Strategic Planning Strategic Planning

An OverviewAn Overview

What is it?What is it?

►A process which helps managers A process which helps managers answer questions answer questions What changes are happening in the What changes are happening in the

environmentenvironment What products or services should we be What products or services should we be

offering offering How can we offer them efficientlyHow can we offer them efficiently

Are their different kinds of Are their different kinds of strategy?strategy?

► Grand StrategyGrand Strategy A general plan of actionA general plan of action GrowthGrowth

► Investing in expansion or acquiring new businessesInvesting in expansion or acquiring new businesses

StabilityStability►Slow down growth, get organized, control what we are Slow down growth, get organized, control what we are

doingdoing

RetrenchmentRetrenchment►Downsize Downsize ►Our current activities are no longer relevant to the Our current activities are no longer relevant to the

environmentenvironment►Sell or close current businesses Sell or close current businesses

Are their different kinds of Are their different kinds of strategy?strategy?

►Generic StrategyGeneric Strategy How will we compete in the market placeHow will we compete in the market place Low costLow cost DifferentiationDifferentiation WideWide Narrow or nicheNarrow or niche

Are their different kinds of Are their different kinds of strategy?strategy?

►Global or International Global or International Domestic StrategyDomestic Strategy Export StrategyExport Strategy Multi-country or Multidomestic Multi-country or Multidomestic GlobalGlobal

What is the purpose of Strategic What is the purpose of Strategic planning?planning?

►Develop a sustainable competitive Develop a sustainable competitive advantageadvantage CompetanciesCompetancies

►Core competanceCore competance►Distinctive competanceDistinctive competance

Key success factorsKey success factors SustainablitiySustainablitiy

How can we develop strategyHow can we develop strategy

►Understand the environment Understand the environment Porter’s five forces Porter’s five forces

►CompetitorsCompetitors►SuppliersSuppliers►CustomersCustomers►New entrantsNew entrants►SubstitutesSubstitutes

Opportunities and threatsOpportunities and threats Key success factorsKey success factors

How can we develop strategyHow can we develop strategy

►Understand our companyUnderstand our company Strengths and weaknessesStrengths and weaknesses Distinctive CompetenciesDistinctive Competencies Our sustainable competitive advantagesOur sustainable competitive advantages

Strategy Strategy ImplementationImplementation

Where the rubber meets the Where the rubber meets the roadroad

A dynamic processA dynamic process

► Involves changing the organization's Involves changing the organization's behaviorbehavior

►Requires visionRequires vision►Requires intuitionRequires intuition►Employee participationEmployee participation

LeadershipLeadership

►Ability to influence organization's Ability to influence organization's members to do things they wouldn’t members to do things they wouldn’t ordinarily do.ordinarily do.

► It includesIt includes MotivationMotivation PersuasionPersuasion Inclusion of everyoneInclusion of everyone

Organizational StructureOrganizational Structure

► Involves relationships among members of Involves relationships among members of the organization.the organization.

► ResponsibilitiesResponsibilities►Degree of DecentralizationDegree of Decentralization► Find ways of organizing that don’t have lines Find ways of organizing that don’t have lines

and boxes.and boxes.► Communication technologyCommunication technology

GlobalizationGlobalization First Level efficienciesFirst Level efficiencies Social systemsSocial systems

Information and Control Information and Control SystemsSystems

►Reward Systems that really reward Reward Systems that really reward performanceperformance

►Budgets Budgets ► Information systemsInformation systems

Everyone has his own set of informationEveryone has his own set of information The company places information where it is The company places information where it is

neededneeded Information is everywhere for anyone to Information is everywhere for anyone to

use ituse it►Rules, policies and proceduresRules, policies and procedures

Human ResourcesHuman Resources

►Finding and recruiting the right peopleFinding and recruiting the right people Fit with the new cultureFit with the new culture

►TrainingTraining►Releasing people who don’t fit the new Releasing people who don’t fit the new

cultureculture

Problems with GlobalizationProblems with Globalization

►All the issues we have discussed have All the issues we have discussed have to be dealt with, complicated by to be dealt with, complicated by distance and:distance and:

►CommunicationsCommunications►LanguageLanguage►CultureCulture►CurrencyCurrency►Laws and customsLaws and customs