Planning

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  • 05/13/10
  • 05/13/10
  • 05/13/10
  • 05/13/10
  • 05/13/10
  • 05/13/10
  • 05/13/10
  • 05/13/10
  • Planning

    1. 1. Strategic Planning <ul><li>Understand Strategy and how it differs from plans, and tactics </li></ul><ul><li>Look at models of strategy development </li></ul><ul><li>Understand the process of strategy development </li></ul><ul><li>Product Life Cycle and Generic Strategies </li></ul>
    2. 2. Functions of Planning 1) Identifying future opportunities 2) Identifying and avoiding future problems 3) Developing courses of action 4) Understanding the risks and uncertainties associated with various options 7.2
    3. 3. Strategy <ul><li>The major courses of action that an organization should take to achieve its goals </li></ul><ul><li>Plans-deal more with actions that should be taken </li></ul><ul><li>Tactics-specific moves </li></ul>
    4. 4. Intended and Realized Strategies <ul><li>Intended-Plans that managers develop </li></ul><ul><li>Realized-What actions actually occur </li></ul><ul><li>Unrealized-Plans that never occur </li></ul><ul><li>Emergent Strategy-Unplanned actions that occur </li></ul>
    5. 5. Realized Strategy Intended Strategy Emergent Strategy Unrealized Strategy Outside Forces
    6. 6. SWOT Analysis <ul><li>Internal </li></ul><ul><ul><li>Strengths and Weaknesses </li></ul></ul><ul><li>External </li></ul><ul><ul><li>Opportunities and Threats in the business environment </li></ul></ul>
    7. 7. Core Competencies <ul><li>Strengths that make an organization distinctive from competitors </li></ul><ul><li>Groups of sustainable competitive advantages </li></ul>
    8. 8. External-O’s and T’s <ul><li>Porter’s Five Forces Model-P94 </li></ul><ul><ul><li>Threat of New Entrants </li></ul></ul><ul><ul><li>Supplier Bargaining Power </li></ul></ul><ul><ul><li>Customer Bargaining Power </li></ul></ul><ul><ul><li>Substitute Goods or Services </li></ul></ul><ul><ul><li>Rivalry of Existing Firms </li></ul></ul>
    9. 9. Product Life Cycle <ul><li>Market phases that products usually go through during their lifetimes </li></ul><ul><li>Introduction </li></ul><ul><li>Growth </li></ul><ul><li>Maturity </li></ul><ul><li>Decline </li></ul><ul><li>Termination </li></ul>
    10. 10. Basic Product Life Cycle Model Adapted from Figure 7.4 Introduction Growth Maturity Decline Termination Biogenetics Electric cars Cellular phones PCs Software Autos Airlines Breakfast cereals Black and white TV Cigarettes Slide rule Drive-ins High Low Sales Volume Time 7.10
    11. 11. Diversification <ul><li>The variety of goods or services provided by the firm </li></ul><ul><li>Focused Strategy </li></ul><ul><li>Dominant Business </li></ul><ul><li>Related Diversification </li></ul><ul><li>Unrelated Diversification </li></ul>
    12. 12. The Risks and Opportunities of Diversification <ul><li>Identifying the Risks and Opportunities of Diversification </li></ul><ul><ul><li>What can we do better than any of our competitors if we enter a new market? </li></ul></ul><ul><ul><li>What strategic assets are needed to succeed in the new market? </li></ul></ul><ul><ul><li>Are there synergies to be realized? </li></ul></ul><ul><ul><li>Will we be simply a player in the new market or will we emerge a winner? </li></ul></ul><ul><ul><li>What can we learn by diversifying, and are we sufficiently organized to learn it? </li></ul></ul>7.4
    13. 13. Level of Diversification and Planning Scope of strategic planning Dick Clark Productions Southwest Airlines Cemex GE Dominant- business firm Single- business firm Related- business firm Unrelated- businesses firm Broad Narrow High Low Level of diversification Adapted from Figure 7.1 7.5 ABB
    14. 14. Single-Business Strategy <ul><li>Serves one segment of a particular market with the intent of being the BEST </li></ul><ul><li>Examples </li></ul><ul><ul><li>Southwest Airlines </li></ul></ul><ul><ul><li>Intel </li></ul></ul>
    15. 15. Dominant Business <ul><li>Serves various segments of a single market </li></ul><ul><li>Examples </li></ul><ul><ul><li>GM </li></ul></ul><ul><ul><ul><li>Trucks, Cars, Semi’s </li></ul></ul></ul>
    16. 16. Related Diversification <ul><li>A variety of similar goods or services </li></ul><ul><li>Concentric Growth Strategy </li></ul><ul><li>Synergies are realized </li></ul><ul><li>Examples </li></ul><ul><ul><li>GM </li></ul></ul><ul><ul><li>Microsoft </li></ul></ul><ul><ul><li>Honda </li></ul></ul>
    17. 17. Unrelated Diversification <ul><li>Provide diverse products to different markets </li></ul><ul><li>Conglomerate Growth Strategy </li></ul><ul><li>Examples </li></ul><ul><ul><li>GE </li></ul></ul><ul><ul><li>ABB </li></ul></ul><ul><ul><li>Mitsubuishi </li></ul></ul>
    18. 18. Corporate Level Strategy <ul><li>Guides the overall direction of the firm deciding what SBU’s to keep, develop, purchase, or sell </li></ul>
    19. 19. Strategic Business Unit <ul><li>SBU-a division or subsidiary of a firm that operates relatively independently </li></ul><ul><li>Examples </li></ul><ul><ul><li>pizza hut, taco bell, kfc </li></ul></ul><ul><ul><li>IBM computers, mainframes, financial </li></ul></ul><ul><ul><li>other examples?? </li></ul></ul>
    20. 20. Growth Strategies <ul><li>Think of facing the ultimate customer </li></ul><ul><li>Forward Integration-when a firm buys its customers </li></ul><ul><li>Backward Integration-when a firm buys its suppliers </li></ul><ul><li>Horizontal Integration-when a firm buys its competitors </li></ul>
    21. 21. Growth Strategies (cont) <ul><li>Market Penetration-development of current markets with current products </li></ul><ul><li>Market Development-seeking new markets for current products </li></ul><ul><li>Product Development- new or improved products for the current market </li></ul>
    22. 22. Business Level Strategies <ul><li>Strategies of SBU’s </li></ul><ul><li>What is the market </li></ul><ul><li>What are the customer needs to be filled </li></ul><ul><li>How will they be satisfied </li></ul>
    23. 23. Generic Strategies <ul><li>Henry Mintzberg-P245 </li></ul><ul><li>3 basic business strategies </li></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><li>Low-cost </li></ul></ul><ul><ul><li>Focus/Niche </li></ul></ul><ul><li>Question- </li></ul><ul><ul><li>Can the 3 basic strategies be combined? </li></ul></ul>
    24. 24. Generic Strategies Model Low Cost (price) Broad Narrow Uniqueness Source of Advantage Strategic Target Differentiation strategy Cost leadership strategy Focus strategy Source: Adapted with permission of The Free Press, a Division of Simon & Schuster, Inc. from Competitive Strategy: Techniques for Analyzing Industries and Competitors (p. 39) by Michael E. Porter, Copyright © 1980 by The Free Press. Adapted from Figure 7.6 7.12
    25. 25. Application of the Generic Strategies Model Feature Company Examples Business-Level Strategy Differentiation Adapted from Table 7.4 Premium Quality Brand image Technological leadership Customer service Lexus - autos Compaq - PCs Gillette - razors Maytag - appliances Nike - shoes 7.13
    26. 26. Application of the Generic Strategies Model (contd.) Feature Company Examples Business-Level Strategy Cost leadership Adapted from Table 7.4 Tight cost controls Efficient scale of facilities Efficient service, sales force, and advertising Competitive pricing Feature Discount Tires - tire replacement Motel 6 - travel accommodations Wal-Mart - retailing UPS - package delivery 7.14
    27. 27. Application of the Generic Strategies Model (contd.) Feature Company Examples Business-Level Strategy Focus Adapted from Table 7.4 Careful identification of target market (niche) Cost leadership emphasis or differentiation emphasis Constant review of customer demand in niche Nieman Marcus - elite retailing Dick Clark Productions Polo - clothing Rolex - watches 7.15
    28. 28. Where to from here???? <ul><li>We have touched on the areas of: </li></ul><ul><ul><li>Organizational Behavior </li></ul></ul><ul><ul><li>Human Resource Management </li></ul></ul><ul><ul><li>Strategic Management </li></ul></ul><ul><li>What careers are there in each area? </li></ul><ul><li>What classes can I take in the areas? </li></ul><ul><ul><li>MGT410,MGT499,MGT320,MGT340,MGT491 </li></ul></ul>

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