The ADDU-DDC Joint MBA Program

The ADDU-DDC Joint MBA Program
In a region in Spain, there is a village which is well-known for the uniqueness of the career choices of its male population: they are either priests or businessmen. It is said that one can predict the career choice of a boy by the choices he makes as a youngster. When the boy reaches the age of ten, he is given a choice between a fistful of coins or rosary beads.
The boy who chooses the fistful of coins, almost always, becomes a businessman. The boy who chooses the rosary beads, almost always, becomes a priest. The boy who chooses both the fistful of coins and the rosary beads, almost always,
becomes a Jesuit! Welcome to the ADDU-DDC Joint MBA Program!!!
THE FUNDAMENTALS OF STRATEGIC PLANNING : A Framework for School Administrators

An Engagement for the ADDU School of Engineering and Architecture
Prof. Mike D. Soledad Prof. Mike Soledad

Strategy
Has its roots in the military. Literally, the act of the general The root word is the Greek verb stratego, to plan the destruction of ones enemies through the effective use of resources From which came the word strategos, a general leading an army Prominent throughout history, discussed in such classics as The Art of War (Sun Zu), The Book of the Five Rings (Miyamoto Musashi), Arthasastra (Kautilya)
If we know where we are and something about how we got there, we might see where we are trending --- and if the outcomes which lie naturally in our course are unacceptable, to make timely change.
Abraham Lincoln
Strategic Planning Process
A systematic step-by-step process by which an organization charts its course of action towards a chosen destination.
Strategic Planning
It is: Sequential, logical, rational Long-term in perspective A guide to short-term decisions Aims for the best results-to-effort, outcome-totask, output-to-input Puts together mutually reinforcing activities to attain synergistic effects
Why do Strategic Planning?

Essential to responsibility discharging management
Simulates the future on paper Presents a framework for decision-making
Becomes a channel of communication at all levels of the organization

Benefits of Strategic Planning

Clearer direction and priorities identification and understanding of the critical success factors. Helps the organization capitalize on opportunities; leads the organization to act rather than react More efficient allocation of resources Ensure acceptance of common goals; increased involvement and commitment of people Provides a basis for measuring performance Trains managers to think ahead
Foundations of Strategic Thinking

1.
2.
3.
4.
No organization operates in a vacuum. Organizations are motivated by desired outcomes, adhere to deep-seated values and possess resources. Organizations are human inventions. They are imperfect. The external environment of an organization is dynamic.

5.
5. There are many ways of killing a cat.
6.
6. The organization has to choose the best way to attain its objective. 7. The best way to attain organizational objectives is that which exhibits the best possible goodness-of-fit among its values, its objectives, what it can do well, what it is deficient in, what it can exploit, and what it must reduce to irrelevance or avoid altogether.
7.
The Best Way

Objectives
Strengths Values
Goodness-of-fit
Threats Weaknesses
Opportunities

5.
5. There are many ways of killing a cat. 6. The organization has to choose the best way to attain its objective. 7. The best way to attain organizational objectives is that which exhibits the best possible goodness-of fit among its values, its objectives, what it can do well, what it is deficient in, what it can exploit, what it must reduce to irrelevance or avoid altogether.
6.
7.
8.
8. The best way, once implemented, must be periodically reviewed and, if deemed necessary, modified or replaced.

How do we know that were getting There? How do we get there? Where do we want to go?
Where are we now?
Personal Property of Prof. Miguel D. Soledad of UP Joint Mindanao. Do not Program Copy The ADDU-DDC MBA

Where do we want to go? How do we know were getting there?
Where are we now?
How do we get there?
General Situation Review
Internal Analysis External Scan
Strategic Audit
Objective Setting
Generating Strategic Options
Decision Making
Implementing Policies, Plans, Programs, Projects and Budgets
Monitoring And Control
Formulation
Implementation Evaluation
Personal Property of The Prof. Miguel D. Soledad of UP Mindanao. Do not Copy ADDU-DDC Joint MBA Program
The General Situation Review

Basic Question: How did we get to where we are now? History: What are the important milestones? Objectives: What was it that brought us together? What are those we value most? What is our Vision? Mission?
Performance: What have we attained so far?

The Strategic Audit
Internal Analysis

What are we good at? What are we deficient in?
External Analysis
What future developments can we possibly exploit? What future developments do we have to prepare against?
Setting the Hierarchy of Objectives
Knowing what we know now, are our articulated Values, Vision and Mission still relevant? Given our Values, Vision and Mission, what can we hope to attain in the foreseeable future in Specific, Measurable, Attainable, Realistic, Timebound (S.M.A.R.T.) frames?
Formulating Strategic Options
Given the results of our strategic audit and the objectives we want to attain, what are the various options open to us so that we can attain those that we said we want to attain?
Making the Strategic Decision
Among the various strategic options we formulated, which one/s is/are the best?
Implementing
What do we need to put in place in order to carry out the decision we made? How should we be structured? What policies should we articulate and enforce? What projects and programs do we put in place? If we do all these that we said we need to do, how much do we need, when?
Controlling and Monitoring
How do we know whether the things we said we want attained are attained? What are the verifiable indicators that we can use to measure our performance? What procedures do we put in place so that the information needed by the decision-maker/s is given in a timely fashion?

Where do we want to go? How do we know were getting there?
Where are we now?
How do we get there?
Internal Analysis External Scan
Strategic Audit
Objective Setting
Generating Strategic Options
Decision Making
Implementing Policies, Plans, Programs, Projects and Budgets
Monitoring And Control
Formulation
Implementation Evaluation
Personal Property of The Prof. Miguel D. Soledad of UP Mindanao. Do not Copy ADDU-DDC Joint MBA Program
The General Situation Review

Basic Question: How did we get to where we are now? History: What are the important milestones? Objectives: What was it that brought us together? What are those we value most? What is our Vision? Mission?
Performance: What have we attained so far?

The Strategic Audit
Internal Analysis

What are we good at? What are we deficient in?
External Analysis
What future developments can we possibly exploit? What future developments do we have to prepare against?
The Basic Tool: S.W.O.T Analysis

Strengths Internal competencies and resources possessed by the organization that enhance its ability to achieve its objectives.
Weaknesses - Internal deficiencies that tend to inhibit the organizations ability to attain its objective.
Opportunities - External developments that could significantly benefit the organization. Threats External trends and events that are potentially harmful to an organizations position.
Internal Appraisal Process

1.
2. 3.
Review by functional area General Management Human Resources Marketing Finance Operations Identify strengths and weaknesses Accomplish an Internal Factor Evaluation (IFE) Matrix
Academic Functional Areas
Instruction Research Extension Administration
Tools for Internal Appraisal

1. 2. 3. 4.
5. 6. 7.
8.
Management Audit Checklists Surveys Interviews Financial Ratio Analysis Tests of profitability, efficiency, liquidity, solvency Horizontal Vertical MERI Score Variance Analysis Profiles Charts
SW Analysis Worksheet
Functions
General Management
Historical Performance
On the brink of disaster in 1992. Turned around in 1993. Change of management in 1993. Manager also worker. No formal papers on ownership. Turned around via cash only/ domestic only policy
Indicated Strengths
Profitable. Ratio of income to sales is increasing
Indicated Weaknesses
Low supervision level Unclear ownership Limited market due to cash only/domestic only policy Customer loyalty. Many repeat customers Decelerating sales growth from 58.4% to 31.5% pa Unfocused marketing effort High employee turnover Labor is a variable cost Ratio of sales to assets is dropping Liquid Underutilized debt capacity Ratio of income to equity is dropping
Marketing
Increased customer base from 90 to 210 in 10 years Marketing limited to promotion and word of mouth Two resignations per year Employees on contract paid on commission Asset utilization is decreasing Only two instances of replacements in 11 years Ratio of cash and savings to payables is high No borrowings History of improving profits
Human Resources Operations
Finance
IFE Matrix of Woodlands Cleaning Service

Key Internal Factors Strengths 1. Profitable operations (ROS from 11.2% to 15.6 %) 2. Loyal customers. Many repeat customers. 3. Underutilized debt capacity (EM=1.18) 4. Liquid (CR=3.25:1) 5. Contractual employees. Variable labor cost Weaknesses 1. Low supervision level. 2. Unclear ownership 3. Dropping ROE (from 129.5% to 4.5%) 4. Decelerating sales growth (from 58.4% to 31.5%) 5. Limited market due to cash/domestic only policy 6. Dropping asset turnover (from 71.5 to 24.4) 7. High employee turnover 8. Unfocused marketing effort Total Weight Rating Score
0.05 0.14 0.04 0.15 0.07
3 4 4 4 3
0.15 0.56 0.16 0.6 0.21
0.09 0.02 0.04 0.13 0.08 0.04 0.12 0.03 1
2 2 1 1 1 1 2 1
0.18 0.04 0.04 0.13 0.08 0.04 0.24 0.03 2.46
Since the IFE Score is less than 2.5, the organization is deemed to be weak.
Preparing the IFE Matrix

1. List the key internal factors as identified in the internal appraisal. Use a total of 20 internal factors listing internal strengths first. Be specific by using percentages, ratios and comparative numbers. 2. Assign a weight that ranges from 0.0 (not important) to 1.0 (all-important) to each other factor indicating the relative importance of the factor to the organizations success. Regardless of whether a factor is a strength or a weakness, factors considered to have the greatest effect on organizational performance should be assigned the highest weights. The sum of all the weights should be 1.0.
Preparing the IFE Matrix

3. Assign a rating to each factor according to the following scale: Description Rating Major Strength 4 Minor Strength 3 Minor Weakness 2 Major Weakness 1 Multiply each factors weight by its corresponding rating to determine the weighted score for each internal variable. Take the sum of the weighted scores of the various variables to determine the IFE score for the organization. IFE scores <2.5 indicate a weak internal position. Conversely, IFE scores> 2.5 indicate a strong internal position.
4. 5.
Exercise
Identify one strength and one weakness of the SEA
THE FIRM AND STEEP FORCES
Socio-Cultural
Technological
Political
The Firm
2
3 4
Economic
Ecological
Framework for External Appraisal

Step 1 Select Key Environmental Variables Step 2 Select Key Information Step 3 Forecast Key Environmental Variables Step 4 Prepare a Broad Assessment of Basic External Forces Step 5 Construct an External Factor Evaluation Matrix
41
Step 1 Select Key Environmental Variables
Step 2 Select Key Information or Indicator
42
Social Factors
43
Technological Factors
44
Economic Factors
45
Ecological Factors
46
Political Factors
47
Step 3 Forecast Key Environmental Variables
48
Economic Indicators:
GDP GNP (%) (%) Average 2002-06 Actual 2007 Best Est 2008 Frcst 2009 2010 2011 2012 2013
9
4.8 7.3 4.5 5.3 6.2 5.5 5.5 6
5.4 7.8 6 6.2 7.2 7 7 7
8 7 6 5 4 GDP (%) 3 2 1 0 GNP (%)
49
91-Day P/$ Ex Rt Inflation TB Average 2002-06 Actual 2007 Best Est 2008 Frcst 2009 2010 2011 2012 51.92 46.2 44 45 46.5 47.5 48.25 5.3 2.8 9.8 8.1 7.5 6.5 5.5 7.1 3.4 5 7.6 7.5 6.8 6
60 50 40 30 P/$ Ex Rt 20 10 0 Inflation 91-Day TB
2013
49
4.5
4.8
50
Fuel (%) Power (%)
Average 2002-06
Actual 2007 Best Est 2008 Frcst 2009 2010 2011 2012 2013
20.3 5.3 52.5 22.2 0.6 0.4 0.3 0.3
9.6 -0.7 19 14.4 3.4 3 2.8 2.7
60 50 40 30 20
Fuel (%)
Power (%)
10
0 -10
51
Business Outlook and GDP Growth Rate

Index
60
%
5
30
GDP
BOIC
0
BOIN
-30
Q1
Q2
Q3
Q4
Q1
Q2
Q3
-2
BOIC = Current quarter business outlook index (Coincident indicator) BOIN = Next quarter outlook index (Leading indicator) GDP = Actual GDP growth rate
52
Step 2 Select Key Information
Step 4 Prepare a Broad Assessment of Basic External Forces
53
Socio-Cultural Analysis
Projection - Continuing lure of overseas jobs - While the under-30 age group will continue to be the base of the population pyramid, the growth rate of this age-group will decelerate Opportunities Identified - Offer degree programs intended to produce globallyemployable graduates - Invest in basic education Threats Identified - Students that are jobs-oriented rather than knowledge-thirsty - Dearth of faculty material
Technological Analysis
Projections - There will be a greater reliance on technology to enhance productivity. This will be articulated by an increased level of computerization in the service and the manufacturing sectors and precision agriculture in the agri-sector Opportunities Identified - S&T-led academic institutions - Technology-driven research - Vertically-articulated research programs (from basic to commercial viability) - All-graduate program institutes Threats Identified - iffy political support as highly specialized education can be capital intensive and require huge commitments of public funds
Economic Analysis
Projections - The global recession will result in slower growth - The following will be the growth drivers: BPO, mining, tourism, agriculture (via higher crop prices) Opportunities Identified - Overseas market BPO needs - Inclusion of mining in course offerings - Engagement in the tourism sector - Updating course curricula to incorporate precision agriculture technology Threats Identified - The education business will be highly competitive. Possible price war - Pressure from employees for more economic benefits
Ecological Analysis
Projections
- There will be a marked preference for the use of green technology - The general public will mature from demanding environmentally-friendly initiatives to ecologicallyresponsible activities
Opportunities Identified
- Align course offerings towards ecological responsiveness
Threats Identified
- Reduced support from donors belonging to the moneyladen industrial sector
Political Analysis
Projections - Political maturity will be articulated by a voter preference for developmentoriented public managers Opportunities Identified - Offer programs on public management
Step 4 Prepare a Broad Assessment of Basic External Forces
Step 5 Construct an External Factor Evaluation Matrix
59
EFE Matrix
1 2 3 4 5
Key External Factor

Opportunities 1. 2. 3. 4. ... n. Threats 1. 2. 3. 4. ... n.
Weight
Relative importance to successful performance
Rating
Score
Superior Above Average Average Poor
=4
=3 =2 =1
TOTAL
1.00
60
Preparing the EFE Matrix

1. List the key external factors as identified in the external appraisal. Use a total of 20 external factors. Be specific by using percentages, ratios and comparative numbers. Assign a weight that ranges from 0.0 (not important) to 1.0 (all important) to each factor indicating the relative importance of the factor to the organizations success. Regardless of whether a factor is an opportunity or a threat, factors considered to have the greatest effect on organizational performance should be assigned the highest weights. The sum of all the weights should be 1.0. Assign a rating to each factor indicating the organizations ability to respond to each key external factor according to the following scale:
2.
3.
Description Superior Above Average Average Poor
Rating 4 3 2 1
Preparing the EFE Matrix

4. Multiply each factors weight by its corresponding rating to determine the weighted score of the external variable.
5. Take the sum of the weighted scores of the various variables to determine the EFE score for the organization. EFE scores < 2.5 indicate that the organization may not be able to effectively exploit opportunities and counter threats. Conversely, EFE scores > 2.5 indicate that the organization displays an outstanding ability to effectively respond to its external environment.
External Factor Evaluation Matrix of UP Mindanao Opportunities 1. Degree programs intended to produce globally-employable graduates 2. Involvement in basic education 3. Upgrading/Course alignment towards becoming a S&T-led academic institution, including mining 4. Technology/Ecology-driven research 5. Vertically-articulated research programs (basic to commercial viability) 6. All-graduate program institutes
Weight
Rating
Score
0.15 0.03 0.10 0.10 0.05 0.02
2 1 3 3 4 1
0.30 0.03 0.30 0.30 0.20 0.02
7. Non-degree programs to fulfill BPO needs

8. Overseas market 9. Engagement in the tourism sector 10. Programs on public management Threats 1. Students that are job-oriented rather than knowledge-thirsty 2. Dearth of faculty material 3. "Iffy" political support. Highly specialized education. Huge commitment of public funds 4. Education will be highly competitive. Possible price war 5. Pressure from employees for economic benefits 6. Reduced support from donors in the money-laden industrial sector TOTAL EFE SCORE
0.03
0.05 0.05 0.08
1
2 3 4
0.03
0.10 0.15 0.32
0.10 0.09 0.02 0.02 0.10 0.01 1.00
4 2 2 4 2 2
0.40 0.18 0.04 0.08 0.20 0.02 2.67
The environmental ADDU-DDC Joint MBA Program Indication: UP Min's ability to respond to anticipated changes is marginally above-average.
EXERCISE
Identify one opportunity and one threat to SEA based on what you know about developments in its external environmental
Setting the Hierarchy of Objectives
Knowing what we know now, are our articulated Values, Vision and Mission still relevant? Given our Values, Vision and Mission, what can we hope to attain in the foreseeable future in Specific, Measurable, Attainable, Realistic, Timebound (S.M.A.R.T.) frames?
What was it that brought us together? What do we commonly desire?
VALUES VISION
MISSION GOAL
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Values
Those that we hold dear in life and are of greatest importance to us, so important that they are beyond compromise. Emotions, sentiments, abilities, qualities considered important in everything we do because they help us do what needs doing get done better, help us become what we want to become faster.
The Vision Statement
The statement of the organizations idea of the ideal. Answers the question: If the organization can be whatever it wants to be, what do I want it to be? May be stated separately from the values statement. May also be stated in such a way that it subsumes the values statement.
Economic Enterprise Bureau

Values
Professionalism, honesty, efficiency
Vision
A model government office leading the way in community development through professional, honest, and efficient public service
Vision of the UP School of Management

The management school of choice in East ASEAN, at par with the best in this part of the world, the standard against which other management schools in the region may measure themselves.
The Mission Statement
An enduring statement of the organizations raison detre. Draws inspiration from the vision statement. Anchored on an analysis of the organizations stakeholders, societal elements whose interests are intertwined with that of the organization. Answers the question: What must the organization be, and do, for whom, in order to be what it wants to be.?
Stakeholder Analysis Worksheet

Example: UP Mindanao
Stakeholder
Students
Expectations
(What do our stakeholders expect from us?)
Service Opportunity
(What can we do for our stakeholders?)
Excellent education at minimum cost
- Provide world-class instruction - Motivate them to excel - Assure them of academic freedom
Economic Enterprise Bureau

Stakeholders City government Davao community Employees
Mission A corps of professional civil servants managing viable economic undertakings; a results-oriented government office delivering competent, efficient, honest public service to the Davao community; and, a responsible employer who makes employment a worthwhile and satisfying experience
Mission of the UP School of Management

As we pursue our vision, we will:
provide our clientele with management education programs that give them the best value for their money, become a self-sufficient unit of the University, ensure a rewarding and fruitful career for our faculty and staff.
Goals
Measurable end-results that derive their impetus from the mission Specific, Measurable, Attainable, Realistic, Time-bound (S.M.A.R.T.) target outcomes Expected achievements within the reasonably foreseeable future
Pointers for Goal Setting

Set a goal for each stakeholder. State goals in quantifiable deliverables using understandable metrics. Ensure that goals are factual and based on indicated capabilities. Set goals that are doable within the planning period. Break down goals by time segments (usually, annually).
78
Stakeholder-Goal Matrix of WCS

Stakeholders
Clients/customers
Key Result Areas

Customer satisfaction Quality of worklife
Historical Performance .9 visits per month 210 customers 2 resignations per year From high of 129% to only 4.5% last year None
Proposed Goal
4 visits per month 500 customers 1 resignation per year 10% ROE
Employees
Owners
Return on Equity
Community
ComDev initiatives
1 ComDev initiative per quarter
SOM Goals (2006-10)

Increase student population from 98 in 2006 to 502 in 2009 Improve the average teaching performance rating from Very Good to Excellent Double publication per capita by 2009 Double average annual resource generation from P1.0 million to P2.0 million by 2009
80
?
Formulating Strategic Options
Given the results of our strategic audit and the objectives we want to attain, what are the various options open to us so that we can attain those that we said we want to attain?
Tools for Strategic Formulation

BCG (Portfolio Analysis) Matrix Strategic Position and Action Evaluation (SPACE) Matrix Grand Strategy Matrix Internal-External (IE) Matrix SWOT Matrix
83
83
Portfolio Analysis Matrix

Developed by Bruce Henderson of the Boston Consulting Group as a portfolio planning model Based on the observation that business units can be classified into four when viewed as to market growth and relative market share: stars, cows, dogs and question marks
84
84
Portfolio Components
Cow - large market share, mature industry - little add-on investment, cash generator Star - large market share, fast-growth industry - requires cash support, potential cow Question Mark small market share, highgrowth industry - requires resources, iffy chance Dog - small market share, mature industry - laps-up cash, liquidation candidate
85
85
Portfolio Analysis Matrix

Market Growth Rate
High
(Cash Usage)
Support
Close Attention
Low
Milk
Prepare To Liquidate
High
Low
86 86
Relative Market Share

(CashJoint Generation) The ADDU-DDC MBA Program
Strategic Position and Action Evaluation (SPACE) Matrix

A four-quadrant framework that suggests the appropriate strategy, whether aggressive, conservative, defensive or competitive. Uses the following key determinants of strategic position as axes: Financial Strength (FS), Competitive Advantage (CA), Environmental Stability (ES), and Industry Strength (IS).
87
87
SPACE Matrix of the Bank

Vector Cordinates: x-axis: -3+(+3.33)=+.33 y-axis: -4.33+(+2.25)=-2.08 Conclusion: The bank has a competitive profile
FS
CA
IS
ES
88
88
Grand Strategy Matrix

Rapid Market Growth Market Development Market Penetration Product Development Horizontal Integration Divestiture Liquidation Weak Competitive Position Market Development Market Penetration Product Development Horizontal Integration Forward Integration Backward Integration Concentric Diversification Concentric Diversification Horizontal Diversification Conglomerate Diversification Joint Ventures
Retrenchment Concentric Diversification Horizontal Diversification Conglomerate Diversification Divestiture Liquidation
Strong Competitive Position
Slow Market Growth
89
Internal-External (IE) Matrix

IFE Score (Grow and Build) (I,II,IV)
Strong (3.0-4.)
I
Average (2.0-2.99)
II
Weak (1.0-1.99)
III
High (3.0-4.0)
EFE Score
Medium (2.0-2.99)
IV
VI
Low (1.0-1.99)
(Hold and Maintain) (III,V,VII)
VII
VIII
IX
(Harvest or Divest) (VI,VIII,IX)

90
90
SWOT Matrix
Tool for generating strategic options, that are generated by juxtaposing S x O, S x T, W x O, and W x T. Draws its inputs from the Strategic Audit. The S & W from the IFE Matrix and the O & T from the EFE Matrix.
91
SWOT Matrix
Goals:
Strengths
1. 2. 3.
S,O Strategies
Strategies that use Strengths to take advantage of Opportunities
Weaknesses
1. 2. 3.
W,O Strategies
1. 2. 3.
Opportunities
1. 2. 3.
Strategies that overcome Weaknesses to take advantage of Opportunities
Threats
1. 2. 3.
S,T Strategies
Strategies that use Strengths to avoid Threats
W,T Strategies
Strategies that minimize Weaknesses to avoid Threats
92
Strengths
Investment incentives program are inplace World-class infrastructures Strategic location
Weaknesses
Pre-American history not given prominence plants growing in historic gate indicative of possible neglect Commercial/Shopping Centers left out from promotional materials Tourism Directory Lack of/Absence of interpretative signages especially in the jungle trail
WXO Enhance/improve promotional materials and signages to address a wider market, including history buffs, vacationershoppers and ecological/educational tourists (w1-3 x o3)
Opportunities Utilities to become 75% cheaper when solar and wind power generators become operational High literacy rate (99.6%) ; ready pool of HR assets --- 39,000 graduates annually Proximity to an operational international airport/accessibility to land-sea-air transpo Threats Absence of signed contract on revenuesharing with IPs Susceptibility to impact of change in political leadership Decline in tourist traffic due to continuing STglobal financial crisis
SXO Emphasize the high return-potential by highlighting incentives, superior infra and location plus lower utility cost (s2,s3 x o1)
SXT
WXO Fully utilize all possible claims that can further highlight SBFs edge over other possible destinations (w1-3 xt3)
Formalize sharing mechanism with IPs to ensure the long-term partnership with IP community bolstered by a sense of ownership over the SBF assets (s2 x t1) Target the price-sensitive but high-volume MICE market while continuing to adopt a rifle-approach to the investor market (e.g., computer and BPO) x The manufacturers ADDU-DDC Joint MBA(s1-3 Program
Making the Strategic Decision
Among the various strategic options we formulated, which one/s is/are the best?
Decision-Making Tools
Eyeballing choosing a strategy based on educated-guesswork Simple criteria set choosing a strategy based on its goodness-of-fit with a set of criteria Weighted criteria set Must and Want Analysis Quantitative Strategic Planning Matrix
95
Decision-Making by Eyeballing
Go through the list and pick the option that you fancy The option that appeals the most becomes the chosen option
Decision-Making Using a Simple Criteria Set

Set-up a criteria set, for example: Profitability Stockholder appeal Alignment with basic objectives Ability to meet competitive challenge Assess each alternatives ability to meet the criteria. The alternative which seems to best meet the criteria becomes the chosen alternative
Decision-Making Using a Weighted Criteria Set

Assign weights to each criterion. Rate each option according to each ability to meet the criterion Take the product of the weight by the rate to arrive at the score Take the sum total of the scores The option with the highest score is the best option
Develop the business market Criteria Profitability Weight .35 Rate 3 Score 1.05
Acquire other Invest in new companies technology
Expand the product line
Rate 4
Score 1.4
Rate 1
Score .35
Rate 2
Score .7
Appeal to stockhoders
.30
1.2
.6
.6
.6
Alignment with objectives Ability to meet competitive challenge Total
.25
.25
.25
.75
.5
.10
.2
.4
.2
.4
1.0
2.7
2.65
1.9
2.2
Decision-Making Using Must-Want Analysis

Set-up two sets of criteria: Musts and Wants The Musts set are criteria that an option must meet in order to be considered The Wants set are criteria that are treated as a weighted criteria set The option with the highest score is the indicated choice
Develop the business market
Acquire other companies
Invest in new technology
Must Criteria
Must not be seen as directly confrontational Must be legal ok X ok ok
ok
ok
ok
ok
Must conform to ethically acceptable practices
ok
ok
ok
ok
Develop the business market Want Criteria Profitability Weight .35 Rate 3 Score 1.05
Invest in new technology
Rate 1
Score .35
Rate 2
Score .7
Appeal to stockhoders
.30
1.2
.6
.6
Alignment with objectives
.25
.25
.75
.5
Ability to meet competitive challenge Total
.10
.2
.2
.4
1.0
2.7
1.9
2.2
Decision-Making Using the Quantitative Strategic Planning Matrix

Use the output of the Strategic Audit (Internal Appraisal and External Environmental Scanning) to test the attractiveness of the various strategic options The option with the highest attractiveness score is the best choice
The Quantitative Strategic Planning Matrix

Alternative 1
(From SWOT Matrix)
Alternative n
(From SWOT Matrix)
Key Factors Key Internal Factors Strengths
Weight
AS
TAS
AS
TAS
Strength 1
Strength 2, etc. From IFE
Weaknesses
Weakness 1, etc. Key External Factors Opportunities Opportunity 1
Opportunity 2, etc.
Threats Threat 1, etc. TOTAL
From EFE
2.00 Joint MBA Program The ADDU-DDC
104
Preparing the QSPM

1.
2.
3.
List the organizations internal strengths and weaknesses and external opportunities and threats. Assign weights to each internal and external critical success factor. These weights should be identical to those in the IFE and the EFE matrices. Examine the strategic options generated by the SWOT Matrix. Group these into mutually exclusive sets, if possible.
105
Preparing the QSPM

4.
Determine the Attractiveness Score (AS). The AS is the numerical value that indicates the relative attractiveness of each strategy. This is determined using the following scale:
4 - Highly attractive 3 - Reasonably attractive 2 - Somewhat attractive 1 - Questionable attractiveness
If the factor is not relevant to the strategy, do not assign any AS. 106
Preparing the QSPM

5.
6.
7.
Compute the Total Attractiveness Score (TAS) by multiplying the weights by the AS. Compute the sum total of the Total Attractiveness Scores. The alternative with the highest Total TAS is the most likely strategic choice. Judgmentally confirm the indicated choice.
107
QSPM of WCS
Key Environmental Factor Weight Develop business market AS TAS .20 .42 .12 .60 .21 Acquire other companies AS 4 3 4 3 2 TAS .20 .42 .16 .45 .14 Invest in new technology AS 2 4 4 3 1 TAS .10 .56 .16 .45 .07 Expand the product line AS 4 4 3 3 2 TAS .20 .56 .12 .45 .14
Strengths 1. Profitable operation 2. Loyal customers 3. Underutilized debt capacity 4. Liquid 5. Contractual employees
Weaknesses 1. Low supervision 2. Unclear ownership 3. Dropping ROE 4. Decelerating sales growth 5. Limited market 6. Underexploited sales potential 7. High employee turnover 8. Lack of marketing focus Opportunities 1. Economy to grow 8.1% 2. Loan rate to go down 3. Expanding business community 4. Crackdown on unlicensed 5. Improvement in office automation Threats 1. Competitive activity to intensify 2. Low entry barriers Total
.05 .14 .04 .15 .07
4 3 3 4 3
.09 .02 .04 .13 .08 .04 .12 .03
1 0 4 4 4 3 1 4
.09 .00 .16 .52 .32 .12 .12 .12
2 1 3 4 4 3 3 4
.18 .02 .12 .52 .32 .12 .36 .12
3 0 3 3 2 4 2 2
.27 .00 .12 .39 .16 .16 .24 .06
2 0 4 4 4 3 2 3
.18 .00 .16 .52 .32 .12 .24 .09
.14 .13 .15 .13 .12 .20 .13
4 3 4 2 3 4 4
.56 .39 .60 .26 .36 .80 .39
3 4 3 3 3 4 3
.42 .52 .45 .39 .36 .80 .39 6.46
3 4 2 2 4 4 4
.42 .52 .30 .26 .48 .80 .52 6.04
3 3 3 2 2 4 3
.42 .39 .45 .26 .24 .80 .39 6.05
The ADDU-DDC Joint MBA 6.49 Program 2.0
STRATEGIC STATEMENT OF THE UP School of Management

WEAKNESS: Inability to maximize growth potential due to limited funding from the university
x
OPPORTUNITY: Demand for short-term, non-degree courses to increase
SOM Strategy: BECOME EXCELLENT

Build on our core competences in management and economic research by Expanding and COMplementing our Existing academic programs with EXCELLENT non-degree programs and certificate courses.
Implementing
What do we need to put in place in order to carry out the decision we made? How should we be structured? What policies should we articulate and enforce? What projects and programs do we put in place? If we do all these that we said we need to do, how much do we need, when?
Diagnostic Model for Strategy Implementation Articulate long-term objectives and

strategies. Identify the kind of functional strategies that are required to operationalize the strategy. Identify the organizational structure, leadership, systems and culture that are required to institutionalize the strategy.
Determine the existing functional strategies and organizational structure, leadership, systems, and culture.
REQUIRED
Decide on what methods to use to close the implementation gap.
GAP?
YES NO
ACTUAL
Continue present course of action
Formulate plan of action and implement the choices.
Institute strategic controls.
112
Controlling and Monitoring
How do we know whether the things we said we want attained are attained? What are the verifiable indicators that we can use to measure our performance? What procedures do we put in place so that the information needed by the decision-maker/s is given in a timely fashion?
A Framework for Evaluating Strategies

Establish standards
Measure actual performance
Compare results vs. expectations (Objectives and Goals)
No
Do significant differences occur?
Yes
Continue present course
Take corrective action
114
Suggested Guide Questions on Monitoring
What information is needed by whom? Why is it needed? In what form (written? verbal? electronic?) How will it be presented? When is it needed? How often is it needed? Where will it be sourced? How will it reach the intended recipient?
GANTT Chart of MDP @ Dolefil 1

Activity 1. Review MDP course and materials. Organize tentative MDP team Meet with Dolefil. Present proposal Point Person Mike T A Mike, Larry T A 3. Finalize proposal Larry T A 4. Produce kits Mike, Malou Mike, Malou T A 5. Run program T A 6. Graduation Larry, Mike, Malou T A T A Budget / Spent 0 0 5,000 5,000 0 0 5,000 6,000 300,000 295,500 50,000 55,000 360,000 361,500
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2.
Total
116
116
SWOT-based Strategic Planning Guide

Research Activity
I.
A. B.
Guide Question/s
How did we get to where we are now?
Tool/s
Interviews Meetings Review of reports Du Pont analysis
Specific Outputs
Evaluation of V/M Preliminary assessment of existing strats
History Present hierarchy of objectives C. Current strategies D. Highlights of operations
II.
A. B. C. D. E.
Internal Appraisal
General Admin Human Resources Marketing Operations Finance
What are we particularly good at?
Operations Audit by functional area using

-audit checklist -surveys -interviews -ratio analysis -variance analysis -trend analysis
Ordered listing of strengths and weakness
Where are we particularly deficient in?
118
Research Activity
III. External Assessment
Guide Question/s
What events and developments with reasonable likelihood of occurrence during the forecasted period will: enhance our chances of success threaten our chances of success Is the existing HO still relevant? Where should we be going from here?
Tool/s
S.T.E.E.P. Model of External Analysis
Specific Outputs
Ordered listing of opportunities and threats
A. B. C. D. E.
Socio-cultural Technological Economic EcologicaL Political
IV. Objective Setting

A. B. Revisiting the Vision and Mission Goal
Values/Vision/Mission Exercises Goal Setting
A set of confirmed and/ or redefined HO
119

Research Activity
V. Generation of Alternatives
Guide Question/s
Knowing what we know, how should we get to where we want to go? Given the set of alternative choices which is/ are the best strategy/ies What functional policies and programs should we adopt in order to properly implement our strategic choice?
Tool/s
SWOT Matrix
Specific Outputs
Set of alternative strategies as a result of juxtaposing; SxO, SxT, WxO and WxT A proposed core strategy/ies that will best attain the redefined HO KRAs, policies, plans, programs, projects, budgets, timetables
VI. Evaluating the Alternatives
Eyeballing Criteria sets Must/Want QSPM Gap analysis

Organizational Planning
VII. Implementing Program
Marketing Planning Operations Planning Financial Planning
VIII. Monitoring and Control System
How will we know Analysis of info whether we are needs indeed going to where KRA/PI identification we want to go? Control system
KRA PIs Monitoring tools (e.g., Gantt Chart)
120
Developing the Vision, Mission and Goal Statements
Step 1
DEVELOP A VALUES SET
The Epitaph Exercise
The things we hold dear are often reflected in the way we want people to remember us. One way of identifying our values is by writing our own epitaph, the words we want written on stone so that people who get to read it will appreciate the kind of person we are.
Example of an Epitaph Exercise

Epitaph of Christy Saavedra:
Here lies Christy. Loving wife and mother. Provider of gifts and good tidings. Whose heart and mind were always in the right place and whose mouth spoke with the confidence of babes.
Self-interpretation by Christy:
She values loyalty, honestly-acquired wealth, integrity, rationality, courage.
Step 2
CRAFT A VISION STATEMENT

IF YOU CAN BE WHATEVER IT IS YOU WANT TO BE, WHAT DO YOU WANT TO BE?
Step 3
IDENTIFY AND ANALYZE YOUR STAKEHOLDERS

Stakeholder Analysis Worksheet

Stakeholders
Clients/customers
Expectations
(What do our stakeholders expect from us?) Best cleaning service at the most reasonable cost
Service Opportunity
(What can we do for our stakeholders?) Give them service in a manner that will make them feel that they got the best value for their money
Workforce
A pleasant work environment and a payscale that gives them commensurate compensation for the effort they put in to their work A satisfactory return on their investment
Help them to develop and grow as persons and as professionals
Stockholders/owners
Ensure a profitable operation without necessarily compromising the safety of their investment in the enterprise
Community
To be generous with its resources by contributing to the general uplift of the quality of life in the locality
Operate responsibly, making sure that all actions are acceptable to the community not only in the letter but also in the spirit
Step 4
CRAFT A MISSION STATEMENT

WHAT MUST I BE, DO, FOR WHOM IN ORDER TO BE WHAT I WANT TO BE?
Step 5
SET YOUR GOALS FOR EACH STAKEHOLDER

Stakeholder-Goal Matrix
Stakeholders
Clients/customers
Key Result Areas

Customer satisfaction Quality of worklife
Historical Performance .9 visits per month 210 customers 2 resignations per year From high of 129% to only 4.5% last year None
Proposed Goal
4 visits per month 500 customers 1 resignation per year 10% ROE
Employees
Owners
Return on Equity
Community
ComDev initiatives
1 ComDev initiative per quarter
Assignments for Next Meeting

Individually accomplish Worksheets 14 to 18 Meet with your can group. Discuss your outputs. Agree on your V/M/G proposals Prepare a presentation of your V/M/G proposals

The ADDU-DDC Joint MBA Program

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