Strategic management

This term paper presents an application of strategic management princiles in a small business, specifically a new optical clinic which will be located in Novaliches town proper.The main objective is to start a new optical clinic that will achieve net sales of at least P600,000 during the first year of operation. The owner aims to increase net sales by 15 percent on the second year and 20 percent during each of the succeeding three years. A net profit margin of at least 40 percent is expected after five years and thereafter.Start-up costs and annual expenses are estimated to be P318,000 and P245,100, respectively. Using a five-year cash forecast, the resulting net present value is P112,456 at 40 percent test discount rate the internal rate of return is 55.3 percent.The recommended strategies to attain the objectives of the proposed optical clinic are as follows:(1) Market penetration - grabbing the market share of competitors through greater marketing efforts such as personal selling and advertisements (2) Market development - introduction of optical products and services to industrial companies (3) Product development - enhancement of main products (lenses and frames) by accessories such as chains, sports band, clip over, tools, cleaner, etc. (4) Integration strategies - forward integration by operating a laboratory equipment for processing of eyeglasses, and backward integration through importation of frames and sunglasses from Hong Kong and Taiwan