GROUP 6 | BSA 4-A

CAYABYAB, Angelo I.

MATIBAG, Kyle Camille S.

VERGARA, Anne Paulyne M.

LEVELS OF STRATEGY
1. CORPORATE LEVEL STRATEGY: What you want to achieve
• Defines the business areas in which your firm will operate
• Integrating & managing the diverse businesses and realizing synergy at the corporate level
• Top management team is responsible

2. BUSINESS LEVEL STRATEGY: How you’re going to compete

• Defining the competitive position of a strategic business unit
• Decided upon by the heads of strategic business units and their teams

3. FUNCTIONAL LEVEL STRATEGY: How you’re going to grow

• Formulated by the functional heads along with their teams
• Involve setting up short-term functional objectives
• Refers to the set of strategic initiatives taken in one part of a business.
• Helps in implementation of grand strategy by organizing and activating specific subunits of the company
to pursue the business strategy in daily activities.
• The primary role of a functional strategy is to support the company's overall business strategy.

A company needs a functional strategy for every major functional activity. Functional strategies must be developed
in the following areas: finance, marketing, production/operations, R&D, and personnel.

Rationale for Levels of Strategy:

✓ Ensure coordination of activities
✓ Facilitation of performance
✓ Commitment to the objectives

STRATEGY IMPLEMENTATION
• The translation of chosen strategy into organizational action so as to achieve strategic goals and objectives

Reasons why a strategy fails:

• Resources aren’t aligned with strategy

• Incentives aren’t aligned with the strategy
• No accountability and lack of empowerment
• No progress reports
• A meaningless plan
MARKETING & STRATEGY IMPLEMENTATION
3 Marketing Activities especially important in Strategy Implementation are:

1. Engaging customers
2. Market Segmentation
3. Product Positioning (Perceptual Mapping)

1. ENGAGING CUSTOMERS
• Building a 2-way relationship with consumers than just informing consumers about a product or service
• A marketing issue is the extent to which companies can track individuals’ movements on the Internet
• Social networking sites are the better means of reaching customers than television, radio, or print ads.
• Television viewers are passive viewers of ads, whereas Internet users take an active role

Purpose-Based Marketing

• In a weak economy when consumers are more interested in buying cheaper brands “show customers how
they can improve their lives” (EXAMPLE: Coca-Cola “Open Happiness” → employs optimism and comfort)

2. MARKET SEGMENTATION
• Subdividing of a market into distinct subsets of customers according to needs and buying habits.
• Market Segment – group of customers who have a similar set of wants & capabilities

An important variable in Strategy Implementation for at least 3 Major Reasons:

1. Strategies such as Market Development, Product Development, Market Penetration, and Diversification
require increased sales through new markets and products.

2. Enables a small firm to compete successfully with a large firm by maximizing per-unit profits/

3. Market segmentation decisions directly affect marketing mix variables: Product, Place, Promotion, Price.

INCREASING RISK
Igor Ansoff’s (1965) Matrix of Marketing Strategies:

• The opportunities of offering existing or new products

within existing or new markets & the levels of risk Market Product
associated. Penetration Development
Existing Products New Products
INCREASING RISK

• Diversification – the riskiest strategy because it is Existing Markets Existing Markets

expanding into areas outside its core activities as well as
targeting a new audience. It also must bear costs of new
product development.
Market
Diversification
Development
New Products
Existing Products
New Markets
New Markets
Ways of Market Segmentation:

1. Geographic • Country, Region, Density (urban, suburban, rural)

2. Demographic • Age, Gender, Income, Generation, Race

3. Psychographic • Lifestyle, Personality

4. Behavioral • Usage Rate, Benefits Sought, Loyalty Status, Attitude Toward Product

Why Segment the Market?

• Segmentation is a key to matching supply and demand. Reveals that large, random fluctuations in demand
actually consist of several small, predictable, and manageable patterns.

Does the Internet Make Market Segmentation Easier?

• Yes. Because consumers naturally form “communities” on the Web. People segment themselves by nature
of the Web sites that comprise their “favorite places,” and many of these Web sites sell information
regarding their visitors

Market Targeting

• Once the firm has identified its market segment opportunities, decide which ones to target
• Selection of customers you wish to target (Which? How Many?)
• 4 Patterns of Market Targeting:

M1 M2 M3 M1 M2 M3 M1 M2 M3 M1 M2 M3

P1 P1 P1 P1

P2 P2 P2 P2

P3 P3 P3 P3
Single-Segment
Product-Specialization Market-Specialization Full-Market Coverage
Penetration
Gains strong Sells a product to Sells an assortment Serves all customer
knowledge of the several markets of products only to a groups with all
market & achieves market products they might
strong brand market need
presence

3. PRODUCT POSITIONING (PERCEPTUAL MAPPING)

• Process used to determine how to best communicate product attributes to their target customers
• PLACE a brand occupies in the mind of the customer; how it is distinguished from competitor products on
dimensions most important to success in the industry.
Only 2 criteria can be examined on a single product-positioning map, multiple maps are developed to assess various
approaches to strategy implementation.

Rules for using product positioning as a Strategy Implementation tool:

1. Look for the hole or vacant niche

2. Don’t serve two segments with the same strategy
3. Don’t position yourself in the middle of the map—strategy doesn’t have any distinguishing characteristics.

An effective product-positioning strategy meets 2 criteria:

1. It uniquely distinguishes a company from the competition

2. It leads customers to expect slightly less service than a company can deliver

Do not create expectations that exceed the service the firm can or will deliver. Underpromise and then overdeliver!

Positioning Statement = Product of Market Positioning

“To (target group & need), our (brand) is (concept) that (point of difference)”

4. MARKETING MIX
• Set of actions, or tactics, that a company uses to promote its brand or product in the market

• Individual Name Strategy – best name for each product

1. Product • Blanket Family Name – brand name attached to new product
• Co-Branding – each brand expects that the other will strengthen purchase

• Exclusive Distribution – producers maintain control over source level

2. Place • Selective Distribution – more than a few but less than all
• Intensive Distribution – as many outlets as possible

• Advertising – paid form of non-personal promotion of products; reason to buy

• Sales Promotion – incentive tools designed to stimulate quicker, greater
purchase of product; incentive to purchase
3. Price
• Public Relations – protect company’s image and its individual product
• Direct Marketing – interactive marketing system that effect a measurable
response or transaction

• Mark-up Pricing
• Going Rate Pricing – based on competitors’ prices
• Psychology Pricing – considers psychology not economics
4. Promotion
• Geographical Pricing
• Promotional Pricing – temporary reduction in price for early/volume purchase
• Value Pricing – charging a fairly low price for a high-quality offering
FINANCE & STRATEGY IMPLEMENTATION
Financial Management is primarily concerned with 2 functions:

1. Acquiring funds to meet current and future needs

2. Recording, monitoring, and controlling financial results of operations

Finance/Accounting Concepts central to strategy implementation:

1. Acquiring needed capital
2. Projected financial statements
3. Financial budgets
4. Evaluating the worth of a business

1. ACQUIRING CAPITAL TO IMPLEMENT STRATEGIES

Successful strategy implementation often requires additional capital. Determining an appropriate mix of debt and
equity in a firm’s capital structure can be vital to successful strategy implementation.

Earnings Per Share/ Earnings Before Interest and Taxes (EPS/EBIT) Analysis – the most widely used technique for
determining whether debt, stock, or a combination of debt and stock is the best alternative for raising capital to
implement strategies.

Timing in relation to movements of stock prices, interest rates, and bond prices becomes important:
• In times of depressed stock prices, debt may prove to be the most suitable alternative from both a cost
and a demand standpoint.
• When cost of capital (interest rates) is high, stock issuances become more attractive.

2. PROJECTED FINANCIAL STATEMENTS

A central strategy-implementation technique because it allows an organization to examine the expected results of
various actions and approaches.

As a result of the Enron collapse and accounting scandal and the ensuing Sarbanes-Oxley Act, companies today
are being much more diligent in preparing projected financial statements to “reasonably rather than too
optimistically” project future expenses and earnings.

Sarbanes-Oxley Act requires CEOs and CFOs to personally sign their firms’ financial statements attesting to their
accuracy. So that these executives could thus be held personally liable for misleading or inaccurate statements.

3. FINANCIAL BUDGETS
A document that details how funds will be obtained and spent for a specified period of time. It is a method for
specifying what must be done to complete strategy implementation successfully.

Should NOT be thought of as a tool for limiting expenditures but rather as a method for obtaining the most productive
and profitable use of an organization’s resources.

Financial budget s can be viewed as the planned allocation of a firm’s resources based on forecasts of the future.
Financial Budgets’ Limitations:

1. Overbudgeting or underbudgeting can cause problems

2. Can become a substitute for objectives
3. Can hide inefficiencies if based solely on precedent rather than periodic evaluation of circumstances and
standards
4. Sometimes used as instruments of tyranny that result in frustration, resentment, absenteeism, and high
turnover.

4. EVALUATING THE WORTH OF A BUSINESS

Central to strategy implementation because integrative, intensive, and diversification strategies are often
implemented by acquiring other firms.

All the various methods for determining a business’s worth can be grouped into 3 main approaches:

1. What a firm owns

2. What a firm earns
3. What a firm will bring in the market

It is important to realize that valuation is NOT an exact science. The valuation of a firm’s worth is based on financial
facts, but common sense and intuitive judgment must enter into the process.

REFERENCES
David, F. (2017). Strategic Management A Competitive Advantage Approach, Concepts and Cases: 16th Global Edition. Pearson
Education Limited. London, United Kingdom

https://onstrategyhq.com/resources/corporate-level-strategy/

https://www.slideshare.net/chitrangtandel/different-levels-of-strategy

http://www.businessdictionary.com/definition/functional-strategy.html

http://smallbusiness.chron.com/strategic-implementation-5044.html

https://www.managementstudyguide.com/strategy-implementation.htm

https://onstrategyhq.com/resources/strategic-implementation/