Chapter 7

Activity 7.1

1. Explain the concept of strategic and competitive assets. What are the different types of strategic
assets?

Competitive assets are the talents, abilities, resources, properties, and other endowments that
provide "plus points" to organizations.

1. Intellectual Property Assets

2. Human Resource Assets

3. Marketing Assets

4. Infrastructure Assets

2. What is unique with possessing intellectual property assets? Give the different forms of
intellectual property assets and show how organizations can benefit from them.

In intellectual property assets the products of purposive research like outcomes of a person's
ingenuity, brilliance, and creativity, or may just be discovered accidentally.

1. Trademarks - trade names, designs, logos, seals, and symbols that are uniquely
developed by an individual, a group of individuals, or an organization.
2. Software - organized information in the form of operating systems, utilities,
programs, and applications that enable computers to work. (system software
and application software).
3. Original literary works - music, and art compositions that are unique and
distinct.
4. Trade secrets - types of information, technical, or otherwise, like organizational
philosophy, programs, strategies, processes, financial data, transaction data and
lists of customers and suppliers.

3. In what ways do market assets create market dominance? Explain your answer.

Historically companies have created market dominance by following traditional monopoly

practices that are based on limiting access, setting a high price and engaging in price skimming.
This works well when you possess exclusive assets or critical patents. Just think of the
pharmaceutical industry.
1. People are said to be valuable assets of organizations. How should organizations handle their
employees to ensure optimization of talents and other cutting-edge qualities? Give examples.

Employers need to understand that a content and motivated employee has a higher probability
of making significant contributions to the organization. It may result in new orders that are won
for the organization or even new ideas for the amendment of the product.

2. When do infrastructure assets create comparative advantage? Cite examples to support your
answer.

Hence infrastructure organizations must invest their scarce resources to develop their new
technology through acquisition, assimilation, transformation and exploitation of technology
available to strengthen their maintenance management process. Effective maintenance
management, being the core process of infrastructure management, can thus create value
to infrastructure organizations regardless of ownership structure.

7.2

1. How important are competencies to organizations today?

Competencies have long been used as a framework to help focus employees' behavior on things
that matter most to an organization and help drive success. They can provide a common way to
harmonize, select and develop talent. The benefits are clear for employees and managers, and
ultimately, the organization.

2. What is competency mapping? Prepare a competency mapping for one job position.

Competency mapping is the process of identifying the specific skills, knowledge, abilities, and
behavior required to operate effectively in a specific trade, profession, or job position.

3. Why is strategic enhancement described as widening the horizon? Give instances to support this
statement.

Organizations of today have no other alternative but to be uniquely knowledgeable to survive

and compete.

1. Maximize the reach of the organization's infrastructure technology.

2. Corporate entities need to appreciate the business value of knowledge, information,

and communication technology.

3. Continuously conduct formal and informal types of training.

4. Systematize a process of enriching job paths of employees.

5. Empower Employees

6. Interact with experts

 7. Prepare for programs that lead to attitudinal change

8. Provide access to needed resources

9. Broaden networking.

10. Analyze cultures

4. When does competitve innovation create bargaining power? Cite example to validate your
answer.

The best assurance in achieving business sustainability and competitive advantage.

- Sailing away from traditional practices.

- Creating, conceptualizing, or inventing new ideas.

- Paradigm Shift from usual conservative mindset.

- Revolutionizing a synergistic outlook and willingness to invent a spectrum of "new

perspectives"
 Chapter 8

8.1

1. Define strategic control. Differentiate the strategic control mechanisms according to purpose
and approach.

Strategic Control

- The process of monitoring the various strategies of the organization and determining whether
there is a parallelism between the organizational milieu and that of the environment.

2. Explain the different types of strategic control according to purpose and according to approach.
Give examples for each type.

Types of Strategic control according to purpose

1. Presupposition control
- Is designed to check systematically and regularly whether the arguments set during the
planning and implementation processes are still binding.
- When strategies formulated, these are based on certain premises or assumptions.
- However since the external environments are continuously changing, there need to
closely monitor the set of strategies and make necessary change or changes when
needed.
2. Implementation control
 Is applied to evaluate whether the intermediate strategies are consistent with the
overall strategy.
 In any instances, a strategy consist of small activities that complement each other
and lead to ultimate attainment of the mother strategy.
 In cases when these transitional activities become misaligned for one reason or
another, then there is need to review the reasons for such occurrence.
3. Strategic surveillance
 Is a monitoring system whereby a broad range of occurrence inside and outside the
organization threatens the implementation of an organization strategy.
 Surveillance means shadowing, observing and scrutinizing the milieu.
 It demands constant awareness, consciousness and knowledge of how the
implementation of the strategy/strategies is fairing.
4. Vigilance control
- Is a special type of strategic control that is applied when immediate reconsideration of
an organization’s strategies pursued.
- This is called for when unusual events happen and there is no choice but for the
organization to attend to it and do the corresponding changes.
 Types of strategic control according to approach

1. Sequential strategic control

 Is the traditional way of looking at strategic monitoring.
 It is sequential, in the formulation of strategy is followed progressively by the
implementation of these designed strategies.
 Once the strategies have been employed, it is only then that strategic monitoring is
carried out
2. Interactive strategic control
 Is more appropriate approach for strategic control. Describe as interactive, this
approach shows the communicating and collaborative natured of process of
strategy formulation, strategy implementation and strategy control
3. Feedback strategic control
 Is a combination of sequential and interactive approaches. Although strategy
formulation, strategy implementation and strategy monitoring appear to be
sequential .

8.2

1. Define performance.

Performance is the ratio of the results derived from the resources invested by an organization or
by the formula.

2. What are the different types of organizational performance?

 Financial Performance
 Market Performance
 Efficiency/Productivity Performance
 People Performance
3. Enumerate the profitability metrics, liquidity measure, gearing (risk) measures, and other
investor`s measures, and explain the use of each metrics.

 Probability measures
Are financial indicators show the organization or the company’s ability to generate
earnings as compared to its expenses and other relevant cost incurred during a specific
period.

Metrics Meaning Formula

A percentage of turnover. A high
gross profit margin is desirable, it
Gross Profit Operating profit
indicates either that the sales prices
Margin Finance cost
are high or that production cost are
low.
A percentage of turnover less all
Net profit
expenses. A high net profit margin is x 100
Net profit Margin Turnover
desirable. It indicates either that the
sales prices are high.
Shows the net profit generated from
Return on Capital every 1 peso of assets employed. Net profit
x 100
employed (ROCE) Capital employed is total assets less Capital employed
current liabilities
Shows the turnover generated from
Turnover Capital
Asset Turnover every 1 peso of assets employed. A
Employed
high asset turnover is desirable.

 Liquidity measures
Are financial indicators that measures are extent to when an organization has a cash to
meet immediate and short term obligations.

Metrics Meaning Formula

Measures company ability to meet its Current Asset
Current ratio
short term liabilities as they fall due. Current Liabilities
Indicates the average number of days
inventory items are held. A decrease in Inventory
Inventory holding x 365
the inventory holding period is Cost of sales
period
desirable. It means that the company is
able to sell.
Receivables Shows the average period it takes a
Receivables
(debtor) Collection company customers to pay their debts. x 365
Turnover
period
Shows the average period that it takes a
Payables (Creditor) Payables
company to pay its debts. x 365
period Purchases
  Gearing (Risk) Measures and Other Investor’s Measures

Metrics Meaning Formula

Shows the long-term debt as a
percentage of equity. A low level
Debt
Gearing Ratio of gearing is desirable where the x 100
Equity
level of risk is minimized in terms
of payment of debts.
The operating profit (profit before
finance charges and tax) divided
Operating profit
by the finance cost. A decrease in
Interest Cover Finance cost
the interest cover is desirable
where operating profit is higher
than the finance costs.
Other Investor’s Measures
Measures the profit attributable Profit after tax less
Earnings Per to each share; ideally must show preference dividends
Share (EPS) an increase in earnings per share Weighted no . of ordinary
shares∈issue
An increase in dividend cover Net Profit
means that the company is more
Dividend Cover Dividend
able to make dividend payments
to shareholders.
An increase in dividend yield
Dividend /share
Dividend Yield means an increase in returns to x 100
Current share price
shareholders

4. Why is measurement of market performance important? What are the uses of the different
market performance metrics? Explain your answers.

As marketers face more and more pressure to show a return on investment (ROI) on their
activities, marketing performance metrics help measure the degree to which marketing
spending contributes to profits.

Metrics Meaning Formula

A simple marketing profit ability
metric that allows a business to
Marketing Return Net marketing contribution
compare performance across the
on Sales (ROS) Sales
organization and other
companies.
A marketing probability metric Net marketing
Marketing Return that shows the ratio of contribution
x 100
on Investment marketing contribution to Marketing∧sales
(ROI) marketing and sales expenses. expenses
 A percentage of customer Total customer
Customer relationships that once retained
x 100
retention established, a business is able to Total customer at the
maintain on a long term basis. start of the year

5. Should efficiency/productivity performance be the only focus of companies? Explain your

answer.

Yes, because most people in business are well aware of the multitude of business benefits to be
gained from having more productive employees as well as from more efficient production lines.
Productivity benefits are obvious and widely felt when implemented in a business environment.

6. What role does people performance play in the success of a company? What are the important
people performance indices? Explain their uses to the company.

Successful employees meet deadlines, make sales and build the brand via positive customer
interactions. When employees do not perform effectively, consumers feel that the company is
apathetic to their needs, and will seek help elsewhere. Employees who perform effectively get
things done properly the first time.
 Chapter 9

9.1

1. How did Kenichi Ohmae define intellectual elasticity? When is intellectual elasticity considered a
strategy? Cite an example.

 The concept of intellectual elasticity came from Kenichi Ohmae. Considered as Japan’s
only management guru, Ohmae wrote The Mind of the Strategies in 1982.
 He say’s, “Strategies stem from creative minds and not from rote memory. There are no
magic formulas for creating brilliant formulas.”

2. Do you agree that strategy is a mindset? How is it exhibited? Cite an example.

Yes, because a strategic mindset is always active and innovative. It is pulsating. It is filled with
ideas. It is alive. It is looking at the future to deal with the present. It then organizes itself
around the basic product or service, and in the process, creates a culture and personality for
itself.

3. Describe instances when learning in organization

Learning refers to any old and new knowledge and competencies, gained or enhanced from
persons, institutions, books, experience, training, and others. Learning is not limited to personal
learning. The center of maximum learning is an organization. Change demands learning, and
learning means continuous change learning, from an organizational perspective, is a process of
maintaning and improving performance experientially

4. When is natural capital considered a strategy to a nation?

Hawken et.al. (1999) emphasized the both environmental and economic priorities are
compatible with one another. When taken in this light, natural capital creates competitive
advantage. Thus, it is in this instance that strategy is considered natural capital.

5. Differentiate common knowledge from intellectual capital. Can an organization easily create its
intellectual capital? How?

By definition, Intellectual Capital is the synergistic confluence and interrelationships of the

organization’s valued resources. It is intangible. Although not visible and concrete, intellectual
capital can be felt. It creates impact. It can be assessed. It is critical to attaining organizational
success. It sometimes makes the difference, but often times it is difference.
9.2

1. What is business process re-engineering? What is the role of information technology in BPR?
Cite example.

Business Process Reengineering involves the radical redesign of core business processes to
achieve dramatic improvements in productivity, cycle times and quality. In Business Process
Reengineering, companies start with a blank sheet of paper and rethink existing processes to
deliver more value to the customer.

Examples: Company selling commemorative cards. In a company that offers products such as
Christmas, anniversary, commemorative cards, etc., renewing the stock and changing the design
of the cards is constantly fundamental. On average, it takes three months for new items to
reach the shelves. Across market research, it’s possible to realize that there would ideally be
new products every month. At first glance, it’s easy to say that the delay was at the production
stage. When analyzing and mapping the process, it’s verified that the creation stage was the
most time consuming. Oftentimes the creative team receives the concept and several
employees begin to perform the same task (duplicate actions), or an idea takes days to get off
the paper. With this information, we can redesign the process completely, defining a cross-
functional team from concept and creation, with incredible results in speed, costs and
effectiveness.

2. Differentiate process improvement from process redesign.

Here are some key differences between process improvement and process redesign:

1. While process improvement or streamlining is done to improve processes within the

existing organizational structure, process redesign is done to create dramatic
improvements to enable the organization to break away from conventional wisdom and
approaches, thereby creating widespread change.
2. Process improvement is a preventive technique that should be applied as a principle
across the business, whether or not there are problems while process redesign is often
applied to fend off impending disasters. Some, however, argue that whether or not
process improvement is implemented within the organization, process redesign may still
be necessary for response to changes in the legal/political environment.
3. Process improvement is often seen as running repairs/maintenance and can be used to
achieve quick wins while process redesign focuses more on the improvement of
organizational operations enterprise-wide, which takes a significant amount of time to
accomplish.

3. When the balanced scorecard considered a strategy tool?

Strategy as balanced scorecard – It gives organizations real measurement figures, thereby

allowing them to plan and advise ways of attaining their set goals.
4. Cite the four perspectives discussed in the balanced scorecard and explain the role of each
perspective in the strategy formulation of a company.

Perspective
1. Learning and growth Learning and growth measures are the engines of the other
measures. They motivate employees to actualize other measures.
2. Customer Customer measures are used by organizations to increase
customer reach and satisfaction.
3. Internal Process For product leader organizations, the measures are on innovation,
while for the customer intimate organizations, focus is on
customer satisfaction.
4. Financial The perspective stresses the need to define a mechanism that
measures growth and profitability.

5. Differentiate strategy maps from the balanced scorecard. What is their similarity? Explain your
answer.

Differences

Strategy maps help clarify the strategy and the related strategic objectives, whereas balanced
scorecards are used to establish metrics and targets to measure and manage the performance
of the organization against those strategic objectives.

Similarity

A strategy map is a simple graphic that shows a logical, cause-and-effect connection between
strategic objectives (shown as ovals on the map). It is one of the most powerful elements in the
balanced scorecard methodology, as it is used to quickly communicate how value is created by
the organization.

9.3

1. When a peoples considered an effective strategy?

 Strategy is both a concept and a tool but it also people. People are strategies in
themselves.
 They are executive managers, managers, supervisors, subordinates, and anyone who
leads, directs and supports the organization toward the realization of objectives. They
are strategy personified.

2. Do you agree with Sloan`s strategy lesson that “the job of a professional managers not to like
people, not to change people; it is only performance that matter”? Explain your agreement or
disagreement.

Sloan felt it wasn’t a manager’s job to like people, to change them or approve of them, he felt
that one must always out their strengths to work and reward good performance. Welcome
disagreement, dissent is not disloyalty. A managers` greatest danger is surrounding himself with
yes men or yes women.
3. Explain what Sloan meant by the statement, “the most important lesson that a professional
should remember is that he is a servant.”

Sloan’s management philosophy: Get the facts, recognize the equities of all concerned, realize
the necessity of doing a better job everyday, keep an open mind and work hard. The last is the
most important of all. There is no short cut to hard work.

4. What did Geneen mean by the statement, “The key element in good business management is
emotional attitude”?

They know his emotional commitment includes them as well as the goals of the enterprise. They
are willing to follow his lead because of that "feeling" which makes him the kind of person he is.

5. Will the drudgery of numbers make an individual free. Explain your answer.

6. Do you think that lacocca`s frustration with Ford Company helped him to give his best at
Chrysler?

7. What is the best strategy lesson that you learn from lacocca? why

8. Why is jack Welch considered the successful epitome of strategy? Support your answer.

Welch changed GE so radically and successfully that business leaders everywhere studied his
methods and tried to emulate them. He was by far the most influential manager of his
generation. Fortune named him the manager of the century in 1999, and in retrospect he still
merits the title.

9. Give examples of people today who portray effective management and leadership.

10. When is creativity a competitive strategy? Cite examples.

Strategy is creativity – One realizes that the challenge today for every organization is creativity.
In short, opportunities are around; it is the creative mind that wins. Creativity is strategy and
strategy is creativity.

9.4

1. Is learning important to an organization? Give concrete example of learning in the company

The importance of organizational learning is shown by the various benefits that occur in
organizations that develop a learning culture: Increased employee job satisfaction. Lower
turnover rates. Increased productivity, profits and efficiency.

2. Are strategy tools unique in themselves or are they essentially generic? Explain your answer.

As a strategic tool, it provides you with clear and measurable goals. You can identify strengths
and gaps in your product or service, learn from specific examples of personal experiences and
gather information through opinions for improvement and gain insight to your planning.
3. Why are people the best catalysts of strategy?

The key catalysts for success include the hiring and investing in the right people, who are getting
trained and coached daily, using scalable technologies, working with strategic partners, and are
providing industry thought leadership.

4. Is having a strategy mindset enough to make an organization achieve enormous positive results?

Any cycle of success begins with the organization coming up with a strategic concept, that is, of
a product or a service.

5. Which do you think is the best strategy to attain organizational success?

Strategy is monopolistic intellectual capital
– As mentioned earlier, strategy is intellectual capital. It is a competitive advantage that is
created by organizations to be in the forefront of any business and industry.
-When Intellectual Capital is monopolistic, one of-a-kind, or the only one, then it is a unique
strategy.
Chapter 10

10.1

1. Explain what the author meant by the military perspective of strategy by giving your own
examples.

Military Intel or intelligence of enemy and situations is the same with business for competitive
analysis and market analysis. Know your competition in detail and out maneuver them. The
importance of achievable goals and objectives with detailed tactics to accomplish them are the
same with military and business.

2. What is the importance of Sun Tzu’s strategies in modern-day living? Which of these strategies
impressed you the most and why?

The resurgence of the interest in the investigation on the likelihood of the ancient war strategy,
Sun Tzu Art of War in improving the competition position of business organisations is reaching a
new height both locally and internationally.

3. Are Miyamato strategies relevant today? Explain your answer.

Today more than ever, leaders must prove their value; today leaders must be a fundamental
support for their teams, and together must pursue the actions and decisions that can develop
and sustain the competitive advantages on their market and assure the sources of profitability
for their organizations

4. As a student, give five examples where you can apply Musashi’s strategies as enumerated in his
Ground, Water, Fire, Wind, and Void books.

Ground
Musashi describes the essence of the ground book as the foundation of the other books. “Know
the smallest things and the biggest things, the shallowest things and the deepest things. As if it
were a straight road mapped out on the ground, the first book is called the Ground book.”

Water
"With water as the basis, the spirit becomes like water. Water adopts the shape of its
receptacle, it is sometimes a trickle and sometimes a wild sea."

He also talks about fundamental knowledge in this book: "The principle of strategy is having one
thing, to know ten thousand things."

A core lesson of water is to stay calm and even-keeled: "Both in fighting and in everyday life you
should be determined though calm. Meet the situation without tenseness yet not recklessly,
your spirit settled yet unbiased. Even when your spirit is calm do not let your body relax, and
when your body is relaxed do not let your spirit slacken. Do not let your spirit be influenced by
your body, or your body be influenced by your spirit. Be neither insufficiently spirited nor over
spirited. An elevated spirit is weak and a low spirit is weak. Do not let the enemy see your
spirit."

Combat is life, you cannot keep them separate: "In all forms of strategy, it is necessary to
maintain the combat stance in everyday life and to make your everyday stance your combat
stance. You must research this well."

Maintain your ability to zoom out and zoom in, don't be lost in the trees or the forest: "In
strategy it is important to see distant things as if they were close and to take a distanced view of
close things."

Focus on victory over yourself first: "Study strategy over the years and achieve the spirit of the
warrior. Today is victory over yourself of yesterday; tomorrow is your victory over lesser men."

Fire
"The essence of this book is that you must train day and night in order to make quick decisions.
In strategy it is necessary to treat training as part of normal life with your spirit unchanging."

The three methods to forestall the enemy:

Forestall by attacking
Forestall by responding to his attack by feigning weakness, then attacking
Forestall by attacking when he attacks and meeting him head on
Maintain control of your position, don't be led about: "In contests of strategy it is bad to be led
about by the enemy. You must always be able to lead the enemy about."

If you can't see the enemy's resources, feign a strong attack to see his response: "In large-scale
strategy, when you cannot see the enemy’s position, indicate that you are about to attack
strongly, to discover his resources. It is easy then to defeat him with a different method once
you see his resources."

Wind
"This book is not concerned with my Ichi school but with other schools of strategy. By Wind I
mean old traditions, present-day traditions, and family traditions of strategy.”

In my Ichi school of the long sword there is neither gate nor interior. There is no inner meaning
in sword attitudes. You must simply keep your spirit true to realise the virtue of strategy.

Void
“By void I mean that which has no beginning and no end. Attaining this principle means not
attaining the principle. The Way of strategy is the Way of nature. When you appreciate the
power of nature, knowing rhythm of any situation, you will be able to hit the enemy naturally
and strike naturally.”
5. Who is the better strategist: Sun Tzu or Musashi Miyamoto? Explain your answer.

In reading Book of Five Rings, I sometimes get a little lost by the way the prose and advice are
worded, which may be a result of the translation, but at times seems to have simply been
Musashi's own way of introspection and reflection rather than to provide advice in the waning
years of his life.

On the other hand, reading Art of War has been much more clear for me in regards to how I
should take the advice and apply it at a more abstract level to daily life.

10.2

1. Differentiate game strategies from complete information, incomplete information or no

information at all. Give examples for each.

Complete information is an economic situation or game in which knowledge about other market
participants or players is available to all participants. The utility functions (including risk
aversion), payoffs, strategies and "types" of players are thus common knowledge. Complete
information is the concept that each player in the game is aware of the sequence, strategies,
and payoffs throughout gameplay.

Incomplete information, players do not possess full information about their opponents. Some
players possess private information, a fact that the others should take into account when
forming expectations about how those players will behave. A typical example is an auction: each
player knows his own utility function (valuation for the item), but does not know the utility
function of the other players.

2. Classify and define games that are sequential, simultaneous, and strategic.

Simultaneous game or static game is a game where each player chooses their action without
knowledge of the actions chosen by other players. Simultaneous games contrast with sequential
games, which are played by the players taking turns.

3. Differentiate dominant from dominated strategy. Give example for each

A dominant strategy is a strategy that is better than all the alternative strategies that a player
can pick, regardless of which moves their opponents make. This means that, in a given game, a
player’s dominant strategy is the best strategy that they can choose from a strategic
perspective, since it’s the one that will lead to the greatest payoff for them.

A dominated strategy is a strategy that is worse than all the alternative strategies that a player
can pick, regardless of which moves their opponents make. This means that, in a given game, a
player’s dominated strategy is the worst strategy that they can choose from a strategic
perspective, since it’s the one that will lead to the worst payoff for them.
4. Define Nash equilibrium and give an example.

A Nash equilibrium is a situation in a game with multiple players, where no player stands to gain
anything by changing their own strategy while other players keep their strategies unchanged.

For example, in the example we saw earlier, where two companies can choose whether to enter
the consumer market (80% of the total market share) or the professional market (20% of the
total market share), the Nash equilibrium is the situation where each of the companies gets a
40% share of the total market by investing in the consumer version of the product, since neither
of them will be able to increase their market share by switching to the professional market.

10.3

1. Differentiate upstream from downstream activities. Give examples for each.

Upstream refers to the material inputs needed for production, while downstream is the
opposite end, where products get produced and distributed.

To illustrate the upstream process, let’s use the petroleum industry as an example. In this
industry, locating underground or underwater oil reserves characterizes the upstream process.
Additionally, the upstream process in petroleum involves bringing oil and gas to the surface.
Extraction wells represent an example of a structure operating in this stage in the process.

Staying with the petroleum industry example, the downstream process could consist of
converting crude oil into other products and then selling those products to customers. Thus, oil
refineries represent structures that operate within the downstream process. However, any kind
of plant that processes raw materials may qualify as operating within the downstream stage of
production.

2. What are different alternatives to vertical integration? Which of them is the most; (Why?)
a. Acceptable?
b. Feasible?
c. Beneficial?
3. Explain the concept of the learning curve. Cite an example.

The learning curve is a visual representation of how long it takes to acquire new skills or
knowledge. In business, the slope of the learning curve represents the rate in which learning
new skills translates into cost savings for a company.