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Strategic Management Notes Chapt 1-5-6-10
Accounting 1 (ACC 1)
Northern Bukidnon State College
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Customer relationship management (CRM) is the emphasis of most companies. In essence, it revolves around the interplay of three significant variables, namely, the company that produces the product, the product produced, and the customers who buy the product. To achieve optimum level of gain and patronage, products should be competitively priced, of good quality, accessible, and ideally the best. Companies should do their part in satisfying customer expectations and delighting them with quality, innovations, and personalized business relationship.
A satisfied customer is the best business strategy of all. – Michael Leboeuf
BA 23 Handouts for Chapters 4 & 5 Strategy Formulation IV. Busines Strategies o Value Chain Analysis -sequence of interlinked undertakings that an organization operating in a specific industry engages in. -it looks at every phase of the business from the time of procurement of raw materials to the time its products reach its eventual end users or consumers. o Supply Chain Management -broad continuum of specific activities employed by a company
Supply Management -purchasing/procurement -identifying material & service needs -locating and selecting suppliers/negotiating and closing contracts -acquiring the needed materials, services, equipment -monitoring inventory Stock Keeping Units (SKU) -tracking supplier performance -managing supplier relationships, identifying strategic sources, accurately forecasting demand requirements, understanding inventory management
GOAL: to obtain the right materials by meeting quality requirements in the right quantity for delivery at the right time and the right place, from the right source, with the right service, and at the right price.
ORGANIZATION
SUPPLY MANAGEMENT
- source and ordering
- Inventory Management
PRODUCTION/OPERATION
- Manufacturing -Assembly
Logistics
- Warehousing -Scheduling
- Transportation
- Delivery
MARKETING AND SALES
- Promotion
- Selling
skills and motivation are essential to effective transformational processes.
Logistics (Logistics Circle) 1.) Warehousing- physically packing finished goods 2.) Scheduling- organizing inventory units and booking them for shipping 3.) Dispatching- products are for transfer 4.) Transportation -goal is to minimize transportation costs (location site, ease, or gravity of traffic, safety, and labor requirements) 5.) Delivery- specified site is undertaken, closed the entire logistics circle
Marketing and Sales -offer competitive pricing, special offers, quantity discounts, and volume sales -advertisements (newspaper, magazines, radio, billboard, TV etc.) -developing salespeople through result-oriented sales trainings, giving competitive salaries
Growth Strategies -to achieve its main objectives of increasing in volume and turnover *Accounting: number of times an asset (cash, inventory, raw materials) is replaced/ revolves during an accounting period -Internal and Integrative Growth Strategies
Internal Growth Strategies Ø Market penetration - selling more of its products/services to its current customers/buyers; least risky Ø Market Development - sell more of its current products by seeking and tapping new markets. (Pastel to Visayas and Luzon) Ø Product Development - sells new product to an existing market. (Downy with perfume scent) Ø Diversification - creating differentiated products for new customers (new products for new customers)
Competitive Strategies - essentially long-term action plans prepared with the end goal of directing how an organization will survive and compete. -formulated to help them gain competitive advantage after evaluating and comparing their strengths and weaknesses against their competitors. Competitive Strategies (Porter 2008)
Competitive Strategies
Cost Leadership
Differentiation Market Niche
Cost Leadership Low-cost leadership strategy
Best-cost provider strategy
Focused lower cost strategy Differentiation Best-cost provider strategy
Broad differentiation strategy
Focused Differentiation Strategy
1.) Low-cost Leadership Strategy - offer products and services at the lowest cost possible in the industry (Piso fare) 2.) Broad Differentiated Strategy - provide variety of products, services or product/service features that competitors do not or are not able to offer to consumers. (Sierra del Oro, Paragliding) 3.) Best-cost Provider Strategy - combination of the low-cost leadership and broad differentiated strategies. Goal: keeping its customer (Aizylim, ukay-ukay, Kaking, etc.) 4.) Focused Lower Cost Strategy - concentrates on a limited market segment and creates a market niche based on lower costs (purchase stocks in bulk, avail in discounts, and therefore sell at low prices: plastic cellophane business) 5.) Focused Differentiated Cost Strategy - concentrates on a limited market segment and creates a market niche based on differentiated features like design, utility, and practicality. (Rolex. Usually applies to branded)
Other Competitive Strategies 1.) Innovation Strategy -difficult to implement, new and original 2.) Operational Effectiveness Strategy -avoid financial leaks and inefficiencies, harnessing better facility and equipment maintenance, increasing work force productivity 3.) Economies of Scale
- lowers costs because of volume. (more product is produced, the lower the costs of producing the product) 4.) Technology Strategy digital (accounting, marketing and purchasing etc.) Enterprise Resource Planning- facilitates processes to radical speed by shortening completion
Strategic Management Notes Chapt 1-5-6-10
Course: Accounting 1 (ACC 1)
University: Northern Bukidnon State College
