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Patricia Isabel G.

Barlaan
BS-ENTRE 4-1

Business Policy
Professor Malanum

Strategic concept
The concept of strategy has been borrowed from the military and adapted for use in business. A
review of what noted writers about business strategy have to say suggests that adopting the
concept was easy because the adaptation required has been modest. In business, as in the
military, strategy bridges the gap between policy and tactics. Together, strategy and tactics
bridge the gap between ends and means (Figure 1). This paper reviews various definitions of
strategy for the purpose of clarifying the concept and placing it in context. The author's aim is to
make the concepts of policy, strategy, tactics, ends, and means more useful to those who
concern themselves with these matters.

Strategic management process

Strategic management analyzes the major initiatives, involving resources and performance in
external environments, that a company's top management takes on behalf of owners. It entails
specifying the organization's mission, vision, and objectives, as well as developing policies and
plans which allocate resources to drive growth and profitability. Strategy, in short, is the
overarching methodology behind the business operations.

Five Steps of Strategic Management


As strategic management is a large, complex, and ever-evolving endeavor, it is useful to divide
it into a series of concrete steps to illustrate the process of strategic management. While many
management models pertaining to strategy derivation are in use, most general frameworks
include five steps embedded in two general stages:

Formulation
Analysis Strategic analysis is a time-consuming process, involving comprehensive market
research on the external and competitive environments as well as extensive internal
assessments. The process involves conducting Porter's Five Forces, SWOT, PESTEL, and
value chain analyses and gathering experts in each industry relating to the strategy.

Strategy Formation Following the analysis phase, the organization selects a generic strategy
(for example, low-cost, differentiation, etc.) based upon the value-chain implications for core
competence and potential competitive advantage. Risk assessments and contingency plans are
also developed based upon external forecasting. Brand positioning and image should be
solidified.
Goal Setting With the defined strategy in mind, management identifies and communicates
goals and objectives that correlate to the predicted outcomes, strengths, and opportunities.
These objectives include quantitative ways to measure the success or failure of the goals, along
with corresponding organizational policy. Goal setting is the final phase before implementation
begins.

Implementation
Structure The implementation phase begins with the strategy in place, and the business
solidifies its organizational structure and leadership (making changes if necessary). Leaders
allocate resources to specific projects and enact any necessary strategic partnerships.
Feedback During the final stage of strategy, all budgetary figures are submitted for evaluation.
Financial ratios should be calculated and performance reviews delivered to relevant personnel
and departments. This information will be used to restart the planning process, or reinforce the
success of the previous strategy.

SWOT Analysis
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and
for identifying both the Opportunities open to you and the threats you face.
Used in a business context, it helps you carve a sustainable niche in your market. Used in a
personal context Add to My Personal Learning Plan, it helps you develop your career in a way
that takes best advantage of your talents, abilities and opportunities.

Business SWOT Analysis


What makes SWOT particularly powerful is that, with a little thought, it can help you uncover
opportunities that you are well-placed to exploit. And by understanding the weaknesses of your
business, you can manage and eliminate threats that would otherwise catch you unawares.
More than this, by looking at yourself and your competitors using the SWOT framework, you can
start to craft a strategy that helps you distinguish yourself from your competitors, so that you can
compete successfully in your market.

How to Use the Tool?

Originated by Albert S Humphrey in the 1960s, the tool is as useful now as it was then. You can
use it in two ways as a simple icebreaker helping people get together to "kick off" strategy
formulation, or in a more sophisticated way as a serious strategy tool.
Strengths and weaknesses are often internal to your organization, while opportunities and
threats generally relate to external factors. For this reason, SWOT is sometimes called InternalExternal Analysis and the SWOT Matrix is sometimes called an IE Matrix.
To help you to carry out your analysis, download and print off our free worksheet, and write
down answers to the following questions.

Strengths
What advantages does your organization have?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can't?
What do people in your market see as your strengths?
What factors mean that you "get the sale"?
Consider your strengths from both an internal perspective, and from the point of view of your
customers and people in your market.

Weaknesses
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem to perceive
weaknesses that you don't see? Are your competitors doing any better than you?

Opportunities
What good opportunities can you spot?
What interesting trends are you aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad and narrow scale.
Changes in government policy related to your field.
Changes in social patterns, population profiles, lifestyle changes, and so on.
Local events.
Threats
What obstacles do you face?
What are your competitors doing?
Are quality standards or specifications for your job, products or services changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?

Could any of your weaknesses seriously threaten your business?


Further SWOT Tips
If you're using SWOT as a serious tool (rather than as a casual "warm up" for strategy
formulation), make sure you're rigorous in the way you apply it:
Only accept precise, verifiable statements ("Cost advantage of $10/ton in sourcing raw material
x", rather than "Good value for money").
Ruthlessly prune long lists of factors, and prioritize Add to My Personal Learning Plan them, so
that you spend your time thinking about the most significant factors.
Make sure that options generated are carried through to later stages in the strategy formation
process.
Apply it at the right level for example, you might need to apply the tool at a product or productline level, rather than at the much vaguer whole company level.
Note: You could also consider using the TOWS Matrix Add to My Personal Learning Plan. This
is quite similar to SWOT in that it also focuses on the same four elements of Strengths,
Weaknesses, Opportunities and Threats. But TOWS can be a helpful alternative because it
emphasizes the external environment, while SWOT focuses on the internal environment.

Key Points
SWOT Analysis is a simple but useful framework for analyzing your organization's strengths and
weaknesses, and the opportunities and threats that you face. It helps you focus on your
strengths, minimize threats, and take the greatest possible advantage of opportunities available
to you.
It can be used to "kick off" strategy formulation, or in a more sophisticated way as a serious
strategy tool. You can also use it to get an understanding of your competitors, which can give
you the insights you need to craft a coherent and successful competitive position.
When carrying out your analysis, be realistic and rigorous. Apply it at the right level, and
supplement it with other option-generation tools where appropriate.

Generic Strategies
Who is Michael porter?

Michael Porter is an economist, researcher, author, advisor,


speaker and teacher. Throughout his career at Harvard
Business School, he has brought economic theory and strategy
concepts to bear on many of the most challenging problems
facing corporations, economies and societies, including market
competition and company strategy, economic development, the
environment, and health care. His extensive research is widely
recognized in governments, corporations, NGOs, and academic
circles around the globe. His research has received numerous
awards, and he is the most cited scholar today in economics
and business. While Dr. Porter is, at the core, a scholar, his work has also achieved
remarkable acceptance by practitioners across multiple fields. Dr. Porters initial training
was in aerospace engineering at Princeton University. He then earned an M.B.A. from
Harvard Business School and a Ph.D. in Business Economics from Harvards
Department of Economics. His research approachapplying economic theory to
complex systemic problemsreflects these multidisciplinary foundations. In 2000,
Harvard Business School and Harvard University jointly established the Institute for
Strategy & Competitiveness to provide a home for his research. Research &
Scholarship Michael Porters early work was on industry competition and company
strategy, where he was the pioneer in utilizing economic theory to develop a more
rigorous understanding of industry competition and the choices companies make to
compete. In addition to advancing his home field of industrial organization economics,
Dr. Porters work has defined the modern strategy field. His ideas are taught in virtually
every business school in the world as well as extensively in economics and other
disciplines. He continues to write about competition and strategy today.
These three approaches are examples of "generic strategies," because they can be applied to
products or services in all industries, and to organizations of all sizes. They were first set out by
Michael Porter in 1985 in his book, "Competitive Advantage: Creating and Sustaining Superior
Performance."
Porter called the generic strategies "Cost Leadership" (no frills), "Differentiation" (creating
uniquely desirable products and services) and "Focus" (offering a specialized service in a niche
market). He then subdivided the Focus strategy into two parts: "Cost Focus" and "Differentiation
Focus." These are shown in Figure 1 below.

Porter's Generic Strategies Diagram


The terms "Cost Focus" and "Differentiation
Focus" can be a little confusing, as they could be
interpreted as meaning "a focus on cost" or "a
focus on differentiation." Remember that Cost
Focus means emphasizing cost-minimization
within a focused market, and Differentiation
Focus means pursuing strategic differentiation
within a focused market.
The Cost Leadership Strategy
Porter's generic strategies are ways of gaining
competitive advantage in other words,
developing the "edge" that gets you the sale and
takes it away from your competitors. There are two main ways of achieving this within a Cost
Leadership strategy:
Increasing profits by reducing costs, while charging industry-average prices.
Increasing market share through charging lower prices, while still making a reasonable profit on
each sale because you've reduced costs.
Remember that Cost Leadership is about minimizing the cost to the organization of delivering
products and services. The cost or price paid by the customer is a separate issue!
The Cost Leadership strategy is exactly that it involves being the leader in terms of cost in
your industry or market. Simply being amongst the lowest-cost producers is not good enough,
as you leave yourself wide open to attack by other low-cost producers who may undercut your
prices and therefore block your attempts to increase market share.

The Differentiation Strategy


Differentiation involves making your products or services different from and more attractive than
those of your competitors. How you do this depends on the exact nature of your industry and of
the products and services themselves, but will typically involve features, functionality, durability,
support, and also brand image that your customers value.
To make a success of a Differentiation strategy, organizations need:
Good research, development and innovation.
The ability to deliver high-quality products or services.
Effective sales and marketing, so that the market understands the benefits offered by the
differentiated offerings.
Large organizations pursuing a differentiation strategy need to stay agile with their new product
development processes. Otherwise, they risk attack on several fronts by competitors pursuing
Focus Differentiation strategies in different market segments.

The Focus Strategy


Companies that use Focus strategies concentrate on particular niche markets and, by
understanding the dynamics of that market and the unique needs of customers within it, develop
uniquely low-cost or well-specified products for the market. Because they serve customers in
their market uniquely well, they tend to build strong brand loyalty amongst their customers. This
makes their particular market segment less attractive to competitors.
As with broad market strategies, it is still essential to decide whether you will pursue Cost
Leadership or Differentiation once you have selected a Focus strategy as your main approach:
Focus is not normally enough on its own.
But whether you use Cost Focus or Differentiation Focus, the key to making a success of a
generic Focus strategy is to ensure that you are adding something extra as a result of serving
only that market niche. It's simply not enough to focus on only one market segment because
your organization is too small to serve a broader market (if you do, you risk competing against
better-resourced broad market companies' offerings).
The "something extra" that you add can contribute to reducing costs (perhaps through your
knowledge of specialist suppliers) or to increasing differentiation (though your deep
understanding of customers' needs).
Generic strategies apply to not-for-profit organizations too.
A not-for-profit can use a Cost Leadership strategy to minimize the cost of getting donations and
achieving more for its income, while one pursuing a Differentiation strategy will be committed to
the very best outcomes, even if the volume of work it does as a result is smaller.
Local charities are great examples of organizations using Focus strategies to get donations and
contribute to their communities.
Choosing the Right Generic Strategy
Your choice of which generic strategy to pursue underpins every other strategic decision you
make, so it's worth spending time to get it right.
But you do need to make a decision: Porter specifically warns against trying to "hedge your
bets" by following more than one strategy. One of the most important reasons why this is wise
advice is that the things you need to do to make each type of strategy work appeal to different
types of people. Cost Leadership requires a very detailed internal focus on processes.
Differentiation, on the other hand, demands an outward-facing, highly creative approach.
So, when you come to choose which of the three generic strategies is for you, it's vital that you
take your organization's competencies and strengths into account.
Porter's Generic Strategies offer a great starting point for strategic decision-making.
According to Porter's Generic Strategies model, there are three basic strategic options available
to organizations for gaining competitive advantage. These are: Cost Leadership, Differentiation
and Focus.

Organizations that achieve Cost Leadership can benefit either by gaining market share through
lowering prices (whilst maintaining profitability) or by maintaining average prices and therefore
increasing profits. All of this is achieved by reducing costs to a level below those of the
organization's competitors.
Companies that pursue a Differentiation strategy win market share by offering unique features
that are valued by their customers. Focus strategies involve achieving Cost Leadership or
Differentiation within niche markets in ways that are not available to more broadly-focused
players.

Mision and Vision


Infinitea is a company focused on providing the
best milk tea & tea based drinks on the market.
The company aims to bring the milk tea
experience closer to each home and to provide
customers with a one of a kind tea experience
by ensuring that we use only the best & freshest
ingredients in the making of our drinks.

Goals and Objectives


The companys goal is to bring milk tea
experience closer to home, while its objective is
to convert coffee drinkers to milk tea drinkers.

Personal Goals and Objectives


1. To achieve the quota sales per day
2. To offer a consistent taste of the infinitea drinks to every customer
3. To offer a fast service quality to the customers
4. To engage its customers so as to gain understanding on customers point of view and to
gather feedback

SWOT ANALYSIS

Strengths
1. Strong management can help Infinitea reach its potential by utilizing strengths and
eliminating weaknesses. "Strong Management (Infinitea)" has a significant impact, so
an analyst should put more weight into it.
2. An innovative culture helps Infinitea to produce unique products and services that meet
their customers needs
3. Customers typically rebel against price increases by switching to competing products,
but if a company has pricing power, customers will continue using Infiniteas products
and services. Infinitea has the ability to charge customers higher price. "Pricing Power
(Infinitea)" has a significant impact, so an analyst should put more weight into it. "Pricing
Power (Infinitea)" will have a long-term positive impact on this entity, which adds to its
value. These statements will have a short-term positive impact on this entity, which adds
to its value.
4. A strong supply chain helps Infinitea obtain the right resources from suppliers and
delivery the right product to customers in a timely manner.
5. A strong brand name is a major strength of Infinitea. This gives Infinitea the ability to
charge higher prices for their products because consumers place additional value in the
brand.

Weaknesses
1. An inefficient work environment means that Infiniteas goods and services are not being
utilized properly.
2. Weak management increases business risks and reduces profits for Infinitea, because
they are responsible for the health of the business.

Opportunities
1. The online market offers Infinitea the ability to greatly expand their business. Infinitea
can market to a much wider audience for relatively little expense.
2. New products can help Infinitea to expand their business and diversity their customer
base.
3. Greater innovation can help Infinitea to produce unique products and services that meet
customers needs.
4. New markets allow Infinitea to expand their business and diversify their portfolio of
products and services.
5. International markets offer Infinitea new opportunities to expand the business and
increase sales.

Threats
1. Mature markets are competitive. In order for Infinitea to grow in a mature market, it
has to increase market share, which is difficult and expensive.
2. Consumers can change their tastes very quickly. Infinitea depends on knowing which
goods and services consumers want.
3. Intense completion can lower Infiniteas profits, because competitors can entice
consumers away with superior products.
4. Politics can increase Infiniteas risk factors, because governments can quickly
change business rules that negatively affect Infiniteas business.

5. Volatile costs mean Infinitea has to plan for scenarios where costs skyrocket.
Cautious planning leads to development delays that can negatively affect Infinitea.
"Volatile Costs (Infinitea)" has a significant impact, so an analyst should put more
weight into it. "Volatile Costs (Infinitea)" will have a long-term negative impact on this
entity, which subtracts from the entity's value. This statements will have a short-term
negative impact on this entity, which subtracts from its value. This qualitative factor
will lead to an increase in costs. This statement will lead to a decrease in profits.
"Volatile Costs (Infinitea)" is an easy qualitative factor to overcome, so the
investment will not have to spend much time trying to overcome this issue.
6. The availability of substitute products hurts Infiniteas ability to raise prices, because
customers can easily switch to another product or service.

Retail Marketing Strategy


Product & Price
Milk tea (40-70php) Hot drinks (50php)
Frappuccino ( 65-85php) Fruit tea ( 45-55php)
Add ons (10php)
Promotions
Distributes Flyers that are available in the store and social media
Target Market
College students and residents of Broadview tower
Retail Marketing Strategy
Operation Management
Advertising and Promotion
Flyers Loyalty Card
Infinitea Branchs Facebook Page Prestige Card
Promotional Drinks like free upsize Promotional Card
Magazine Advertisement (entrepreneurial magazine and Cebu Pacific magazine)
Buying and Handling of Merchandise

The store owners monitors its inventory and buys merchandise depending on the number of
stocks available in their stock room
Advertising and Promotion
Downside
Foods like rice meals and desserts are included in its menu but are unavailable all the
time.
There are times that flyers are not available in the store.
People or Staff
5 employees
Customer Service and Selling
Drinks are served to the table
Music is provided
Provides wireless internet for the customer use
Promotes self-service when it comes to water and other utensils.
Facilities
Comfort Room available
The color scheme (combination of green and orange) and lighting (yellow light) of the
branch provides a relaxing atmosphere
Seats are available outside the store
Advertising and Promotion
The owner adds his regular customers, talk to them, and promote the stores upcoming
promotions.
Discounts are given to regular customers when he is at the store
Conclusion and Recommendation
1. CCTV camera
2. Standardize the store design and color
3. Offer more snacks and increase availability of some food products.