MOTIVATORS AND

DRIVERS OF
STRATEGIC
MANAGEMENT
C2
JishPesos
 WHY THE NEED FOR
STRATEGIC
MANAGEMENT

The idea of strategic

management was never heard of
or that popular back in the 1960s
or even in the 1970s

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With technology developments
and innovations and so many
business organizations that
sprouted in the 1970s up to this
date, competition has become
so stiff and sometimes at
cutthroat levels resulting to the
bankruptcy or closure of some
firms.
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 THE
DYNAMIC
NATURE OF
THE MARKET
AND THE
BUSINESS
“ One thing
constant in this
world is change
itself

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 Circumstances and realities:
Dynamic Nature of the market
and the Business
￮ The ever changing market
conditions
￮ The changing taste of the market
￮ Sociopolitical changes
￮ The impact of global development
vis-a-vis the local markets
￮ The changes in the conduct of
businesses 6
Business organizations have their own unique or creative
ways of responding to this change resulting to a level of
competition that motivates and drives the business
organizations to adopt strategic management theories. 7
The ever The changing taste
changing market of the market
conditions
The taste and
Entrepreneurs and preferences of the
business strategists buyers/consumers
are obligated to change over time thereby
respond to the compelling businesses to
changing market make appropriate
scenario chnages that invite other
players in the same
market to do the same.
The need to strategize.
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Sociopolitical The impact of
changes global
developments vis-
Political changes affect a-vis the local
the conduct of the markets
business in other
countries. Political This scenario has placed
changes in a given small or domestic business
country have a domino concerns under pressure as
effect beyond its shores. large or multinational
business concerns have
undermined the
competitiveness of local or
domestic business concerns
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The changes in the
conduct businesses

E-commerce/e-Business has
changed the conduct of the
business from the usual
morning and afternoon
business hours during
weekdays to a round-the-clock
and round-the-year 24x7x65 as
well as real time transactions
beyond traditional geographical
boundaries.
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 TRIGGERING EVENTS
TRIGGERING EVENTS refers to the
situations or scenarios that may have caused
or resulted to the actions or initiatives of the
top management of the firm to consider
certain strategic objectives.

Something that acts as stimulus for a

change in strategy

Wheelen and Hunger (2004) 11

 TWO FORMS OF
TRIGGERING EVENTS

1. INTERNAL TRIGGERING EVENTS

2. EXTERNAL TRIGGERING EVENTS

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INTERNAL TRIGGERING
EVENTS
￮ Those situations and
scenarios intervening or
disturbing the business
organization on account of
factors internal or inherent to
the firm itself and the one that
the company can exercise
certain level of control.
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EXTERNAL TRIGGERING
EVENTS
￮ Factors external to the firm
or matters where the
business organization itself
may not like or want to
happen but there is nothing
much it can do – as
compared to internal
triggering events
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 INTERNAL
TRIGGERING EVENTS
1. New CEO/President
2. Performance gap
3. Change in ownership
4. Management team shake up
5. Corporate
reorganization/restructuring
6. New products or services
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 EXTERNAL Lorem
ipsum

TRIGGERING EVENTS
- The overall economic environment
- Government
- Sociopolitical environment Lorem ipsum
congue
- Legal environment
- Technologies environment
- Global/regional environment
- Market factors
- Religious environment
- Occurrence of calamities and other natural phenomena 16
STRATEGIC INFLECTION POINT
(Andy Groove)
- It is a generic term that takes I to account
both internal and external factors that influence
business direction.
- It represents what happens to a business
when a major change takes place due to
introduction of new technologies, a different
regulatory environment, a change in customers’
values, or a change in what customers prefer. 17
 THEORY OF THE FIRM
The concept of theory of the firm suggests that under
ideal conditions, there are four categories of market conditions
that can be either favorable or unfavorable to the business.

TYPES OF MARKET STRUCTURES:

1. MONOPOLY
2. OLIGOPOLY
3. MONOPOLISTIC COMPETITION
4. PERFECT COMPETITION 18
MONOPOLY
- It is a market structure characterized by
the existence of a single seller of a product
which dominates the market. A true monopoly
offers no clear substitute for the product.
-If the demand is weak, the monopolist will
achieve limited market power.

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OLIGOPOLY
- This type of market has more than one
producer or seller of a product, which may be
either homogenous or differentiated. A market
dominated by a few firms that hold a similar
share in the market is considered an oligopoly.

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MONOPOLISTIC COMPETITION
- It exists when many sellers offer similar
products that are not perfect substitutes for one
another. In a monopolistic competitive structure,
price varies, with both the market and the
individual firms impacting price decisions.
- Monopolistic competitive firms often
lower prices in an effort to increase revenue.
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PERFECT COMPETITION
- It is a market structure characterized by
many producers or sellers and a homogenous
product. The market has almost similar product
or service and no single firm dominates the
market.

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PRODUCT LIFE CYCLE

Every product or service in

any industry or sector has its
own life cycle. The same
product or service life cycle
translates to what is also
known as the market or
industry life cycle. 23
 The product life cycle sometimes referred
to as S-curve is a living proof that just like
humans, there is beginning and end for
everything and the same is true for every
product or service in this world.

The life cycle model of the product or service

is one important theory that should always warn
company strategist.
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 Experience Curve
The theory of the experience curve suggests that as
the business organizations stay much longer in the business
or the industry, the business organization accumulates a
body of knowledge and experience that enables the firm to
do its business better.

The theory of the experience curve is also referred to

as the learning curve. The learning curve slope refers to the
percentage of learning. This is the percentage level to which
marginal casts falls each time cumulative output doubles.
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 Yesterday

Today

Tomorrow

Figure 2. Experience Curve 26

Thanks!

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