Seminar in Management

of 23
Seminar in Management
“Strategy Formulation in Multinationals
Corporate while Deciding for
Expansions”
A thesis submitted in fulfillment of the requirements of MBA degree
Supervised by: Dr. Sania El Galaly
Submitted by: Kamel M. Saifalnasr Kamel Abdullatif
Count of words: 3016 words

of 23
TABLE OF CONTENTS
ABSTRACT 3
KEYWORDS 4
INTRODUCTION 5
LITERATURE REVIEW 7
RESEARCH METHODOLOGY 20
CONCLUSION 21
REFERENCES 22

of 23
Abstract
Strategic management is about managing the future, the word “strategic” as we used to hear it
always referred to something with long term impact or implementation. And therefore effective
strategy formulation is crucial, as it directs the attention and actions of an organization and
individuals in that firm, even that in many cases actual implemented strategy can be different
from what was initially intended, planned or thought. But this is normal especially in
multinationals as their exposure is very different and very wide.
Add to this the case of expansion, what if they decided or just started to think how to expand? A
lot of questions would follow like why to expand? How to implement the expansion? Where to
expand? And most important what is our strategy for the expansion and how we gonna formulate
it?
Today, firms need to strive with competitive challenges and barriers related to innovation,
proactive responses, knowledge accessibility, etc. by means of effective and dynamic strategy
formulation.
The purpose of this paper is to investigate the strategy formulation process for the firms that are
seeking after expansion. In order to evaluate the process we gonna define each aspect of the title
and demonstrate the link between strategy formulation, multinationals corporate and expansion
decisions.
The findings of the study offer multi-perspective reflection on strategy formulation. Such
reflection is assumed to enable us as “Students” and managers in the future to proactively
evaluate the potential outcome of the chosen strategy.

of 23
Keywords
Strategic Management, Strategy Formulation, Corporate, Firm
Expansion, Expansion Strategy, Decision

of 23
Introduction
Strategic management is a complicated process that once implemented can lead to higher profits
and ease the obtaining of the competitive advantage.
Today’s dynamic external environment puts a huge pressure on every manager’s shoulder when
it comes to create the best strategy on which the entire company has to rely on and especially in
deciding for expansions and the intended strategy to pursuit that expansion .
To deal with these constrains a lot of thinking has been done in the past years and many
approaches that can be used in the development of the strategic management process have been
identified.
Within this context one can easily see the utterly importance of well designed strategy.
The formulation phase is just one of those elements without the strategy cannot work in practice.
Thus, the assessment of strategy formulation becomes crucial for both practitioners and
researchers in order to conduct and evaluate different formulation processes. Judging from the
literature, formulation of a particular strategy can be only be examined reactively, by examining
the strategy outcome after a period of time.
However, practitioners need greater confidence that their chosen strategic expansion decisions
are going to lead to successful results. Starting from this point, we strive to elaborate upon a
proactive assessment tool of strategy formulation processes that ensures high quality in process
and outcome.
I was interested in how the managers are filling about this important step in the strategic
management process, so I developed a questionnaire that was applied to a sample of managers in
CEMEX where I work as “Sales Executive” while I was investigating some particular aspects
about the formulation of strategy in CEMEX.
This paper is structured as follows: it starts with a literature review on the strategic management
process that is followed up by a thorough presentation of the formulation phase. During this

of 23
stage the research questions are being hypothesized and a brief description of the research
methodology follows.
The paper continues with a discussion of the most relevant findings of the survey and ends up
with some conclusions regarding the advantages and the drawbacks of the strategy formulation
process within the expansion stages.

of 23
Literature Review
During time, many scholars tried to define the strategic management. We have reached by now a
considerable number of definitions regarding strategic management, yet there exists little
consensus about the similarities of such definitions. Ohmae’s (1982) ideas of strategic
management offer a simple but robust initial definition. He draws attention to three key groups –
the corporation, the costumer and the competitors. Strategic management might be defined,
therefore, as the pursuit of superior performance by using a strategy that “ensures a better or
stronger matching of corporate strengths to customer needs than is provided by competitors”
(Ohmae, 1982: 91). Other remarkable contribution to the development of strategic management
theory is that of Pettigrew and Whipp (1993) who also make the point about the importance of
properly linking strategic and operational changes. Strategic intentions should be broken down to
what they call actionable pieces, made the responsibility of change managers. Joyce and Woods
(2002) consider strategic management as being a difficult process in part because it requires
contradictory qualities and skills in dealing with paradoxical demands of situations. Indeed,
strategic management is not one of the easy tasks managers have to accomplish. Moreover, the
success of the strategy will rely on the ability of every strategist responsible of the
implementation. In fact, Charles Handy, an influential management writer explains the role of
the each management type and points out how the qualities and skills of different types may be
present in single individuals, who have to bring together in complementary ways to deal with
strategic tensions they confront (1991). Handy uses Greek myths and gods to personalize the
four manager types that he describes in his book “The gods of management” (1991). The
strategic management process consists of the following steps: (1) analysis of the external and
internal environment; (2) strategy formulation; (3) strategy implementation and (4) strategy
evaluation (Borza et al., 2008). Some authors make a clear distinction between strategic
management (which is a term used especially in the academic world) and strategic planning (a
term that was coined within the business world which is associated with the formulation phase).
Figure 1 shows the specific elements that comprise the strategic management process. Figure 1:
The strategic management model Source: adapted from Wheelen and Hunger, 2006: 11

of 23
The strategic management process starts with an analysis of the internal and external
environment of the company. The role of this analysis is to determine which are the strategic
factors that determine the future direction of the company. The external environment consists of
those elements that are not controllable by the managers that form the context in which
companies evolve. On the other hand, the internal environment includes the variables within the
company (for example organizational structure corporate culture and the resources of the
company). This first step usually ends up with the development of the SWOT analysis which will
briefly include the strengths and weaknesses from the internal environment and the opportunities
and threats from the external environment. As Figure 1 shows the strategic management is a
continuous process that contains also a feedback phase suggesting that while the companies goes
through all the steps it is possible to correct some of the decisions taken earlier or even changing
the desired strategy. Strategy implementation deals with establishing the annual objectives,
policies, programs, staff motivation and resource allocation in order to facilitate the strategies.
During this phase, the strategists will try to determine every employee and manager to work
together in order to transform the strategies into coherent actions. The following decisions are
taken within this phase (David, 2008: 263): the creation of an organizational culture that will
sustain the strategy; the creation of the marketing budget; the establishment of company budget;
the development and use of the informational systems and the correlation of employees’ salaries
with the company’s performance. Strategy evaluation offers managers valuable information

of 23
about the way in which the strategy proved its efficiency. Managers will compare the results with
the goals established during the first phases of the process. This is a step absolutely necessary
because actual success of the current strategy is not a guarantee of the future success. The
dynamics of the external environment will determine changes in the context in which companies
act. Strategy evaluation includes the following activities (Borza, 2008: 19): (1) the analysis of the
internal and external factors on which the strategy has been developed; (2) the assessment of
company’s performance and (3) implementing corrective actions. Strategy formulation consists
of determining the organization’s mission, goals, and objectives and selecting or crafting an
appropriate strategy (Figure 2). Strategy formulation involves much research and decision
making, yet it is primarily a process to answer the question, “How are we going to accomplish
our goals and get where we want to go?” Before this question can be asked, however, the goals
and objectives must already have been determined. Essentially, crafting the strategy can be
thought of as a continuous effort to develop a set of directions, draft a blueprint or draw a road
map. Strategy formulation is influenced by many factors, including:
(1)Evaluating the internal and external organization (especially the projected future
environment);
(2)Establishing the predetermined mission and goals of the organization;
(3)Setting the organization’s strategic policies or guidelines; and
(4)Assessing the needs, values, and skills possessed by those who develop the strategy. The same
factors influence development of the strategic objectives (Alkhafaji, 2003).
Most large organizations these days have mission statements. Usually a mission statement is
defined as being a formal expression of an organization’s purpose. This may be distinguished
from the strategic vision, which is a description of a desired future state, and strategic goals,
which are specific outcomes that contribute to the achievement of the mission in the
circumstances that prevail or are emerging (Joyce and Woods, 2002). The importance of the
mission statement is that it leads to focus and persistence by the organization and these things are
generally assumed to be important for organizational achievement. It may also be argued that
mission statements and strategic visions are important for motivating and inspiring managers and
employees within an organization. The development of mission statements and strategic goals
can be useful as one approach to developing systems for evaluating strategic effectiveness
(Figure 3). In the devoted literature the terms objectives and goals are used interchangeably
(Sadler, 2003). Strategic objectives are normally ones to be achieved over the medium or long
term. They may be financial such as a certain increase in earnings per share or non-financial such

of 23
as a percentage increase in market share. In theory they should be capable of being quantifiable
and hence susceptible to measurement. Strategic decisions are ones that are of fundamental
importance to the business, but will not prove to have been right or wrong for some considerable
time. Strategic decisions are normally such that they are irreversible or at least can only be
reversed at considerable cost. In the context of company strategy, policies are rules or principles
that are regarded as an integral part of the company’s success model; they are practices or ways
of doing things, often long established, that are seen as indispensable parts of the company’s
According to Bogner and Thomas (1993), there are two competing models of strategy
formulation. The objective model is based on economic concepts (i.e., supply and demand,
competition factors, etc.). The model begins with a company objective, which will finally be
affected by competition. The competition will have an impact on strategy formulation process.
The industry structure (combined competitors) will directly impact the formulation process,

of 23
which in turn will affect resource allocation decisions. This process will continue until an
external factor (i.e., technological change) will disrupt it, at which time a new objective model
will be formulated. The second model is the cognitive model. It exposes a flaw in the objective
model (i.e., the inability to capture the significance of the changes causing the objective
formulation process to begin again). The cognitive model follows the sample principles as the
first model. However, it also consists of a collective view of objective strategies, which are
consolidated into one formulation process. This process is to define one’s one place in the
industry and cognitively organize one understands of competitive strategy (Bogner and Thomas,
1993).
The second part of the research title is the multinational corporation or worldwide enterprise
which is an organization that owns or controls production of goods or services in one or more
countries other than their home country. It can also be referred as an international corporation, a
"transnational corporation", or a stateless corporation.
The actions of multinational corporations are strongly supported by economic liberalism and free
market system in a globalized international society. According to the economic realist view,
individuals act in rational ways to maximize their self-interest and therefore, when individuals
act rationally, markets are created and they function best in free market system where there is
little government interference. As a result, international wealth is maximized with free exchange
of goods and services.
To many economic liberals, multinational corporations are the vanguard of the liberal
order. They are the embodiment par excellence of the liberal ideal of an interdependent world
economy. They have taken the integration of national economies beyond trade and money to the
internationalization of production. For the first time in history, production, marketing, and
investment are being organized on a global scale rather than in terms of isolated national
economies.
Anti-corporate advocates criticize multinational corporations for entering countries that have
low human rights or environmental standards. In the world economy facilitated by multinational
corporations, capital will increasingly be able to play workers, communities, and nations off
against one another as they demand tax, regulation and wage concessions while threatening to

of 23
move. In other words, increased mobility of multinational corporations benefit capital while
workers and communities lose. Some negative outcomes generated by multinational corporations
include increased inequality, unemployment, and wage stagnation.
The aggressive use of tax avoidance schemes allows multinational corporations to gain
competitive advantages over small and medium-sized enterprises. Organizations such as the Tax
Justice Network criticize governments for allowing multinational organizations to escape tax.
For example, British Petroleum, General Electric, Toshiba, and Wal-Mart are multinational
corporations with extensive business activities that span across the globe. Sometimes financial
analysts use the term, multinational enterprise because a government could form a joint venture
with a corporation, and the definition of an enterprise implies a broader meaning.
A multinational enterprise's goal is to earn profits. Therefore, they enter the international markets
and foreign countries in the pursuit of profits. Every international enterprise has a choice. It
could export to another country or relocate production outside their home country. For instance,
many U.S. corporations relocated manufacturing outside the United States, although the U.S.
suffers from a high unemployment rate since the beginning of the Great Recession.
Financial analysts and economists divide the world's markets into mature economies and
emerging markets. Mature economies are competitive, and a company entering this market
would face narrow profit margins. Some examples include the United States and Europe. On the
other hand, the emerging-market economies are countries that recently opened their markets to
international trade and finance. They can be very profitable but entail greater risk. For example,
China, India, and Mexico are removing their government controls of their markets, and they
allow international investors and corporations to invest in their economies.
A government that attracts foreign investment must change its laws to reflect three requirements.
First, a government establishes an open-marketplace that means a government allows free
markets and allows the free movement of capital, labor, and technology. Thus, a government
relaxes its control over its market. Second, a government allows strategic management. Thus,
companies can develop new products and services, and compete with other companies.
Furthermore, a multinational enterprise could tailor its goods and services to accommodate
different cultures and tastes. Finally, multinational corporations need access to capital because

of 23
international activities require financing. Hence, a country must allow the free movement of
money, and corporations are free to issue more stock, bonds, or receive bank loans without
government interference. Consequently, a firm has twelve reasons to relocate production to
another country, rather than to export.
Reason 1: A foreign government offers subsidies and tax breaks to a company. Some countries
such as Dubai (United Arab Emirates) and China have free-trade zones, where companies pay
little or no taxes, experience few regulations, and can freely export their products and services to
the international markets. Consequently, some governments offer incentives to companies
because they want to create jobs and reduce unemployment and poverty rates.
Reason 2: A company gains access to technology from another country. For example, India has
talented computer programmers and engineers, who work for relatively lower wages than their
counterparts in the United States and Europe. Consequently, a company could relocate to India to
tap into their skilled workforce.
Reason 3: An enterprise that moves its factories to a foreign country automatically avoids trade
restrictions, like tariffs and import quotas. Government does not apply trade restrictions to
products and services produced within a country.
Reason 4: A company relocates its manufacturing facilities to reduce transportation costs. For
example, sugarcane is bulky and expensive to transport. Consequently, sugar producers locate
the sugar mills close to the sugarcane fields. Then they extract and purify the sugar and ship it to
distant markets.
Reason 5: A business gains access to new markets and more consumers. For instance, the Coca-
Cola Corporation produces and sells its carbonated soda products in most countries around the
world, boosting its consumers.
Reason 6: A company could diversify its business and manufacturing by expanding into foreign
markets. Some foreign markets grow quickly, while other markets experience weak growth.
Consequently, the business could earn a return on its investments.

of 23
Reason 7: A company needs an important raw material for production. For example, battery
manufacturers need lithium to produce laptop batteries. They started mining and refining
facilities in Bolivia because Bolivia possesses half the world's reserves for lithium.
Reason 8: Businesses and companies reduce their production costs. Consequently, many U.S.
manufacturing companies moved to China and Mexico to take advantage of the lower wages and
comparable productivity.
Reason 9: A company outsources its production to another company, usually located outside the
country. For example, Microsoft outsourced its production of X-box consoles to Flextronics, a
Singaporean company. Then Flextronics outsourced the production to a Chinese manufacturing
plant. Consequently, outsourcing can lower a company's cost, granting it a cost advantage over
its competitors.
Reason 10: A company investing in a foreign market today may lead to future investments. For
example, a company opens a subsidiary in Moscow, Russia. After establishing the subsidiary, the
company can open branches in other Russian cities or enter other Russian speaking countries.
Reason 11: A company that produces in a foreign market reduces economic exposure. Economic
exposure is changes in economic factors, such as inflation, interest rates, and exchange rates
affect a company's profits. One important factor is fluctuating exchange rates. A company could
experience wide swings in profits if it produces in one country and exports to another. However,
if the company produces and sells within the same country, fluctuating exchange rates would
impact less because the company's revenues and costs are denominated in the same currency.
Thus, a company's profit could remain stable in a foreign market.
Reason 12: Many companies relocate subsidiaries to politically safe and business-friendly
countries, such as the Bahamas, Dubai, and Singapore. These countries have low taxes and few
regulations.
Multinational enterprises are more complicated than businesses that remain in their home
country. First, the businesses transfer resources, such as machines, equipment, and labor between
different countries. Next, they ship products and services to other countries. Consequently,
companies need excellent management in logistics, and specialists who monitors a country's

of 23
different laws and regulations. Second, international enterprises are exposed to exchange rate
risks and credit risks. Thus, a company's profit can quickly change due to fluctuations in
currency exchange rates, or a company cannot get credit to finance operations in a specific
country. Finally, enterprises have other exposures, such as country risk. For example, when
Hugo Chavez became president of Venezuela, his government began nationalizing companies.
Any international enterprise in Venezuela can experience the seizure of its assets without
compensation.
A country risk is the risk of investing in a particular country as political conditions rapidly
change. For example, the Republic of Kazakhstan was a former state of the Soviet Union that
became an independent country in 1991.Country's president, Nursultan Nazarbayev, opened its
economy to free markets in early 1990s.Consequently; Kazakhstan made great strides towards a
market economy and attracted billions in international investment because the country contains
vast petroleum and mineral wealth. After the 2008 Financial Crisis, the Kazakh government is
gradually reviving the Soviet rules, practices, and regulations. Unfortunately, the Soviet legal
system is very bureaucratic, slow, and arbitrary, and suffers from corruption and political
favoritism. Moreover, the Kazakh government nationalized several foreign-owned companies,
and international investment began plummeting in 2012.
One of the oldest tools yet important to managers and top management in evaluating their
expansion strategy is the BCG growth share matrix, The Boston Consulting Group, a leading
consulting firm, developed and popularized a portfolio analysis tools that helps managers
develop organizational strategy based on market share of businesses and the growth of markets
in which businesses exist.
The 1st
step in using this model is identifying the organization’s strategic business units (SBUs).
A Strategic business Unit is a significant organization segment that is analyzed to develop
organizational strategy aimed at generating future business or revenue.
Exactly what constitutes as SBU varies from company to company. In bigger organizations, and
SBU could be a company division, a single product or a complete Product Line.
In smaller organizations, it might be the entire company.

of 23
Even though they vary drastically in form each SBU has the following characteristics:
 It is a single business or collection of related businesses.
 It has its own competitors.
 It has a manager who is accountable for its operation.
 It is an area that can be independently planned for within the organization.
After identifying the SBUs, the next step is to categorize each SBU within one of the 4 Matrix
Quadrants:
STARS – Star SBUs have a high share of a high growth market and typically need large amounts
of cash to support their rapid and significant growth. Stars also generate large amounts of cash
for the organization and are usually segments in which management can make additional
investments and earn attractive returns.
CASH COWS: SBUs that are Cash Cows have a large share of a market that is growing only
slightly. Naturally, these SBUs provide the organization with large amounts of Cash, but since
their market is not growing significantly, the cash is generally used to meet the financial
demands of the organization in other areas, such as the expansion of a STAR SBU.
QUESTION MARKS: These categories of SBUs have a small share of a high growth market.
These are “question marks” because it is uncertain whether management should invest more cash
in them to gain a larger share of the market or deemphasize or eliminate them. Management will
choose the 1st option when it believes it can turn the question mark into a star, and the 2nd
option when it thinks that future investments would be fruitless.
DOGS: SBUs that are dogs have a relatively small share of a low-growth market. They may
barely support themselves; in some cases, they actually drain off cash resources generated by
other SBUs. These are the SBUs which are likely to be shortlisted for deemphasize or
elimination.

of 23
PITFALLS of the BCG Growth Matrix Model:
 The matrix does not consider factors like:
 Various types of Risk associated with product development
 Threats that inflation and other economic conditions can create in the future.
 Social, Political and Ecological Pressures.
Before jumping to the next part which is listing the expansion strategies let’s mention some of
the risks attached to the expansion and growth.
The risks of business are real; otherwise everyone would grow their business. Risks fall into
many categories including: personal, business and competitive.
By acknowledging the risks, you can seek out solutions, learn from others who have faced the
same challenges, and gain confidence in forging on with your business expansion strategies.
Managing Risk
1. Personal Risks: Stress, No Family Time, Loss of Control.
If you think that business expansion is not going to affect your loved ones, and your own health
and personal finances, and that they can be separated from the ongoing pressures of growing
your business - you are misinformed. Safeguard against poor health by getting regular exercise,
eating well and spending quality time (vs. quantity time) with your family members.
Choose your business partners just as wisely as you choose your friends/family. Bringing on
business partners and signing covenants can feel to an entrepreneur like they are losing control
and independence. Would you like to own 50% of a multi-million dollar business, or 100% of a
$100,000 business? If you cannot grow without taking on a new partner then the three questions
to ask yourself when evaluating a potential partnership's worth are:
Is it a good fit strategically?
Is it a good fit operationally?
Could you spend a week on a boat with this person(s)?
2. Business Risks: Instability, Ineffective Management, Financial Loss.
Business growth brings pressures to a system that may not have had the time/experience to get
geared up for increased production or services. New timings of payables/receivables may create
financial strain. Customers may feel underserved. Employees may be uneasy about all the

of 23
changes. The owner(s) and management may not have the right skills. This is a good time for a
soul-searching examination of strengths and weaknesses. Do you have enough of the right stuff?
3. Competitive Risks: Unknown Markets, Aggressive Competitors, Unfamiliar Terrain.
Growing is the next big challenge for a business owner - it's exciting and new. That part is
familiar. Pushing your existing product into new markets, or new products into existing markets
will be unfamiliar and may have unanticipated results. Also as you push up against bigger
competitors, don't be surprised if they fight back! Think about outsourcing, bringing in
temporary executive savvy in expansion, training your staff in new technology/methodology or
starting a new company with new equity, rather than existing cash flow.
Now, let’s summarize briefly 7 strategies to expand to the global markets:
1. Increase your sales and products in existing markets. This is obviously the easiest and most
risk-free way to expand. This tactic may require a bigger location, different pricing strategies,
new/improved marketing techniques - but it will be in a customer group with whom you already
have a relationship. If you get off track, your present customers will let you know!
2. Introduce a New Product. You have a successful product/service that you have been offering
for some time and have been collecting data, customer feedback and doing the tinkering on your
newest product. This is a normal evolution in business, not just an expansion tactic. When
positioned as adding value and being responsive to customer needs, this can be a relatively risk-
free way to expand.
3. Develop a New Market Segment or Move into New Geography. Both of these areas require
cost outlays and uncertainty. Moving your products into new categories or demographic
segments requires market research, beta testing and new marketing strategies, i.e. a message for a
16-year old will differ that one for a 60-year old. Management of new remote locations may
absorb significant time and attention. While the risks are more, the payoffs are large - and for
most businesses looking to expand, these two methods of expansion are inevitable.
4. Start a Chain. A restaurant, retail or service business that's easily reproduced and can be run
from a distance is all you need to launch a chain. But, you must be cognizant of what made the
first location a success - was it location, your staff or you? If it is just you, then duplication is
only possible through detailed operations plans and sharing staff between locations. You will
need to duplicate the plan of your first location while meeting increased customer demands.
Starting a chain gives your current staff a crack at "management" duties, training opportunities
and an opportunity to expand their horizons.
5. Franchise or License. While it's a quick way to grow, a franchise agreement can cost
(minimally) $100,000 to prepare. You will need to be a good teacher, be able to prepare the
training manuals (preferably in more than one language), be very organized and willing to travel.

of 23
Licensing can carry less risk, but demands giving up a certain amount of control. Licensing a
patent, trademark or industrial design means that you sell manufacturing, distribution or
production rights.
6. Join Forces / Strategic Alliance. A merger or acquisition combines the best of two companies,
expands your customer base, increases intellectual capital and delivers operational efficiencies.
The trick is finding the right partner. These partners may be new distributors, but be forewarned
large retailers exact heavy performance expectations. Can you perform to the letter of your
promise? Can you meet high standards of quality (ISO, or the like) and adapt your procedures to
meet just-in-time delivery? Due diligence and strong contractual arrangements are essential here.
7. Go Global. You can decide to go global in a number of ways. Growing markets, rising
consumer spending, improved business climate--sometimes the only place to find these things is
overseas. Doing business internationally can take the form of exporting, licensing, a joint venture
or manufacturing, but whatever form you choose, the basic business rules apply: assess customer
demand, gain legal and accounting assistance, protect intellectual property and obey regulations.
More difficult to understand than the regular business affairs may be the cultural nuances -
ignore them at your peril. In some countries, particularly those in Asia, a local partner is virtually
a requirement. Your first stop should be your target country's economic development agency,
which can help marshal local resources to get you on your way, possibly with a small financial
boost. Be patient. Growing your business globally can take more than one "sightseeing trip" to
the region.

of 23
Research Methodology
In order to see how the managers think about one of the most important stages in the strategic
management process I have developed a questionnaire that was addressed to a number of 28 managers
in CEMEX. The questionnaire comprised two sections: the former included factual questions, while the
latter included 12 questions about different elements of the formulation phase of the strategy, such as:
company visions, the SWOT analysis, the goals of the company and company’s values. The questionnaire
was administrated in person during Jan and Feb 2016. Due to the type of questions it was absolutely
necessary to have managers replying to the questionnaire. A very high proportion of the respondents
held the position of manager (85%) and the rest declared that they had the necessary data needed to
complete the survey. The respondents had an average age of 47, the youngest being 33 and the oldest
being 58 years old. Among the respondents 11% of them were female while 89% were male. CEMEX
company that was included in the survey sample had an average lifetime of twenty years. The company
had a number of employees around 1000.

of 23
Conclusions
The strategic management has been defined as that set of decisions and actions which may lead
to the development of an effective strategy or strategies to help achieve corporate objectives.
Strategy formulation is the second step of the strategic management process that comes naturally
after the analysis of both internal and external environment. The work presented in this paper
identified the elements of strategy formulation phase within CEMEX in specific. A simple
questionnaire was developed and used to test validity of the successful expansion strategy
formulation. Simplistically, one might assume that strategic thinking is followed by strategic
planning and then embedding in the organization. Rather than this sequential perception,
however, we consider that the phases are managed as interrelated in parallel over the course of a
strategy formulation process. Our study points out the fact that although there were many
managers who developed a vision for their company and also established a strategy for their
company, only few of them revise their strategy. We can also conclude that, despite the fact that
some firms have incorrectly developed and implemented their strategic management process
based on insufficient data, they have also chosen not to revise it periodically. This may lead
towards very unpleasant situations or even situations that can put the firm’s survival at risk,
especially when going to decide for expansion as we witnessed that the corporate strategy is very
attached to the strategic decisions like expansion.

of 23
References
[1] Acur, N., Englyst, L., (2006). Assessment of strategy formulation: how to ensure quality in
process and outcome, International Journal of Operations and Production Management, 26(1),
69-91.
[2] Alkhafaji, A.F., (2003). Strategic management. Formulation, evaluation and control in a
dynamic environment, USA: The Haworth Press.
[3] Bogner, W.C., Thomas, H., (1993). The role of competitive groups in strategy formulation: a
dynamic integration of two competing models, Journal of Management Studies, 30(1), 51-67.
[4] Borza, A., Bordean, O., Dobocan, C., Mitra, C., (2008). Strategic management. Concepts and
cases, Risoprint Publishing House, Cluj-Napoca.
[5] David, F., (2008). Strategic Management. Concepts and cases,11th Edition, New Jersey:
Pearson/Prentice Hall.
[6] Eden, C., Ackerman, F., (1993). Evaluating strategy – its role within the context of strategic
control, The Journal of the Operations Research Society, 44(9), 853-865.
[7] Handy, C., (1991). The gods of management, Business Books, London.
[8] Joyce, P., Woods, A., (2002). Strategic management. A fresh approach to developing skills
knowledge and creativity, Kogan Page Limited, London, UK.
[9] Ohmae, K., (1982). The mind of the strategist, McGraw-Hill, London.
[10] Pettigrew, A., Whipp, R., (1993). Managing change for competitive success, Blackwell
Publishers, Oxford.
[11] Ramanujam, V., Venkatraman, N., Camillus, C.J., (1986). Multi-objective assessment of
effectiveness of strategic planning: a discriminate analysis approach, Academy of Management
Journal, 29(2), 347-372. Sadler, P., (2003). Strategic management, 2nd Edition, Kogan Page
Limited.

of 23
[12] Wheelen, T., Hunger, D., (2006). Strategic Management and Business Policy, 12th Edition,
New Jersey: Pearson Education.
[13] Pitelis, Christos; Roger Sugden (2000). The nature of the transnational firm. Routledge.
p. 72. ISBN 0-415-16787-6.
[14] http://www2.econ.iastate.edu/classes/econ355/choi/mul.htm
[15] Roy D. Voorhees, Emerson L. Seim, and John I. Coppett, "Global Logistics and Stateless
Corporations," Transportation Practitioners Journal 59, 2 (Winter 1992): 144-51.
[16] Doob, Christopher M. (2013). Social Inequality and Social Stratification in US Society.
Pearson Education Inc.
[17] http://yaleglobal.yale.edu/about/globalinc.jsp "GlobalInc. An Atlas of The Multinational
Corporation" Medard Gabel & Henry Bruner, New York: The New Press, 2003. ISBN 1-56584-
727-X
[18] Case study: The Relationship between the Structure/Strategy of Multinational Corporations
and Patterns of Knowledge Sharing within them. Oxford University Press. 2009.
[19] Ken Szulczyk. “Expanding into Foreign Countries.” Money, Banking, and International
Finance. Boundless, 21 Jul. 2015. Retrieved 28 Feb. 2016 from
https://www.boundless.com/users/233416/textbooks/money-banking-and-international-
finance/multinational-enterprises-3/multinational-enterprises-24/expanding-into-foreign-
countries-61-15159/ce less money can be spent for public services.
[20] BCG Matrix https://managementinnovations.wordpress.com/2010/06/10/strategy-
formulation-bcg-growth-share-matrix-model/
[21]Bob Wright. “Community Futures British Columbia“ http://www.cf-
sn.ca/about_cfsn/overview.php

Seminar in Management

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Destaque

Destaque (11)

Semelhante a Seminar in Management

Semelhante a Seminar in Management (20)

Seminar in Management