CHAPTER 7

Strategic Management
Models
KEYWORDS AND PHRASES TO REMEMBER:
i. Strategic Management Model
ii. Strategic Plan
iii. Short, Medium, and Long – term Plan
iv. Force Majeure
v. Wright, Kroll and Parnell Model
vi. The Hybrid Model (Orcullo Model)
vii. Thompson and Strickland Model
viii. F. R. David Model
ix. Wheelen and Hunger Model
x. Rayport and Jaworski Model
xi. Pitts – Lei Model
THE RESURGENCE OF MODELS
Force Majeure, (first use in 1883, which was originated in
France) is an event or effect that cannot be reasonably
anticipated or controlled.
 Inherent difficulty in planning and predicting the future or
market scenarios.

Strategic Plan, is an organizations process of defining it’s

direction, and making decisions in allocating it’s resources
to pursue their strategy.
 The end result of a strategic planning exercise.
 The Authors who have profounded a variety of
Strategic Management Models:

 Wheelen and Hunger (2004)

 Thompson and Strickland (1999)
 F.R. David (1998)
 Rayport and Jaworski (2004)
 Wright, Kroll and Parnell (1992) etc.,
 The Wright, Kroll and Parnell Model (1996)
(Strategic Management Model)
Fundamentals of Strategic Management
EXTERNAL ENVIRONMENTAL OPPORTUNITIES AND THREATS
Macro Environment Industry Environment

THE INTERNAL ENVIRONMENT

The firm’s resources, organizational mission and goals

STRATEGY FORMULATION
Corporate Strategy Formulation
Business Unit Strategy Formulation
Functional Strategy Formulation

STRATEGY IMPLEMENTATION
Organizational Structure
Leadership, Power, and Organizational Culture
 STRATEGIC CONTROL
Strategic Control Process and Performance
 Thompson and Strickland Model
(The Five (5) Tasks of Strategic Management)

Task 1 Task 2 Task 3 Task 4 Task 5

Develop a Craft a Implement Monitor,

Strategic Set Strategy to and Evaluate,
Vision and Objectives Achieve Execute and Take
Objectives Strategy Corrective
Mission
Action

Revise Revise Recycle

Improve/ Improve/
as as as
Change Change
Needed Needed Needed
 F.R. David Model
(Comprehensive Strategic Management)

Perform
External
Audit

Develop Establish
Generate, Establish
Perform
Measure and
Evaluate policies and
Mission long-term
and select annual
External Evaluate
Statement objectives
strategies objectives
Audit Performance
 Wheelen and Hunger Model
(Strategic Management Model)

Environmental Environmental Environmental Environmental

Scanning Scanning Scanning Scanning
 Feedback/Learning
Environmental Strategy Evaluation and
Strategy Formulation
Scanning Implementation Control

External Mis
sion
Societal -
Reas Obj
Environmental on ecti
Process to monitor
for ves
Stra performance and
(General Forces) exist -
tegi take corrective
Task ence Wha
es action
t
-
Environment resu Poli
Plan
(Industry Analysis) lts cies
to Progr
to -
achi ams
Internal Structure acco Broa
eve -
mpli d Budge
the Activiti
Chain of Command sh guid t
miss es
by eline - Cost
ion needed
Culture whe s for of the Proce
and to
n decis progra dures
objec accomp
(Beliefs, ion- m -
tives lish a
expectations, mak Sequen
plan Performance
values) ing ce of
- Actual results
steps
Resources (Assets, needed
skills, to do
competencies, the job
knowledge)
 Rayport and Jaworski Model
(Classical Framework of Strategic Management)

Mission

Goals

Internal
External
Strategy Formulation (company)
(industry)
• Corporate analysis
• Business Unit
• Functional
• Operating

Implementation

Control and Monitoring

 Pitts – Lei Model
(Strategic Management Process)

Implement Adjustment
Analysis Formulation
ation /Evaluation
External Internal Mission Policies
Environment Environment

Opportunities, Strengths, Customers to Goals, Organization (Cycle to

Threats Weaknesses be served. Guidelines for Structure, Earlier Stages)
Competencies major Systems,
to be activities Culture, etc.
developed.
 The Hybrid Model
(The Six (6) Tasks of Strategic Management, Orcullo. 2006)

Monitoring/Review --- Board of Directors Level

Monitoring/Review --- Operating Officers Level

Strategy
Developing
Environme Setting Evaluation,
Strategic Crafting Strategy
ntal Strategic Monitoring,
Vision and Strategies Execution
Scanning Objectives and
Mission
Revision

Two – way feedback --- Operational Level

 Strategic Plan --- The Output of the Strategic
Management Models
(What Comes with Strategic Plan)
Vision – Mission Statement
- A declaration of what the firm is all about and what it wants to
become.

Strategic Objectives
- Specific targets and objectives the firm wants to achieve in
measurable terms.

Strategies
Strategic Plan - Functional and Operating plans detailing tasks on what needs
to be done and how to achieve strategic objectives.

Strategy Implementation/Execution Plan

- Details of ground or operating level tasks identifying
responsible parties including routine and daily activities.

Monitoring, Evaluation, and Taking Corrective Actions

- Monitoring compliance of the strategy, evaluating performance
and doing corrective actions as needed.
 Mission

Vision

Strategic Objectives

Strategies designed to achieve Strategic Objectives

Functional Strategies/Objectives
Admin/Finance Marketing Operations Research

Tactical/Operational Activities

Operationalizing the Strategic Plan

SHORT, MEDIUM, AND LONG – TERM PLAN
i. Short – term Strategic Plan, refers to a plan to be carried
out or achieved within the ensuing year (or even less).
ii. Medium – term Strategic Plan, covers a period beyond
the short – term usually ranging from 1 – 3 years.
iii. Long – term Strategic Plan, talks about what to achieve
beyond the medium term period usually anywhere
between 3 – 5 years (or even more).