STRATEGIC MANAGEMENT

Strategic Management
STRATEGIC
MANAGEMENT
The Art And Science Of Compiling, Implementing, And Evaluating Decisions
Boyke Hatman
College of Economic on Development

Business and Management
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CHAPTER I
DESCRIPTION OF STRATEGIC MANAGEMENT
1. Definition of Strategy Management
Management of company activities in general refers to the basic ability

to be able to compete. Strategic planning refers to the use of the concept
of strategy to develop a plan of action. Strategic management refers to the
analysis and implementation of strategies including the action of strategic
plans.
Strategic management can be practiced or applied in organizational

units that differ in size of organization, in groups of companies, companies
individually, in divisions or functional fields within the company, in
government departments, and in nonprofit organization.
Definition of Strategy Management
Strategy Management is a series of planning activities for efficient and

effective long-term decision making, through the establishment of
methods and methods of implementation, which are made by the
company's leadership and the final results are applied and evaluated
within an organization, to achieve the company's goals.
 Fred R. David (2016: 5) Strategy management is, art and

knowledge to formulate, implement, and evaluate cross-functional
decisions that make the organizational system reach its objectives.
 According to Pearce Robinson (2007: 5), "Strategic Management is

a set of decisions and actions that produce formulations and
implementation plans designed to achieve company goals"
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 According to Hubeis & Najib (2008: 18), "Strategic Management is

a set of managerial decisions and actions that determine
organizational performance in the long run"
 Suwarsono M (2008: 6) states "Strategic management is defined as

a managerial effort to develop corporate strength to exploit
emerging business opportunities in order to achieve company goals
that have been set in accordance with a predetermined vision"
 David Campbell (2008:11), “Strategic management can be viewed

as a set of theories, frameworks, tools and techniques designed to
explain the factors underlying the perfomance of organizations and
to assist managers in thinking, planning and acting strategically. In
simple terms, it is a vehicle through which a business can review
past performance and, more importantly, determine future actions
geared towards achieving and sustaining superior performance”.
 According to Lawrence R. Jauch & W. F Glueck (2007: 75),

"Strategic management is a number of decisions and actions that
lead to the preparation of a strategy or a number of effective
strategies to help achieve the company's objectives".
 According to Jatmiko (2004: 4), "Strategic management is a way in

which the organization will meet its objectives, in accordance with
the opportunities and threats faced by the external environment and
internal resources and capabilities of the organization"
 Alfred Chandler in James C. Craig and Robert M. Grant (2002: 4)

defines management strategy as setting long-term goals and
objectives for the entire company, and the direction of actions and
allocation of resources needed to achieve those goals and
objectives.
 Robert D Buzzell and Bradley T. Gale in James C. Craig and

Robert M. Grant (2002: 4) define the policies and key decisions
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used by management that have a large impact on financial

performance. These policies and decisions usually involve
commitment of important resources and cannot be replaced easily.
• Kenneth Andrew in James C. Craig and Robert M. Grant (2002: 5)

management strategy is a pattern of goals, intentions or goals and
policies and important plans to achieve that goal, expressed in a
way such as establishing a business that is adopted or that will be
adopted by the company, and what type or type will this company
be.
Strategic management is a process or series of decision-making

activities that are fundamental and comprehensive, accompanied by the
determination of how to implement them, which are made by the
leadership and implemented by all levels within an organization, to
achieve the objectives.
According to Pearch and Robinson (2007) it is said that strategic

management is: gathering and action that results in the formulation and
implementation of plans designed to achieve organizational goals.
Whereas the notion of strategic management according to Nawawi

(2007) is a large-scale planning (called strategy planning) that is oriented
towards a distant future (called vision), and is determined as the highest
leadership decision (decisions that are based on principles), so as to
enable organizations to interact effective (called mission), in trying to
produce something (operational planning to produce goods and / or
services) that is qualified, with the aim of optimizing the achievement of
goals (called strategic goals) and various organizational goals (operational
goals). Strategic management according to Nawawi is a large-scale
planning (called strategic planning) that is oriented towards the reach of
the distant future (called vision), and is determined as the highest
leadership decision (fundamental decisions and principles), the agency
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allows organizations to interact effectively (called missions), in business

produces something (operational planning to produce quality goods and /
or services and services), directed at optimizing the achievement of goals
(called strategic goals) and various organizational goals (operational
goals).
Strategic management according to David (2016) is Art and

knowledge to assemble, implement and evaluate cross-functional
decisions that make organizations able to achieve their objectives.
Strategic management according to Hunger and Wheelen (2003: 4)

is a series of managerial decisions and actions that determine the
company's performance in the long run.
Thus, from the definition above, it can be seen that the focus of
strategic management lies in integrating management, marketing, finance
/ accounting, production / operations, research and development, and
computer information systems to achieve organizational success.
Strategic management is said to be effective if it tells all employees to
target business, business direction, progress towards achieving goals and
customers, competitors and our product plans. Communication is the key
to the success of strategic management.
From these quite broad understandings, it shows that strategic

management is a system which as a whole has various components that
are interconnected and influence each other, and move simultaneously
(together) towards the same direction. The first component is planning
strategy with elements that consist of the vision, mission, goals and main
strategies of the organization. While the second component is operational
planning with elements of operational goals and objectives,
implementation of management functions in the form of organizing
functions, budgetary functions and functions, site policies, internal and
external networks, control and evaluation functions and feedback.
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From these broad enough understandings, it shows that strategic

(together) towards the same direction.
Besides that the definition of strategic management that has been

mentioned last can be drawn several conclusions :
1. Strategy management manifested in the form of large-scale

planning means that it encompasses all components within an
organization as outlined in the form of a strategic plan that is
translated into operational planning, which is then described in
the form of annual work programs and projects.
2. Strategic plans oriented to the future reach.
3. Vision, mission, selection of strategies that produce the parent

strategy, and organizational strategy goals for the long term are
a reference in formulating the strategy plan, but in the technique
of placing it as a management decision, it is written all the
references contained in it.
4. The strategic plan is described as an operational plan which

includes operational programs including projects, with their
respective medium-term goals as well as top management
decisions.
5. Determination of strategic plans and operational plans must

involve top management because they are very basic / principle
in carrying out the entire mission of the organization, to realize,
maintain and develop the existence of a medium term including
its length.
6. Implementation of strategies in programs including projects to

achieve their respective goals is carried out through other
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management functions which include organizing, implementing,

budgeting and controlling.
Principles of Management Strategy Divided into:
• Strategic Planning Seeping (penetrating), all managers in

various divisions must learn to think strategically, all managerial
levels will be involved in management strategies in a variety of
specific ways. each pattern and method that will be used is
different but still leads to the same goal, set goals
• Comprehensive planning, meaning that planning is based on

needs and business development, not made with origin
A broad understanding of management strategy shows that

management is a system that as a whole has various components that
are mutually related and influence each other, and move simultaneously
in the same direction. The first component is Strategy Planning with its
elements consisting of Vision, Mission, Objectives of organizational
strategy. While the second component is Operational Implementation with
its elements are Operational goals or Objectives, Implementation of
operational management functions, Internal and external networks,
Control and evaluation functions and feedback.
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2. STRATEGIC DIMENSIONS
Strategy management has several dimensions or is multidimensional. The

dimensions in question are:
1. Dimensions of time and future orientation
Management strategies in maintaining and developing the existence of an

organization with a far-sighted future into the future, and behaving
proactively and anticipatively towards predicted future conditions.
Anticipation of the future is formulated and defined as the vision of the
organization that will be realized 10 years or more in the future. Vision can
be interpreted as "ideal conditions to be achieved in the existence of an
organization in the future".
Vision can be interpreted as "ideal conditions to be achieved in the

existence of organizations in the future". In connection with the above
matter, Lonnie Helgerson quoted by Salusu stated that "Vision is a
description of the future conditions of an organization that does not yet
appear now but is a conception made read by everyone (member of the
organization). The vision has the power that is able to invite, call and call
on everyone. to enter the future. The organization's vision must be
formulated by top management (top management) of the organization ".
2. Internal and External Dimensions
The internal dimension is the condition of the current non-profit

organization in the form of strengths, weaknesses, opportunities and
obstacles that must be known precisely to form a long-term strategic plan.
Analysis of the external environment consists of operational environment,
national environment and global (internal) environment, which includes
various
aspects or conditions, such as socio-political conditions, socio-economic

conditions, social culture, population, progress and development of
science and technology, customs, religion and others.
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3. Dimensions of Utilization of Resources
Resources consist of material resources specifically in the form of

facilities and infrastructure, financial resources in the form of allocation of
funds for each program and project, human resources, technological
resources and information resources.
4. Dimensions of Top Management Participation
Strategy management that starts with developing a strategic plan is the

control of the future of the organization, so that its existence in
accordance with its vision can be realized, both for private and public
organizations. The strategy plan must be able to accommodate all
aspects of the organization's life that affect its existence in the future is the
authority and responsibility of top management, because all activities
realize it are their responsibility as the highest leadership, even though the
activities are delegated to the relevant organizations or work units.
5. Multi-Sector Dimensions
Every organization / company to exploit business opportunities that

appear to achieve company goals that have been set in accordance with a
predetermined mission.
This means organizations (business and public) try to reduce their

weaknesses, and try to adapt to their environment. Then this definition
also points to reducing the negative effects caused by threats. Then the
main components of strategy management are:
a. Environmental analysis
b. Profile analysis
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b. Strategies for achieving organizational goals (business and

public) by paying attention
c. Mission
Thus environmental analysis is very important in the strategy

management process, because strategy management is not to see
opportunities (reactive to change) but the compiler of strategy
management must be seen as an effort to know the strengths and
weaknesses of the organization so that the organization can survive ) face
continuous environmental change.
Human resource development is about training and development.

Human resources are all productive human activities and all their potential
to make productive contributions to society. The quality of human
resources involves two aspects, namely physical aspects (physical
quality), and non-physical aspects (non-physical qualities) that involve the
ability to work, think, and other skills. Therefore efforts to improve the
quality or non-physical capabilities of the education and training efforts are
the most needed. This effort is intended by the development of human
resources.
Thus, business environment analysis only attempts to collect and

analyze a number of finite variables. The analysis of the business
environment should not be limited to trying to analyze as many
environmental infinites as possible to analyze because:
1) So that strategy makers can anticipate every opportunity and

help develop a system of solving company / organizational
goals.
2) To be able to streamline the strategy management process,

because by analyzing the environment the results to be
obtained are more effective.
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3) To assist managers in predicting environmental impacts on the

development of the company. The collection of various
organizations from various environments makes it easy to make
long-term planning Environmental analysis is carried out in 3
(three) ways :
a. Analyze the relationship between company strategy and

responses to the environment used as a basis for comparing
ongoing strategies with potential future strategies.
b. Analyze trends in potential factors and potential problems

that will come.
Basically the environmental structure can be divided or

divided into two main elements, namely:
• External environment
• Internal environment
3. Vision, Mission and Objectives
Every organization has a unique purpose and reason for its

existence. This uniqueness must be reflected in the vision and mission. A
good vision statement reveals customers, products / services, technology,
markets, thoughts of survival (growth and profit), thinking for employees,
thinking for the image of the public / society, and the company. There are
eight basic characteristics that serve as practical frameworks for
evaluating and writing mission statements.
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There are 4 Vision Formulation Processes
• Determine the time span and scope of the analysis correctly
• Identification of social, economic, political and technological trends

that will affect the future
• Identification of competitive conditions
• Evaluation of internal resources and capabilities.
The mission that wants to be achieved by a company / organization
• Public or service users who want to be served
• The main services offered
• The geographical area served
• Organizational commitment to technology choices
• Organizational commitment to alternative goals
• Key elements in the organization's philosophy
• The concept of selfhood and organizational image
4. STRATEGIC MANAGEMENT PROCESS
According to J. David Hunger & Thomas L. Wheelen (2010: 9) the

strategic management process includes four basic elements, namely:
1. Environmental observation
Environmental observations are divided into two, namely external analysts

and internal analysis. The external environment consists of the
organization and not specifically in the short-term control of top
management. While the internal environment consists of several variables
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that exist within the organization but usually in the short-term control of
top management.
2. Formulation of strategies
Strategy formulation is the development of a long-term plan for effective

management of environmental opportunities and threats, judging from the
strengths and weaknesses of the company. Strategy formulation includes
determining the company's mission, determining achievable goals,
developing strategies, and setting policy guidelines.
3. Strategy Implementation
Strategy implementation is the process by which management embodies

strategies and policies in action through developing programs, budgets,
and procedures.
4. Evaluation and control
Evaluation and control are processes through which company activities

and performance results are monitored and actual performance compared
to desired performance. In his book, Amin Widjaja Tunggal (2008: 16),
states that, the strategic management process is an eight-step process
that includes strategic planning, implementation and evaluation. Although
the first six steps describe the planning, implementation and evaluation
are also equally important. Even the best strategies can fail if
management does not implement or evaluate them properly.
According to Pearce Robinson (2007: 6), strategic problems have the

following dimensions:
1. Strategic Issues Requires Top Management Decisions because of

Strategic Decisions in the Field of Operations of a Company, so
this decision requires involvement of top management.
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2. Strategic Issues Requiring Large Company Resources
3. Strategic Problems Often Affect the Long-Term Welfare of the

Company. Strategic decisions have a long-term commitment,
which is generally five years
4. Future Oriented Strategic Problems. Strategic decisions are based

on what the predicts are, not based on what they know.
5. Strategic Problems Usually Have Consequences of Multifunction

or Multibusiness. Strategic decisions have complex implications
for almost all areas of the company.
6. Strategic Issues Requires Consideration of the Company's

External Environment. All business companies operate in open
systems. According to Fred R. David (2016: 16) various forces
that influence the Design of Strategic Management Systems:
The company was established to achieve several objectives:

earning profits, increasing share prices, mastering market share, and
growing long-lived healthy. To achieve the stated goals, company
management designs, implements, and evaluates selected competing
strategies. With competitive advantages that have been successfully built
and based on the commitment of the vision that has been owned,
companies try to exploit available business opportunities and at the same
time avoid business threats that originate from the business environment.
All activities are summarized in strategic management, namely a series of
decisions and managerial levels that determine the company's
performance in the long run.
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Strategic management is the art and science of compiling,

implementing, and evaluating decisions across sashafinis, strategic
management focuses on the process of setting organizational goals,
developing policies and planning to achieve goals, and allocating
resources to implement policies and plan for achieving organizational
goals. Strategic management combines activities from various functional
parts of a business to achieve organizational goals. There are three
stages in strategic management, namely strategy formulation, strategy
implementation, and strategy evaluation.
Strategic management is the highest management activity usually

arranged by the board of directors and carried out by the CEO and
executive team of the organization. Strategic management provides
comprehensive direction for the company and is closely related to the field
of organizational behavior.
Strategic management talks about the big picture. The essence of

strategic management is to identify organizational goals, resources, and
how the available resources can be used most effectively to meet
strategic objectives. Current strategic management must provide a basic
foundation or guideline for decision making in the organization. This is a
continuous and continuous process. The organization's strategic plan is a
living document that is always visited and re-visited. It may even be
necessary to consider it as a liquid because it continues to be modified.
As new information becomes available, he must be used to make
adjustments and revisions.
Some experts in management science define strategic

management in different ways. Strategic management as an analysis,
decision and action taken by the company to create and maintain a
competitive advantage. This definition describes the two main elements of
strategic management.
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Strategic management in a company is related to on going

processes : analysis, decisions, and actions. Strategic management
relates to how management analyzes strategic objectives (vision, mission,
goals) and the internal and external conditions faced by the company.
Furthermore, companies must create strategic decisions. This decision
must be able to answer two main questions:
(1) What industry is involved in the company.
(2) How companies must compete in the industry.
Finally, action is taken to carry out the decision. Actions that need
to be taken will encourage managers to allocate resources and design
organizations to change plans into reality.
The second component, strategic management is the study of why

a company can beat other companies. Managers need to determine how
companies can create competitive advantages that are not only unique
and valuable, but also difficult to imitate or look for so that the subtitles
can last long. Long-lasting competitive advantage is usually obtained by
doing different activities with what competitors do, or doing the same
activities in different ways.David (2016:6) explained that the strategic
management process consists of three stages :
a. Strategy Formulation
Strategy formulation is the initial stage in strategy management, which

includes developing a vision and mission, identifying organizational
external opportunities and threats, determining internal strengths and
weaknesses, setting long-term goals, generating alternative strategies,
and choosing specific strategies to achieve goals.
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b. Implementation Strategy
Strategy implementation is the next stage after the formulation of the

strategy set. The implementation of this strategy requires a decision from
the authorities in making decisions to set annual goals, develop policies,
motivate employees, and allocate resources so that the formulated
strategies can be implemented. At this stage development of a culture
supporting strategy is carried out, planning an effective organizational
structure, rearranging the marketing efforts undertaken, preparing a
budget, developing and utilizing information systems and linking employee
compensation to organizational performance.
c. Strategy Evaluation
Strategy evaluation is the final stage in strategic management. Managers

really need to know when certain strategies don't work well; Strategy
evaluation is the main tool for obtaining this information. This can be done
by assessing or conducting a strategy evaluation process. In the
assessment of the strategy there are three fundamental assessment
activities, namely: a review of external and internal factors that form the
basis of the current strategy, performance measurement, and Taking
corrective steps. Strategic assessment is needed by a company because
successful strategies for now do not always work for the future.
5. Characteristics of Strategic Management
According to Jatmiko (2004: 6), departing from the fact that

strategic management includes overall organizational management,
strategic management tends to be a subject that can be viewed from a
variety of different perspectives :
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1. Management strategies improve organizational effectiveness
In each organization there are two very successful requirements,

namely: efficiency and effectiveness. Strategic management is
primarily focused on creating effectiveness related to the
compatibility between the organization and its relevant
environment. Creating an efficient organization is relatively easier
by compiling and defining methods, procedures, and systems to
solve everyday problems.
2. Strategic management leads to the long term direction
Strategic management addresses organizational issues that have

a dimension of the future, not the present or the past. Many
factors or variables that affect long-term strategic planning or
management include:
a. Market factors
b. Human factors
c. Performance factors.
3. Strategic management relates to top management decisions

or senior managers.
Even though all employees are involved in implementing strategic

decisions, most strategic decisions come from senior management
or top managers. But top managers can be consulted to get input
from employees before making strategic decisions.
4. Strategic management is at every level of the organization.
Strategies can be analyzed at three levels or levels of the

organization, namely:
a. Corporate level strategy
b. Business level strategy
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c. Functional level strategy
5. Strategic management promotes broad knowledge about

organizations.
The nature of strategic decisions that usually involve

changes in habits and behavior requires a broader view or
spectrum of cross-functional activities within an organization.
The main components of strategic management are:
(1) Analysis of the business environment needed to detect

business opportunities and threats
(2) Analysis of company profiles to identify the strengths and

weaknesses of the company
(3) Business strategies needed to achieve company goals by

paying attention
(4) Vision of the company mission. The relationship between the

business environment and company profile gives an
indication of what might be done (what is possible).
6. Strategy Management Model
Management strategies start from identifying existing

organizational visions, missions, goals, and strategies are logical
starting points for strategic management because the current
situation of the company and conditions can hinder certain
strategies and may even dictate certain actions. Every organization
has a vision, mission, goals, and strategies, even if these elements
are unconsciously designed, written, or communicated.
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In implementing Strategy Management a pattern is needed in

the achievement stages:
1. Analyzing the External and Internal Environment
Analyzing the External Environment, including Identifying the

direction of the trend (Socio-Economic Environment, Socio-
Culture, Technology, Politics, Defense) that will affect the future,
Market Analysis, Community, Competitors, Suppliers, Government
Macro and Micro Policies.
Analyzing the internal environment, including the ability of human

resources owned, work environment situation, asset supporting
activities, and other capabilities.
2. Formulating the Strategy
The process of developing long-term planning to achieve effective

and efficient corporate goals through analyzing opportunities and
threats from the environment based on the strengths and
weaknesses of the company includes Vision and Mission, Having
a short and long-term vision and mission of the company.
translated both in terms of time, quality, and quantity.
3. Implementing the Strategy
Corporate Strategy
a. Applying the company's brand image that has been built into
a business opportunity that can become revenue for the
company.
b. Developing business through cooperation with strategic

partners with the principle of synergy and mutual benefit.
c. Expanding the funding network through the creation of

attractive and capable business prospects.
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Business strategy
a. Carry out all company transactions with an accountable and

secure administrative system.
b. Creating optimal productivity.
c. Diversify profitable businesses.
d. Facilitating more transparent and optimal business

communication that provides added value and benefits for
each actor or member.
e. Develop appropriate technology through the creation of

economically effective systems that create developments for
the company.
Strategy Management Process Model Includes Three Steps:
1. Stage of strategy formulation, namely making a statement of

vision, mission, and purpose
2. The phase of strategy implementation, namely the process of

translating the strategy into actions
3. The evaluation phase of the strategy, namely the process of

evaluating whether the strategy implementation can reach
the goal.
7. STRATEGIC MANAGEMENT OBJECTIVES
According to Suwandiyanto (2010: 02), there are four objectives of

strategy management, namely:
1. Provide direction for achieving organizational / company goals.

In this case, the strategy manager must be able to show all parties
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where the direction of the organization / company. Because, a

clear direction will be used as a basis for controlling and
evaluating success.
2. Helps think about the interests of various parties.

Organizations / companies must bring together the needs of
various parties, suppliers, employees, shareholders, banks, and
other wider communities who play a role in the success or failure
of the company.
3. Anticipate each change back evenly.

Strategy management allows top executives to anticipate
changes and prepare guidelines and controls, so they can
broaden their time frame / thinking perspective and understand
good contributions for today and tomorrow.
4. Associated with efficiency and effectiveness.

The responsibility of a manager is not only concentrating on ability
for the sake of efficiency, but also should have serious attention to
work hard to do things better and effectively.
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CHAPTER II
STRATEGIC FORMULATION
8. Strategy Formation
The first task in strategic management in general is the compilation

and dissemination of mission statements. This activity documents the
basic framework of the organization and defines the scope of activities
that the organization wants to run.
After that, the organization will scan the environment to build harmony
with the mission statement that has been made.
Formation of strategies is a combination of three main processes as
follows:
• Perform situation analysis, self-evaluation and analysis of
competitors: both internal and external; both micro and macro
environments.
• Along with the assessment, the objectives are formulated.
This goal must be parallel in the short and long term range. So here
also includes the preparation of a vision statement (a far-reaching
outlook from the future that is possible), a mission statement (how
does the role of the organization in the public environment),
corporate goals in general (both financial and strategic), strategic
business unit goals ( both financial and strategic), and tactical goals.
`From here the position of the company in the market can be known.
While the relationship between the analysis of the business environment,
company profile, and the company's vision and mission points to what is
desired (what is desired) by the owner and management of the company.
Methodologically, the business strategy consists of three interrelated and
uninterrupted processes, namely the formulation process, the
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implementation process (execution), and the monitoring process (control)

strategy. Schematically the strategic management component can be
seen in the image below.
9. Strategic Management Component
According to Fred R. David (2016: 5) the strategy management

process consists of three stages:
a. Strategy formulation
This stage is included in business development, recognizing

external opportunities and threats of the company, establishing
internal strengths and weaknesses, establishing long-term
objectives, producing alternative strategies, and choosing certain
specific strategies to be implemented.
The issue of strategy formulation includes formulating a new
business that needs to be entered, what business must be stopped,
how to allocate resources, whether to expand operations or
diversification, whether to enter the international market, whether to
conduct a joint venture or form a joint venture, and how to avoid the
takeover of competing companies .
b. Implementation of strategy
This stage requires companies to set annual objectives, equip

policies, motivate employees, and allocate resources so that the
formulated strategies can be implemented; implementation of
strategies includes developing a culture of supporting strategies,
creating effective organizational structures, changing the direction
of marketing efforts, preparing budgets, developing and utilizing
information systems, and linking employee compensation with
organizational performance
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c. Strategy evaluation
This stage is the final stage in strategic management. Managers

must know when certain strategies are not functioning properly;
Strategy evaluation mainly means an attempt to obtain this
information. All strategies can be modified in the future because
external and internal factors always change. Three basic activities
for evaluating strategies are:
1. Review internal and external factors
2. Measuring achievements
3. Take corrective action
Peter Drucker in Fred R. David (2016: 7) states that the main task
of strategic management is to thoroughly think about the mission of a
business.
According to Pearce Robinson (2007: 5), strategic management

consists of nine important tasks including:
1. Formulate the company's mission, including a broad statement

about the intent, philosophy, and goals of the company.
2. Conduct an analysis that reflects the condition and internal

capabilities of the company.
3. Assessing the company's external environment, including

competition factors and other general contextual factors.
4. Analyze the choices owned by the company by adjusting its

resources to the external environment.
5. Identify the most profitable choices by evaluating each choice

based on the company's mission.
6. Choose a set of long-term goals and main strategies that will

produce the most favorable choices.
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7. Develop annual goals and short-term strategies that are in line

with long-term goals and predetermined main strategies
8. Implement strategies that have been selected through budgeted

resource allocation, where adjustments between work, human,
structural, technological and reward systems are emphasized.
9. Evaluate the success of the strategic process as input for future
decision making.
As indicated by the nine tasks, strategic management includes

planning, directing, organizing, and controlling decisions and actions
related to the company's strategy. Strategy for managers is a large-scale
plan, with a future orientation to interact with the conditions of competition
to achieve company goals. Strategy is the company's game plan. Even
though it does not specify all (human, financial, and material) uses in the
future, the plan becomes a framework for managerial decisions. The
strategy reflects the company's knowledge about how, when, and where
the company will compete, with whom the company should compete and
for what purpose the company must compete.
10. Benefits and Strategic Management Functions
Pearce Robinson (2007: 13) states that the benefits of Strategic

Management are as follows:
1. Activity formulation strategies strengthen the company's ability
to prevent problems.
2. Group-based strategic decisions are most likely to be taken
from the best available alternatives.
3. Employee involvement in strategy formulations increases their
understanding of the relationship between productivity in return
for each strategic plan, so this will increase their motivation.
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4. The gap and overlapping of activities between individuals and

groups will decrease because participation in strategy
formulations clarifies role differences.
Hubeis Najib (2008: 20) states that the benefits of Strategic

Management are as follows:
1. Financially strategic management will encourage an increase in

production, sales and profits because companies are encouraged
to have high performance.
2. Strategic Management also provides non-financial benefits such as

increasing awareness of threats originating outside the company's
environment, allowing companies to understand competitor's
strategies, minimizing the emergence of resistance to changes that
occur within the organization, enabling clear relationships between
rewards and performance, and making companies able to see
change as an opportunity.
According to Greenley in Fred R. David (2016: 19), strategic

management offers the following benefits:
1. Allows recognizing, setting priorities, and utilizing various

opportunities
2. Provide an objective view of management problems
3. Become a framework for improving coordination and activity

control
4. Minimizing the effects of adverse conditions and changes
5. Enables major decisions that are better supported target set
6. Enables more effective allocation of time and resources to

recognize opportunities
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7. Enables smaller resources and less time devoted to correcting

ad hoc mistakes or decisions
8. Creating a framework for internal communication between staff
9. Helping to integrate individual behavior into a total effort
10. Provide a basis for an explanation of individual responsibilities
11. Provide encouragement for future thinking
12. Providing a collaborative, integrated and enthusiastic approach
dealing with various problems and opportunities
13. Encourage the attitude that accepts change
14. Provide the right level of discipline and formality managent of
a business
According to Suwarsono (2008: 26), strategic management can

function as a means of communicating the objectives of the company and
the path it wants to meet to achieve these goals to owners, executives,
employees and other interested parties. Thus, various parties, especially
those with direct interests, can better understand the opportunities and
challenges faced by businesses. They will have sufficient sensitivity to the
business environment and at the same time have sufficient readiness if
the company decides to make internal changes.
11. Level of Strategy
According to Pearce Robinson (2007: 8), there are three levels of

strategy: The hierarchy of decision making of a company generally
consists of three levels. The corporate level, which consists mainly of the
board of commissioners, top executives, and administrative directors at
the top of the hierarchy. They are responsible for financial performance
and the achievement of the company's non-financial goals, such as
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maintaining the company's image and fulfilling its social responsibilities.

Most attitudes at the corporate level reflect the views of shareholders and
society at large. In multibusiness companies, corporate level executives
determine the type of business the company will enter. They also set
goals and formulate strategies that determine the extent of activities and
functional areas of these businesses.
The central part of the decision-making hierarchy is the business

level, which consists mainly of business and corporate managers. These
managers must translate direction statements and intentions formulated at
the corporate level to become real goals and strategies for each individual
business division. The point is business-level strategic managers
determine how companies will compete in the market arena of selected
products. They struggle to identify and ensure the most promising market
segments in the arena. This segment is part of the entire market that the
company can obtain and maintain because of its competitive advantage.
The bottom part of the decision making hierarchy is the functional

level, which consists mainly of product managers, geographical
managers, or functional area managers. They develop annual goals and
short-term strategies for areas such as production, operations, research
and development, finance and accounting, marketing, and public
relations. But their main responsibility is to implement or implement the
company's strategic plan.
Level-Level Strategy
1. Strategy The Corporate Level seeks to answer the business

question whether or not the business-busis should we enter?
2. The Business Level Strategy seeks to answer the question of

how we must compete in each of our businesses?
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3. Functional Level Strategies trying to answer the question how

do we support business-level strategies?
According to Salusu, there are some instructions on how to make a

strategy so that it can be successful, including:
1. The strategy must be consistent with the environment
2. Each strategy does not only make one strategy.
3. Effective strategies should focus and unite all resources and do not
match one another.
4. Strategies should focus on what constitutes strength and not on

points that are precisely on their weaknesses
5. Resources are critical. Given that a strategy is possible, it must

make something feasible and workable.
6. Strategies to think about risks that are not too large
7. The strategy should be prepared on the basis of the success that

has been achieved.
8. Signs of the success of the strategy are revealed by the support of

the relevant parties.
12. Strategic Position
As "the creation of a unique and valuable position obtained by

carrying out a series of activities." Porter outlines three bases of strategic
position. The three are not mutually exclusive and often intersect. The first
base is obtained by producing a small part (subset) of a product from a
particular industry. Porter calls it a variety-based positioning because this
position comes from product selection, not based on consumer
segmentation. In other words, companies try to meet the needs of many
people. Porter gave an example of Jiff Lube International which only
produces automotive lubricants and does not offer other treatment
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products. Variety-based positioning is effective if the company has the

ability to create such a subset product well, far superior to its competitors.
The second base is to serve most or even all of the needs of

certain consumers, which are called needs-based positioning. An example
is IKEA, which seeks to fulfill all furniture needs, not just a subset, for its
target market. This position is obtained by conducting a series of activities
in ways different from those of competitors. If there are no differences in
activities, consumers will not be able to distinguish the company
concerned from competitors. The variant of this model is meeting the
needs of the target market for different times. A consumer, for example,
has different needs when he travels for business and when he travels for
holidays. Companies can take positions to meet the different needs of the
same target market.
The third base is obtained by targeting consumers who can be

accessed in different ways, which is called access-based positioning.
These consumers, even though they have needs and desires that are
almost the same as other consumers, require configuration of different
activities to meet those wants and needs. Porter exemplified it through
Carmike Cinemas, which operates cinemas only in small, crowded cities,
but with a population of less than 200,000. Even though the market is
small with its purchasing capability below a big city, Carmike Cinemas has
made a profit because of the different activities offered by cinemas in big
cities, for example by standardizing, opening only a few studios, and using
lower technology compared to cinemas in big city.
13. Component of Strategic Management Process
Strategic management is generally defined as a future-oriented

process that allows organizations to make decisions today to position
themselves for success in the future. A more traditional view of strategic
management uses a linear approach where first the monitoring of the
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organization's environment (both internal and external), strategies are

formulated, strategies implemented and then the organization's progress
towards the strategy is then evaluated. The current pace of change has
stated that the formulation and implementation phase must be more
closely integrated to ensure that in line with changes and the emergence
of problems implemented, the strategy is re-visited continuously.
Environmental monitoring must include both internal and external

components. While most organizations feel comfortable with scanning the
internal environment, they still have more difficulties with the external part.
Organizations that only look inward still lose half of the whole equation to
make more effective decisions for the company. Some elements
commonly used to examine external conditions include industry as a
whole (including trends that have an impact on industry), and social trends
in four main areas: economics, technology, political-legal trends, and
socio-cultural.
There are three levels of strategy made in larger organizations,

which include corporate, business, and functional (or operational)
strategies. While the company's strategy will determine what business the
company will actually operate there, the business strategy will determine
how the company will compete in each of the selected businesses. And
operational level strategies will determine how each functional area (such
as human resources or accounting) will truly support business and
corporate strategies. All of these strategies must be closely related to
ensure that the organization moves in a unified direction.
Data from environmental monitoring is then used to make strategic

plans for the organization - which are then implemented. An old adage
states that "failing to plan is the same as planning to fail." If an
organization does not plan its direction, it also does not take control of its
future. The implementation phase involves almost all members of the
organization. in the planning stage. While historical attention is given more
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to the planning stage, today's smart organizations are also aware of the
critical nature of the implementation aspect. The best plan is meaningless
if the implementation is flawed.
The final component of strategic management is the evaluation and

monitoring of the company's progress towards its strategic objectives.
Organizations that believe that the process is completed after the plan is
implemented will only find themselves failing. It is very important for
organizations to continuously monitor their progress
Strategy management is the art and knowledge in formulating,

implementing, and evaluating cross-functional decisions that enable
organizations to achieve goals. Strategic management focuses on the
process of setting organizational goals, development policies and
planning to achieve goals, and allocating resources to the goals of
organizational goals. Strategic management combines activities from
various functional parts of a business to achieve organizational goals.
The following are some other notions of strategy management

according to some experts:
• According to Thomas Wheelen et al (2010: 105), management

strategy is a series of managerial decisions and activities that
determine the success of the company in the long run. These
activities consist of formulation / planning of strategies,
implementation / implementation and evaluation.
• According to Bambang Haryadi (2003: 3), management strategy

is a process that is systematically designed by management to
formulate strategies, execute strategies and evaluate strategies
in order to provide the best values for all customers to realize the
organization's vision.
• According to Mulyadi (2001: 40), strategy management is a

process used by managers and employees to formulate and
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implement strategies in providing the best customer value to

realize the organization's vision.
Based on some of these opinions, it can be seen that management

strategy is the art and science of formulation, implementation and
evaluation of cross-functional decisions, which are used as guidelines for
the functions of human resource management, financial marketing,
production, etc. so that the organization can reach his goal.
There are several components in the strategy management

process, including:
• The mission of the organization (company), is a description of the

purpose of the existence of the company. this mission includes the
type, scope and characteristics of the actions to be carried out
• Objectives, goals are the end result of an activity. here will be

confirmed what things will be reached, when, and how much should
be achieved.
• Strategy, is a skill or knowledge in winning a competition.

competition is the struggle for consumers (market share) and
consumers at any time will experience changes, then the strategy
should be managed in such a way so that the company's goals can
be achieved
• Policy, policy is a way to achieve company goals. the policy

includes guidelines, rules and procedures to support efforts to
achieve established goals or objectives
• Company Profile, describes the condition of the company, be it

financial, human resources (HR) and other physical resources.
• External environment, is all strength that will influence the choice of

strategy and define the conditions of the competition
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• Internal environment, the internal environment includes all elements

of the business contained in the company
• Analysis of Strategies and Options, this is addressed to investment

decisions for the future
• Featured Strategy, is a general and comprehensive plan for all the

main activities aimed at achieving goals in a dynamic environment
• Functional Strategy, is a general strategy translation that will be

carried out by the division
14. Functional Strategy in Business Activities
a. Operational Activities
• Standardize production and production processes productively,
efficiently and effectively.
• Development of processing technology models in quality and
quantity that consumers can absorb well and sustainably.
• Production planning that is right on target according to needs.
• Timely and efficient distribution system.
• Quality and quantity of products that are suitable for consumer
needs.
• Monitoring and creating price stability.
• Development of loyal and professional communities in accordance
with their functions and roles.
• Establish partnerships with surrounding communities in the
application of Corporate Social Responsibility (CSR).
b. Administration and Finance
• Facilitating all funding needed for company activities.
• Administrative systems that are right on target and transparent.
• An efficient and effective, inexpensive and accountable

administration system.
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• Describe all business activities by providing the latest Financial

Report information to all Stakeholders.
• Creating the right financial schemes whether working capital or

investment is needed.
• Creating the availability of funds that will be used by companies by

expanding funding sources from both the Bank and or investors.
• Maintaining the stability of cash flow and company liquidity.
• Creating a reserve fund for business development.
• Providing optimal benefits for each stakeholder.
• An efficient, effective, clean and transparent financial system.
c. Human Resource Management and Organizations
• Availability of quality and professional human resources.

Developing the ability of the company through improving the
quality of human resources possessed by conducting continuous
Education and Training.
• Train and develop professional partners needed in every company
activity. Creating a promotion and transfer system that matches
the expertise and people who are right in their fields. Creating an
organizational structure capable of supporting all functions of a
company's performance that is clean and unlimited in developing
its business.
4. Evaluation and Control
• The process of supervision of all company activities has been

running in accordance with the planning and strategy chosen,
through a comparative analysis of the conditions of actual
achievement compared to the initial planning.
• The method of this analysis report can be applied in weekly,

monthly, and annual periods, so that all irregularities can be
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evaluated and corrected so that what is planned can be carried

out properly.
• How to Implement Strategy Management Processes
• Make a Business Plan about the long-term plan that the company
wants to achieve
• Compile Standard Operating Financial Procedures and

Operations: A system consisting of continuous steps or techniques
that describe in detail how the implementation of a particular task
• Arranging Budget: Planning for the Future Revenue and Expense

Budget for example over a period of 5 years.
• Develop a clear and purposeful Job Description Program; all

company operational activities are integrated with each other to
achieve company goals
15. Strategy Management Formulation
The formulation of corporate strategy management can include the

development of a business mission, identifying an opportunity and threat
from the external, measuring and determining weaknesses and internal
strengths of the company, setting long-term goals, weighing other
alternatives, and choosing specific strategies that will be applied in certain
cases
The scope of strategy formulation includes new objects to be

worked on, business objects to be abandoned, allocating financial or non-
financial resources, deciding whether it needs an activity development or
product diversification, deciding domestic or international markets, what
mergers or acquisitions are needed, avoiding from the acquisition of the
company by a competing company. because there is no company that
has unlimited resources, a strategy must be courageous to decide on an
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alternative strategy that can have the best positive impact in order to
provide maximum benefits for the company. A strategy should provide
comparative advantage and ultimately be able to provide competitive
advantage in the long run, it must be important for management strategy.
16. Implementing the Strategy
Often called the stages of strategy management activities. In the

stage of implementing this strategy the company sets annual company
goals or objectives, develops policies, motivates employees and allocates
resources so that the strategies that have been prepared can be
implemented. The implementation of this strategy includes a culture that
supports the development of the company, prepares a budget, utilizes the
information system, motivates human resources to be willing to run and
work as well as possible. Implementation of the strategy requires
discipline and high performance and adequate service benefits.
17. Basic Foundation for Strategy Management
Strategy managers must be able to analyze the main functions of

existing businesses and understand how to influence a strategy
management process and know how to integrate it. The benefits of
business function relations with the strategy management process cannot
be ignored. Generally there are 3 main business functions :
• Production function
• Marketing function
• Financial function
Besides the three above, there are still other functions such as human
resource management, development and research, as well as its
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relationship with the community. all functions have a direct influence that
has a profound effect on Strategy Management.
Strategic management is a process or series of decision-making

activities that are fundamental and comprehensive, accompanied by the
determination of how to implement them, which are made by the
leadership and implemented by all levels within an organization, to
achieve the objectives.
According to Pearch Robinson it is said that strategic management is

Collections and actions that produce the formulation and implementation
of plans designed to achieve organizational goals.
While the notion of strategic management is large-scale planning

(called strategic planning) that is oriented to the reach of the distant future
(called vision), and is determined as the highest leadership decision
(decisions that are based on principle), so as to enable organizations to
interact effectively (called missions) , in trying to produce something
(operational planning to produce quality goods and / or services), with the
aim of optimizing the achievement of goals (called strategic goals) and
various organizational goals (operational goals). Strategic management
according to Nawawi is a large-scale plan (called strategic planning) that
is oriented towards a distant future range (called vision), and is
determined as the highest leadership decision (fundamental and principal
decisions), the agency allows organizations to interact effectively (called
missions), in an effort to produce something (operational planning to
produce quality goods and / or services and services), with the aim of
optimizing the achievement of goals (called strategic goals) and various
organizational goals (operational goals).
Strategic management according to David (2016) is Art and knowledge

to formulate, implement and evaluate cross-functional decisions that make
organizations able to achieve their objectives.
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Strategic management according to Hunger and Wheelen (2003: 4) is

a series of managerial decisions and actions that determine the
company's performance in the long run.
Thus from the above definition it can be seen that the focus of
strategic management lies in combining management, marketing, finance
/ accounting, production / operations, research and development, and
computer information systems to achieve organizational success.
Strategic management is said to be effective if it tells all employees to
target business , business direction, progress towards achieving goals
and customers, competitors and our product plans. Communication is the
key to the success of strategic management.
From these broad enough understandings, it shows that strategic

(together) towards the same direction. The first component is planning
strategy with elements that consist of the vision, mission, goals and main
strategies of the organization. Whereas the second component is
operational planning with elements of operational goals and objectives,
implementation of management functions in the form of organizing
functions, budgetary functions and functions, site policy, internal and
external networks, control and evaluation functions and feedback.
Strategy management shows that management is a system that as
a whole has various components that are interrelated and influence each
other, and move simultaneously in the same direction. The first
component is Strategy Planning with its elements consisting of Vision,
Mission, Objectives of organizational strategy. While the second
component is Operational Implementation with its elements are
Operational goals or Objectives, Implementation of operational
management functions, Internal and external networks, Control and
evaluation functions and feedback.
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The strategy management process model includes three stages:
1. Stage of strategy formulation, namely making a statement of

vision, mission, and purpose
2. The phase of strategy implementation, namely the process of

translating the strategy into actions
3. The evaluation phase of the strategy, namely the process of

evaluating whether the strategy implementation can reach the goal
18. How to Implement Strategic Management?
There are three questions that underlie every move of strategic

planning steps, namely:
1. Where is the company's current position? This question leads
to an analysis of the situation consisting of several elements,
namely: external analysis, internal analysis, and analysis of
competition.
2. Where will the company go? This question leads to the logic
of why a company (organization) is established. Mission
statement is present as a corporate direction, while long-term
goals and short-term goals are present in the business unit.
3. How can the company get there? At this stage the strategy is
structured as a direction to achieve the company's vision and
mission. Strategy formulations can be categorized into three
groups, corporate level, business unit level, and functional
level.
In principle, strategic management consists of three stages, namely:
1. Formulation Phase: includes making the mission, identifying

external opportunities and challenges of the organization,
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determining internal strengths and weaknesses, making long-term

goals, making strategic choices, and making decision-making
strategies chosen to be implemented.
In terms of strategy formulation, Fred R. David divides the process
into three stages of activity, namely: input stage, matching stage,
and decision stage. [David, 2016]. Included in the strategy
formulation is a discussion of the new business to be entered, the
business being stopped, the allocation of sources owned, whether
to expand or diversify business, whether to enter the international
market, whether to merge or form a joint venture, and how to avoid
hostile take-over.
2. Implementation Phase (also called the action stage): includes

annual targeting, policy management, employee motivation,
allocation of resources so that the formulated strategy can be
implemented. This includes developing a culture that supports
strategies, creating effective organizational structures, directing
marketing efforts, preparing budgets, developing and utilizing
information systems, and linking employee compensation with
organizational performance. [Compare Senge, 1994]. At this stage,
interpersonal skills are very important. As Carl von Clausewitz
(1780-1831) in his book published on On War, strategy is not just
problem-solving activity, but more than that a strategy is open-
ended and creative to sharpen the future in the model chain of
command where a strategy must be carried out as precisely as
possible (avoid unnecessary biases in each part of the
organizational structure).
3. At the evaluation stage which includes activities, observe

whether the strategy is going well or not. This is needed to fulfill
the principle that the company's strategy must be constantly
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adapted to changes that always occur in the external and internal

environment. The three main activities at this stage are: Analyzing
external and internal factors as a basis for ongoing strategies,
performance measurement, and taking corrective actions (compare
Apart from the planning approach used, strategy formulation must
be based on deep understanding of the market, competition and
external environment Strategies come in various forms, however,
the strategy will identify the types of goods and services to be sold,
the sources and technologies used in the production process,
methods of coordinating efforts and plans to be used to produce
efficient and effective performance, as well as the types of activities
taken.
Richard P. Rumelt identified four benchmarks used to test whether or not

a strategy is, namely:
1. Consistency: strategies must not present inconsistent goals and

policies.
2. Consonance: the strategy must represent an adaptive response

to the external environment and to important changes that may
occur.
3. Advantage: the strategy must provide an opportunity for the

creation or maintenance of competitive advantage in a certain
area of activity (chosen).
4. Feasibility: a strategy must not overuse resources (beyond

capacity) and may not present new problems that are not solved.
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19. Strategy Factor Analysis
External environment analysis is an activity of monitoring and

evaluating the external and internal environment of the organization
to important people within the company. The external environment is
distinguished from the macro environment and industrial
environment. For this environment using the SWOT method
(Strength and weaknesses of the internal environment, Opportunities
and Threats for external environment analysis).
Macro environment is an environment that indirectly influences

corporate strategy decisions in the long run. In general, the
categorized environment becomes four, namely:
1. Economy
2. Politics and Culture
3. Technology
4. Social Culture
The main strategic activities consist of 4 (four) main elements:
1. Environmental scanning (Adaptation to the environment)
2. Strategy formulation (Strategy Formulation)
3. Implementation strategy (implementation of the Strategy)
4. Evaluation and control (Review and Supervision)
Internal Factor Analysis
In the process of formulating a strategy a company needs to

identify and evaluate the company's business environment. The results of
identification and evaluation are faced by the company to find out the
profile of the company's strategic superiority. So that the company can
anticipate business opportunities and respond to existing business threats
quickly.
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SWOT Analysis
SWOT analysis is a tool that helps managers determine and

develop appropriate strategies in the face of competition. However, it
should be noted that the goal in determining the strategy used from the
SWOT results is basically to produce a viable alternative strategy, not to
determine the best strategy. So that a manager can judge that not all
strategies in SWOT are chosen to be developed include:
1. Vertical Integration Strategy
Vertical integration strategy is a strategy that requires companies to

exercise more control over distributors, suppliers and / or competitors
either through mergers, acquisitions, or making their own companies.
Integration strategies are divided into three, namely:
1. Forward integration is a strategy to obtain ownership or

increase control over distributors or retailers.
2. Backward integration is a strategy to find ownership or

increase control over a supplier company
3. Horizontal integration is a strategy for controlling competitors.
Companies interested in carrying out vertical integration are

based on reasons:
a. Can create comfort for newcomers.
b. Provide investment facilities
c. Maintain product quality
d. Improve scheduling
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Although it has benefits, the vertical integration strategy also has

weaknesses, namely;
a. Weakness in terms of costs
b. Technology
c. There is fluctuating demand
2. Diversification Strategy
The diversification strategy is the main strategy approach at the

level of corruption. Levels of diversification strategies are divided into
three categories, namely:
o Low diversification level
o Medium level of diversification
o High level of diversification.
In addition, it is also known as related diversification (concentric

diversification) and unrelated diversification (conglomerate
diversification and horizontal diversification). The company implements
a diversification strategy, based on reasons and motives for
maintaining strategic advantages, incentives and resources, as well as
managerial motives. Besides that, it is also encouraged by the internal
environment (low performance, uncertainty of future cash flows, and all
risk reduction) and the external environment (government regulations,
tax provisions, or new rules).
3. Business level strategy
To be able to achieve competitive advantage, companies must

evaluate the external environment, in order to identify opportunities,
threats, and external resource capabilities to determine the core
competencies and strategies to be implemented, which are called
46 |
business-level strategies. This type of strategy at the business level is

called the strategic strategy, which consists of :
1. Cost Leadership
2. Differentiation
3. Focussed Low Cost
4. Focused Differentiation
Functional Level Strategy.
The description of the strategy at the functional level plays a very

decisive role in the success or failure of the predetermined business
strategy, therefore it is necessary to elaborate as detailed as possible on
the business strategy that has been proclaimed. The explanation also
facilitates the control of the manager and facilitates the implementing part
to implement. At the level of functional strategy that is quite strategic is the
function of production and operation which includes,
a. Facilities and equipment
b. Sources of raw materials
c. Production planning and control
Marketing function which includes,
a. Product
b .Price
c. Distribution
d. Promotion
Financial functions which include
a. Capital requirements
b. Capital allocation
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c. Management of dividends and capital
The functions of human resources include :
a. Recruitment and orientation process
b. Career development and training
c. Evaluation compensation, discipline and control
20. Base Strategy in Organizations
Basically valuable; must produce something of value for the

supervisory institution, service users (clients), and the community at a low
cost. Legitimate and politically sustainable; must be able to get mandates
and funds and be responsible for existing institutions.
Operationally and administratively can be implemented

(operationally and administratively feasible); planned authority and
activities can be carried out within existing organizations or with the
assistance of other parties who assist the organization.
Program; activities or steps arranged systematically as a

description of the strategy. Budget; a detailed description of the sources of
funds needed and how they are used.
Procedure; often called SOP, a system of sequential steps or

techniques about how a job or task is done
Performance Standards; the target size is quantitative and

qualitative from the program implemented to determine its success or
achievement. Relations between the final level (goals & objectives) with
the means of achievement (strategy and tactics) are not easy. The
existence of management strategies is not to dictate goals, on the
contrary the goals and objectives must be influenced by the opportunities
available, there are some that need to be considered in the effort to
achieve objectives in management strategy plans, among others:
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1. Effective and Efficiency
Strategy management is called effective if the results achieved are

as desired. Because most situations that require strategy analysis
are not static but interactive and dynamic, the relationship between
causes and results is not fixed or definite. Instead tactics are real
actions taken by the perpetrators and fully under the supervision of
the perpetrators. In contrast to strategy, tactics are internal and the
criteria used are not effectiveness but efficiency.
2. Decision and Implementation
Strategy management decisions mean nothing without

implementation. Strategy depends on potential possibilities and
tactics. Decision strategy must be able to achieve its objectives.
Rules in competitive strategy management:
 The process of thinking that precedes action

 Knowledge of numbers is an important key
 Strategic management of actions taken will quickly
dominate the slow ones.
 Victory must show the value of the goal
 Attack only those who can be attacked
 Enduring is the strongest form of competition
 Superiority in fundamental competition is everything
 Invincibility is the real defense
 Strategy management requires the development of
unique strengths
4. Growth and Organizational Structure
The strategy implementation phase requires consideration in the

preparation of the organizational structure, because the alignment
of the structure with the strategy is an important thing to achieve
the implementation of the strategy. Organizational growth occurs
49 |
when the scale of the organization develops. Growth that occurs

can be vertical and can also be horizontal. Organizational growth
results in various forms of organizational structures such as
functional structures, geographical divisions, business unit
organizations, matrix organizations and horizontal organizational
structures. Each of these structures has its own strengths and
weaknesses.
5. Leadership and Organizational Culture
Organizational culture actually grows because it was created and

developed by individuals who work in an organization, which are
accepted as values that must be maintained and passed down to
each new member. These values are used as guidelines for each
member as long as they are within the organization, and can be
regarded as a distinctive feature that distinguishes another
organization.
21. Product Making Strategy
A. Product Design: Products, Brands, Packaging and Services
Products are the first and important element in the marketing mix.
Product strategy requires coordinated decision making regarding product
types, product lines and product mix. Every product offered to consumers
can be seen in three levels. This product is an important service that
buyers really buy. Real products include characteristics, style, level of
quality, brand name and packaging of products to be sold. Additional
products are real products plus various accompanying services, such as
guarantees, installations, maintenance services, and free shipping.
Several design schemes are proposed to classify products. For

example, all products can be qualified according to durability (non-
durable goods, durable materials and services). Consumable items
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(convenience goods, shop items, special items, and non-attractive items).

Industrial goods (raw materials and components, capital goods, as well as
tools and services).
The facility must arrange a brand policy for the type of product
according to the line. They must decide whether to give a brand to all
products, whether to use brand names or brand names of each product,
whether to expand the brand name for new products, and whether to
remove some of the competing brands.
Physical products require decisions regarding packaging that must

also consider protection, economy, convenience and promotion. Physical
products also need labels to identify and understand possible product
explanations and promotions. American law binding makes sellers provide
certain minimum information about labels to explain and protect
consumers.
Companies must provide consumer services desired by consumers

and effectively fight competitors. The company must determine the
important services that will be offered, the level at which each service
must be provided, and the form of each service. The service mix can be
coordinated by a customer service department that handles complaints
and adjustments, credit, maintenance, technical services and information.
Many companies produce not only one type of product but a product line.
A product line is a group of products that together have functions,
consumers or distribution channels. Every product line requires a
marketing strategy. The stretching of the line raises questions about what
particular lines must be stretched up, down or both. Charging lines raises
questions about whether additional items must be added to the range of
product lines currently available. Determination of the characteristics of
the line raises questions about what characteristics should be highlighted
in promoting this line.
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The product mix doubles a series of product lines and items offered
to consumers by certain sellers. The product mix can be described as
having a certain width, length, condition and consistency. These four
dimensions of the product mix are tools for designing the company's
product strategy.
Product Design: Development of New Products and Product Life

Cycle Strategies
The company is increasingly aware of the benefits and needs of

developing new products and services. The existing products are facing a
short life span and new products must be replaced. However, new
products can fail. The risk of innovation is as great as the benefits. The
key to achieving successful innovation lies in how companies can manage
new product ideas and make decision and research procedures at each
level of the new product development process.
The new product development process consists of 8 stages: idea

collection, screening, concept development and testing, concept testing,
marketing strategy development, business analysis, product development,
market testing, and commercialization. The purpose of each phase is to
determine whether the idea should be more developed or stopped. The
company wants to limit the possibility of using bad ideas and excluded
good ideas.
Every commercial product has a life cycle characterized by a series

of problems and opportunities. The sales history of a particular product
goes through a curve that goes through four stages. The introductory
phase is characterized by slow growth and minimal profit when the
product is thrown into the distribution. When successful, the product
enters a growth phase marked by rapid sales growth and increased
profits. At this stage, companies try to improve products, enter new
market segments and distribution channels, and reduce prices little by
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little. Then followed by the stage of maturity, when the development of

sales decreases and profits are stable. The company is looking for new
strategies to update sales developments, including markets, products and
marketing mix modifications. Finally, the product enters a stage of
obsolescence, at this time sales and profits plummet. The task of the
company at this level is to identify the product that is declining and in each
case the company must determine whether it will survive, make a
reduction or stop it. The last way out, products can be sold to other
companies or discontinued.
B. Product Strategy
Product Pricing: Purpose and Pricing Policy.
Although the role of non-price factors is increasing in the modern

marketing process, fixed prices are an important element of an important
stage in marketing that is characterized by monopoly or oligopoly
competition.
In setting prices on a product, the company follows a six-step procedure,

namely:
1. The company carefully arranges its marketing objectives, for

example, survives, increases profit at that time, wants to win the
market share, or product quality.
2. The company determines the demand curve that shows the
possibility of the number of products that will be sold per period, at
alternative price levels. The more inelastic demand, the higher the
price the company can install.
3. The company estimates how the costs will vary at different levels of
production.
4. The company observes the prices of competitors as a basis for
applying their own prices.
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5. The company chooses one of the following pricing methods: fixing a

cost-plus price, the principal analyst, and setting the target profit,
fixing the value obtained, fixing the price according to the rate of
development and fixing the price in a closed cover.
6. The company has a final price, states it in the most effective
psychological way and checks it to ensure that the price is in
accordance with the cost pricing policy and also in line with
suppliers, wholesalers, company salespeople, competitors,
suppliers and the government.
C. Pricing Strategy
The company applies various pricing strategies for basic prices:
• Geographical pricing, where the company decides how to put

prices for distant buyers, by choosing one of a variety of
alternatives such as FOB pricing, uniform delivery pricing, regional
pricing, base point pricing, and transportation absorptive pricing•
Pricing of discounts and prizes, where the company gives
deductions for cash, discounted amounts, functional discounts,
seasonal deductions, and prizes.
• Promotional pricing, where the company decides to install a loss

of goods, special opportunity pricing and cash deductions.
• Determination of discrimination prices where companies put

different prices based on buyers' considerations, different product
forms, places and times.
• Determination of the price of new products, where the company

decides to introduce a product innovation that is protected by
patents at a cross-market price and translucent market prices.
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The company determines one of the nine price / quality strategies to

introduce a counterfeit product.
1. The company carefully arranges its marketing goals, for

example, maintains life, increases profit at that time, wants to
win the market share, or product quality.
2. The company determines the demand curve that shows the

possibility of the number of products that will be sold per period,
at alternative price levels. The more inelastic demand, the
higher the price the company can install.
3. The company estimates how the costs will vary at different levels
of production.
4. The company observes the prices of competitors as a basis for

applying their own prices.
5. The company chooses one of the following pricing methods:

fixing a cost-plus price, the principal analyst, and setting the
target profit, fixing the value obtained, fixing the price according
to the rate of development and fixing the price in a closed
cover.
6. The company has a final price, states it in the most effective

psychological way and checks it to ensure that the price is in
accordance with the cost pricing policy and also in line with
suppliers, wholesalers, company salespeople, competitors,
suppliers and the government.
If a company considers starting price changes, the company must

carefully consider the reactions of buyers and competitors. The buyer's
reaction is influenced by the way buyers buy in relation to price changes.
Competitors' reactions originate both from a set of reaction policies or
from new interpretations of each situation. Companies that initiate price
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changes must also predict reactions that might arise from wholesalers,
distributors, and the government.
Companies that face price changes initiated by a competitor must

try to understand the competitor's intentions and the period of change. If a
reaction speed is needed, the company must plan in advance its reactions
to various possible price actions.
22. Process of Managing Corporate Strategy
1. Konsep Dasar Manajemen Strategi
Griffin (2000) defines strategy as a comprehensive plan for achieving

organizational goals. (Strategy is a comprehensive plan for accompanies
an organization's goals) not only to achieve, but also a strategy intended
to maintain the sustainability of the organization in the environment where
the organization carries out its activities.
2. Strategy Components
In general, a strategy has components of a strategy that are always

considered in determining the strategy to be implemented. The
components include:
a. Different Competencies
What is meant by different competencies is something that is

owned by a company where the company does well compared to
other companies. Like: marketing and payment online is one of the
different competencies owned by Amazon.com
b. Scope
What is meant by scope is an environment where the organization

or company is active.
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c. Resource Distribution
What is meant by the distribution of resources is how a company

uses and distributes its resources. In implementing the company's
strategy.
3. Type of Strategy
There are 3 types of strategies in general according to Griffin (2000);
1. Strategy at the Corporate Level (coporate-level strateg), is the

strategy carried out by the company in connection with competition
between companies in the business sector which is carried out as a
whole.
2. Strategy at the Business Level (business-level strategy), is

alternatufb the strategy undertaken by the company in connection
with business competition that is run on several types of businesses
that are traded.
3. Strategy at the Functional Level (funcional level strategy), is the

company's strategy in the marketing section, especially at the
advertising level.
23. Processing in Strategy Management
1. Strategy preparation
The strategy formulation process basically consists of 3 phases, namely:
a. Strategy Arrangement Needs Assessment
Here it needs to be questioned whether the formulation of the

strategy, be it a new strategy or a strategy that needs to be done or
not, according to the demands of environmental change or vice
versa.
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b. Situation Analysis
Here it is necessary to analyze the weaknesses of the company

that are owned by the organization while also analyzing the
opportunities and challenges faced by the organization.
c. Selection of Situations
Here companies can determine strategies that will be taken from

various alternatives. Basically, alternative strategies are divided into
3 parts, namely:
1. An attacking or aggressive strategy.

2. Strategies that tend to avoid resikio namely defensive
strategies (defensive strategies).
3. Strategies that combine risk taking and avoiding risk.
2. Strategic Management Process
a. Strategic planning
This process includes the determination of objectives to formulation

of the strategies as described previously.
b. Implementation of strategy
This process includes implementation carried out based on the

chosen strategy and also control over the implementation carried
out.
24. Strategy at the Corporate Level
The Strategy at the Corporate Level is a strategy that the company will do
to answer questions such as what business should be done by the
company.
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a. Portfolio Strategy
a strategy carried out by the company to minimize the risk of the

business being run by investing in various business sectors.
How to take profits in other sectors, namely;
1.) Certain company acquisition (acquisition). This strategy is done by

buying or taking over other companies.
2.) Unrelated diversification (unrelated diversion). This strategy is

done by forming a new business for the company taking over in
different sectors.
3.) Determination of strategies based on BCG Matrix analysis. The

analytical model introduced by the Boston Constuling Group to
find out how the position of the company in the business sector is
run
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BCG MATRIX can be described as follows:
a. Question Mark. It means that whether or not the company can

continue the business it is running on is highly dependent for
example; on existing financial conditions.
b. Star. Means that the company is achieving success in business.
c. Cash cow. This means that the company experiences high

success by gaining excess revenue from high market share even
though market growth is relatively low.
d. Dogs. This means that the company is experiencing poor

conditions in the business sector that it runs.
Then it can be concluded using the BCG Matrix analysis of the company
can assess whether it still needs to be developed or actually tended tob.
Strategi Utama (Main Strategy)
The main strategy or main strategy is a strategy that can be chosen

by the company to maintain the company's activities in the long run.
There are 3 main strategies, namely:
- Growth strategy
- Stability strategy
- Savings strategy.
b. Strategy at the Business Level
Strategy at the business level is a strategy that is carried out in order to

maintain the competency capability of the company compared to its
competitors in the same business.
There are 5 driving factors for competition from Michael Porter known as
the Five Forces model factor:
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1. Customers. It's the main factor why a business is run.
2. Competition in the same business. In competition in the same

business or between companies and competing companies that
run the same business.
3. Potential of newcomers. It is the potential entry of newcomers in

the same business who will become new competitors for the
company.
4. Supplier Input Factor. Is a supplier factor the input factor

needed in the business being run.
5. Substitution Company. Companies need to be aware that if

business conditions change, customers can switch to
substitution companies.
c. Positioning Strategy
Positioning strategy is carried out by companies to ascertain how

companies can get attention from customers or win competition.
According to Porter, there are 3 generic strategies, namely:
a) Cost Advantage Strategy. It is a strategy done by the

company if the company allows to save costs compared to the
costs incurred by competing companies.
b) Differentiation Strategy. This strategy is done to influence the

competition process with competing companies.
c) Focus Strategy. This strategy is done when the company

cannot carry out a cost advantage strategy, so it focuses more
on one type of company in full to reinforce the uncertainty of
customers who will give our products.
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25. Adaptive Strategy
The adjustment strategy is carried out by the company with the aim to
choose the most appropriate strategy when the company is faced with
various changes that occur in the business environment that is being run.
There are 4 types of adjustment strategies, namely:
1. Defenders Strategy. This strategy is carried out with the aim of

keeping the company in business.
2. Strategy Of Prospectors. This strategy is carried out with the

aim to pursue growth more aggressively.
3. Analyzer Strategies. This strategy is a combination of deferent

strategies and prospector strategies. Companies answer the
opportunity opportunities are only limited to a few opportunities.
4. Strategies Of Reactors. This strategy does not have

a consistent strategy. Companies that carry out this strategy tend to
be reactive and wait for opportunities and how other companies
answer these opportunities.
Strategy at the Functional Level
Functional strategies are often referred to as direct strategies or

derect strategies. This is because companies tend to compete with certain
types of businesses that are run, and do not exist at the level of
companies and business sectors that are traded.
There are 2 factors that determine how the strategy at the functional level.
1) Market Equality. Asar equality is related to the same level of friendship

between the two companies in terms of reaching customers through the
type of product offered.
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2) Equality Of Sources. The similarity of sources is related to the state of

competition in which companies have similarities in which tractors they
compete.
Strategy at the functional level is often known as the action and

reaction strategy. Where the number of companies and competitors is
relatively small. As a result of the small number of companies in a
business, the actions and reactions of competition between companies
will appear very aggressive and reciprocate with each other. Given that
tactics are applied to lower levels of hierarchy, tactics tend to be more
detailed.
Balanced Scorecard for Organizations
The balanced scorecard is a method developed by Kaplan and

Norton to measure every activity carried out by a company in order to
realize the goals of the company. The original balanced scorecard was a
separate activity related to targeting, but then integrated with the strategic
management system. The balanced scorecard is even further developed
as a means to communicate from various units within an organization.
The balanced scorecard is also developed as a tool for

organizations to focus on strategies. How the balanced scorecard is
applied to government organizations is the goal of writing this article. The
discussion about it began with a discussion of the strategic management
system.
26. Strategic Management System
Strategic management system is the process of formulating and

implementing strategies to realize a vision continuously in a structured
manner. Strategy is a chosen pattern of action to achieve certain goals.
Initially, the strategic management system was characterized by relying
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on annual, long-term budgets and focusing on financial performance. The

implementation of such a strategic management system in many private
companies has failed. The reasons include: only 25% of managers have
incentives connected to strategy, 60% of companies do not link their
budgets to strategy, 85% of executive teams spend less than one hour
discussing strategies every month, and only 5% of employees understand
the strategy.
But the strategic management system is still needed because

companies are required to develop in a planned and measurable manner,
so that it requires a travel map to face an uncertain future, requires
strategic steps, and needs to direct human resource management
capabilities and commitment to realize the company's goals. The
balanced scorecard developed by Norton and Kaplan provides a solution
to this demand. The role of the balanced scorecard in strategic
management systems is: broadening perspectives in each stage of the
strategic management system, making management focus balanced,
linking various targets coherently, and quantifying performance
quantitatively.
The use of balanced scorecard in the context of private companies

is intended to produce productive and cost effective processes, produce
multiple and long-term financial returns, develop productive and
committed human resources, realize products and services that are able
to produce the best value for customers. The balanced scorecard is
believed to be able to transform strategy into action, make strategy as the
center of the organization, encourage better communication between
employees and management, improve the quality of decision making and
provide early warning information, and change work culture. The potential
to change work culture exists because with the balanced scorecard,
companies are more transparent, information can be easily accessed,
organizational learning is accelerated, feedback becomes objective,
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scheduled, and appropriate for organizations and individuals; and form an

attitude of seeking consensus because of the initial differences in
determining targets, strategic steps taken, size used, etc.
The strength of the balanced scorecard-based strategic management

system compared to other management concepts is that it shows clear
outcome and output indicators, internal and external indicators, financial
and non-financial indicators, and indicators of cause and effect. The
balanced scorecard is best arranged at certain times, for example when
there is a merger or acquisition, when there is pressure from
shareholders, when it will implement a large strategy and when the
organization changes direction or will encourage the process of change.
The balanced scorecard is also applied in routine situations, including:
when preparing budget allocation plans, compiling performance
management, disseminating new policies, obtaining feedback, increasing
staff capacity.
Is there a possibility of failure in implementing the balanced

scorecard ? Developing a balanced scorecard is not an easy job. Many
organizations fail to create a balanced scorecard for various reasons. The
reasons include: no leadership commitment, too little staff involved, the
scorecard is stored only, the old drafting process and once, consider the
balanced scorecard as a project, choosing a consultant error, or using the
balanced scorecard only for compensation needs.
Who uses the balanced scorecard ? Many private, government and

non-profit organizations that have used balanced scorecard 60% of 1000
organizations in Fortune use balanced scorecard. Balanced scorecards
are increasingly being adopted in Europe, Australia and Asia by large,
medium and small organizations. The industry of users of the balanced
scorecard consists of various types of companies, such as banks,
construction, consulting services, IT, oil, pharmaceutical, aviation,
insurance, manufacturing, trading and distribution companies. Companies
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that show remarkable success after implementing the balanced scorecard

include: Mobil Oil which in 1993 ranked 6th in probability, then number
one in the 1995-1998 period; Cigna in 1993 lost $ 275 billion in 1994: a
profit of $ 15 billion and in 1997 amounting to $ 98 billion; Brown & Root
Eng. in 1993 it lost but in 1996 became number one in profit growth.
27. Strategy with the Balanced Scorecard
The emergence of the balanced scorecard idea originated from the

findings of Kaplan and Norton's research (from Harvard Business School)
in the early 1990s. The initial concept of the balanced scorecard based on
the research was written in 1992 in the prestigious Harvard Business
Review magazine. In 1996 Norton and Kaplan published the book The
Balanced Scorecard - Translating Strategy into Action, based on their
experience in applying balanced scorecard to many companies in
America. This book is increasingly popularizing the balanced scorecard, to
countries in Europe, Australia and Asia. They recently published the book
The Strategy Focused Organization - How BSC Companies Drive in the
New Business Environment (2001). The inventors and their colleagues
built a Balanced Scorecard Collaboration institute to popularize the use of
balanced scorecard at various institutions in various countries. Norton and
Kaplan regularly hold conferences in various countries to introduce and
discuss their latest concepts. Regrettably, Indonesia until now has not
been able to present the originator of the balanced scorecard idea, but the
courses and books on the balanced scorecard already exist, although
they are still limited.
The short balanced scorecard is a management system for

managing strategy implementation, measuring performance in its entirety,
communicating vision, strategy and objectives to stakeholders. The word
balanced in the balanced scorecard refers to the concept of balance
between various perspectives, time periods (short and long), scope of
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attention (internal and external). The word scorecard refers to the

organization's performance plan and its parts and their size quantitatively.
The balanced scorecard benefits the organization in several ways:
• explain the organization's vision
• align the organization to achieve that vision
• integrating strategic planning and resource allocation
• improve management effectiveness by providing appropriate

information to direct change
Furthermore, in implementing the balanced scorecard, Robert

Kaplan and David Norton, require the following five main principles to
be held:
1.Translating the balanced scorecard-based strategy management

system into operational terminology so that everyone can
understand
2. Linking and aligning the organization with that strategy. This is

to give direction from the executive to frontline staff
3. Making a strategy is a job for everyone through the contribution

of each person in strategic implementation
4. Making strategies for a continuous process through

organizational learning and adaptation and
5. Implement the change agenda by the executive to mobilize

change.
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28. The use of the Balanced Scorecard in the overall process of

planning
The balanced scorecard is used in almost the entire planning

process. The stages of planning are basically covering the following six
activities: strategy formulation, strategic planning, program preparation,
budgeting, implementation and monitoring.
1. Strategy Formulation
This stage is intended to produce mission, vision, beliefs and basic

values, and institutional goals. The process of strategy formulation is
carried out in stages, namely: external analysis, internal analysis,
identification of identity, and formulation of the strategy itself.
External and Internal Analysis
External Analysis consists of analysis of macro and micro environments.

Macro environment analysis aims to identify macro opportunities
and threats that have an impact on the value generated by the
organization to customers. The objects of observation in this
analysis are among others: political and legal strength, economic
strength, technological strength, social strength, demographic
factors.
Micro external analysis is applied to an environment that is closer

to the institution in question. In the world of companies, the
environment is the industry in which a company is included. The
analysis carried out can use Porter's theory of competition,
namely: supplier bargaining power, threats of new entrants,
bargaining power of buyers, threat of substitute products or
services.
Internal Analysis is intended to formulate the strengths and weaknesses

of the company. The strengths of a company include: unique
competencies, adequate financial resources, superior skills, good
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image, cost advantages, high innovation capability, etc. While the

company's weaknesses include: there is no clear strategy
direction, unfavorable competition position, 'obsolete' facilities,
managerial capability gaps, narrow product lines, poor image,
etc.
Mission explains the scope, purpose or limits of an organization's

business, namely the needs of the customer what the organization will
fulfill, who and where; and what core products are produced, with core
technology and what core competencies. The mission is written simple,
concise, focused. The mission elements include core products, core
competencies, and core technology. Core products are defined as goods
or services that are perceived to be of high value by the customer, in the
form of key components protected by patents and producing the largest
profits. Core competencies are the key capabilities of the organization in
producing core products. While the core technology is know-how,
hardware and software which is the basis of core competencies.
Some examples of missions are as follows.
"To engineer, produce, and market the world's finest automobiles,

known for uncompromised levels of distinctiveness, comfort, convenience,
and refined performance." (Cadillac Motor Co.)
"To produce outstanding financial returns by providing totally

reliable, competitively superior global markets, the transportation of high
priority goods and documents that require rapid, time-sensitive delivery."
(FedEx).
Vision describes what an organization will be in the future. It is simple,

fosters a sense of obligation, provides challenges, is practical and
realistic, and is written in one short sentence. Examples of vision are:
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"We will be an outstanding company by exceeding customer

expectations through empowered people, guided by shared values."
(PepsiCo.)
"From managing a world-class port, we will grow into the world-

class corporation with network of perts, logistics and related businesses
throughout the world. We shall be recognized everywhere for quality and
value. "
"Being the number one planner consultant service company."
"Becoming the biggest, strongest and most valued commercial

bank."
Vision needs to be detailed in various perspectives. In a financial

perspective, for example: "We will deliver superior long-term value
consistently to shareholders". In the customer perspective: "We will
provide the best value for each offer that meets customer needs in the
market chosen to be served." In an internal process perspective: "We will
increase customer value through rethinking, improving and streamlining
(streamlining) our business processes. "In the perspective of learning and
growth:" We will always think about customers and be proud of being
responsible for customers. "
Basic Confidence is a statement that directors and employees need to

hold in facing obstacles and uncertainties. This statement is to encourage
the spirit of management and employees in facing obstacles and
uncertainties. Example: "We believe that customer service and
satisfaction are fundamental to any successful long-term partnership. We
provide our customers with service of high quality and at the right price.
"(PSA Co.)
Basic Value is to guide management and employees in deciding choices

that can arise at any time. Example: PepsiCo's basic values are: Diversity
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- respecting the differences of everyone, Integrity - doing what is said,

Honesty - talking openly and working hard to understand and solve
problems, Teamwork - working to meet customer needs, Accountability -
sincerity meeting expectations, Balance - appreciating someone's
decision to achieve balance in life.
Purpose is a statement about what will be realized as a translation of the

organization's vision. The objectives are described in four perspectives
too: What are the objectives related to the customer's perspective? What
are the objectives related to the financial perspective? What internal
business processes will support the achievement of customer and
financial goals? What are the objectives related to the learning and growth
perspective?
Examples of goal statements are: "Becoming the most profitable

construction services company in Indonesia in 2005 based on excellence
in management, technology, and human resources." "Reaching a
circulation of 100,000 copies in 2006." "Building 15,000 RSS units per
year since in 2007 with the most desirable models, supported by the best
technology, carried out by reliable and committed construction workers. "
Strategy Formulation
Strategies are made in several levels: organizational level,

business unit level, and functional level. In determining the strategy it is
necessary to recognize the internal barriers faced, including management
barriers: where management systems are traditionally designed to
oversee the implementation of activities and related to budgets, not
strategies, vision barrier: where strategies are often not understood by
those who have to implement them, operational barriers : where important
processes are not made to drive strategy, and people barrier: where the
goals of people per person, improvement in the ability and knowledge of
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employees is not related to the implementation of organizational

strategies.
Good strategies generally follow the following criteria: internally

consistent, realistic, focusing on finding opportunities and solving root
causes, increasing customer value, highlighting competitive advantages,
being flexible, easily implemented within the company, and responsive to
the external environment.
2. Strategic Planning
Strategic planning includes the process of determining targets,

benchmarks, targets and initiatives.
The target is the intended future condition. Targets are comprehensive: in

accordance with the goals and strategies, formulating targets in a
coherent, balanced and mutually supportive manner Some guidelines in
setting goals are: the target must determine the measurable single
outcome that must be achieved, the target must determine a single target
or time span for completion, the target must determine the maximum cost
factors, the target must be as specific and quantitative as possible (and
therefore measurable and can be tested), the target must determine only
what and when; must avoid word speculation as to why and how, the
target must be in the direction of supporting, or in accordance with, the
organization's strategic plan and other high-level plans, and the objectives
must be realistic and achievable, but still represent a difficult challenge.
Between vision, goals and objectives must be interrelated in the logical
flow clearly.
Goals must also be elaborated in various perspectives. Example:

Financial perspective: "We will achieve a total result that will consistently
place our company among the 125 top organizations listed on the S & P
500". Customer perspective: "We will continuously improve customer
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perceptions of the values offered by our company so that the number of

customers who do not give a" very good "value will decrease by 40%
when conducting customer surveys in 2015". Internal process perspective:
"In 2015, our total operational cost ratio will decrease by one third
(33.33%)". Growth and learning perspectives: "Our goal is an annual
increase in the scores set by the benchmark survey. In addition, we will
monitor our progress through gathering employee opinions, both formally
and informally, periodically ".
Benchmarks are tools for measuring target progress. Benchmarks

consist of two types: lag indicator and lead indicator. Both are key
performance indicators. Key performance indicators must be measurable
factors, log in logically in a particular key area of results whose objectives
are clear, identify what is to be measured, not how much or in what
direction, are tracked factors. continuously to the extent possible.
If the outcome indicator focuses on the results of performance at

the end of the time period or activity and reflects past successes or
activities and decisions that have been carried out, then the output
indicator measures the processes and activities between and the
hypothesis of a causal relationship. strategic consequences. Examples of
outcome measures in the context of increasing profits: revenue growth,
while the size of the drivers: revenue mix. In the context of increasing
customer trust, the size of the results: the percentage of revenue from
new customers, medium size of the driver: the growth of new customers.
Target functions to provide additional effort but is not demoralizing, has a

period of two to five years to give a lot of time to make a breakthrough,
limit many targets, focus on breakthroughs in one or two key areas,
depending on value, gap, timeliness, desire / desires, skills. Targets can
be determined using benchmarking results. Benchmarking is to get best
practice information, to build a clear case to communicate how important it
is to reach those targets.
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Initiatives are long-term steps to achieve goals. Initiatives do not have to

be specific to one part, but can be cross-functional / part, identifying
important things that must be done by the organization to achieve goals, it
must be clear that managers and employees can determine the plans
needed, and estimate the resources needed to support achievement
overall strategy.
3. Penyusunan Program
Proses penyusunan program adalah: menjabarkan inisiatif menjadi

beberapa program yang akan dilaksanakan beberapa tahun yad.,
memperkirakan investasi yang diperlukan untuk setiap program,
menghitung perkiraan penerimaan yang dapat diperoleh dan menghitung
perkiraan laba/hasil yang akan diperoleh.
4. Budgeting
Budgeting aims to determine the activities of the following year and the
resources needed. The budget is prepared based on the formulation that
has been formulated. A good budget is: a detailed action plan, a one-two-
year plan, outlining the costs needed, identifying the most important
achievements of the activity, mentioning who will be responsible, as a
reference for preparing individual performance plans, written briefly but
completely, tools to monitor performance and be updated in the event of
changes. With such a balanced scorecard supporting a complete
management system by linking long-term strategies to annual budgeting.
5. Implementation
This stage carries out activities as planned.
6. Monitoring and Control
This stage compares performance with target. Various possible outcomes

are successful, failed, and variations between the two. The general
principle in monitoring is measuring performance, comparing
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performance, reviewing, rewarding and identifying results achieved,

studying experiences, adjusting and refreshing strategies, and making
improvements. Monitoring must be followed by control. Types of controls:
premise control / basic assumptions, implementation control, strategic
supervision, and control based on specific signals. Control can be more
easily done using the balanced scorecard because the benchmarks have
been clarified.
Strategic principle: The application of strategic principles is to help ensure

that people will be chosen. There are eight strategic principles defined
and called the Smart Growth Principles, namely:
1. Maintaining capacity for land use planning
2. Strive for effective land use decisions
3. Strengthening the community through a healthy environment
4. Designing a city to support a harmonious life
5. Protect the environment
6. Expand various transportation options
7. Using public investment as a catalyst to achieve the desired results
Perspective: With an emphasis on "balance", the Charlotte City balanced

scorecard uses four perspectives to answer the service needs desired by
the community.
1. Customer Perspective: serving customers.
The city manager must know whether the city government really meets
the needs of the community. They must answer the question: Does the
organization provide what the community wants?
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2. Internal Process Perspective: Providing services competitively.
City managers must focus on important tasks that enable them to meet
community needs. City managers must answer the question: Can the city
government improve services by changing the way the service is
delivered?
3. Financial Perspective: Managing budgets accountably.
City managers must focus on how to meet service needs efficiently. They
must answer the question: Has the service provided been carried out at a
low cost?
4. Learning and Growth Perspective: Develop employee capacity.
The organization's ability to improve and fulfill community demand is

directly related to the ability of employees to fulfill that demand. The city
government must answer the question: Does the city government use
appropriate technology and conduct employee training for continued
progress?
Target
The city of Charlotte selected 16 company targets for its organizational

scorecard. Each organizational goal is outlined in such a way that it
provides a context for achieving what the organization was formed. The
relationship between the five focus areas, four perspectives and 16
organizational goals is a guide for each unit and employee in carrying out
their activities.
Connection
Strategic goals must be interconnected in a causal relationship. For

example, if an organization provides employees with necessary training
for "Promoting Learning & Growth", the organization will be able to
"Deliver Services Competitively". This will affect the organization's ability
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to "Improve Services for the Community" which ultimately "Provides

Various Service Options".
Size & Target
For each strategic goal, there is a set of measures and strategic targets.
This is outlined in a strategic plan for each focus area.
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CHAPTER III
STRATEGIC IMPLEMENTATION
29. Strategy & Tactics at the Company
According to the wikipedia dictionary, strategy is an overall

approach that is related to the implementation of ideas, planning, and
execution of an activity in a certain period of time. The word "strategy"
itself comes from Greek, namely strategos, which means "military
commander" at the time of Athens' democracy. While tactics are a way of
achieving goals at the operational level of implementation which has a
relatively short span of time.
While the word "strategy" itself when used in certain fields will have
a more specific meaning, for example in the field of corporate
organization, the word strategy can have meaning in determining the long-
term goals and objectives of a company and the allocation of resources
needed to achieve that goal. The difference between Stratospheric and
tactic terms is from the point of view of the level of behavior, the strategy
is developed at the top management level and deals with decision making
at the top level, while the tactics are formulated at a lower management
level. Based on the level of order, the formulation of the strategy is
continuous but irregular because it must adjust to the dynamics that
occur. While. Tactics are determined on the basis of the periodic cycle
with a relatively fixed period of time, such as only annual budgeting. On
the basis of the number of alternative possibilities, strategies have more
choices than tactics.
In terms of time span, the strategy is more directed towards the

long term, while tactics are more referring to results in the short term. PT.
PQR Indonesia Tbk. is a multinational company that markets various
consumer goods to meet daily needs for nutrition, health and personal
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care with products that make users feel comfortable, look good and enjoy
life more. In the face of competition between companies, PT. PQR
Indonesia Tbk has prepared a strategy and tactics in the face of
competition between companies, to make it easier for us to understand
how PT. PQR conducts market investments, there are several excellent
ways that companies do.
There are a number of effective ways that this company can do to

remain competitive in the midst of tight markets, especially from their
competitors by having market penetration in almost every country in the
world. companies must have the ability to anticipate trends and needs of
consumers and then meet their needs in various ways that can be
accepted by the community, among others, with marketing strategies;
1. Product Differentiation
PQR products continue to introduce the latest packaging, but PQR

still maintains the quality of its products. Whether it's packaging
with glass bottles, sachets, small bottles and many more
packaging.
2. Focusing on Market Opportunities
PQR products use a customer information system that is different

from the others, the product enters the market by promoting its
goods by going directly to the community with real-world quality
evidence, for example by holding competitions to the community in
comparison between PQR products and products. - other
competing products.
3. Strengthening Customer and Supplier Familiarity
Use information systems to facilitate direct access from suppliers to

production schedules and even allow suppliers to decide how and
when to send supplies to suppliers. In addition, PQR also conducts
consumer questions and makes the voice of consumers where
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consumers complain in PT. PTQR Indonesia, the promotion carried

out at most through electronic media. But in the daily life of
promotions carried out by PT. Indonesian PQR is not only through
electronic media but also through print media, sponsorship, holding
events.
4. Product Segmentation
PQR creates each brand on each product, thus dividing the product
market into 3 brands with consumer demographic and
psychographic segmentation. QQR not only answers its market
needs but also ensures its partners to think several times before
defeating the competition's confusion.
The sales and sales promotion approach will be effective and

efficient if it is designed by implementing a regionalization pattern or
applied in certain regions or regions. PQR has implemented a
regionalization pattern because PQR already has factories or branch
companies in each country. This is done so that each country can buy
products that are in accordance with the wishes and habits of consuming
products that are very closely related to the taste of the country.
PQR has opened a branch of a company in Indonesia. To be better

known by the people and to be able to get the heart of the Indonesian
people, PQR makes products that are in accordance with Indonesian
flavors like Bango soy sauce. Soy sauce is a food made from soybeans.
You could say soy sauce is a typical food from Indonesia.
Therefore, quality is very important in making products. Because even

though the promotion carried out by the company is very good, but if the
quality offered is not considered, the promotion carried out is practically
useless.
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a. Information Technology Strategy
Many strategies are used by companies especially in the field of

information technology to improve the efficiency of the company. PT PQR
runs integrated market communication (Integrated Marketing
Communication / IMC). This strategy is a company effort to integrate and
coordinate all communication channels to convey their message clearly,
consistently and have a strong influence on the organization of its
products.
IMC (Integrated Marketing Communication) is a concept of

marketing communications planning that introduces added value from a
comprehensive plan that evaluates the strategic role of various
communication disciplines — for example general advertising, direct
response, sales promotion, and PR — and combines these disciplines to
provide clarity, consistency and maximum communication impact. Simply
stated IMC can be interpreted as "The process of managing customer
relationships that drive brand value." While specifically, IMC can be
interpreted as "a process that has a cross function in creating and
maintaining beneficial relationships with customers and other
stakeholders by controlling and influencing strategically all messages sent
to this group and move the dialogue with a specific intention to them. "
Integrated Marketing Communication (IMC) is one of the many

processes available to build relationships with customers. What
distinguishes the IMC from other customer-centric processes is the basis
of the process is communication, which is the heart of all relationships,
and is also a circular process. As mentioned above, the basic concept of
IMC is communication. With this communication, IMC seeks to maximize
positive messages and minimize negative messages from a brand, with
the goal of creating and supporting brand relationships. To build long-term
relationships, IMC is also used to build and strengthen brands. Positive
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brand relationships will also generate profits and increase the value of the
company's shareholders.
The increasing number of IMC terms used by practitioners and

education experts, but there is no truly agreed term about what IMC is?
But there are two main ideas about IMC: (Source: book Advertising
Management) one-voice marketing communication. The point is, although
the marketing communication elements used vary in reaching consumers,
they must be coordinated in the right way by various organizations and
agencies working on these different elements. Communication that
integrates Communication here is not only aimed at increasing brand
awareness or good product imaging, but also must be able to generate
good sales results.
b. Product Marketing Strategy
As we know, PQR is a multinational company that manufactures

consumer goods to meet daily needs for nutrition, health and personal
care with products that make users feel comfortable, look good and enjoy
life more.
Marketing Goals
1. Being the first and best in its class in meeting the needs and
aspirations of consumers
2. Become the main partner for customers, consumers and the

community.
3. Eliminating non-value added activities from all processes.
4. Become a chosen company for people with high performance.
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Aims to increase profitable growth targets and provide rewards

above the average of employees and shareholders. Gain respect for high
integrity, care for the community and the environment.
Strategy in marketing products
In the face of competition between companies, PT. PQR, has

strategies in dealing with competition between companies, the strategies
include:
• Low Price Leadership
By keeping low prices and well stocked shelves using legendary

inventory replenishment systems, Wal-mart became the retail business
leader in the United States. The Milan Wal-Mart system sends orders for
new merchandise directly to suppliers when customers pay for their
purchases at the cashier. The final point of sale records the item code of
each item that passes through the cashier and sends a purchase
transaction directly to Wal-Mart's central computer. The computer collects
orders from all Wai-Mart stores and sends them to suppliers. Suppliers
can also access and sell and supply Wal-Mart using web technology. This
system is able to make Wal-Mart maintain low costs while adjusting its
inventory to meet customer demand.
• Product differentiation
PQR products continue to introduce the latest packaging, but PQR

still maintains the quality of its products. Whether it's packaging with glass
bottles, sachets, small bottles and many more packaging.
• Focusing on Market Opportunities
PQR products use a customer information system that is different

from the others, the product enters the market by promoting its goods by
going directly to the community with real-world quality evidence, for
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example by holding competitions to the community in comparison

between PQR products and products. - other competing products.
• Strengthening Customer and Supplier Familiarity
Use information systems to facilitate direct supplier access to

production schedules and even allow suppliers to decide how and when to
send supplies to suppliers. In addition, PQR also conducts questions and
answers to consumers and makes consumers' voices where consumers
complain.
In PT PQR Indonesia, most promotions are carried out through

electronic media. But in the daily life of promotions carried out by PT.
Indonesian PQR is not only through electronic media but also through
print media, sponsorship, holding events that include products. Because if
the promotion is done only through electronic media then it does not get
optimal profits. Communities in Indonesia consist of various groups and
diverse social levels. If the company cannot touch the hearts of all people,
the company cannot grow rapidly. The meaning of the advertisement
offered by the company must also be understood by various groups,
because advertising is one way of promotion that can be done by the
company in order to obtain optimal profits.
Besides through electronic advertising, the marketing process

carried out by PQR also uses various methods, including various
marketing programs that can attract the attention of customers. Free
shopping coupons for PQR products are one of the ways of promotion
carried out by PQR, besides the discounts given also attract customers'
attention that comes from the middle to lower class of society.
Advertising itself is the main content of promotional management

that uses paid media space to deliver messages, while advertising clients
and practitioners see it as a means of communicating with consumers.
This ad is part of the promotion mix, which consists of direct marketing,
PR (Public Relations), sales promotions, and personal sales. The role of
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the product brand is also very important, because the brand is a symbol of
a marketed product. Even in one company there are a variety of different
brands.
Such large-scale marketing is only one of the various promotional

programs carried out by PQR, direct inter-personal promotions to
customers are also carried out by PQR by providing special benefits to
loyal customers of PQR products. With this marketing program, it is
expected that PQR can cover a broad market share in the Indonesian
consumer market.
In global marketing, the existence of a company is needed in

developing ideas, both nationally and internationally. In this case,
especially the PQR company must be able to create a masterpiece grand
design, especially global marketing, which demands a miracle in
developing the career of a company, especially PQR, in addition to
monitoring the course of globalization from competitors. Absolute is
always held what is called innovation treatment in each session of the
company's steps.
Therefore other questions can arise immediately why promotions

need to be held, the answer is of course yes, because in some aspects of
the company one of the objectives of the company's quality development
is to be able to touch all layers of consumers in this case the global
targets held and made from the grand design, therefore a PQR company
can fight with its competitors from both the foreign world and the domestic
leading competitors.
PQR also continues to study the needs and desires of consumers,

innovates and activates products, and continues to build product images.
This is part of the company's strategy to be able to maintain and increase
consumer confidence in PQR brands. Communication delivered through
advertisements in various print and electronic media is very effective and
directly on target, for future evaluation of PT. PQR Indonesia, Tbk will do
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4 things in order to continue to have a good image on its customers,

including: branding, design, technical printing, and merchandising. So that
this can quickly affect consumers to buy and consume products issued by
PT. PQR.
Promotional Strategies That Can Be Done By PT. PQR
• Advertising → all forms of non-personal presentation and promotion of

ideas, goods or services paid by a particular sponsor.
• Sales Promotion → Various short-term incentives to encourage the

desire to try or buy a product or service.
• Public Relations and Publicity → various programs to promote and or

protect the company's image or individual products.
• Personal Sales → direct interaction with one or more prospective

buyers to make presentations, answer questions, and
receive messages
• Direct Marketing → the use of letters, telephone, facsimile, e-mail,

and other non-personal interfaces to communicate directly
with or get responses directly from certain customers and
prospective customers.
However, with increasing age, increasingly fierce market competition, the

development of various types of new media and increasingly sophisticated
consumers, the Promotion Strategy was formulated to be :
 Advertising
 Consumer Sales Promotion
 Trade Promotion and Co-Marketing
 Packaging. Point Of Purchase
 Personal Selling
 Public relations
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 Brand Publicity
 Corporate Advertising
 The Internet
 Direct Marketing
 Experiantial contact: Event, sponsorship
 Customer Service
 Word Of Mouth
Consumer - market sales promotion techniques:
• Coupons → Certificates that give the holder the right to get a price
reduction as printed for the purchase of certain products.
• Price-Off Deals → Giving discounts directly at the place of purchase.
• Premium and Advertising Specialties → Goods offered at a relatively
low cost or free as an incentive to buy certain products.
• Contest and Sweeptakes → Prizes are offers the opportunity to win
cash, trips, or items for buying something.
• Sampling and Trial Offers → Free offers for a number of products or
services (product samples).
• Brand Placement → One technique of sales promotion to reach the
market by entering products on a television program or
film.
• Rebates → provides a price reduction after the purchase has
occurred and not at the retail store.
• Frequency → This program is one technique that leads to
sustainable programs such as offering consumers free
discounts or gifts directly to achieve repetition of
purchases or subscriptions from the same brand or
company.
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• Event Sponsorship → When a company sponsors an event, makes

the brand very highlighted at the event, making brand
credibility increase along with the audience at the event.
The sales and sales promotion approach will be effective and

efficient if it is designed by implementing a regionalization pattern or
applied in certain regions or regions. PQR has implemented a
regionalization pattern because PQR already has factories or branch
companies in each country. This is done so that each country can buy
products that are in accordance with the wishes and habits of consuming
products that are very closely related to the taste of the country.
PQR has opened a branch of a company in Indonesia. To be better

known by the people of Indonesia and be able to get the heart of the
Indonesian people, PQR makes products that are in accordance with
Indonesian flavors. Moreover, the advertisements displayed in the media
about products reflect the Indonesian state. With models from Indonesia,
this will further build a PQR image in the eyes of consumers in Indonesia.
Consumers will have the desire to buy products because they are
impressed to see the advertisements displayed. Although consumers only
try to buy the brand but at least the product is very well known by the
public.
Therefore, quality is very important in making products. Because

even though the promotion carried out by the company is very good, but if
the quality offered is not considered, the promotion carried out is
practically useless. Indeed, currently competition in the consumer goods
industry is very tight both from local players and domestic players.
Competitors will lead to innovation and not cause a monopoly on the
market. The biggest challenge now and very detrimental is the rampant
counterfeiting and smuggling. Many counterfeit and smuggled products
from China make the PQR uncompetitive. "Therefore the government
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needs to enforce clear rules of the game because in business that is

important is the existence of business certainty and legal certainty," he
said. The government must dare to take firm action against counterfeit
and smuggled goods from China which disrupt the industry in general.
Copyright protection needs to be done because it requires large

costs in research and development and advertising costs. The
government must make adequate infrastructure in the form of roads so
that product marketing can reach all regions at low cost.
The role of the brand is no longer just as a name or as a

differentiator with competing products, but it has become a determining
factor to be a "trend setter" in the industrial field. Many companies are
successful because they have a brand reputation, so they can open
distribution in other cities and even other countries by attracting targeted
customers through the strengths of their brands. A brand that has reached
high equity is a valuable asset for the company.
Therefore, maintaining and increasing brand equity is not an easy

job, because what is faced is customer expectations. Consumers will feel
"familiar" with the brand name that first entered the market, even though
the brands that enter later perform better. This will lead to greater loyalty
to the first brands and producers.
Loyalty is the key to success not only in the short term but a
sustainable competitive advantage. Brands need to be perceived as high-
quality products, so that consumers can understand a product only
through existence, function, image and quality. Quality in the eyes of
consumers is more subjective, depending on how consumers perceive the
product. When then the number of brands known to consumers is
increasing, the role of the brand can be expanded so that it is able to
provide certain associations to the consumers. A brand will often be
associated with special functions and images. Brand-based values are
often based on specific associations related to them.
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Brand associations are pursued with slogans, or desired positions,

or with brand identity strategies, namely creating important attributes as
perceived by consumers. Brand associations such as Ronald McDonald
can create positive attitudes or feelings related to a brand. Brands and
quality act as perceptions that influence customer buying decisions. Value
must be the basis of strategy and tactics, because value is the reason
why consumers use products and remain loyal. The value of a brand is to
create more loyal customers, loyal consumers are the goals of every
marketer. Customer loyalty to the brand is one of the brand assets. This is
very expensive because to build a lot of challenges.
30. Concept of Strategy Program Development Using Integrated

Marketing Communication
1. Direct Marketing
When companies want to deal directly with customers without going

through retailers, direct-response marketing is used, such as: close-loop,
interactive, database-driven messaging systems that use many types of
media to create behavioral responses.
Direct marketing is one of the functions of IMC which consists of

front-end and back end operations. Front-end compiles expectations from
consumers that include the offer (ie everything that is real or not promised
by the company to achieve customer behavior desired by the company,
for example: offering special prices, guarantees, etc.), the database
(getting customer data- and use that data for subsequent offers) and the
response (give a good response to the customer, for example: by making
a toll-free line for customer service) while the back end tries to bring
together consumer expectations with the product, including fulfillment (ie
making a product or information requested by consumers is suitable,
effective and timely.
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2. Sales Promotion
Sales promotion is a short term of value-added offers designed to

drive and accelerate customer responses. In the concept, Sales
promotion is used to motivate customers to take action by buying products
that are triggered by a product offering in a limited period of time. PQR
often uses this strategy and has been proven to increase sales turnover.
3. Public Relations
PR in the conception of the IMC does a very broad and diverse

work, not only in the task of tracking public opinion, but also in the task of
managing the corporate brand and maintaining its reputation.
Then the Management Public Relation (MPR) is a PR function that is used

as a media without pay to positively brand information to influence
prospective customers or customers. MPR itself is more focused on
customers or prospective customers and complements other marketing
strategies in 4 ways:
1. Increasing brand message credibility;
2. Convey the message according to the target based on

demographic, psychographic, ethnic or audience aspects
regionally;
3. Influencing influential opinion leaders or trendsetter;
4. Involve the customer and other stakeholders at special events.
4. Personal Selling
Personal Selling is a two-way communication where a seller

explains the features of a brand for the benefit of the buyer. In Personal
Selling, communication that is face-to-face and its activities at the same
time are focused on solving problems and creating value for the customer
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(better known as partnerships) The dimension of this partnership is that a

salesperson must understand his customers well.
Personal selling itself is part of direct marketing, but the basic

difference is in personal selling, companies that are bridged by
salespersons interact face to face with customers.
5. Advertising
Advertising is "A form of non-personal presentation and promotion

of an idea, goods or services that are not free (paid) and carried out by
the sponsor (company) identified. The characteristics of the ads
themselves are non-personal, one-way communication, there are
sponsors (caring audiences), and aim to change attitudes and behavior.
Usually advertising is used when a company wants to change

customers from unaware, become aware of a brand. The cost for
advertising is indeed quite large for a company but PQR is very
concerned about the advertising that will be used because this will help
the company in forming a brand image.
6. Publicity
Publicity itself is one of the services provided by the Public

Relations Firm and Advertising Agency. Publicity arises to help capture
public attention and distinguish each company from other companies that
are rivals. Publicity in the MPR means getting the name of the brand in
the mass media in different ways, time and place as often as possible so
that it becomes top-of mind awareness. Although PR offers greater
credibility in building publicity, adverts can offer greater awareness and
control. Then for some reason, a number of companies convey their PR
messages through advertising.
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7. Events / Sponsorship
Event marketing is a significant situation or promotional event that

has a primary focus on capturing attention and involving customers in the
event. Companies and non-profit organizations use events for several
reasons, namely: to engage target audiences, to associate a brand with
certain activities, lifestyles or people, to reach target audiences that are
difficult to reach, to increase brand awareness and to provide a good
platform for brand publicity.
Sponsorship is financial support to an organization, person, or

activity that is exchanged with brand publicity and a relationship.
Sponsorship can differentiate while increasing the value of a brand. Some
guidelines used by companies in choosing sponsorship: target audiences,
strengthening brand image, can be extended, brand involvement, cost
effective and other sponsors.
PQR often sponsors an event because the company has carefully

calculated the benefits to be gained. By becoming a sponsor at one of the
events, PQR can get a message from the community that will be
promoted and increase brand awareness.
8. Interactive Marketing
Interactive marketing here is more focused on how a company can

or does not communicate with its customers or is able to provide a good
solution, which is related to product use. In this case interactive marketing
is also related to customer relationship management.
PQR as one of the companies that controls several markets is able

to maintain its position for several years because the company is able to
provide a satisfying image to consumers. Every year new products appear
that offer a variety of advantages and competitive prices, but with a
mature strategy, PQR focuses on strategies to increase sales in the
formation of brand image and good marketing.
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From the general definition, it can be seen a number of IMC benefits for
organizations or companies, including:
• Establish a strong brand identity in the market by binding together

and strengthening all corporate communications images and
messages.
• Coordinate all messages, positioning and image, and corporate

identity through all forms of marketing communication
• There is a closer relationship between the company (through its

products / services) and its customers.
The IMC solution demands to understand the importance of all

contact points where customers may suddenly encounter a particular
company, its products and brands. IMC must be able to produce better
communication consistency and greater sales impact IMC places
responsibility in the hands of someone to unite the company's image,
because the image of the company is formed by thousands of company
activities.
31. Management Functional Strategy
Short-term goals refer to functional strategies that are operational. This

more operational functional strategy leads to a variety of functional fields
within the company to clarify the relationship of the meaning of the main
strategy by identifying specific details. This functional strategy is a guide
in carrying out various activities to be consistent not only with the main
strategy, but also with other functional strategies. In the business world,
companies must have the main functional fields in order to compete with
their business competitors, including:
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Financial Management Strategy
This strategy must be able to determine the direction of the use of

funds both for the long and short term. This strategy generally revolves
around three things, namely how companies obtain capital, capital
allocation, and working capital management, including in terms of profit
sharing.
PQR is currently focusing on organic growth such as increasing

sales turnover, company profits and reducing the cost structure. But it
does not rule out the possibility of doing inorganic growth. Throughout its
work in Indonesia, PQR has acquired four brands four times. In making
acquisitions, PQR always uses internal financial funds, no need for central
office funds injection. He stressed, the acquisition would only be carried
out if it could support the existing PQR main business. PQR will not come
out of its main business, producing and marketing consumer goods. The
PQR financial management strategy is carried out through the
establishment of Indonesia's PQR marketing office to various countries
such as Singapore, Japan and Australia.
Human Resource Management Strategy
Human resource management activities revolve around the

procurement, use and maintenance of human resources. In order for the
three main activities to run smoothly, a reliable system must be prepared.
The procurement phase includes human resource management planning,
recruitment, selection and orientation. The use phase needs to pay
attention to the compatibility between human resource management
capabilities and what are their duties and responsibilities. Also need to be
considered matters regarding the opportunity to obtain training and
education, supervision, performance appraisal, rewards and guarantees
of protection and occupational health. Finally, at the stage of maintenance
of human resources the goal is how to make employees feel satisfied
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working. One of the strengths of PQR is the quality of human resources.

PQR routinely recruits new graduates from leading universities.
After that, training for production, marketing and financial systems

was given for three months. They don't work directly but are trained first in
various fields such as manufacturing, marketing, research and
development. Currently the workforce absorbed by the PQR directly
amounts to 3,000 people, not including indirect labor. The total workforce
absorbed amounts to 25,000 people. If it is assumed that one person has
four family members, the company bears the fate of around 100,000
people. Developing Human Resources for growth. '
In order for companies to continue to grow, employees need to be

continuously nurtured and developed continuously. Efforts must be made
to create synergies between company strategy and employee
development. In order to achieve the best results, our strategy must be
based on the dynamics between the organization and the people. It is this
energy that evokes our superiority in facing competition.
Operational Management Strategy
Formulating operational management strategies requires at least

two components, namely the existence of adequate facilities and
infrastructure and how to provide these facilities and infrastructure. From
the two components above, the main things in operational management
can be translated into several fields, namely inventory, procedures,
purchasing goods, quality control, production costs, work productivity,
production schedules, labor, facility use, and equipment maintenance.
PQR Operational Management Strategy is inclusion, embracing

differences, creating possibilities and developing together for a business
that has better performance. The company embraces diversity in the
workforce. This means giving full and fair attention to all applicants and
the sustainable development of all employees regardless of gender,
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nationality, race, belief, disability or social status. Diversity plays an

important role in ensuring companies understand consumer needs.
Working productivity is increased from year to year by training human
resource management in the fields of production and finance.
Marketing Management Strategy
There are four main components of the marketing sector that can
be controlled by companies that we know as 4P (Product, Price, Place,
and Promotion), including the conditions of competition
Product
In the marketing strategy, PQR creates each brand in each

product, thus dividing the product market into 3 brands. PQR not
only responds to its market needs but also ensures its partners
to think several times before defeating the confusion of the
competition.
Price
Give a discount directly at the place of purchase.
Place
In PT PQR Indonesia, most promotions are carried out through

electronic media. But in the daily life of promotions carried out by
PT. PQR Indonesia is not only through electronic media but also
through print media, sponsorship, holding events that include
products from PT. PQR Because if the promotion is done only
through electronic media, PT. Indonesian PQR does not get
optimal profits. Communities in Indonesia consist of various
groups and diverse social levels. If the company cannot touch
the hearts of all people, the company cannot grow rapidly. The
meaning of the advertisement offered by the company must also
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be understood by various groups, because advertising is one

way of promotion that can be done by the company in order to
obtain optimal profits.
Promotion
Promotion of strategies that can be done by PT. PQR namely:
1. Advertising
all forms of non-personal presentation and promotion of

ideas, goods or services paid by a particular sponsor.
2. Sales Promotion
Various short-term incentives to encourage the desire to try

or buy a product or service.
3. Public Relations and Publicity
various programs to promote and or protect the company's

image or individual products.
4. Personal Sales
direct interaction with one or more prospective buyers to

make presentations, answer questions, and receive
messages
5. Direct Marketing
use of letters, telephone, facsimile, e-mail, and other non-

personal interfaces to communicate directly with or obtain
responses directly from certain customers and prospective
customers.
However, with increasing age, increasingly fierce market

competition, the development of various types of new media and
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increasingly sophisticated consumers, the Promotion Strategy was

formulated to be:
 Advertising  Brand Publicity

 Consumer Sales Promotion  Corporate Advertising
 Trade Promotion and Co-  The Internet
Marketing  Direct Marketing
 Packaging. Point Of  Experiential contact:
Purchase Event, sponsorship
 Personal Selling  Customer Service
 Public relations  Word Of Mouth
Implementation, Control and Evaluation Programs
In order for the objectives to be achieved can be realized with a

predetermined strategy, the strategy needs to be followed up with action.
Implementation will not be effective if it is not preceded by planning. Good
planning at least contains principles to achieve goals, realistic and
reasonable, efficient and is a reflection of corporate strategy and policies.
Planning that is still in the global form should be made in a more detailed
form, for example in the form of work programs. If the work program has
been prepared and the resources needed are needed, the work can
already be started. Control or supervision is intended to better guarantee
that all activities carried out by the company should be based on agreed
plans, so that the target does not deviate from the boundaries of
tolerance. Three tests can be used to evaluate the best choice of
strategies, namely :
Goodness of Fit Test - A good strategy must be truly compatible with

industry conditions and competition, market opportunities and
threats, and other aspects of the company's external environment.
On the other hand, it must also be in harmony with the strengths and
99 |
weaknesses of the resources, competencies, and competitive

capabilities of the company.
Competitive Advantage Test - A good strategy must be able to increase

the competitiveness of a company.
Performance Test - A good strategy must be able to improve company

performance. The two types of performance enhancements most
often said about strategy capabilities are: increasing profitability and
increasing the company's competitive strength and market position in
the long run.
32. SWOT analysis on PQR
In this increasingly advanced industry competition companies are

required to always make positive developments within the company so
that the company always strives to improve itself with good strategic
planning. For this reason, PT PQR as a multinational company that
produces products for consumer needs needs to identify each of its
strengths and weaknesses, and always monitor every opportunity that
brings benefits and threats that bring losses. To fulfill this demand, a
SWOT analysis was created which has an important role in determining a
company's strategy.
SWOT analysis is a systematic way of analyzing threats and

opportunities to differentiate future environmental conditions so that
problems can be found. From the SWOT analysis, companies can
determine effective strategies that as far as possible take advantage of
opportunities based on the strength of the company, overcome threats
that come from outside, and overcome existing weaknesses.
100 |
Analisis SWOT
SWOT analysis is a systematic identification of various factors to decide

the company's strategy. This analysis is based on logic that can maximize
strength and opportunity, but can simultaneously minimize weaknesses
and threats. Strategic decision making processes are always related to
the development of mission, goals, strategies, and company policies.
Thus the strategic planner must analyze the company's strategic factors
(strengths, weaknesses, opportunities, and threats) in the current
conditions. This is called Situation Analysis. The most popular model for
situation analysis is SWOT Analysis.
Discussion
Strengths
1. PT PQR's product promotion strategy that is effective by

displaying models that are typical young, white, long-haired, thus
spurring consumers (more specifically women) to buy the product
in order to experience the results that the model receives in the ad
itself.
2. PT PQR is active in social missions, so that closeness with

consumers can be maintained. This can be seen from advertising
and promotion spending which has driven sales growth amid a
competitive market. PT PQR Indonesia as one of the companies
with the biggest advertising expenditure according to marketing
magazine
3. The leader of the consumer goods market in Indonesia.
4. Having a team of dedicated, skilled, and motivated people in all

ranks.
5. There is an increase in market share for important categories such

as face care, savory, and ice cream.
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6. Good planning and close collaboration with suppliers, consumers

and distributors to deliver products from factories to sales
quarters.
7. PT PQR already has its own distribution network so that the

distribution of its products to regions can be served.
8. PT PQR has the motto "operational excellent with no compromise

on quality". PQR in carrying out its operations is carried out
properly without ignoring product quality.
Weaknesses
1. PT PQR has a matrix structure, which has several challenges that

must be faced by the company, first, the difficulty of coordinating
activities between departments that have their own agenda and
schedule. Second, communication to employees who can receive
different messages. And third, conflict resolution between
initiatives from department support (human resource
management, finance, etc.) with product line departments that are
usually very commercially oriented.
2. Low market response to certain products.
3. The number of employees who are overweight.
4. Long bureaucracy due to the centralization policy that caused

Indonesian PQR to be unable to just decide on something.
5. Slow internal consolidation in decision making.
6. Unclear halal certificates for certain products.
7. The majority of PQR products have a low entry barrier.
8. Sales turnover growth is below the industry average.
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Opportunities
1. Relatively good economic stability with encouraging economic

growth of 6.3%.
2. Strong economic growth in the region
3. The high level of consumer satisfaction can be seen from the

prime predicate of the consumer satisfaction index.
4. There are many national market players who do not have good
methods of producing cosmetics.
5. The market potential is around 250 million, precisely 122,527,186

men (49.9%) and 122,922,553 (50.1%) women.
6. The high level of community dependence on the types of

consumer goods products.
7. Investment recommendations on stocks with beta levels below 1.
8. High and stable level of community loyalty to 83% consumer

goods products.
Threats
1. There is an increase in the cost of raw materials and packaging

materials such as palm oil, coconut sugar, and petroleum-based
ingredients caused by rising prices of oil, chemicals and other
commodities.
2. The volatility of the rupiah exchange rate against foreign

currencies.
3. Weakening consumer purchasing power.
4. The rise of counterfeiting and smuggling of products from China.
5. Low adequate infrastructure in the form of roads that cause high

product marketing costs.
6. The elimination of fuel subsidies for the industry.
103 |
7. Inconsistent gas supply from Pertamina.
8. The trend of changing people's lifestyles from traditional-national

products to foreign products.
9. The existence of a campaign against PQR by Greenpeace due to

deforestation is endangering the orangutan community.
10. The boycott of zionism products including PQR.
11. Competitive products at lower prices.
Generating a Strategic Factor Analysis Summary
(SFAS) Matrix
The tool used in compiling the company's strategic factors is the

SWOT matrix. This matrix clearly illustrates how the internal
opportunities and threats faced can be adjusted to the strengths and
internal weaknesses possessed. This matrix can produce four sets of
possible strategic alternatives.
To summarize the strategic factors of a company by combining

external strategic factors (EFAS) with internal strategic factors (IFAS)
into a summary of analysis of strategic factors (SFAS) which when
used together can be a strong set of analysis tools for strategy
analysis. Use of the SFAS form, namely with the following steps:
1. In column 1 is a strategic factor. List the most important EFAS and

IFAS items in the key strategic factor column, then determine
which ones are strength (S), weakness (W), opportunity (O), and
threat (T).
2. Review the weights given for the factors in the EFAS and IFAS
tables, and adjust until the total number in the EFAS and IFAS
weight columns reaches 1.00.
104 |
3. Enter in the ranking column given by company management on

each factor from the EFAS and IFAS tables.
4. Multiply the weight by ranking to produce the amount in the

weighted score column.
5. Give an X in the duration column to indicate whether one factor

has a short-term time period (<1 year), medium (1-3 years), length
(> 3 years).
6. Give information for each of the factors from the EFAS and IFAS
SFAS tables that summarized the external and internal strategic
factors in one form. SFAS only contains the most important
strategic factors and provides a basis for strategy formulation.
Reviewing of Mission and Objective
The next point that management must do is retest the company's current
mission and goals before it can produce and evaluate alternative
strategies. Retesting is very important, because when making decisions,
there is usually a tendency to concentrate only on alternatives rather than
on the goals to be achieved. This tendency is widespread because it is
easier to relate to alternative actions that exist than to think about what we
want to achieve in the future.
Problems in performance can arise from inappropriate mission

statements, which can be too narrow or even too broad. If the mission
does not provide integrative topics for the company's business, then
managers become unclear with the direction of the company. As goals
and strategies can conflict, divisions that compete with each other, which
can later bring damage to the company as a whole.
The goals of a company can also be expressed in an inappropriate

manner. These objectives may be too focused on short-term, or even too
broad, operational goals. Then there is a planning gap between the
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objectives planned and those achieved. If the gap occurs, what must be
done is to change the strategy to improve performance or reduce the
goals to be achieved to be more realistic. Therefore a constant review of
objectives is needed.
Generating Alternative Strategies by Using a TOWS Matrix
We have discussed how companies assess the situation and review

available company strategies. Then the next is to identify alternative ways
so that the organization can use its particular power to use opportunities
for opportunities or to avoid threats and overcome its weaknesses. The
SWOT matrix describes how management can match external
opportunities and threats faced by a company with its internal strengths
and weaknesses. This method leads to brainstorming to create alternative
strategies that management might not have thought of. The SWOT matrix
can be applied to single and multi-business business companies.
SO Strategy
1. Penetration and market development of existing products.
2. Improving the quality, capacity of facilities and infrastructure to

anticipate future demand.
3. Increasing the speed of the claim service process.
4. Strengthening the pattern of cooperation that is synergistic with

partners in terms of IW and SW marketing.
5. Increased reliability of the surveillance system.
WO Strategy
1. Increasing the role of PR in promoting and positioning products

effectively.
106 |
2. Increasing the structure of employees who have professional

degrees.
3. Strengthening investment and financial management systems.
4. Strengthening the capital structure.
5. Strengthening the loading system and work arrangements.
ST strategy
1. Strengthening the financial accounting system and its

mechanisms, which are communicative and interactive in
relations between the center and the regions.
2. Increased coordination with relevant agencies to resolve claims

in accordance with applicable standards.
3. Consolidating the moral power of human resource management

through efforts that lead to the philosophy of "respect to people"
4. Improving the filing system as one of the information provider

facilities.
5. Improving the quality of legal products to support company

operations.
WT Strategy
1. Strengthening the organizational structure to anticipate future

changes.
2. Strengthening the human resource management system.
3. Increased professionalism and entrepreneurial spirit to support

the company's competitiveness.
4. Development of an integrated computerized system that is able

to support strategic and operational decision-making processes.
107 |
5. Development of a creative work culture system and innovation.
6. Designing a program of research and development activities that

is more oriented to market needs.
33. Internal & External Environmental Analysis of PT. PQR Company

Internal Conditions Strategic Advantage Profile (SAP)
Strength
Strategic Factors Nilai Bobot Rating Skor
Effective Product Promotion 4 0,2 4 0,8
Consumer Goods Market Leader 4 0,2 4 0,8
Skilled Production Team 4 0,2 3 0,6
Cooperation Closely with Suppliers 4 0,2 3 0,6
Distribution Network To Regions - Regions 4 0,2 4 0,8
TOTAL 20 1 3,6
Weakness
Number of employees who are Tambun 2 0,14 4 0,56
Slow Internal Consolidation in Decision Making 2 0,14 3 0,42
Low Sales of Certain Products 4 0,29 1 0,29
Unclear Halal Certificates Against Certain Products 4 0,29 2 0,58
Difficulties in the Coordination of Inter- 2 0,14 3 0,42

Departmental Activities that Have Their Own
Schedule Agenda
TOTAL 14 1 2,3
108 |
Kondisi Eksternal Perusahaan Envorimental Threat and opportunity profil (ETOP)

Opportunity
High Customer Satisfaction 4 0,22 4 0,9
The number of National Market Players with Low 3 0,17 4 0,7

Production Method
Relatively Good Economic Stability 4 0,22 2 0,4
The High Level of Community Dependence 4 0,22 3 0,7
Extensive Potential Market 3 0,17 4 0,7
TOTAL 18 1 3,4
Threat
Increase in Raw Material Costs 4 0,21 4 0,8
Unstable Rupiah Exchange Rate 4 0,21 3 0,6
The rise of counterfeiting and smuggling of Chinese 4 0,21 4 0,8

products
Elimination of BBM Subsidies 3 0,16 3 0,5
Competitive Products with Lower Prices 4 0,21 4 0,8
TOTAL 19 1 3,2
SWOT Matrix Analysis
SWOT Matrix Analysis
a) Coordinates of Internal Analysis
(Total Strength Score - Total Weakness Score) = 3.6 - 2.3 = 1.3
b) Coordinate External Analysis
(Total Opportunity Score - Total Threat Score) = 3.4 - 3.2 = 0.2
109 |
Diagram SWOT
Kuadran Point Position Area of Matrix Rank Strategic Priority
I (S;O) ( 3,6 ; 3,4 ) 12,24 1 Growth
II (W ; O ) ( 2,3 ; 3,4 ) 7,82 3 Stabilitas
III ( W ; T ) ( 2,3 ; 3,2 ) 7,36 4 Penciutan
IV ( S ; T ) ( 3,6 ; 3,2 ) 11,52 2 Kombinasi
S O Relation Program Initiative

Product Promotion Product Promotion xx
Effective at High Effective at High xxx Market Intensification
Customer Customer Satisfaction
Satisfaction Potential Market
Potential Market Extensions
Extensions
110 |
Consumer Goods Consumer Goods Market xxx Market Development

Market Leader High Leader High Consumer
Consumer Satisfaction
Satisfaction
Distribution Distribution Network to xx Market Development

Network to Regions Regions - Areas of High xxx
- Areas of High Customer Satisfaction
Customer Potential Market
Satisfaction Potential
Potential Market
Potential
S T Hubungannya Program Initiative
Effective Product Competitor Products xxx Concentric Diversion

Promotion with Lower Prices
Consumer Goods Competitor Products xxx Concentric Diversion

Market Leader with Lower Prices
Distribution Network Competitive Products at xx

to Regions Lower Prices The False xx
Counterfeit of Fuel xxx Future Integration
Subsidy Removal
Products
W O Hubungannya Inisiatif Programnya

Unclear Halal High Customer xxx Market Penetration
Certificates for Certain Satisfaction Through Promotions
Products About Product Quality
Massively
W T Hubungannya Inisiatif Programnya

Unclear Halal Competitive Products with x Reduction of Marketing
Certificates for Lower Prices The Rise of xxx Areas in Areas that
Certain Products Product Counterfeiting Have a Lot of
Counterfeiting
111 |
CHAPTER IV
EVALUATION OF STRATEGIES
34. Strategy Evaluation and Supervision
Strategy evaluation and supervision is the final stage in the

strategy management process. all strategies are subject to modification
in the future, because various factors both external and internal will
continue to experience a change.
Strategy evaluation includes several things:
• Reviewing external and internal factors that are the basis for
each strategy being carried out
• Measuring the performance that has been carried out
• Take a corrective action if there is a discrepancy
Evaluation of this strategy is very much needed for the company

because a business success achieved today is not a success in the
future. Even often business success at the present time can bring up
new and different problems. Even so, if it fails, then new problems
arise and must be faced in order to be able to revive business activities
that have failed.
In large companies, the process of formulating (formulating)

strategies, implementing, evaluating and monitoring strategies there
are three levels of hierarchy, corporate levels, division levels and
functional levels.
112 |
35. Advantages of Strategic Management
Strategic Management is a process in which management takes

the initiative of allowing business owners to use resources and increase
the productivity of their companies. All actions must reflect the
organization's mission, vision, objectives and policies. This is done by
designing and implementing programs that aim to achieve goals and
available resources must be used correctly.
Strategic Management is managerial level action that prioritizes

goals rather than tactics. Strategic management provides the direction
the organization will take. However, this is not only limited to
managers, but also directors and other shareholders in the internal
management structure. Overall strategic management is an ongoing
process that controls the organization and industry that influences it.
Strategic management evaluates its competitors and

determines methods to deal with and compete with them. The first
step taken in strategic management is the compilation and
dissemination of the organization's mission. This will determine the
actions that the organization can take to service their customers.
The initial formation of the strategy is divided into several

processes. This includes the micro environment and macro
environment, evaluating competitors, and how to deal with them, and
consideration of internal and external factors that influence the
outcome of the process. After the analysis phase, management will
begin to set goals.
Usually there is a time period and a goal. This process focuses on

the formulation of the organization's vision, mission, and summary of
objectives. During implementing the strategic plan, changes in
113 |
management can emerge which can lead to obstacles to develop. It is

important to determine management changes that are competent enough
to avoid negative effects that might occur. This is important to determine if
there has been an increase when applying the strategy and if the progress
obtained is consistent with the expected results. Reviewing also needs to
be done to consider new technological challenges, new competitors,
social and economic changes, and political interests.
Strategic management is an integral part of management science.

Present as a solution to empower the entire organization (company) so
that comprehensively and systematically able to realize the vision and
mission of the organization. Over the years a variety of concepts and
theories that explain strategy have continued to be developed. Starting
from emphasizing attention to the ability of the organization to maximize
its resources in answering opportunities and challenges and various
uncertainties originating from outside the organization to the study that
emphasizes the ability of internal organizational resources to encourage
competitive advantages.
However, despite the debate about the point of view of the strategic
planning of an organization, the two schools clearly have the same goal of
achieving organizational goals and objectives through systematic methods
so that successes that might occur can be traced back.
36. Strategic Management Failure
Andrew Campbell and Marcus Alexander identify at least three reasons

why a strategy can fail to deliver a company to achieve its goals and
objectives. These three things are :
1. Directionless strategies: failure to distinguish between purposes

(what an organization will do) and constraints (what an organization
must do to survive). Companies that fail to understand the
114 |
constraints they have and misread them as mean objects, will tend to
be thrown from the business arena.
2. Planning paralysis: failure to determine the initial step to move

(from the strategy or goal?) Results in a 'paralyzed' plan due to
confusion regarding the 'process' involved in formulating a strategy.
Determine goals and then develop a strategy to achieve them or
imitate a proven strategy that is successful and then determine the
goals that can / want to be achieved based on the strategy.
3. Too Focus on Process (good strategy vs. planning process): Often

managers hope to be able to develop a new and better strategy.
Unfortunately success often does not depend solely on a new
planning process or a better designed plan, but rather on the ability
of managers to understand two basic things, namely: the advantages
of having purposes that are stable and well articulated; and the
importance of finding, understanding, documenting, and exploiting
important information (insights) about how to create more value than
other companies.
Compare the findings of Campbell and Alexander with what Henry

Mintzberg expressed in his writing in Harvard Business Review (1994)
which revealed that strategic planning has a large potential failure. The
failure is the belief that analysis will lead to synthesis and strategic
planning is strategy making.
Basically, this failure is caused by three fundamental errors in

assumptions :
1. Fallacy of Prediction: not every thing can be predicted, except

things that have a recurring pattern like the season. While other
things such as technological inventions and price increases are
almost impossible to predict relatively accurately, except by
115 |
visionaries who usually build their strategies personally and

intuitively.
2. Fallacy of Detachment: often managers are separated from

detailed and operational issues, something they should know well.
When managers are kept away from these basic things, managers
will fail to understand the whole process and deny Frederick
Taylor's concept of management that processes must be fully
understood before being programmed [see Jelinek, 1979].
3. Fallacy of Formalization: failure of strategic planning is the failure

of the system to work better than humans. Formal or mechanical
systems often fail to balance the information that develops in the
human brain. The system is indeed able to manage more
information, but is unable to internalize. Formalization refers to a
rational sequence, but making strategies is a learning process that
keeps moving. Formalization will fail to digest something that is
not continuous and new.
And therefore an understanding of strategic planning must be

distinguished from an understanding of strategy making. Both cannot be
considered the same.
37. Generic Evaluation of Strategic Business Units
The attractiveness of your company in its industry is the main

determinant of its profitability. The location in the industry is in the near
future. Even though an industry has below-average profitability, a
company that is positioned optimally can generate higher profits, this is
where strategic business planning comes in.
1. Competitive advantage
Competitive advantage is that obtained from competitors by offering

more value to consumers. You increase value by lowering prices or
116 |
increasing benefits and services to justify higher prices. Cost

differentiation and leadership strategies seek competitive
advantage on a broad scale, while the focus strategy is to work in a
narrow market. Sometimes, businesses look for combination
strategies to please customers who are looking for various factors
such as quality, style, comfort and price.
2. Cost Leadership Strategy
To train cost leadership, organizations compete to get the largest

number of customers through price. Cost leadership works well
when goods or services are standardized. That way, companies
can sell generic goods that can be received at the lowest price.
They can minimize costs for companies to minimize costs to
customers without reducing profits. A company sells its goods at
the industry average price to get higher profits from its competitors
or sell it at prices below the industry, trying to make a profit by
gaining market share. Wal-Mart is an example of a company with a
cost leadership strategy.
3. Differentiation Strategy
Differentiation strategies require companies to provide products or

services with distinctive quality that are valued by customers. You
attract customers because you differentiate yourself from the
competition. To succeed in this strategy, your business must have
access to leading scientific research (or conduct this research); a
highly skilled and creative product development team; strong sales
and marketing team; and the company's reputation for quality and
innovation. Apple, for example, uses a differentiation strategy.
117 |
1. Focus Strategy
The focus strategy is just as it is: concentrate on customers,

product lines, geographical areas, niche markets, and others. The idea is
to serve a limited group of customers better than your competitors who
serve wider customers. The focus strategy is to work well for small but
aggressive businesses. In particular, companies that do not have the
ability or resources to engage in national marketing efforts will benefit
from a focus strategy. Focus can be based on cost or differentiation
strategies. This involves focusing cost leadership or differentiation on a
small scale. The idea is to make your company stand out in certain market
sectors.
2. Integrated Cost Leadership Differentiation Strategy
Companies that integrate strategies rather than relying on a single

generic strategy can adapt quickly and learn new technologies. Products
produced based on integrated cost leadership differentiation strategies
are less distinctive than differentiators and costs are not as low as cost
leaders, but combine the advantages of both approaches. A rather typical
product, the mid-range price can be a greater attraction for customers
than cheap generic products or expensive special products.
118 |

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College of Economic on Development

DESCRIPTION OF STRATEGIC MANAGEMENT

1. Definition of Strategy Management

Management of company activities in general refers to the basic ability

Strategic management can be practiced or applied in organizational

Definition of Strategy Management

Strategy Management is a series of planning activities for efficient and

 Fred R. David (2016: 5) Strategy management is, art and

 According to Pearce Robinson (2007: 5), "Strategic Management is

 According to Hubeis & Najib (2008: 18), "Strategic Management is

 Suwarsono M (2008: 6) states "Strategic management is defined as

 David Campbell (2008:11), “Strategic management can be viewed

 According to Lawrence R. Jauch & W. F Glueck (2007: 75),

 According to Jatmiko (2004: 4), "Strategic management is a way in

 Alfred Chandler in James C. Craig and Robert M. Grant (2002: 4)

 Robert D Buzzell and Bradley T. Gale in James C. Craig and

used by management that have a large impact on financial

• Kenneth Andrew in James C. Craig and Robert M. Grant (2002: 5)

Strategic management is a process or series of decision-making

According to Pearch and Robinson (2007) it is said that strategic

Whereas the notion of strategic management according to Nawawi

allows organizations to interact effectively (called missions), in business

Strategic management according to David (2016) is Art and

Strategic management according to Hunger and Wheelen (2003: 4)

From these quite broad understandings, it shows that strategic

From these broad enough understandings, it shows that strategic

Besides that the definition of strategic management that has been

1. Strategy management manifested in the form of large-scale

2. Strategic plans oriented to the future reach.

3. Vision, mission, selection of strategies that produce the parent

4. The strategic plan is described as an operational plan which

5. Determination of strategic plans and operational plans must

6. Implementation of strategies in programs including projects to

management functions which include organizing, implementing,

Principles of Management Strategy Divided into:

• Strategic Planning Seeping (penetrating), all managers in

• Comprehensive planning, meaning that planning is based on

A broad understanding of management strategy shows that

Strategy management has several dimensions or is multidimensional. The

1. Dimensions of time and future orientation

Management strategies in maintaining and developing the existence of an

Vision can be interpreted as "ideal conditions to be achieved in the

2. Internal and External Dimensions

The internal dimension is the condition of the current non-profit

aspects or conditions, such as socio-political conditions, socio-economic

3. Dimensions of Utilization of Resources

Resources consist of material resources specifically in the form of

4. Dimensions of Top Management Participation

Strategy management that starts with developing a strategic plan is the

Every organization / company to exploit business opportunities that

This means organizations (business and public) try to reduce their

b. Strategies for achieving organizational goals (business and

Thus environmental analysis is very important in the strategy

Human resource development is about training and development.

Thus, business environment analysis only attempts to collect and

1) So that strategy makers can anticipate every opportunity and

2) To be able to streamline the strategy management process,

3) To assist managers in predicting environmental impacts on the

a. Analyze the relationship between company strategy and

b. Analyze trends in potential factors and potential problems

Basically the environmental structure can be divided or

3. Vision, Mission and Objectives