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lecture slides

  1. 1. Introduction Strategic Business Planning (BUS1220) 1-
  2. 2. Strategic Management Defined <ul><li>Set of managerial decisions and actions that determines the long-run performance of an organization. </li></ul>1-
  3. 3. Strategic Management is Based on 3 Key Strategic Questions: <ul><li>Where is the organization now? </li></ul><ul><li>If no changes are made, where will the organization be in the future? </li></ul><ul><ul><ul><li>In one year? </li></ul></ul></ul><ul><ul><ul><li>In three years? </li></ul></ul></ul><ul><ul><ul><li>In ten years? </li></ul></ul></ul><ul><ul><ul><ul><li>Are the answers acceptable? </li></ul></ul></ul></ul><ul><li>If the answers are not acceptable, what actions should management take? </li></ul><ul><ul><ul><li>What risks and payoffs are involved? </li></ul></ul></ul>1-
  4. 4. Strategic Management <ul><li>What are the benefits of linking processes, systems, people together? </li></ul>1-
  5. 5. Strategic Management <ul><li>What are the benefits of linking processes, systems, people together? </li></ul>1- <ul><ul><li>Clearer sense of strategic vision for the firm for investors, shareholders, employees </li></ul></ul><ul><ul><li>Invest money on what is important </li></ul></ul><ul><ul><li>Clearer priorities for staff </li></ul></ul><ul><ul><li>Improved understanding of a rapidly changing environment </li></ul></ul>
  6. 6. What Prompts Companies to Develop Written Strategic Plans? 1-
  7. 7. What Prompts Companies to Develop Written Strategic Plans? <ul><li>Required when there is a triggering event (new CEO, external issue, threat, gap, strategic inflection point – unanticipated change in technology or taste) </li></ul><ul><li>Typically contains results of four stages – Planning, Scanning, Implemementing, Controlling & Evaluating </li></ul>1-
  8. 8. Strategic Decision-Making <ul><li>What makes a decision STRATEGIC? </li></ul><ul><ul><li>Rare (no precedent to follow) </li></ul></ul><ul><ul><li>Consequential (big money, time, resources) </li></ul></ul><ul><ul><li>Directive (influences decisions and actions at all levels of the organization) </li></ul></ul>1-
  9. 9. A Test: Strategic versus Functional? <ul><li>What market should we be in? </li></ul><ul><li>Open a new production facility? </li></ul><ul><li># people to schedule for tonight’s shift? </li></ul><ul><li>Acquire a competitor? </li></ul><ul><li>Buy a new workstation PC? </li></ul><ul><li>Buy an SAP system? </li></ul><ul><li>Change benefit program design? </li></ul><ul><li>Offer discounts for large purchasers? </li></ul>1-
  10. 10. Strategic Management Model Evaluation and Control and Control Strategy Development Strategy Implementation Mission Objectives Strategies Feedback/Learning Environmental Scanning Societal Environment General Forces Task Environment Industry Analysis Structure Chain of Command Resources Assets, Skills Competencies, Knowledge Culture Beliefs, Expectations, Values Reason for existence What results to accomplish by when Plan to achieve the mission & objectives Programs Activities needed to accomplish a plan Budgets Cost of the programs Procedures Sequence of steps needed to do the job Process to monitor performance and take corrective action Performance External Internal Evaluation and Control
  11. 11. <ul><li>A Key Concept: </li></ul><ul><li>Michael Porter’s </li></ul><ul><li>“ Generic Competitive Strategies” </li></ul>1-
  12. 12. Business Strategy <ul><li>Focuses on improving the competitive position of a company’s or business unit’s products or services within the specific industry or market segment that the firm serves. </li></ul>1-
  13. 13. Porter’s Generic Competitive Strategies <ul><li>Competitive Advantage: </li></ul><ul><ul><li>Lower cost strategy </li></ul></ul><ul><ul><ul><li>Design, produce, and market more efficiently than competitors </li></ul></ul></ul><ul><ul><li>Differentiation strategy </li></ul></ul><ul><ul><ul><li>Offer unique and superior value in terms of product quality, features, service </li></ul></ul></ul>1-
  14. 14. Porter’s Generic Competitive Strategies <ul><li>Competitive Scope: </li></ul><ul><ul><li>Broad target strategy </li></ul></ul><ul><ul><ul><li>Aim at the middle of the mass market </li></ul></ul></ul><ul><ul><li>Narrow target strategy </li></ul></ul><ul><ul><ul><li>Aim at a market niche </li></ul></ul></ul>1-
  15. 15. Porter’s Generic Competitive Strategies 1- <ul><li>Application 1 </li></ul><ul><li>Place the leading athletic footwear brands on the matrix </li></ul>
  16. 16. Porter’s Generic Competitive Strategies 1- <ul><li>Application 2 </li></ul><ul><li>Complete the lesson and exercise on MarketingTeacher.com </li></ul><ul><li>http://www.marketingteacher.com/Lessons/lesson_generic_strategies.htm </li></ul>
  17. 17. Porter’s Generic Competitive Strategies <ul><li>Stuck in the middle: </li></ul><ul><ul><li>No competitive advantage </li></ul></ul><ul><ul><li>Below-average performance </li></ul></ul>1-
  18. 18. Assignment 1: Generic Competitive Strategies 1- Lower Cost Differentiation Narrow Target Broad Target Competitive Advantage Competitive Scope Instructions: Place your organization and its competitors on the matrix. Names: ___________________________ ___________________________