The document discusses goals, objectives, and organizational capabilities for strategic planning. It defines goals as qualitative and objectives as quantitative and specific. Objectives provide the basis for strategic decision making and performance appraisal. Organizational capabilities include financial, marketing, operations, personnel, information management, and general management factors. Methods for assessing capabilities include internal analysis using the VRIO framework, value chain analysis, quantitative analysis like ratios and benchmarks, and comprehensive analysis using tools like the balanced scorecard.

1. Goals and Objectives

2. • Goals – Denote what an organization
hopes to accomplish in a future period of
time. (Financial and Non Financial)
(Qualitative)
• Objectives – Are the ends that state
specifically how the goals shall be
achieved (Concrete and specific, makes
goals operational) (Quantitative)

3. Role of Objectives
• Provide the basis for Strategic Decision
Making
• Provide the standards for Performance
Appraisal

4. Characteristics of Objectives
•
Should be understandable
•
Should be concrete and specific
•
Should be related to a time frame
•
Should be measurable and controllable
•
Should be challenging
•
Different objectives should correlate with each other
•
Should be set within constraints

5. Objectives need to be set for

6. •
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•
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•
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Market standing
Innovation
Productivity
Physical and Financial Resources
Profitability
Manager performance and development
Worker performance and attitude
Public responsibility

7. Types of Objectives

8. Factors Considered for Objectives Setting
• The Forces in the Environment
• Realities of Enterprise Resources and Internal Power Relationships
• The Value system of the Top Executive
• Awareness by the Management

9. The Balance Scorecard Model
The Model and Map

11. The approach for the Balance score card

12. A typical Strategy Map

13. The concepts of CSF and KPI

14. CSF

15. Organizational Appraisal

16. Framework
for
Development
of
Strategic
Advantage

17. Organizational Capability factors

18. “Organizational capability factors are the
strategic strengths and weaknesses
existing in different functional areas within
an organization, which are of crucial
importance to strategy formulation and
implementation.”

19. The Factors….

20. Financial Capability Factors

21. • Source of Funds
» Financing (External Borrowing, Internal Financing), Capital
Mix Decisions eg. Capital Structure, Procurement of
Capital, working capital borrowings, reserves and surplus
as sources of funds ; relationship with lenders, banks and
financial institutions.
• Usage of Funds
» Investment or Asset Mix Decisions e.g. Capital Investment,
Fixed asset acquisition, current assets, loans and
advances, dividend decisions, relationship with
shareholders
• Management of Funds
» Decisions related to systematic aspects of Financial
Management e.g. Systems of Finance, accounting and
budgeting, management control system; cash, credit and
risk management; cost control and reduction; tax planning
and advantages

22. Typical Strengths that support this capability

23. Marketing Capability Factors

24. • Product
Quality, features, choice of models, brand names,
packaging etc
• Pricing
Discount, mode of payment, allowances, payment
period, credit terms, etc
• Place
Channels to be used, transportation, logistics and
inventory storage management and coverage of
markets etc.
• Promotion
Advertising, Personal Selling, Sales Promotions,
Publicity
• Integrative and Systemic Factors
Marketing Mix, Segmentation, targeting, positioning,
market standing, company image, marketing
organization, marketing system, marketing
management information system etc.

25. Typical Strengths that support this capability

26. Operational Capability Factors

27. • Production System
» Capacity, Location, Layout, product or service design,
work systems, degree of automation, extent of vertical
integration etc.
• Operational Planning and control
» Aggregate Production Planning, Materials supply;
inventory, cost and quality management; and
maintenance of plant and equipment.
• Research and Development
» Product Development, Personnel and facilities, level of
technology used, technology transfer and absorption,
technological collaboration and support etc.

28. Typical Strengths that support this capability

29. Personnel Capability Factors

30. • Personnel System
» Manpower Planning, Selection, Development,
Compensation, Communication and appraisal
• Organizational and employee characteristics
» Corporate image, Quality of Managers, Staff and
workers, perception about the image of the organization
as an employer, availability of development opportunities
for employees, working conditions etc.
• Industrial Relations
» Union Management Relationships, Collective Bargaining,
safety, welfare and security, employee satisfaction and
Morale etc.

31. Typical Strengths that support this capability

32. Information Management Capability

33. • Factors related to Acquisition and Retention of
Information
» Sources, Quantity, Quality and Timeliness of Information, retention
capacity and security of information
• Factors Related to Processing and Synthesis of
Information
» Database Management, Computer Systems, Software Capability
and the ability to synthesize information
• Factors Related to Retrieval and usage of Information
» Availability and appropriateness of Information formats and the
capacity to assimilate and use information
• Factors related to Transmission and Dissemination
» Speed, scope, width and depth of coverage of information and
with the willingness to accept information
• Integrative, Systemic and Supportive Factors
» Availability of IT infrastructure, its relevance and compatibility to
organizational needs, upgradation of facilities, willingness to invest
in state-of-the-art systems, availability of computer professionals
and top management support

34. Typical Strengths that support this capability

35. General Management Capability

36. General Management Capability

37. Typical Strengths that support this capability

38. Methods and Techniques used
for Organizational appraisal

40. Internal Analysis

41. VRIO Framework
• Valuable
• Rare
• Inimitable
• Organised for Usage

42. How Organizational Capabilities
contribute to strengths and
Weaknesses
Using the VRIO Framework

43. Value Chain Analysis

44. Value Chain Analysis
• Primary Activities
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Inbound logistics
Operations
Outbound Logistics
Marketing and Sales
Service
• Support Activities
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Firm Infrastructure
Human Resource Management
Technology Development
Procurement

45. Porters Generic Value Chain

46. Quantitative Analysis
• Financial Analysis
• Non-Financial Quantitative Analysis

47. Financial Analysis
• Ratio Analysis
– Assesses Liquidity, Profitability, Leverage and activity
aspects.
• Economic Value added (EVA) Analysis
– To determine wealth of a company : Defines profitability
in terms of the returns on capital above the cost of
servicing the capital employed.( PAT – Cost of Capital)
• Activity based Costing (ABC)

48. Non Financial Analysis
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Employee Turnover
Absenteeism
Market Ranking
Rate of Advertising Recall
Total Cycle time of production
Inventory units used per period
Service call rate
Number of patents registered per period etc.

49. Comparative Analysis
• Historical Analysis
• Industry Norms
• Benchmarking

50. Types of Benchmarking
• Performance Benchmarking
• Process Benchmarking
• Strategic Benchmarking

51. To determine against whom one should compare
• Internal Benchmarking (Between units or departments of
the same organization)
• Competitive Benchmarking (Direct comparison of ones
performance against the best competitors)
• Functional Benchmarking (Comparison of processes or
functions against non competitive organizations within
the same sector or technological area)
• Generic Benchmarking ( Comparison of own processes
against the best practices anywhere, in any type or
organization)

52. Comprehensive Analysis
•
•
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Key Factor Rating
Business Intelligence Systems
Balance Scorecard

53. Key Factor Rating

54. Marketing Capability factors

55. Business Intelligence

56. Balance Scorecard
• Customer Perspective : “How do customers see us?”
• Internal Business Perspective : “What must we excel at?”
• Innovation and learning perspective : “Can we continue to
improve and create value?”
• Financial Perspective : “How do we look at shareholders?”

57. The Models

58. Structuring Environmental Appraisal
ETOP Model

59. Environment Threat and Opportunity Profile

60. Structuring Organizational Appraisal
Organizational Capability Profile (OCP)
Strategic Advantage Profile (SAP)

61. Organizational Capability profile

62. Strategic Advantage Profile (SAP)