THE STRATEGIC MANAGEMENT PAPER

GUIDELINES & SUGGESTED OUTLINE EXECUTIVE SUMMARY

Provide a brief summary or overview of the strategy paper (in two pages at most), stating what
the business of the company is, the main results of the external and internal analyses, results
of strategy formulation tools used, the key strategic management issues and the
recommended strategic and financial objectives (at least for the next three years), and
strategies and significant action plans.

I. INTRODUCTION

Include a short background on the company

❑ 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

Identify the following:

❑ Data and information sources
❑ How information was obtained & methodologies used
❑ Major assumptions

III. COMPANY’S VISION AND MISSION

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

❑ Comment or evaluate the vision and mission statements using David’s framework
and other criteria discussed in class. 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 current and expected outlook in the following areas, focusing only on
factors that will have significant impact on your business. Consider the following
areas only insofar as they are relevant, and thus exert a significant impact on
your industry.

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

2. 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. Do 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. Draw your conclusion about the industry’s overall prospects and industry
attractiveness.

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. Identify key strategic issues related to the external environment that will have a
significant impact on your business.

V. INTERNAL/COMPANY 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.

4. 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 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.