S trategy D esign and P lanning Chapter Outline  The strategic design approach  the strategic planning approach  The Design versus The Planning Model.

Slides:



Advertisements
Similar presentations
Strategic Management.
Advertisements

COMPETITIVE STRATEGY - Dolly Dhamodiwala.
Planning and Strategic Management
Chapter 1: Strategic Management and Strategic Competitiveness
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 9 -1 Chapter 9 Strategy Review, Evaluation, and Control Strategic Management: Concepts.
Contemporary Investments: Chapter 12 Chapter 12 COMPANY ANALYSIS: THE HISTORICAL RECORD What are the components of a company analysis report? How do analysts.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Financial Statement Analysis CHAPTER 14.
Chapter 4 The Internal Assessment
Performance Management and Strategic Planning: Overview
I. Identification of Strategy (includes but not limited to SWOT) A. Firm Situation 1. General macro environment 2. Industry and Competitive analysis 
Auditing II Unit 1 : Audit Procedures Unit 2: Audit of Limited Companies Unit 3: Audit of Government Companies.
Planning and Strategic Management
1. 2 Learning Objectives To understand: the elements or stages of the strategic management process the different perspectives on strategy development.
Planning and Strategic Management
MARKETING STRATEGY O.C. FERRELL • MICHAEL D. HARTLINE
Essentials of Management Chapter 4
Doing An Internal Analysis
Strategic Management Process
Chapter 4 The Internal Assessment
Strategic Management the art and science of formulating, implementing and evaluating crossfunctional decisions that enable an organization to meet its.
CHAPTER 7 STRATEGY AND STRATEGIC MANAGEMENT
 Control ◦ Any process that directs the activities of individuals toward the achievement of organizational goals.
1. 2 Learning Objectives To understand: the elements or stages of the strategic management process the different perspectives on strategy development.
Strategic Planning: Making Choices in a Dynamic Environment
Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Planning and Strategic Management Chapter 04.
AGENDA 09/09 & 09/10 F Nature of Strategic Challenge & F Strategic Management F The Strategy Concept and Process F Strategic Plan - Team Meetings.
2011 PK Mwangi Global Consulting Forming a Strategy for your Business. Strategy refers to the plan that needs to be put in place to assist the business.
Logistics and supply chain strategy planning
Strategy Formulation and Implementation
Organizational Resources and Competitive Advantage 1.
Strategic Human Resource Management Copyright © Texas Education Agency, All rights reserved.
Chapter 8 Audit Planning and Analytical Procedures
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder Audit Planning and Analytical Procedures Chapter 8.
Foundations in Strategic Management, 2e Learning Objectives Understand the: The leadership responsibilities of executive managers The responsibilities.
Organizational Structure and Controls Organizational structure specifies: –The firm’s formal reporting relationships, procedures, controls, and authority.
Introduction to Management LECTURE 17: Introduction to Management MGT
© 2003 Pearson Education Canada Inc.
Strategic Management: Chapter 1 Basic Concepts of Strategic Management Page 1 Basic Concepts of Strategic Management Chapter 1.
Chapter 1 What is Strategy & the Strategic Management Process?
Chapter 1 The Nature of Strategic Management
Chapter 3 Organizational Resources and Competitive Advantage 1.
Western New England College
Strategic Management Strategic Management: Concepts and Cases, 11/E Strategic Management: Concepts and Cases, 11/E by Fred David.
1 Ch. 4 Outline Introduction to Planning 1.Planning Fundamentals 2.Levels of Planning 3.Strategic Planning.
Herman Aguinis, University of Colorado at Denver Prentice Hall, Inc. © 2006 Performance Management and Strategic Planning: Overview  Definition and Purposes.
Strategic Management.
Chapter 1: Introduction
 What strategies to pursue? › Strategic resources › Capabilities  Two Principal Strategies: › A. Evaluate current resources and core competencies used.
Marketing’s Strategic Role in the Organization. The process of determining an organization’s primary objectives, allocating funds, and then initiating.
Strategic Planning In a Competitive Marketplace. Strategic Planning Process Necessary for large corporations to survive & prosper Budget/Forecast oriented.
Team III M Isabel Castaneda Cal Wallace Patrick McGregor
Module 7 Strategy and Strategic Management. Module 7 What types of strategies are used by organizations? How are strategies formulated and implemented?
Strategic Management Defined: Set of managerial decisions and actions that determines the long-run performance of a firm.
BUSINESS 7e Copyright 2004 Prentice Hall, Inc.1 PART 2 UNDERSTANDING THE BUSINESS OF MANAGING.
SUBJECT:- ENGINEERING ECONOMICS AND MANAGEMENT TOPIC:- - FUNCTION OF MANAGEMENT YEAR EC-DEPARTMENT.
APPLIED MARKETING STRATEGIES Lecture 7 MGT 681. Review of Concepts Part 1.
THE ROLE OF MARKETING IN STRATEGIC PLANNING Chapter 3 Kotler, Bowen, Makens and Baloglu Marketing for Hospitality and Tourism.
JANI AARTI En No:  By the end of this lecture, students should be able to: 1.Explain the functions of management 2.Define and explain strategy.
M.Phil. (TU) 01/2010), Ph.D. Scholar
Strategic thinking Chapter 1.
Policies and Planning Premises: Strategic Management
Strategy and Human Resources Planning
Chapter 4 The Internal Assessment
Strategic Management I
Strategy Design and Planning
Chapter 4 The Internal Assessment
Strategy and Human Resources Planning
Strategic Management and Strategic Competitiveness
Chapter 4 The Internal Assessment
As we grow, what should our business look like?
Presentation transcript:

S trategy D esign and P lanning Chapter Outline  The strategic design approach  the strategic planning approach  The Design versus The Planning Model  A Model for strategic planning t

The strategic design approach Seven Premises  strategy formation should be a controlled, conscious process.  the CEO is “the” strategist.  strategy formation must be kept simple and informal. 51

The strategic design approach  Strategies should be unique.  strategy design should be full-blown, not incremental.  strategies should be articulated.  once the first 6 premises are completed the strategy can be implemented. 51

The Strategic Planning Approach 3 premises  strategy formation should be a controlled process.  responsibility rests with the CEO in principle, and executed by staff planners.  strategies emerge full-blown, to be explicated for implementation. 53

differences between the design and planning approaches  the design model emphasizes simplicity and informalness while the planning model uses an intricate array of procedures.  The planning model uses staff planners as major actors, while the design school uses them as minor actors in the implementation process. 53

A combination model The basic Plan Format I. mission statement a. business definition b. long-term objectives b. long-term objectives II. scan of external environment a. industry environment b. macroenvironment b. macroenvironment III. scan of internal environment a. value chain analysis a. value chain analysis b. financial analysis b. financial analysis c. assessment of strengths and weaknesses c. assessment of strengths and weaknesses iv. business strategy statement v. integrated programs The basic Plan Format I. mission statement a. business definition b. long-term objectives b. long-term objectives II. scan of external environment a. industry environment b. macroenvironment b. macroenvironment III. scan of internal environment a. value chain analysis a. value chain analysis b. financial analysis b. financial analysis c. assessment of strengths and weaknesses c. assessment of strengths and weaknesses iv. business strategy statement v. integrated programs 55

i. The mission statement 1. What business should we be in? 2. Why do we exist? 3. What is unique about our organization? 4. Who are our principal customers? 5. What are our principal products/services, present and future? 6. What are our principal market segments, present and future? 55

The mission statement 7. What are our principal outlets/distribution channels, present and future? 8. How is our business different than it was three and five years ago? 9. What is likely to be different about our business three and five years in the future? 10. What are our principal economic concerns? 11. What philosophical issues are important to our future? 12. What special considerations do we have regarding stakeholder groups? 56

Stakeholder groups  owners/ stockholders/ investors/ constituents  board of directors  parent organization  legislative bodies  employees  owners/ stockholders/ investors/ constituents  board of directors  parent organization  legislative bodies  employees  customers/ clients/ users  suppliers  general public  customers/ clients/ users  suppliers  general public 56

Stakeholder groups  owners/ stockholders/ investors/ constituents  board of directors  parent organization  legislative bodies  employees  owners/ stockholders/ investors/ constituents  board of directors  parent organization  legislative bodies  employees  customers/ clients/ users  suppliers  general public  customers/ clients/ users  suppliers  general public

ii. long-term objectives  marketing  profitability  physical and financial resources  productivity  worker performance  management development  innovation  social responsibility  stockholder responsibility  size/ growth/ diversification 57

iii. scan of internal environment and financial analysis  value chain analysis  financial analysis $leverage ratios $liquidity ratios $activity ratios $profitability ratios  value chain analysis  financial analysis $leverage ratios $liquidity ratios $activity ratios $profitability ratios 58

iii. scan of internal environment and financial analysis  value chain analysis  financial analysis $leverage ratios $liquidity ratios $activity ratios $profitability ratios  value chain analysis  financial analysis $leverage ratios $liquidity ratios $activity ratios $profitability ratios

dupont financial analysis sales minus costs 61

dupont financial analysis sales minus costs net profit sales

dupont financial analysis sales minus costs net profit sales net profit margin TIMES asset turnover sales total assets

dupont financial analysis sales minus costs net profit sales net profit margin TIMES asset turnover sales total assets total debt total assets (1-Debt Ratio) [divided by] roi roe

iv. the strategy statement Answers the five questions of:  What should be our future driving force?  How does this differ from our current driving force?  What changes will be needed to meet the future driving force?  How is this compatible with the mission?  How is this compatible with the conclusions from our strategic analysis? Answers the five questions of:  What should be our future driving force?  How does this differ from our current driving force?  What changes will be needed to meet the future driving force?  How is this compatible with the mission?  How is this compatible with the conclusions from our strategic analysis? 61

v. integrated programs The seven Steps  Identify results needed to accomplish each long-term objective.  select 5 to 10 most critical results required to achieve the long-term objective.  reach agreement on each integrated program. 63

integrated programs  Reach agreement on what is needed concerning results, timetable, resource, accountability, and feedback mechanism.  invite review and comment from management levels.  Complete final documentation.  Implement and evaluate.

strategic choice Links strategy formulation to strategy implementation. Choice

strategic choice Links strategy formulation to strategy implementation. Choice

Formulation and Implementation Corporate Strategy : Pattern of purposes and policies defining the company and its business. Formulation (Deciding what to do) Implementation (Achieving Results) 1. opportunity and Risk. 2. material, technical, financial, and managerial resources. 3. personal values and aspirations. 4. Acknowledgment of noneconomic responsibility to society. 1. Organization structure and relationships. 2. Organization processes and behaviors. 3. top leadership Figure 1 68

relating opportunities to resources Matching opportunity and competence. 68

relating opportunities to resources Matching opportunity and competence.

Environmental Conditions and Trends Economic Technical Physical Social Community Nation World Schematic development of economic strategy Figure 2 73

Environmental Conditions and Trends Economic Technical Physical Social Community Nation World Schematic development of economic strategy Figure 2

Environmental Conditions and Trends Economic Technical Physical Social Community Nation World opportunities and risks Identification inquiry assessment of risk Schematic development of economic strategy Figure 2

Environmental Conditions and Trends opportunities and risks Distinctive CompetenceCapability Financial Managerial Functional organizational reputation history Schematic development of economic strategy Figure 2

Environmental Conditions and Trends opportunities and risks Distinctive Competence Corporate resources as extending or constraining opportunity identification of strengths and weaknesses programs for increasing capability Schematic development of economic strategy Figure 2

Environmental Conditions and Trends opportunities and risks Distinctive Competence Corporate resources Consideration of all Combinations Figure 2 Schematic development of economic strategy

Distinctive Competence Corporate resources Consideration of all Combinations Evaluation to determine best match of opportunity and resources Figure 2 Schematic development of economic strategy Environmental Conditions and Trends opportunities and risks

Distinctive Competence Corporate resources Consideration of all Combinations Evaluation to determine best match of opportunity and resources choice of products and markets Schematic development of economic strategy Figure 2 Environmental Conditions and Trends opportunities and risks

Schematic development of economic strategy Environmental Conditions and Trends opportunities and risks Distinctive CompetenceCapability Financial Managerial Functional organizational reputation history Corporate resources as extending or constraining opportunity identification of strengths and weaknesses programs for increasing capability evaluation to determine best match of opportunity and resources Consideration of all Combinations choice of products and markets economic strategy Identification inquiry assessment of risk Economic Technical Physical Social Community Nation World Figure 2 16

Generic versus competitive strategy G eneric Competitive Measure of success Sales growthMarket share Return to the firm Value addedReturn on investment Function Provision of value Maintaining a defensible to the customer position to the customer position Basic strategic tasks Adapting to changeCreating barriers and and innovation deterring rivals and innovation deterring rivals Method of expressing Product/market Policies leading to strategy terms defensible position strategy terms defensible position Basic approach to Study a group of Comparison across rivals analysis businesses over at a given time time time G eneric Competitive Measure of success Sales growthMarket share Return to the firm Value addedReturn on investment Function Provision of value Maintaining a defensible to the customer position to the customer position Basic strategic tasks Adapting to changeCreating barriers and and innovation deterring rivals and innovation deterring rivals Method of expressing Product/market Policies leading to strategy terms defensible position strategy terms defensible position Basic approach to Study a group of Comparison across rivals analysis businesses over at a given time time time Table 1 76

Questions ?