Components of Strategic Plan 1 Day Workshop on Strategic Planning Model – See Notebook for exercises. Matt H. Evans, matt@exinfm.com

Strategic Planning Model A B C D E Where we are Where we want to be How we will do it How are we doing Assessment Baseline Components Down to Specifics Evaluate Environmental Scan Situation – Past, Present and Future Mission & Vision Performance Measurement Performance Management Background Information Significant Issues Values / Guiding Principles Targets / Standards of Performance Review Progress – Balanced Scorecard Situational Analysis Align / Fit with Capabilities Major Goals Initiatives and Projects Take Corrective Actions The Overall Model consists of five major phases SWOT – Strength’s, Weaknesses, Opportunities, Threats Gaps Specific Objectives Action Plans Feedback upstream – revise plans Matt H. Evans, matt@exinfm.com

Components Matt H. Evans, matt@exinfm.com

Major Components of the Strategic Plan / Down to Action Action Plans Evaluate Progress Mission Why we exist Vision What we want to be Goals What we must achieve to be successful Objectives Specific outcomes expressed in measurable terms (NOT activities) O1 O2 Initiatives Planned Actions to Achieve Objectives AI1 AI2 AI3 Indicators and Monitors of success Measures M1 M2 M3 Targets T1 T1 T1 Desired level of performance and timelines Matt H. Evans, matt@exinfm.com

Captures the essence of why the organization Mission Statement Components Captures the essence of why the organization exists – Who we are, what we do Explains the basic needs that you fulfill Expresses the core values of the organization Should be brief and to the point Easy to understand If possible, try to convey the unique nature of your organization and the role it plays that differentiates it from others Matt H. Evans, matt@exinfm.com

Examples – Good and Bad Mission Statements Components NASA To Explore the Universe and Search for Life and to Inspire the Next Generation of Explorers Does a good job of expressing the core values of the organization. Also conveys unique qualities about the organization. Walt Disney Too vague and and unclear. Need more descriptive information about what makes the organization special. To Make People Happy Matt H. Evans, matt@exinfm.com

How the organization wants to be perceived in the Vision Components How the organization wants to be perceived in the future – what success looks like An expression of the desired end state Challenges everyone to reach for something significant – inspires a compelling future Provides a long-term focus for the entire organization Matt H. Evans, matt@exinfm.com

Examples of Vision Descriptors Components Adept Aggressive Agile Aligned Assertive Available Best-in-class Challenging Clear Competent Complex Compliant Conservative Coordinated Critical Direct Equal Disciplined Effective Efficient Enduring Expanding Expert Fast Fast-paced Financially-sound Focused Growth Healthy Improving Incentivized Increasing Informative Innovative Leading Logical Major Nimble Pioneering Protected Organized Over-Arching Quick Ready Responsive Savvy Simple Solid Solvent Stable State of the Art Strong Streamlined Sufficient Strategic Sustainable Timely Value-added Vigilant Visionary World-class Matt H. Evans, matt@exinfm.com

Guiding Principles and Values Components Every organization should be guided by a set of values and beliefs Provides an underlying framework for making decisions – part of the organization’s culture Values are often rooted in ethical themes, such as honesty, trust, integrity, respect, fairness, . . . . Values should be applicable across the entire organization Values may be appropriate for certain best management practices – best in terms of quality, exceptional customer service, etc. Matt H. Evans, matt@exinfm.com

Examples of Guiding Principles and Values Components We obey the law and do not compromise moral or ethical principles – ever! We expect to be measured by what we do, as well as what we say. We treat everyone with respect and appreciate individual differences. We carefully consider the impact of business decisions on our people and we recognize exceptional contributions. We are strategically entrepreneurial in the pursuit of excellence, encouraging original thought and its application, and willing to take risks based on sound business judgment. We are committed to forging public and private partnerships that combine diverse strengths, skills and resources. Matt H. Evans, matt@exinfm.com

Describes a future end-state – desired outcome Goals Components Describes a future end-state – desired outcome that is supportive of the mission and vision. Shapes the way ahead in actionable terms. Best applied where there are clear choices about the future. Puts strategic focus into the organization – specific ownership of the goal should be assigned to someone within the organization. May not work well where things are changing fast – goals tend to be long-term for environments that have limited choices about the future. Matt H. Evans, matt@exinfm.com

Cascade from the top of the Strategic Plan – Developing Goals Components Cascade from the top of the Strategic Plan – Mission, Vision, Guiding Principles. Look at your strategic analysis – SWOT, Environmental Scan, Past Performance, Gaps . . Limit to a critical few – such as five to eight goals. Broad participation in the development of goals: Consensus from above – buy-in at the execution level. Should drive higher levels of performance and close a critical performance gap. Matt H. Evans, matt@exinfm.com

Examples of Goals Components Reorganize the entire organization for better responsiveness to customers We will partner with other businesses, industry leaders, and government agencies in order to better meet the needs of stakeholders across the entire value stream. Manage our resources with fiscal responsibility and efficiency through a single comprehensive process that is aligned to our strategic plan. Improve the quality and accuracy of service support information provided to our internal customers. Establish a means by which our decision making process is market and customer focus. Maintain and enhance the physical conditions of our public facilities. Matt H. Evans, matt@exinfm.com

Objectives Components Relevant - directly supports the goal Compels the organization into action Specific enough so we can quantify and measure the results Simple and easy to understand Realistic and attainable Conveys responsibility and ownership Acceptable to those who must execute May need several objectives to meet a goal Matt H. Evans, matt@exinfm.com

Goals vs. Objectives Components GOALS OBJECTIVES Very short statement, few words Longer statement, more descriptive Broad in scope Narrow in scope Directly relates to the Mission Statement Indirectly relates to the Mission Statement Covers long time period (such as 10 years) Covers short time period (such 1 year budget cycle) Matt H. Evans, matt@exinfm.com

Examples of Objectives Components Develop a customer intelligence database system to capture and analyze patterns in purchasing behavior across our product line. Launch at least three value stream pilot projects to kick-off our transformation to a leaner organization. Centralize the procurement process for improvements in enterprise-wide purchasing power. Consolidate payable processing through a P-Card System over the next two years. Monitor and address employee morale issues through an annual employee satisfaction survey across all business functions. Matt H. Evans, matt@exinfm.com

Corporate Strategies Competitive Competitive Competitive Functional Provincial Gov Corporate Strategy Competitive Tourism Pro Office Competitive Municipality Competitive Rural Dev Functional Companies typically formulate three types of strategies. Corporate strategies identify the mix of business in which the firm will engage. The business level/competitive strategies identify how each of the firm’s businesses will compete; and each business then has several functional strategies identifying how the unit’s will contribute to the business’ strategy. Hotel & Res Associations Tour inform & Guide Services Cultural & Arts Matt H. Evans, matt@exinfm.com

USE SWOT to form Strategies Opportunities Threats ST ++ Invest Clear matches of strengths and opportunities lead to comparative advantage Star +- Defend Areas of threat matched by areas of strength indicate a need to mobilize resources either alone or with others. Cash Cows Wn -+DECIDE - + Areas of opportunity matched by areas of weakness require a judgement call: invest or divest; collaborate. Question Mark --DAMAGE CONTROL - - Areas of threat matched by areas of weakness indicate need for damage control or divest. Dogs Matt H. Evans, matt@exinfm.com

Concentration (Mc Donald, KFC, Pizza Hut, Pepsi, Coke) Corporate Strategies Concentration (Mc Donald, KFC, Pizza Hut, Pepsi, Coke) Market penetration Geographic expansion Product development (Coke Zero, Pepsi light, stick rice hamburger) Horizontal integration (Bangkok hospital – PnP, Ram Khon Kaen) Matt H. Evans, matt@exinfm.com

Vertical Integration Betagro Annimal Feeds Butcher House Swine Farm Maize farm Drug & Chemical Matt H. Evans, matt@exinfm.com

Defend and Damage Control Strategic Alliances and Joint Ventures Diversification Related diversification Conglomerate diversification Investment Reduction Strategies Retrenchment Divestment Retrenchment means the reduction of activity or operations (downsizing, closing facilities) Divestment means selling or liquidating individual businesses Matt H. Evans, matt@exinfm.com

Competitive (Business) Strategies Competitive Strategy specifies how the company will compete Cost Leader Differentiator Product image Product durability Product Usability Reliability Focuser NZ Milk Gifarine A focus strategy selects a market segment and builds its competitive strategy on serving the customers in its market niche better or more cheaply than its competitors Matt H. Evans, matt@exinfm.com

Competitive Analysis: The Five Forces Model Potential Entrants Threats of new entrants Industry Competitors Rivalry among Existing Firms Buyers Suppliers Suppliers Barเgaining power of suppliers Threat of entry: Intensity of industry competition depends first on the threat of new entrants to the industry. The more easily new competitors can enter the business, the more intense the competition. Intensity of Rivalry among existing Competitors. Rivalry among existing competitors manifests itself in tactics like price competition, advertising battles, and increased customer services. Pressure from substitute products, e.g. frozen yogurt is a substitute for ice cream, rayon for cotton Bargaining power of buyers. Big buyers like Toyota, Tesco, Big C, Wal Mart Bargaining power of suppliers. Suppliers tend to have greater bargaining power when they are dominate by a few firms and are more concentrated. When the supplier’s product is an important input to the buyer’s business, then the suppliers power rises. Bargaining power of buyers Substitutes Threat of substitute products or services Matt H. Evans, matt@exinfm.com

Functional Strategies Functional Strategy is the basic course or courses of action that each department is to follow to enable business to accomplish its strategic goals. It must “fit” the competitive strategy Matt H. Evans, matt@exinfm.com

Matt H. Evans, matt@exinfm.com