SM & 9 Winter 2012

Strategic Planning Approaches  “Generic”  Product/Market  Goals  SWOT TOWS matrix  BCG matrix  Environmental scanning  Five Forces  Benchmarking  Diamond-E  Scenario Planning  Product Cycle  Game theory  Strategic Group Map  Value Web  Strategic Choice

Strategic Group Map # locations price Canadian retail hardware independents regional Rona Beaver McDairmid international Home Depot national Canadian Tire department stores Sears department stores WalMart

Strategic Group Map market share price Canadian retail hardware independents regional Beaver McDairmid international Home Depot national Canadian Tire department stores Sears department stores WalMart

Strategic Group Map quality Chain -ness Winnipeg speciality coffee shops Starbucks 2 nd Cup Timothy’s That place on Corydon Fyxx That place on Osborne

Strategic Group Map ? ? Canadian sports news St. Malo Provincial Park

Value Web supplier retailer retailer complementorcompany productcomplementor customer

Strategic Choice What is an alternative? 1.Mutually exclusive 2.Coherent 3.Complete 4.Probably successful

Strategic Choice constructing organizational scenarios:  steps in constructing scenarios – 1.use industry scenarios 2.develop common-size financial statements 3.construct detailed pro forma financial statements for each alternative that forecast effects on return on investment

Projections Last Historical Trend 19— FactorYearAverageAnalysis OPMLOP OP Comments GDP CPI Other Sales units Dollars COGS Advertising & marketing Interest expense Plant expansion Dividends Net profits EPS ROI ROE Other Scenario Box  Pro Forma Statements

Strategic Choice Corp Finance  Net Present Value  WACC  IRR

Strategic Choice attitude toward risk:  risk is composed of: probability of effective strategy amount of assets committed length of time of asset commitment

Strategic Choice Real Options Approach  step-by-step decision-making the problem of sunk costs

Strategic Choice stakeholder pressures 1. effect 2. intensity 3. reaction probability

Strategic Choice org culture pressures  alignment top level bottom level community history “observers”  reactions foot-dragging sabotage recrimination

Strategic Choice process  evaluation  selection  not consensus  discussion  disagreement  programmed conflict

Strategic Choice process  Dialectical Inquiry 2 proposals different assumptions  discussion  disagreement  programmed conflict

Strategic Choice process  Devil’s Advocate  discussion  disagreement  programmed conflict