Download - Ch 6 Strategic Planning
-
8/8/2019 Ch 6 Strategic Planning
1/28
Prentice Hall, 2005 1 - 1
Ch
apter 6
Strategic Planning
-
8/8/2019 Ch 6 Strategic Planning
2/28
Prentice Hall, 2005 1 - 2
ObjectivesObjectives
ObjectivesObjectives
1. Definitionsofbothstrategicplanningandstrategy
2. Anunderstandingofthestrategymanagementprocess
3. A knowledgeoftheimpactofenvironmentalanalysison
strategyformulation
4. Insightsintohowtousecriticalquestionanalysisand
SWOTanalysistoformulatestrategy
5.Insightsintowhattacticalplanningisandhowstrategicand
tacticalplanningshouldbecoordinated
-
8/8/2019 Ch 6 Strategic Planning
3/28
Prentice Hall, 2005 1 - 3
Barnes & Nobles New strategyBarnes & Nobles New strategy
Barnes & Nobles New strategyBarnes & Nobles New strategy
owns & operates about 900 retail bookstores,
& being of th
e largest book retailers in th
e worldProcess: purchase the books from the publishers & then sell
to individual customers
New competitors: - Internet retailers as Amazon.com; 10%/on
line- Discount retailers as Wal-Mart
New strategy: publish & sell in its store copies of classic
books as the scarlet letter & great expectations
Such strategy could improve the companys competitive
position; could also prove difficult to implement!!!
WHY?
-
8/8/2019 Ch 6 Strategic Planning
4/28
Prentice Hall, 2005 1 - 4
Strategic PlanningStrategic Planning
Strategic PlanningStrategic Planning
Fundamentals of Strategic Planning
Strategic Planning is a long-term planning that focuses on the
org as a whole
Long-term is a period of time extending about 3-5 years
Org is considered as total unit
Strategy: the end product of ST process: general plan
developed to reach
long-term objectives; focu
s on differentorganizational areas
Org objectives should be linked to strategy
-
8/8/2019 Ch 6 Strategic Planning
5/28
-
8/8/2019 Ch 6 Strategic Planning
6/28
Prentice Hall, 2005 1 - 6
Strategic PlanningStrategic Planning
Strategic PlanningStrategic Planning
Strategy Management: process of ensuring that an
org possesses & benefits from the use ofan
appropriate organizational strategy
SMSteps:
1. Environmental Analysis
2. Establishment of organizational direction (mission &
objectives)
3. Strategy formulation
4. Strategy implementation
5. Strategy control
-
8/8/2019 Ch 6 Strategic Planning
7/28
Prentice Hall, 2005 1 - 7
StrategyStrategy MManagement Processanagement ProcessStrategyStrategy MManagement Processanagement Process
-
8/8/2019 Ch 6 Strategic Planning
8/28
Prentice Hall, 2005 1 - 8
SM StepsSM Steps11-- Environmental AnalysisEnvironmental Analysis
SM StepsSM Steps11-- Environmental AnalysisEnvironmental Analysis
The General Environment
Economic, Social Component,
Political, Legal & TechnologyComponents
The Operating Environment
Customer , Competition , Labor ,
Supplier, International
The Internal Environment
-
8/8/2019 Ch 6 Strategic Planning
9/28
-
8/8/2019 Ch 6 Strategic Planning
10/28
-
8/8/2019 Ch 6 Strategic Planning
11/28
Prentice Hall, 2005 1 - 11
The Operating Environment: external environment that
have relatively specific & immediate implications formanaging the org
Customer who buy goods/services provided by the org
Competitors with whom the org is competing with
Labor who are performing organizational tasksSupplier that provide org with resources they need
International as other countries laws, culture, politics,
economic
The Internal Environment: the entire org factors that
affect the managing of the org as finance, HRs,
marketing,
Environmental AnalysisEnvironmental Analysis--Environmental AnalysisEnvironmental Analysis--
-
8/8/2019 Ch 6 Strategic Planning
12/28
Prentice Hall, 2005 1 - 12
Strategic PlanningStrategic PlanningStrategic PlanningStrategic Planning
-
8/8/2019 Ch 6 Strategic Planning
13/28
Prentice Hall, 2005 1 - 13
Group Work: DiscussionGroup Work: DiscussionAnalyzing the Environment at EI NuevoAnalyzing the Environment at EI Nuevo DiaDia
Group Work: DiscussionGroup Work: DiscussionAnalyzing the Environment at EI NuevoAnalyzing the Environment at EI Nuevo DiaDia
Pages no 183-184 at your Text book
Divide yourself into groups, each of 5-7
membersDiscuss the case
Identify a notes writer and presenter
Duration: 5 Minutes
-
8/8/2019 Ch 6 Strategic Planning
14/28
Prentice Hall, 2005 1 - 14
Strategy Management (continued)Strategy Management (continued)Strategy Management (continued)Strategy Management (continued)
2- Establishing Organizational Direction: based on the
environment analysis, managers can determine the directionin which an org should move: Mission & Objectives
Organizational Mission is broad statement that defines the
present purpose of the organization: why org exist? what
business we are in? Reflect info as types of product/service,customers, values..
Developing a Mission Statement usually done by managers &
non-managers, it is expressed in writing and should beunderstood by all org members
Organizational Mission is very important because it focus
human effort in a common direction; serves as rationale for
allocating resources; define broad & important areas
-
8/8/2019 Ch 6 Strategic Planning
15/28
Prentice Hall, 2005 1 - 15
SomeSome examplesexamplesSomeSome examplesexamples
College ofBusiness Mission
http://www.q
u.ed
u.qa/b
usiness/abo
ut_u
s/m
ission.ph
p
FedEx
http://about.fedex.designcdt.com/our_company/company
_inform
ation/m
ission_statem
ent
-
8/8/2019 Ch 6 Strategic Planning
16/28
Prentice Hall, 2005 1 - 16
McDonald's Mission Statement
McDonalds mission is to be the worldsMcDonalds mission is to be the worldsbest quick service restaurant experience.best quick service restaurant experience.
Being the best means providingBeing the best means providing
outstanding quality, service, cleanlinessoutstanding quality, service, cleanlinessand value, so that we make everyand value, so that we make every
restaurant smile.restaurant smile.
-
8/8/2019 Ch 6 Strategic Planning
17/28
Prentice Hall, 2005 1 - 17
Strategy Management (continued)Strategy Management (continued)Strategy Management (continued)Strategy Management (continued)
3- Strategy Formulation: is the process of determining
appropriate courses of actions for achieving org objectives
& purpose. It can be done though specific tools:
Critical Question Analysis
SWOT AnalysisCritical Question Analysis
What are the purposes and objectives of the organization?
Where is the organization presently going?
In what kind of environment does the organization now
exist?
What can be done to better achieve organizational
objectives in the future?
-
8/8/2019 Ch 6 Strategic Planning
18/28
-
8/8/2019 Ch 6 Strategic Planning
19/28
Prentice Hall, 2005 1 - 19
SWOTSWOT AnalysisAnalysis
Strengths (strategic) Internal resources that are available or things that an
organization does well.
Weaknesses
Resources that an organization lacks or activities that it does
not do well.
The Internal Environment
Opportunities (strategic) Positive external environmental factors.
Threats
Negative external environmental factors.
Operating & General Environment
-
8/8/2019 Ch 6 Strategic Planning
20/28
Prentice Hall, 2005 1 - 20
McDonalds SWOT analysis
StrengthStrength: well established brand name, goodvalue meal, the best entertaining experience for
kids
WeaknessesWeaknesses: product image associated tounhealthy and junk food
OpportunitiesOpportunities: an anticipated increase in
demand for fast food restaurants ThreatsThreats: increasingly health oriented
consumers, the increasing number of
competitors
-
8/8/2019 Ch 6 Strategic Planning
21/28
Prentice Hall, 2005 1 - 21
Strategy Formulation: Types (Porters strategies)
Differentiation
Cost Leadership
Focus
Differentiation: developing a product(s) perceived different
from other competitors. It emphasize highquality, innovativedesign, extraordinary services as after-sale service as Nikes
Air Jordan shoe (high technology air construction)
Cost Leadership: becoming the lowest-cost producer,
cheaper, in an industry which is achieved by efficiency inoperations, technological innovation, low-cost labor.
Focus: targeting particular customers as Magazines
targeting women, body builders, special needs, engineers,
Strategy Management (continuedStrategy Management (continuedStrategy Management (continuedStrategy Management (continued
-
8/8/2019 Ch 6 Strategic Planning
22/28
Prentice Hall, 2005 1 - 22
Sample Organizational Strategies
Growth
Stability
Retrenchment
1- Growth strategy increase the amount of business in terms of the level of its
operations.
Growth can be in sales revenues,more market share, more
employees
It can be achieved through direct expansion, new product
development, quality improvement, diversifying (merging
with other firms)
Strategy Management (continuedStrategy Management (continuedStrategy Management (continuedStrategy Management (continued
-
8/8/2019 Ch 6 Strategic Planning
23/28
Prentice Hall, 2005 1 - 23
2- Stability Strategy
Maintain or slightly improve the amount of current
business
characterized by an absence of significant
change.
Org continue to serve its same market &
customers while maintaining market share
It is best with some conditions as stable
environment, satisfactory performance, and non-
significant opportunities & threats
Strategy Management (continuedStrategy Management (continuedStrategy Management (continuedStrategy Management (continued
-
8/8/2019 Ch 6 Strategic Planning
24/28
Prentice Hall, 2005 1 - 24
3- Retrenchm
ent Strategy A strategy in whichmanagement attempts to
strengthen or protect the amount of business
Usu
ally by redu
cing its size,u
su
ally in anenvironment of decline, which is due to
technological advancement, global competition,
and oth
er environm
ental ch
anges.44-- CombinationCombination strategystrategyThe simultaneous pursuit by an organization of two
ormore of growth, stability, and retrenchment
strategies.
Strategy Management (continuedStrategy Management (continuedStrategy Management (continuedStrategy Management (continued
-
8/8/2019 Ch 6 Strategic Planning
25/28
Prentice Hall, 2005 1 - 25
Strategy Management (continued)Strategy Management (continued)Strategy Management (continued)Strategy Management (continued)
4- Strategy Implementation is to put the formulated strategies
into action. The successful implementation requires 4 basic
skills:
1. Interacting skill: ability to manage people during implementation
2. Allocating skill: ability to provide the org resources necessary to
implement strategy
3. Monitoring skill: ability to use information to determine whether a
problemhas arisen that is blocking implementation
4. Organizing skill: ability to create throughout the org a network of
people who can help solve implementation problems as they
occur
Strategic Control
Monitor and evaluate the whole strategy management process
It focuses on the activities involved in the environmental analysis,
org direction, strategy formulation & implementation
-
8/8/2019 Ch 6 Strategic Planning
26/28
Prentice Hall, 2005 1 - 26
Tactical PlanningTactical PlanningTactical PlanningTactical Planning
Tactical Planning is short-term, less than a year, planning that
emphasizes the current operations of various part of the org
Usually developed in the areas of production, marketing, HR, finance,
& facilities
Basic differences between strategic and tactical planning:
1. Strategic plans are usually developed by upper-level management
and tactical plans by lower-level management
2. Facts to base strategic plans are more difficult to gather
3. Strategic plans are generally less detailed than tactical plans
4. Strategic plans cover a relatively long period of time
whereas tactical plans cover a relatively short period of time
-
8/8/2019 Ch 6 Strategic Planning
27/28
Prentice Hall, 2005 1 - 27
Tactical PlanningTactical PlanningTactical PlanningTactical Planning
-
8/8/2019 Ch 6 Strategic Planning
28/28
Prentice Hall, 2005 1 - 28
QuestionsQuestions