Developing a Strategic Management Paper

Understanding where the stakeholders / owners would like • Vision

to take the business. • Mission

• Industry / Market Analysis

Taking into account the general environment that affects a • PESTLE
business. • Porter’s Five Forces
• CPM

Analyzing the impact of the environment, consolidating the findings and • Opportunities
assessing the results. Strongly consider the CPM to determine the • Threats
appropriate factors to include in the EFE. • EFE

Conducting a general audit of the company’s HR, market (Mix, Target Market),
• Strengths
financial performance and production / operations to determine its capacity to
• Weakness
compete. Strongly consider the CPM to determine the appropriate factors to
• IFE
include in the IFE.
4-1 JPJavier – 09/22/2021
 Developing Strategies
• SWOT Matrix
Consolidating the general findings to define the company’s • Working draft of:
• Financial objectives
necessary strategies, tactics and objectives. • Departmental programs
• Strategy Map
• Balanced Scorecard.

• IE Matrix
Develop the analytical frameworks based on the existing • SPACE
• BCG
EFE, IFE and CPM matrices. • Grand Strategy
• QSPM

The researcher must clearly know and understand the difference between strategies and
tactics. Chosen strategies are focused, aligned with the Vision / Mission as well as taking the
organization to the next level of competition.

Tactics are the Objectives, Departmental Programs, Strategy Map and Balanced Scorecard
targets that bring life to the chosen strategies.
JPJavier – 09/22/2021
Strategic Position & Action Evaluation (SPACE) Matrix

• Financial Ratio Audit • Market Analysis

• CPM • PESTEL
• Porter’s 5 Forces

• Market Analysis / Share

• Market Analysis
• CPM
• Porter’s 5 Forces
• Strengths / Weakness

JPJavier – 09/22/2021
 Strategic Position & Action Evaluation (SPACE) Matrix
A four-quadrant framework that indicates whether
an organization will use aggressive, conservative,
defensive or competitive strategies.

At this point, the researcher can confirm the

• Benchmarking • Capture market share strategies to organization will pursue. Review and
• Limited resources • Weak or comparable competition redo the different External Factor matrices If there
• Strong Competition • Strong internal factors are inconsistencies.
• Benchmarking
• Good market opportunities
Support the analysis with cold, hard facts and
NUMBERS. Perception leads to bias and will distort
the final recommendations.

• Weak standing • Benchmarking

• Overcrowded or • Strong internal factors
shrinking market • Strong competition
• Weak business • Good market opportunities
climate
JPJavier – 09/22/2021
Strategic Position & Action Evaluation (SPACE) Matrix

Tips
• Factors are based on previously developed frameworks like PESTLE, 5 Forces, Financial Ratios, CPM etc.
One example is the lack of financial ratios under the “Financial Position” quadrant. This affects not only the
IFE but also the CPM. The true measure of a company’s strength is behind its Balance Sheet and P&L. The
researcher cannot properly assess a competitor’s strength or weakness without these numbers.
• The SPACE Matrix is a “research validator” that dictates research thoroughness and diligence. The
researcher should add more factors to the previously mentioned frameworks if a quadrant has less than
five factors.
• SPACE Matrix factor scores should align with EFE weights.

JPJavier – 09/22/2021
 BCG Matrix
When a firm’s divisions compete in different industries, a separate strategy often must be developed for each
business. Also called as one of the portfolio matrices, the Boston Consulting Group (BCG) Matrix is designed
specifically to enhance a multidivisional firm’s efforts to formulate strategies.

An example is the Max’s Group made up of 14 brands, with 500 outlets and 25 stores overseas. Max’s brands
include Max’s Restaurant, Max’s Corner Bakery, Krispy Kreme, and Jamba Juice. Pancake House’s brands
include Pancake House, Le Coueur de France, Dencio’s Teriyaki Boy, Singkit, Sizzling Pepper Steak, Kabisera,
the Chicken Rice Shop, and Maple

Globe Telecom operates mobile, fixed line and broadband networks and provides communications services to
individual customers, small and medium-sized businesses, and corporate and enterprise clients. Its business
segments are Mobile Business, and Fixed Line and Broadband Business.

JPJavier – 09/22/2021
BCG Matrix
Geographic Divisions Revenues Percent Profits Percent
Profit
Revenues (millions
(millions) )
U.S. $8,558.9 33.68 $3,612 50.55
International Lead 7,614.9 29.97 2712.6 37.96
Markets
High Growth Markets 6,172.8 24.29 841.1 11.77
Foundational Markets 3,066.4 12.07 (20.2) (0.28)
and Corporate

Total $25,413 100.0 $7,145.5 100

More often than not, companies do not provide revenue

segments. This challenge tests the researcher’s creativity.
The researcher should clearly explain data sources and the
basis for assumptions.

JPJavier – 09/22/2021
BCG Matrix
Strong research efforts for the Market Analysis and
Competitor’s Profile Matrix (particularly financials) result
to good and sensible assumptions for this matrix.

Strategic recommendations should also clearly reflect the

FUTURE of the products analyzed in this matrix.

JPJavier – 09/22/2021
IE Matrix
The IE Matrix validates the IFE and EFE
Weight Factors.

The IE Matrix also validates the contents of

the BCG Matrix for multi-product or multi-
location portfolios that require different
distinct strategies,

JPJavier – 09/22/2021
IE Matrix
An IE Matrix can both present a BEFORE and
AFTER snapshot of each portfolio
performance.

The AFTER snapshot can also move to a

stronger quadrant after implementing the
recommended strategies.

JPJavier – 09/22/2021
Grand Strategy Matrix
A Grand Strategy Matrix is used to justify
alternative strategies based on the firm’s
competitive position (CPM) and market
growth (Market Analysis). It tells a story of
what the firm should consider given the
circumstances of the X & Y axis.
An example are firms that fall under
Quadrant IV. This tells a story of a dwindling
market caused by disruptions, market trends
or consumer preferences. Rather than
wasting marketing resources, in the hope of
improving sales, the firm should concentrate
on diversifying its portfolio as it moves out
of the existing market.

JPJavier – 09/22/2021
 Quantitative Strategic Planning Matrix (QSPM)

Attractiveness Scores
1 – Not Attractive 3 – Reasonably Attractive
2 – Somewhat Attractive 4 – Highly Attractive
JPJavier – 09/22/2021
 Quantitative Strategic Planning Matrix (QSPM)

Attractiveness Scores
1 – Not Attractive 3 – Reasonably Attractive
2 – Somewhat Attractive 4 – Highly Attractive
JPJavier – 09/22/2021
 Quantitative Strategic Planning Matrix (QSPM)
TIPS
• Finalize all factor scores and weights before proceeding to the QSPM. Struggling with the QSPM is an indicator of
weak or underdeveloped strategic matrices.
• The columns may indicate specific alternative actions such as Close or Scale Down, Build or Outsource
Manufacturing Plant ,Joint Venture or Acquire Firm, Relocate or Remain etc.
• The primary reason for choosing between alternative strategies is COST.

JPJavier – 09/22/2021
 StraMa Study Wall

Competitor’s A
Audit* PESTEL

Industry / Company
Market EFE IFE Audit*
CPM Analysis

Working Draft
Porter’s
A 5 Forces SWOT • Objectives
Matrix • Departmental Plans
• Strategy Map
* Emphasis is given to the firm’s Financial Ratios • Balanced Scorecard Targets

JPJavier – 09/22/2021
 StraMa Study Wall
EFE Financial
IE BGC Ratios
Matrix IFE Matrix Industry / EFE
Market QSP
Financial Analysis Matrix IFE
Ratios

SWOT PORTFOLIO MATRIX DECISION STAGE

Matrix
Financial
SPACE Ratios Grand CPM
Matrix PESTEL Strategy Industry /
Porter’s Matrix Market
Departmental
Analysis
IFE Objectives Plans and
Actions
Strengths /
Weakness
Industry / Strategy Balanced
Market Scorecard
Map
Analysis
MATCHING STAGE
 What Should a Strama Paper Deliver?
Does the product address specific Megaworld’s Eastwood was the first pet-friendly mall.
market needs?
Does the product CREATE or OPEN new Apple Ipod, Spotify, AirBNB, Grab, Netflix
markets?
Were challenges converted to • Jollibee challenged McDonalds with the “Langhap Sarap” campaign
opportunities? and beat Tropical Hut, Cindy’s Orange Julius in the process.
• Bounty Agri-Ventures opened Chooks-to-Go because of oversupply.
• Lamoiyan Corp developed Hapee Toothpaste because it lost its
contract to supply toothpaste tubes.
Can the strategy take the competition • Victoria Court rebranding.
by surprise? • Shopee took advantage of Lazada employee’s discontent with the
company.
Does it offer a clear competitive edge Customers can deposit checks by taking a picture with UnionBank’s
over rivals? mobile banking app.
Were sustainable innovations Grab went beyond its taxi riding service because of its technology
introduced? platform.