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INTRO TO STRATEGIC MANAGEMENT AND PLANNING
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INTRO TO STRATEGIC MANAGEMENT AND PLANNING

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  • 1. POLICY vs STRATEGY
    • POLICY STUDIES
    • INTERNAL FOCUS
    • EMPHASIZES EFFICIENCY OF OPERATIONS
    • STRATEGIC STUDIES
    • EXTERNAL FOCUS
    • EMPHASIZES ADAPTING TO A CHANGING ENVIRONMENT
    • “ SEAT-OF-THE-PANTS ” MANAGEMENT = Intuitive Management
    • We must move away from intuitive approaches as:
    • THE ORGANIZATION BECOMES LARGER …
    • THE LAYERS OF MANAGEMENT INCREASE …
    • THE ENVIRONMENT BECOMES MORE COMPLEX .
  • 2. THE FOUR PHASES OF STRATEGIC PLANNING
    • 1--BASIC FINANCIAL PLANNING (Budgeting)
    • Seek better control by emphasizing the meeting of budgets
    • Focus is internal
    • 2--FORECAST-BASED PLANNING
    • Plan for growth by trying to predict the future beyond next year
    • Predicting and forecasting the environment
    • 3--EXTERNALLY-ORIENTED (Strategic) PLANNING
    • Responding and reacting to market shifts and competitor actions
    • Environmental reaction
    • 4--STRATEGIC MANAGEMENT
    • Developing a competitive advantage which creates your future
    • Environmental proaction
  • 3. STRATEGIC PLANNING
    • Any organization that doesn’t plan for the future isn’t likely to have one.
    • Planning without action is futile, but action without planning is fatal.
    • STRATEGIC PLANNING
    • FORCES MANAGERS TO THINK ANALYTICALLY
    • FOCUSES ATTENTION ON THE FUTURE OF THE FIRM
    • INCREASES UNDERSTANDING OF THE ENVIRONMENT
    • DEVELOPS ABILITY AND OUTLOOK OF MANAGERS
    • IS A BASIS FOR PERFORMANCE EVALUATION AND ASSESSMENT
    • Three most highly rated benefits:
    • CLEARER SENSE OF THE STRATEGIC VISION OF THE FIRM
    • SHARPER FOCUS ON WHAT IS STRATEGICALLY IMPORTANT
    • IMPROVES UNDERSTANDING OF THE CHANGING ENVIRONMENT
  • 4. TRIGGERING EVENTS FOR STRATEGIC CHANGE
    • SIGNIFICANT PERFORMANCE GAPS
    • CHANGES IN OWNERSHIP
    • CHANGES IN LEADERSHIP—A NEW CEO
    • INTERVENTION BY A SIGNIFICANT EXTERNAL ENTITY
    • STRATEGIC INFLECTION POINT
    • IN GENERAL, ANY CHANGES, CRISES, OR DEVIATIONS FRO THE EXPECTED OR STATUS QUO
  • 5. THE BASIC MODEL OF STRATEGIC MANAGEMENT
    • 1-- ENVIRONMENTAL SCANNING
      • EXTERNAL ENVIRONMENT
        • Opportunities and Threats
      • INTERNAL ORGANIZATION
        • Strengths and Weaknesses
    • 2-- STRATEGY FORMULATION
      • DEVELOPING A MISSION/VISION
        • Who are we? What is our business? Where are we headed?
      • SETTING OBJECTIVES
        • Financial Objectives – Earnings, ROA, Cash Flow
        • Strategic Position Objectives – Market Share, Customer Service, Competitive Position
      • CRAFTING STRATEGIES
        • How to achieve the targeted results?…What is our strategic plan?
        • Corporate, Business-level, Functional
    • 3-- STRATEGY IMPLEMENTATION
      • ESTABLISHING PROGRAMS, BUDGETS, AND PROCEDURES
      • ASSIGNMENTS
        • Who does what by when?
    • 4-- EVALUATION AND CONTROL
      • MONITORING, REVIEW, AND INTERVENTION
        • When should we intervene?
  • 6. THREE STRATEGIC LEVELS
    • CORPORATE-LEVEL STRATEGIES
    • Are long-term investment strategies
    • Is the corporate mission/vision well-served by continuing in this business?
    • Seek a favorable portfolio of business activities for the corporation GROWTH
    • STABILITY
    • RETRENCHMENT
    • BUSINESS-LEVEL (Divisional) STRATEGIES
    • Are competitive strategies for each business segment the company operates in
    • How to improve the relative market position of each product/service line?
    • Emphasize development of a competitive advantage for each business line
    • COST LEADERSHIP
    • DIFFERENTIATION
    • FOCUS
    • FUNCTIONAL-LEVEL (Departmental) STRATEGIES
    • Are departmental strategies that focus on resource utilization and efficiency
    • Develop efficiency plans that are in harmony with higher-level objectives
  • 7. TESTS FOR A WINNING STRATEGY THOMPSON & STRICKLAND
    • GOODNESS-OF-FIT
    • HOW WELL IS THIS STRATEGY MATCHED TO THE ORGANIZATION’S CAPABILITIES AND ASPIRATIONS?
    • COMPETITIVE ADVANTAGE
    • DOES THIS STRATEGY LEAD TO A SUSTAINABLE COMPETITIVE ADVANTAGE?
    • DOES THIS STRATEGY STRENGTHEN OUR COMPETITIVE POSITION?
    • PERFORMANCE
    • IS PROFITABILITY ENHANCED?
    • ARE LONG-TERM GAINS REALIZED IN STRATEGIC-POSITION AND IN FINANCIAL AREAS?
  • 8. FIVE CRITICAL STRATEGIC QUESTIONS HAMBRICK & FREDERICKSON
    • ARENAS:
    • WHERE WILL WE BE ACTIVE? …WHICH AREAS?
    • VEHICLES:
    • HOW WILL WE GET THERE?
    • DIFFERENTIATORS:
    • HOW WILL WE WIN IN THE MARKETPLACE?
    • STAGING:
    • HOW FAST CAN WE DO IT… AND IN WHAT SEQUENCE?
    • ECONOMIC LOGIC:
    • WHAT RETURN CAN WE EXPECT… AND WHEN WILL WE GET IT?
  • 9. IMPLEMENTATION
    • FINDING A GOOD “ FIT ” BETWEEN STRATEGY AND ….
    • -- ORGANIZATIONAL CAPABILITIES
    • -- THE REWARD STRUCTURE
    • -- INTERNAL POLICIES AND PROCEDURES
    • -- THE ORGANIZATION’S CULTURE
  • 10. WE IMPLEMENT STRATEGY BY:
    • -- BUILDING AN ORGANIZATION ( STRUCTURE ) CAPABLE OF SUCCESSFULLY SUPPORTING AND CARRYING OUT THE STRATEGY
    • -- DEVELOPING BUDGETS THAT STEER RESOURCES INTO CRITICAL INTERNAL ACTIVITIES
    • -- MOTIVATING PEOPLE TO PURSUE TARGETED OBJECTIVES ENERGETICALLY
    • -- TYING REWARDS TO ACHIEVEMENT OF TARGETED RESULTS
    • -- CREATING A WORK ENVIRONMENT CONDUCIVE TO SUCCESSFUL IMPLEMENTATION OF STRATEGY
    • -- INSTALLING STRATEGY-SUPPORTIVE POLICIES AND PROCEDURES
    • -- DEVELOPING AN INFORMATION REPORTING SYSTEM TO TRACK PROGRESS AND MONITOR PERFORMANCE
    • -- EXERTING INTERNAL LEADERSHIP TO DRIVE IMPLEMENTATION FORWARD
  • 11. MYTHS OF CORPORATE PLANNING ACKOFF 81
    • MOST CORPORATE PLANNING IS LIKE A RITUAL RAIN DANCE,
    • IT HAS NO EFFECT ON THE WEATHER THAT FOLLOWS, BUT IT MAKES THOSE WHO ENGAGE IN IT FEEL THAT THEY ARE IN CONTROL.
    • MOST DISCUSSIONS OF THE ROLE OF MODELS IN PLANNING ARE DIRECTED AT IMPROVING THE DANCING, NOT THE WEATHER.
    • IMPLICATIONS:
    • DON’T FOCUS EXCLUSIVELY ON THE PROCESS…
    • KEEP AN EYE ON RESULTS!
    • IS THERE PROOF THAT THINGS ARE IMPROVING?

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