission meets the criteria based on David’s framework, including how it takes into account ethical
principles and nation building.
• Give recommendations on how you will communicate the vision and mission to the employees and other
stakeholders.

IV. EXTERNAL ANALYSIS

A. General Environment

1. Discuss the results of your PESTEL analysis of the company. Focus only on factors that will have significant
impact on your business. Look into current and future trends.

a. Economic developments
b. Socio-cultural, demographic trends, lifestyle changes
 c. Technological developments
d. Political, legal, governmental aspects
e. Ecological aspects
f. Other external factors that may be more directly relevant to your business

Translate the above in terms of what it means for your business, identifying opportunities and threats that may
affect the following:

a. Market demand and opportunities

b. Types of products and services offered
c. Intensity of competition
d. Suppliers and distributors
e. Costs of doing business
f. Other aspects of the business

B. Industry and Competitor Analysis

1. Analyze the industry’s situation and prospects by looking into the following:

a. Market size and/or growth rate and stage in the growth cycle
b. Number of players and their relative sizes; market share analysis
c. Market aspects (products or service, price, promotion, and channels of distribution)
d. Buyer/Customer profile
e. Factors affecting costs of doing business
f. Operations/Production aspects
g. Technology developments
h. Industry financial analysis (growth, profitability, liquidity, leverage, efficiency)
i. Problems in the industry
j. Critical success factors in the industry

2. Analyze your industry using Porter’s Five Forces framework of competitive analysis and based on the
preceding analysis, state your conclusion for each force.

3. Perform a competitor analysis:

a. Identify your major competitors and provide relevant information for each, e.g. revenue size, financial
health, market share, strategies, etc. If there are too many, select and focus only on a few (about two or
three) and explain why you chose to focus on these competitors.
 b. Evaluate your competitors and your company vis-à-vis the critical success factors identified earlier. Do a
Competitive Profile Matrix and explain the ratings.

C. Summary and Conclusion

1. Using the results of your general environment and industry analyses, identify and summarize the major
opportunities and threats.
2. Use the EFE matrix tool to assess how well your company is responding to the opportunities and threats in
the environment. Make sure that the factors included in your EFE have been discussed in the external and
industry analyses and the factors you discussed in your analyses should be reflected in your EFE for
consistency. Explain your weights and ratings.
3. 3. Draw your conclusion about the industry’s overall prospects and industry attractiveness.
4. 4. Make a conclusion about your current company’s competitive position or business strength in the
industry, e.g., very strong, strong, middle-ground, weak.
5. 5. Identify key strategic issues related to the external environment that will have a significant impact on your
business.

V. INTERNAL ANALYSIS

A. Review the company’s performance in terms of key performance indicators:

1. Revenue/sales in the past three years

2. How the company’s growth compares with industry growth or vis-à-vis the other players
3. Profitability, other relevant performance indicators
4. Applicable financial ratios
5. Value Chain Analysis

B. Do an organization diagnosis using:

1. David’s functional audit to assess the different functional areas of the organization
2. McKinsey’s 7S Model or Galbraith’s Star Model

C. From the above, identify the company’s major strengths and weaknesses
D. Use the IFE matrix to evaluate the overall internal strengths and weaknesses of the company
E. Summary and Conclusion
1. Identify the major financial and internal strategic issues that the company must address
2. Identify key organizational elements that may hinder or promote growth and productivity.
VI. STRATEGY FORMULATION

A. Use the different strategy formulation tools (SWOT, SPACE, BCG, IE, GE/McKinsey, GRAND, and QSPM) and other
relevant analytical and matching tools to come up with strategic options and directions for the company. Explain
the results of your analyses.
B. Make sure that your analysis and positioning in the various matrices/cells are consistent with the results of your
external/industry and company analyses.
C. Do a summary and prioritization of the various strategies derived from the various tools. Select the strategies that
you will adopt to attain your objectives, and ultimately, your vision.

VII. OBJECTIVES, STRATEGY RECOMMENDATIONS AND ACTION PLANS

A. Strategic and Financial Objectives

1. Provide a clear statement of your strategic and financial objectives for the company or business, for the next
three years. It should state measurable objectives, e.g. market position, sales or revenue growth, net income
or profit level, profitability or rate of return, etc. (Follow the SMART rule – specific, measurable, achievable,
realistic, and time-bound.)
2. Financial objectives: These can be stated in terms of revenue level and growth, and productivity growth (cost
effectiveness). Other financial objectives like net income, profit margin, or other appropriate measures of
financial performance of the industry / company may be included.
3. Strategic objectives: These should define the major strategic thrust of the company. The strategic objectives
should consider the following: a. It must support the company’s vision/mission in Chapter III b. It must take
into account the expected external/industry prospects as shown in the external and industry analysis c. It
must take into account the company’s historical performance and current/expected competencies and
capabilities d. It must be consistent with the results of your analytical tools under Chapter VI. For example,
an aggressive expansion strategy should show more aggressive revenue growth while a “hold and maintain”
position should show more moderate growth for the company. The time frame can be anywhere from three
to five years hence, depending on the nature of the business and the characteristics of the industry where it
belongs.

B. Recommended Business Strategies

1. This should provide a more specific and comprehensive discussion of your proposed strategies consistent
with the directions/generic strategies indicated by the strategy formulation tools. Avoid generic and
motherhood statements. The strategies should enable the company or organization to achieve its objectives
and address the strategic issues identified in your external and internal analysis.
 2. If you are dealing with several businesses or product types, you may need to group them or come up with
one set of strategies for each business or product type.
3. If you are diversifying into a new business but plan to maintain your existing or core business, you need to
specify a set of strategies for both the core and new business.
4. Include functional level strategies for the following areas: Marketing, Sales and Distribution,
Operations/Production/Manufacturing, Finance and Human Resources.

C. Recommended Organizational Strategies

1. Identify strategies that will involve the necessary changes needed in order to align the organization with the
requirements of the business, given the long-term objectives and strategies
2. Identify strategies that will address the identified internal strategic issues, address the organizational
weaknesses of the company or take advantage of its strengths. Note that the business and organizational
strategies may also be combined if deemed more appropriate.

VIII. STRATEGY IMPLEMENTATION

A. The Strategy Map Translate your strategy recommendations into a strategy map for the company.
B. Departmental Action Plans and Programs

1. Show that the action plans and programs will support your objectives and strategies.
2. This should outline the different programs and step by step action plans that will be undertaken to
progress the implementation of the strategic plan. The action plans can be classified by strategic
programs or by department or both.
3. Specify milestones/expected output, timetable and persons or units responsible. Follow the template
given in class.
4. The action plans should also consider and indicate the resource requirements (financial, physical,
technological and human resources). This will support your financial projections.

C. Financial Projections and Overall Evaluation of the Strategies

1. Show and discuss the long-term financial plan/projections in comparison with historical
performance. Show and discuss the projected Income Statement, Balance Sheet and Cash Flows.
Indicate ratio to sales and annual growth rates. For non-business oriented organizations, the
financial projections may only involve projected budgets, costs or expenses.
2. State your assumptions and explain how your strategies will impact on some of the components of
the financial projections. The financial projections should incorporate the financial implications of
your strategies and should provide the level of detail needed especially on the costs and expenses.
3. Summarize overall evaluation, and assess the reasonableness, feasibility and acceptability of your
strategies.
 4. Make sure your strategies have logic based on your external and internal analysis and they will
enable the company accomplish its strategic and financial objectives.

VIII. STRATEGY EVALUATION, MONITORING AND CONTROL

A. Prepare an appropriate Balanced Scorecard for the company as your strategy evaluation and monitoring tool.
This should allow the company to evaluate and monitor its strategies from four perspectives: financial
performance, customer knowledge, internal business processes, and learning and growth.
B. In each perspective, the Balanced Scorecard should contain the following: objectives, performance measures,
targets, and initiatives. Make sure that these are consistent with your strategy recommendations.

Additional Guidelines:
• Do not plagiarize.
• Do not be constrained by the company’s current strategic plans or what you think will be acceptable to the
company’s management. What is important is that your recommended strategies follow the logic of your
external and internal analyses and you strategy formulation tools and your own strategic insights.
• Make assumptions whenever necessary, but state these assumptions clearly.
• Ensure internal consistency of your strategic and action plans with the financial plan/projections.
• While the STRAMA paper will be evaluated largely on the basis of its logic, substance and content, it should
be professionally done and written in formal style using the correct grammar, spelling, choice of words, and
proper format. In addition, all tables and figures in the paper should be numbered for easy reference and
should have appropriate titles, with units of measures used and data sources indicated. The previous three
years’ financial statements should be included in the paper as part of the Appendices.
• Acknowledge and cite your references and data sources. Proper footnoting should be followed. Note that the
school enforces strict rules against plagiarism.