STRATEGIC MANAGEMENT

STRATEGIC MANAGEMENT

Strategy It is a useful tool in making a company

successful It is a plan of action that prescribes resource

allocation and other activities. It is the ability of the leader to see their future

ahead of others and to create products and services which will take advantage of this foresight.

It refers to the ability of a firm’s management to properly align itself with the forces that drives the change in environment in which it competes.

STRATEGIC MANAGEMENT

Objectives of Strategy To win customer’s preference. To create sustainable competitive advantage To leave sufficient money for owners and

stakeholders

STRATEGIC MANAGEMENT

Competitive conditions and industry attractiveness

Economic, societal, political, and government regulations

FACTORS SHAPING THE CHOICE OF STRATEGY

Company opportunity and threats

FACTORS SHAPING THE CHOICE OF STRATEGY

What an enterprise can and cannot do. Strategy wise is always constrained by what is legal, by what complies with government policies and regulatory requirements, by what is considered ethical, and by what is in accord withsocietal expectations and the standards of good social and communitycitizenship.

Economic, societal, political, and government regulations

Governor Alfredo Marañon Jr. said the call by some groups on the public to boycott all products of Coca-Cola Bottlers Philippines is not a practical way to address the looming crisis of the sugar industry.

Sugar Watch, a group composed of small farmers, entrepreneurs, and members of civil society in Negros Occidental, has called on the public to boycott all products of Coca-Cola as it accused the company of alleged technical smuggling by importing large volumes of sugar in the guise of premixes.

Confederation of Sugar Producers’ Association (CONFED) has filed charges for technical smuggling against Coca-Cola and other beverage companies before the Bureau of Customs. CONFED accused the said companies for allegedly importing pre-mixed sugar to avoid paying the appropriate tariff and taxes despite the fact that the premixed sugar was found by SRA laboratory as consisting of between 99.5 percent to 99.7 percent refined sugar.However, Catherine Avelino, corporate communications director of Coca-Cola Philippines, said, "At this point all we can say is our premix importations are legal. It is unfortunate that there are some parties that may not agree with that."

Coca-Cola has approached the Valuation, Classification and Review Committee (VCRC) for review of the firm’s position that its premix importation is legal, she said.

FACTORS SHAPING THE CHOICE OF STRATEGY

An industry's competitive conditionsand overall attractiveness are bigstrategy-determining factors.

A company's strategy has to be tailoredto the nature and mix of competitivefactors in play—price, product quality,performance features, service, warranties, and so on.

Competitive conditions and industry attractiveness

Coca-Cola is a global manufacturer, distributor, and marketer of non-alcoholic beverages. Coca-Cola sells syrups and concentrates to authorized bottling and canning operators. Coca-Cola has equity stakes in 20% (by volume) of these operators.In addition, Coca-Cola sells fountain syrups directly to restaurants. The company also sells bottled and canned products directly to retailers. The company’s products include sparkling beverages, juices, and bottled water.Roughly 75% of the company’s revenue is international, and 53% comes from concentrate and syrup sales of Coke. Coca-Cola has a 10% market share of the non-alcoholic beverage market. Coca-Cola has 14 brands with sales over $1B, and owns four out of five of the worlds top sparkling non-alcoholic beverage brands.Globally, Coca-Cola is number one in sales of sparkling beverages, juice, and ready to drink coffee and tea, number two in sports drinks, and number three in bottled water.

FACTORS SHAPING THE CHOICE OF STRATEGY

A company's strategy needs to be deliberately aimed at capturing its bestgrowth opportunities, specially the ones that hold the most promise forbuilding sustainable competitive advantage and enhancing profitability.

Strategy should also provide a defense against external threats to thecompany's well-being and future performance.

Company opportunity and threats

ACTIVITY

Look for the opportunities and threats of Coca- Cola.