CHAPTER 6 STRATEGIC PLANNING AND STRATEGIC MANAGEMENT

MANAGEMENT IN ACTION: STRATEGIC PLANNING n Defined as executive management’s responsibility n to define the firm’s position n and formulate strategies and long-term organizational activities n for the purpose of achieving superior competitive fit n between the organization and its environment

STRATEGIC PLANNING/ MANAGEMENT ELEMENTS n Answers Critical Questions u What is the organization’s position in the marketplace? u What should it be? u What trends and changes are occurring in the marketplace? u What are the best alternatives to achieve the objectives and vision management has for the organization?

STRATEGIC PLANNING/ MANAGEMENT ELEMENTS n Four Elements of the Strategic Planning and Management Process u Scope u Resource Deployment u Distinctive Competitive Advantage u Synergy n Responsibility for Strategic Planning and Management n Strategy Formation versus Strategy Implementation

STRATEGIC PLANNING/ MANAGEMENT ELEMENTS n Levels of Strategy u Corporate-Level Strategy--What Business are We In? u Business-Level Strategy--How Do We Compete? u Functional-Level Strategy--How Do We Support Business Level? F Research and Development F Finance/Marketing/Human Resources/Production

THE STRATEGIC PLANNING PROCESS n Evaluate the Organization’s Mission, Vision, Goals, Objectives, Strategies n Analyze the Environments n Reassess the Mission, Goals, Objectives n Formulate Strategies n Implement Strategies n Monitor and Evaluate the Results

THE STRATEGIC PLANNING PROCESS n Formulate Strategies u Corporate u Business u Functional n Implement Strategies u Leadership/Ownership Assigned u Structural Barriers Identified u Management Information and Control Systems Designed

FORMULATING CORPORATE-LEVEL STRATEGY n Grand Strategy u growth u integration F vertical/horizontal integration u diversification u retrenchment u stability

FORMULATING CORPORATE-LEVEL STRATEGY n Portfolio Strategy u Strategic Business Units (SBUs) F Boston Consulting Group Matrix market share/market growthmarket share/market growth

FORMULATING BUSINESS- LEVEL STRATEGY n Adaptive Strategies u prospector u defender u analyzer u reactor n Competitive Strategies u differentiation u cost-leadership u focus

FORMULATING FUNCTIONAL-LEVEL STRATEGY n Production Strategy n Marketing Strategy n Finance Strategy n Human Resource Strategy n Research and Development Strategy