The document discusses the importance of strategic planning in organizations, emphasizing the need for long-term goals and adaptability to changing environments. It introduces key frameworks such as the BCG matrix and Porter's five forces to evaluate market conditions and organizational strategies. Additionally, it outlines the components of the strategic process, which include assessing the environment, establishing mission and goals, and setting operational strategies.

1. Strategic Planning
HDCS 4393/4394
Internship
Dr. Shirley Ezell

2. Introduction
• Strategy is the larger vision in a
company that guides the plans for
employees and managers.
• Strategy has its foundation in strategic
thinking. It is the determination of the
long-term goals and objectives of an
organization and the courses of action
and resources necessary for
implementing these goals.
Strategic thinking produces strategies.

3. • In modern organizations executives
included every level of the organization
in developing and implementing the
overall strategy.
• Strategic planning must anticipate
unexpected events, randomness, and
chaos to provide a good strategy. Good
strategic planning allows a company to
develop a sustainable competitive
advantage.
Introduction (Cont.)

4. • The earlier history of planning found
organizations using current-year sales, and
environmental trends for 5 to 10 years and basing
their plant, product and investment decisions on
this data within a stable environment.
• The environment changed into one of uncertainty,
intensifying foreign competition, technological
obsolescence, and changing markets and
populations; and, managers turned to strategic
planning.

5. • Strategic planning is a process that reviews market
conditions, customer needs, competitive strengths
and weaknesses, sociopolitical, legal, and economic
conditions, technological developments, and the
availability of resources to assist the organization in
its planning for opportunities or threats.
• The Strategic Plan includes taking this environmental
information and deciding on a mission, objectives,
strategies and a strategic architecture.
See Figure 6-2 in the readings for a visual diagram of
the process.

6. Lets look at one strategic plan in
action. Review the
Matsushita process where
department managers provide 3 plans every 6
months:
A five-year plan with technological and
environmental changes, a two-year plan taking
strategies into new products, and a six-month
operating plan that shows monthly projections for
production, sales, profits, inventories, quality
control, and personal requirements.

7. Organizations need to
reflect to be successful the
critical questions are:
1. What is our business?
2. What should it be?
And these must be answered by top management.

8. Business Porfolio Matrix
Identify each division, product line -called
strategic business units (SBU’s) which have 4
parts (distinct mission, own competitors, single
business or collection of businesses).
They can be planned independently of other
businesses of the total organization.
Then form a matrix.
What are the Important
Strategic Thinking Frameworks?

9. Market
Growth
See Figure 6-3 in your reading and analyze your
internship company. Pick an area in your intern
organization an determine what products or services
fall into the 4 boxes: stars, ?, cash cow & cash trap.

10. Star is a SBU that has a high share of a high-growth market. They
need a great deal of resources because of growth. When growth
slows they become cash cows.
Cash Cow has a high share of a low-growth market and produces a
good deal of cash for the organization. Since the market is not
growing they do not require a great amount of resources.
Question Mark has a low share of a high-growth market, and the
organization must decide whether to build, phase it out, or
eliminate.
Cash Trap Has a low market share of a low growth market. It may
generate enough cash to maintain itself, or be a drain, but
it does not generate sources of cash.
Definitions

11. 1. Build, if you believe it has the potential to be
a star.
2. Hold, if the SBU is already a successful cash
cow (especially when more cash is needed)
3. Harvest, appropriate for all SBUs except
cash cows.
4. Divest, getting rid of low-growth markets.
So What are your Strategic
Choices using the BCG
Business Porfolio Matrix?

12. Criticism of this approach
• Market share and market growth are
critical to profitability and sometimes
this finds managers unable to predict
the more profitable project.
• Some other critics contend that
managers focus on what to bring to
market and de-emphasize marketing.
• Also, can this matrix show the many
complex concepts in strategic thinking?
It is widely used across diverse
industries.

13. 2ND
Model: Porter’s Five Forces
Harvard Business School economist
Michael Porter developed a framework
for developing a organization’s strategy.
Five competitive forces are identified:
1. The threat of new entrants
2. The threat of substitute products of services
3. The bargaining power of suppliers
4. The substitute products or services
5. The rivalry among the existing competitors.
He also uses complementors which refers to the dependence
that develops between companies whose products work in
conjunction with each other.

14. 2ND
Model: Porter’s Five Forces
(Cont.)
• The strength of Porter’s model forces varies
in different industries. However, these 5
forces determine profitability since they shape
the firm prices, the costs, the investment
required to compete.

15. The Strategic Planning Process
1. The process asks manager to ask what they
want the future to be or what they must do to
ensure the ` desired future is achieved.
2. In a high performance organization, strategic
planning never ends.
3. Managers may be involved in the process and
influence it by providing information and
suggestions in their areas of responsibility. They
must know the process and results since their own
department objectives should be derived from the
strategic plan.

16. Example
One process highlighted was used by Tony Rigato, CEO of
MRM, Inc, a distributor of pneumatic industrial components in
Michigan. He identified 5 questions managers should
consider before the process begins:
1. Do you recognized a need to change?
2. Are you prepared for honest feedback even if it’s painful?
3. Are you willing to change the way you do business and
change yourself?
4. Will you turn the plan into action?
5. Do you have the guts to lead your company into
uncharted waters?

17. The Components of the
Strategic Process include:
1. Assessing the Organization’s Environment
2. Establishing an Organizational Mission
3. Establishing Organizational Goals and Objectives
4. Setting Operating Strategies.
Review the reading descriptions of these components.
Organizational strategies are the general approaches
used to achieve the organizational objectives. These
strategies include differentiation, low cost, and niche.

18. Review the descriptions of these strategies.
It is important to remember that if an
organization's strategic plan is properly executed,
the scope, range, issues, and time perspectives
will differ from department to department. But all
the plans will be derived from the strategic plan
and this will guide the achievement.