SBA : MD 1 & 2

What is strategy?

Strategy is a long-term pattern of actions that helps an organization reach its goals while adjusting to changes in the business environment.

Who defined strategy in this lesson?

Peter Drucker.

According to Peter Drucker, what is strategy?

A pattern of activities that helps an organization achieve its objectives while adapting its scope, resources, and operations to environmental changes over the long term.

Is strategy just a plan?

No. It is a consistent pattern of actions, not just a written plan.

Why is strategy important?

It helps a company reach its goals and stay successful even when the business environment changes.

What are the four fundamental questions of strategy?

Opportunity and Risk,

Scope and Structure,

Trade-offs, and

Organizational Structure.

What is the Opportunity and Risk question?

It asks what opportunities the company should pursue and what risks it is willing to accept.

What is the Scope and Structure question?

It asks what the company's scope of operations should be and how much it should specialize, diversify, or integrate.

What is the Trade-offs question?

It asks how the company should balance time and money and whether to do work itself or partner with others.

What is the Organizational Structure question?

It asks what type of organization and structure will best help the company achieve its goals.

What is business analysis?

Business analysis is the actions and decisions management makes while understanding the effects of strategic events.

What are strategic events?

Important business decisions or changes that can affect the company's future.

Give examples of strategic events.

Launching a new product, opening a new factory, hiring important employees, choosing an organizational structure, investing in technology, managing risks, following regulations, and making organizational changes.

What is strategic business analysis?

A systematic way of studying a company's strategic position, creating strategic choices, and turning those choices into action.

What are the three key characteristics of strategic business analysis?

Long-term focus, external focus, and qualitative emphasis.

What does long-term focus mean?

Looking at how the company can stay competitive and successful for many years, not just make short-term profits.

What does external focus mean?

Looking at outside factors like competitors, the economy, government rules, and the business environment.

What does qualitative emphasis mean?

Considering non-financial factors like reputation, employee skills, leadership, innovation, and company culture together with financial data.

What are the three elements of strategic management?

Strategic Position, Strategic Choices, and Strategy into Action.

What is Strategic Position?

Understanding where the organization currently stands before making decisions.

What are the three parts of Strategic Position?

Environment Analysis, Strategic Capability, and Expectations and Purpose.

What is Environment Analysis?

Studying outside opportunities and threats that affect the business.

What is Strategic Capability?

Looking at the company's strengths, weaknesses, resources, and what it can achieve.

What are Expectations and Purpose?

Understanding what the company wants to achieve and what stakeholders expect from it.

What is Strategic Choices?

Deciding what the organization should do in the future.

What are the three steps of Strategic Choices?

Generation, Evaluation, and Selection.

What is Generation?

Creating different strategic options.

What is Evaluation?

Studying the advantages, disadvantages, and feasibility of each option.

What is Selection?

Choosing the best strategy to use.

What is Strategy into Action?

Putting the chosen strategy into practice.

What are the three parts of Strategy into Action?

Organizing, Enabling, and Managing Change.

What is Organizing?

Creating a structure, assigning responsibilities, and giving authority so the strategy can be carried out.

What is Enabling?

Using people, money, technology, and other resources effectively to achieve success.

What is Managing Change?

Helping employees accept changes and reducing resistance while implementing the strategy.

What are the three levels of strategy?

Corporate Level, Business Level, and Functional Level.

What is Corporate Level Strategy?

The overall strategy for the whole organization. It decides what industries or markets the company should be in and how to enter them.

Example of Corporate Level Strategy

Ayala Corporation deciding to enter the healthcare industry.

What is Business Level Strategy?

The strategy for a specific business unit. It focuses on how that business will compete successfully.

Example of Business Level Strategy

Ayala Land deciding to develop luxury residential properties.

What is Functional Level Strategy?

The day-to-day strategies used by departments to support the business strategy.

Example of Functional Level Strategy

The marketing department creating a promotional campaign.

What are the three strategy lenses?

Strategy as Design, Strategy as Experience, and Strategy as Ideas.

What is Strategy as Design?

Strategy is carefully planned by top management through formal planning. It follows a top-down approach.

What is Strategy as Experience?

Strategy develops from the company's past experiences, routines, and culture. It grows naturally over time.

What is Strategy as Ideas?

Strategy develops from new ideas, innovation, and creativity. Employees at different levels can contribute ideas. It follows a bottom-up approach.

What are the three approaches to strategy development?

Deliberate Strategy, Emergent Strategy, and Incremental Strategy.

What is Deliberate Strategy?

A planned strategy based on the company's vision and mission. It follows a top-down approach and is carried out as intended.

What is Emergent Strategy?

A strategy that develops from unexpected results or new opportunities. The company learns and adjusts while carrying out its plans.

What is Incremental Strategy?

A strategy that develops through small changes over time instead of making major changes all at once.

Who developed the Generic Competitive Strategies?

Michael Porter.

What are Michael Porter's three Generic Competitive Strategies?

Cost Leadership, Differentiation, and Focus.

What is Cost Leadership?

Becoming the lowest-cost producer or operator in the industry while still making a profit.

Example of Cost Leadership

Cebu Pacific offering lower fares than many competitors.

What is Differentiation?

Offering a unique product or service that customers see as different from competitors.

Example of Differentiation

Starbucks offering a unique coffee experience and premium products.

What is Focus Strategy?

Concentrating on a specific market or niche by using either low cost or differentiation.

Example of Focus Strategy

A specialty coffee shop serving only one neighborhood or a specific type of customer.

What are the essential characteristics of a Business Analyst?

Strategic thinker, analytical, communicator, stakeholder manager, financially literate, and change agent.

What does a Strategic Thinker do?

Looks at the big picture and plans for the future.

What does an Analytical Business Analyst do?

Breaks complex problems into smaller parts to understand and solve them.

What does a Communicator do?

Clearly explains ideas and recommendations to different people.

What does a Stakeholder Manager do?

Works effectively with customers, employees, managers, investors, and other stakeholders.

What does Financially Literate mean?

Understands financial information and uses it in business decisions.

What does a Change Agent do?

Helps the organization successfully manage and adapt to change.

What career opportunities are available for Business Analysts?

Business Analyst, Strategic Planner, Management Consultant, Financial Analyst, Operations Analyst, Project Manager, and Corporate Strategist.

What does a Business Analyst do?

Studies business needs and recommends solutions.

What does a Strategic Planner do?

Creates long-term plans for the organization.

What does a Management Consultant do?

Advises companies on improving their business.

What does a Financial Analyst do?

Studies financial information to help management make decisions.

What does an Operations Analyst do?

Improves business processes and increases efficiency.

What does a Project Manager do?

Leads projects to achieve business goals.

What does a Corporate Strategist do?

Helps decide the company's overall direction and future strategies.

How is the accountant's role changing?

Accountants are becoming strategic business partners who help management make important business decisions, not just prepare financial statements.

What is external environmental analysis?

It is studying the factors outside a company that can affect its performance, operations, and future decisions.

Why is external environmental analysis important?

Because it helps the company find opportunities, avoid threats, understand changes, stay competitive, and make better decisions.

How does external analysis provide direction for growth?

It helps the company identify new markets and opportunities to expand.

How does external analysis identify opportunities and threats?

It shows outside factors that can help or harm the business.

How does external analysis support continuous learning?

It keeps the company updated about changes in the business environment.

How does external analysis help build the company's image?

It shows stakeholders that the company is aware of changes and plans ahead.

How does external analysis help in meeting competition?

It helps the company prepare for competitors and respond effectively.

What are the two layers of the external environment?

The Macro-Environment and the Industry or Competitive Environment.

What is the Macro-Environment?

Broad external factors that affect almost every organization and cannot be directly controlled.

What is the Industry or Competitive Environment?

The external forces that directly affect how a company competes in its industry.

What is PESTEL Analysis?

A tool used to study the six major macro-environmental factors that affect a business: Political, Economic, Social, Technological, Environmental, and Legal.

What does PESTEL stand for?

Political, Economic, Social, Technological, Environmental, and Legal.

What are Political factors?

Government policies, political stability, and political conditions that affect business operations.

What questions are asked when analyzing Political factors?

Is the government stable? What taxes apply? Are there trade restrictions? How involved is the government? Are political leaders business-friendly?

What are Economic factors?

Conditions in the economy that affect costs, prices, business growth, and customers' buying power.

What questions are asked when analyzing Economic factors?

Is the economy growing? What is the inflation rate? What are interest rates? How do exchange rates affect the business? Is labor available? How much are consumers spending?

What are Social factors?

The cultural, demographic, and lifestyle characteristics of people that influence businesses.

What questions are asked when analyzing Social factors?

What are the demographics? What are people's values? How are lifestyles changing? What are customers buying? Is the population growing? What social issues affect the business?

What are Technological factors?

New technologies and innovations that affect how businesses operate and compete.

What questions are asked when analyzing Technological factors?

How is technology changing the industry? What innovations are emerging? How is digital transformation affecting operations? What research is happening? Is technology available and affordable?

What are Environmental factors?

Natural and ecological conditions that affect business operations and sustainability.

What questions are asked when analyzing Environmental factors?

How does climate affect the business? What environmental regulations apply? Are customers demanding sustainability? Are natural resources available? How is waste managed?

What are Legal factors?

Laws and regulations that businesses must follow.

What questions are asked when analyzing Legal factors?

What employment laws apply? What consumer protection laws exist? What health and safety rules apply? What industry regulations must be followed? How are intellectual property rights protected?

What is Porter's Five Forces Model?

A tool that studies how competitive and profitable an industry is by looking at five competitive forces.

Who developed the Five Forces Model?

Michael Porter.

What are the five forces in Porter's Five Forces Model?

Threat of New Entrants, Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of Substitute Products, and Rivalry Among Existing Competitors.