Planning and strategic management

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Lesson 4
PLANNING AND STRATEGIC
MANAGEMENT
Management Information Systems
Mrs. Rosemarie M. Coronejo
Math-IT Dept, IAS, FEU

2. Learning Objectives
• Summarize the basic steps in any planning process
• Describe how strategic planning should be integrated with
tactical and operational planning
• Identify elements of the external environment and internal
resources of the firm to analyze before formulating a
strategy
• Summarize the types and choices available for corporate
strategy
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3. Learning Objectives
• Discuss how companies can achieve competitive advantage
through business strategy
• Define core competencies and explain why they provide
the foundation for business strategy
• Describe the keys to effective strategy implementation
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4. The Planning Process
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5. An Overview of
Planning Fundamentals
• Planning
– Plans are the conscious, systematic process of
decisions about goals and activities that an
individual, work unit, or organization will pursue in
the future
– A decision process in which you decide what to do
and how to do it
– Various types of plans include single-use,
standing, and contingency plans
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6. Types of Plans
• Single-use plans
– Designed to achieve a set of goals that are not likely to
be repeated in the future
• Standing plans
– Focus on ongoing activities designed to achieve an
enduring set of goals
• Contingency plans
– Actions to be taken when a company’s initial plans
have not worked or require sudden change
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7. The Basic Planning Process
• Step 1: Situational Analysis
• Step 2: Alternative Goals and Plans using
SMART Goals
• Step 3: Goal and Plan Evaluation
• Step 4: Goal and Plan Selection
• Step 5: Implementation
• Step 6: Monitor and Control
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8. Step 1: Situational Analysis
• Gather, interpret, and summarize all
information relevant to the planning issue in
question
• The outcome of this step is identification and
diagnosis of planning assumptions, issues, and
problems
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9. Step 2: Alternative Goals and Plans
• Generate alternative goals that may be used in
the future
• Once a range of alternative is generated,
alternatives can be evaluated
• SMART Goals: (Specific, Measurable, Attainable,
Relevant, Time-bound)
• Plans are the actions or means managers intend
to use to achieve organizational goals
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10. Step 3: Goal and Plan Evaluation
• First, managers must evaluate the advantages,
disadvantages, and potential effects of each
goal and plan
• Second, managers must prioritize goals
• Third, managers must consider implications of
alternative plans for meeting high-priority
goals
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11. Step 4: Goal and Plan Selection
• Managers select the most appropriate and
feasible goals and plans after assessing
alternatives
• Scenarios
– A narrative that describes a particular set of future
conditions
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12. Step 5: Implementation
• The best plans are useless unless
implemented
• Successful implementation requires that plans
be linked to other systems, particularly budget
and reward systems
• Managers and employees must
– Understand the plan
– Have the resources to implement the plan
– Be motivated to implemented the plan
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13. Step 6: Monitor and Control
• Monitoring allows managers to determine if
the plan is succeeding
• Controlling makes modifications as part of the
planning cycle
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14. Tactical and
Operational Planning
Strategic goals and plans are the foundation for planning
done by middle-level and frontline managers
Tactical
planning
A set of procedures for translating broad
strategic goals and plans into specific
goals and plans that are relevant to a
distinct portion of the organization
Operational
planning
The process of identifying the specific
procedures and processes required at
lower levels of the organization
For middle-level and frontline managers to accomplish
their jobs, it is critical that top managers communicate
the strategy to all levels of the organization

15. Hierarchy of Goals and Plans
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16. Aligning Tactical, Operational, and
Strategic Planning
• Organizations must aligning tactical,
operational, and strategic planning
• Each plan must be mutually supportive
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17. Example of a Strategy Map
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18. Strategic Planning
Strategic plans have a strong external orientation and
cover major portions of the organization
Strategic planning A set of procedures for making
decisions about the organization’s
long-term survival
Strategic goals Major targets or end results relating to
the organization’s long-term survival,
value, or growth
Strategy A pattern of actions and resource
allocations designed to achieve the
organization’s goals

19. Strategic Planning
• Strategic management
– A process that involves managers from all parts of
the organization in the formulation and
implementation of strategic goals and strategies
• Both large and small organizations benefit from the
planning framework discussed next
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20. The Strategic Management Process
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21. The Strategic Management Process
Step 1: Establishment of Mission, Vision, and Goals
Step 2: Analysis of External Opportunities and Threats
Step 3: Analysis of Internal Strengths and Weaknesses
including Resources and Core Competencies
Step 4: SWOT Analysis and Strategy Formulation including
Corporate Strategy, the BCG Matrix, and Business
Strategy
Step 5: Strategy Implementation
Step 6: Strategic Control

22. Mission
Mission is an organization’s basic purpose and scope of
operations.
McDonald’s “To be our customers’ favorite place and way to
eat”
Microsoft “We work to help people and businesses
throughout the world to realize their full potential”
Allstate “To be the best...serving our customers by
providing peace of mind and enriching their quality
of life through our partnership in the management
of the risks they face”

23. Vision
The strategic vision describes the long-term direction and
strategic intent of the company
DuPont “To be the world’s most dynamic science
company, creating sustainable solutions
essential to a better, safer and healthier life for
people everywhere”
City of
Redmond,
WA
“Together we create a community of good
neighbors”
Great Lakes
Naval
Museum
“To enhance and become an integral part of the
training mission of the Naval Service Training
Command, Great Lakes, by instilling in our
newest sailors a strong sense of tradition and
heritage in the United States”

24. Goals
Strategic goals evolve from the mission and vision of the
organization.
Strategic goals for the City of Redmond, WA include:
“Enhance citizen engagement in city issues”
“Sustain the natural systems and beauty of the community”
“Sustain a safe community with a coherent,
comprehensive, cohesive approach to safety”
“Maintain economic vitality”

25. Step 2: Analysis of External
Opportunities and Threats
• An accurate evaluation of the competitive environment and
macroenvironment are key to successful strategic
management
• Stakeholders
– Groups and individuals who affect and are affected by the
achievement of the organization’s mission, goals, and
strategies
• The difference between an opportunity and a threat
depends on how the company positions itself strategically
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26. Step 3: Analysis of Internal Strengths and Weaknesses
including Resources and Core Competencies
• Analysis of internal strengths and weaknesses provides an inventory
of existing functions, skills, resources, and overall performance level
• Resources
– Inputs to a system that can enhance performance
• Resources are a source of competitive advantage only if they create
value, are rare, difficult to imitate, and are organized
• Core competence
– A unique skill and/or knowledge an organizational possesses
that gives it an edge over competitors
• Benchmarking
– The process of assessing how well one company’s basic
functions and skills compare with those of another company or
set of companies
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27. Resources and Core Competencies
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28. Step 4: SWOT Analysis and Strategy
Formulation including Corporate Strategy,
BCG Matrix and Business Strategy
SWOT Examples
Strengths Skilled management, positive cash flow,
brands
Weaknesses Lack of spare production capacity,
absence of reliable suppliers
Opportunities New technology that improves
efficiency, new market niche
Threats Competitors’ entrance into niche market
once the niche proves profitable

29. Corporate Strategy
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30. Types of Corporate Strategies
Corporate strategy identifies a set of businesses, markets, or
industries in which an organization competes and the distribution
of resources among those entities
Concentration Strategy employed for an organization that
operates a single business and competes in a
single industry
Vertical
integration
Acquisition or development of new businesses
that produce parts or components of the
organization’s product
Concentric
diversification
Strategy used to add new businesses that
produce related products or are involved in
related markets and activities
Conglomerate
diversification
Strategy used to add new businesses that
produce unrelated products or are involved in
unrelated markets and activities

31. BCG Matrix
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32. Business Strategy
Business strategy describes the major actions by
which a business competes in a particular market
Low-cost
strategies
A strategy an organization uses to build
competitive advantage by being efficient
and offering a standard, no-frills product
Differentiati
on strategy
A strategy and organizations uses to build
competitive advantage by being unique in
its industry or market segment along one
or more dimensions
Functional
strategies
Strategies implemented by each
functional area of the organization to
support the organization’s business
strategy

33. Step 5: Strategy Implementation
1. Define strategic risks
2. Assess organization capabilities
3. Develop and implementation agenda
4. Create an implementation plan
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34. Step 6: Strategic Control
• Strategic control system
– A system designed to support managers in
evaluating the organization's progress regarding
its strategy and, when discrepancies exist, taking
corrective action
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35. Planning and Strategic Value
• Planning helps deliver strategic value by
concentrating organizational efforts
• Skilled managers realize the important of
alignment of goals and implementation of
those goals
• Planning is at the heart of these efforts
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