7. STRATEGIC PLANNING

Transcription

1 7. STRATEGIC PLANNING STRATEGY, STRATEGY MAKERS, LEVELS OF STRATEGY, LONG-TERM OBJECTIVES, STRATEGIC PLANNING, PRODUCT-MARKET MATRIX, STRATEGIC PLAN AND OPERATIONAL PLANS

2 Corporate strategy pattern of major objectives, purposes or goals and essential policies or plans for achieving those goals stated in such a way as to define what business the company is in or is to be in the kind of company it is or is to be 2

3 STRATEGISTS Involved in the strategic management proces Several levels of management The board of director, president, the chief executive officer, the chief operating officer, and the division managers 3

4 THE STRATEGIC DECISION MAKERS Competent individuals to success in the strategic management process Top management Board of directors Planning staff 4

5 THE STRATEGIC DECISION MAKERS Competent individuals to success in the strategic management process Top management Board of directors Planning staff The final responsibility rests with top management 5

6 Top Management English president chief executive officer vice president executive vice president comittee chairperson board of directors Czech prezident, leader výkonný ředitel viceprezident, zástupce prezidenta, místopředseda výkonný viceprezident výbor, komise předseda dozorčí rada 6

7 CEO The CEO must understand that strategic management is his responsibility. Parts of this task, but certainly not all of it, can be delegated. The CEO is responsible for establishing a climate in the organization that is congenial to strategic management. The CEO is responsible for ensuring that the design of the process is appropriate to the unique characteristics of the company. The CEO is responsible for determining whether there should be a corporate planner. If so, the CEO generally should appoint the planner (or planners) and see that the office is located as close to that of the CEO as practical. The CEO must get involved in doing planning. The CEO should have face-to-face meetings with executives for making plans and should ensure that there is a proper evaluation of the plans and feedback to those making them. The CEO is responsible for reporting the results of the strategic management process to the board of directors. 7

8 BOARD OF DIRECTORS Elected by stockholders and given ultimate authority and responsibility Chairperson who is responsible for overseeing board business and standing committees A strategy committee works with CEO to develop strategic management process Consisting of both outsiders and insiders. Role in the strategic management process: Commonly audits an organization's strategic management process to make it more effective and efficient Guides the affairs of corporation and protects stockholder interests Strategic decisions are evaluated by the board of directors 8

9 Key Terms in Strategic Management STRATEGY TACTICS POLICY PURPOSE MISSION GOALS (VISIONS) OBJECTIVES 9

10 STRATEGY Strategies are the means by which long-term objectives will be achieved. The role of strategy is to identify the general approaches that the organization utilize to achieve its organizational objectives. The choice of strategy is so central to the study and understanding of strategic management. 10

11 TACTICS specifics actions the organization might undertake in carrying its strategy 11

12 POLICY The means by which objectives will be achieved Policies include guidelines, procedures, rules, programs, and budgets established to support efforts to achieve stated objectives Policies become important management tools for implementing them 12

13 PURPOSE Outlines why the organization exists Includes a description of its current and future business The purpose of an organization is its primary role in society, a broadly defined aim (such as manufacturing electronic equipment) that it may share with many other organizations of its type 13

14 MISSION The unique reason for its existence that sets it apart from all others Describes why the organization exists and guides what it should be doing. Often, the organization's mission is defined in a formal, written mission statement Decisions on mission are the most important strategic decisions, because the mission is meant to guide the entire organization Although the terms "purpose" and "mission" are often used interchangeably, to distinguish between them may help in understanding organizational goals 14

15 GOALS (VISIONS) A desired future state that the organization attempts to realize Provide a standard of performance Provide a basis for planning and management control related to the activities of the organisation Provide guidelines for decision making and justification for actions taken Influence the structure of the organisation and help determine the nature of technology employed Help to develop commitment of individuals and groups to the activities of the organisation Give an indication of what the organisation is really like, its true nature and character Serve as a basis for the evaluation of change and organisation development 15 Are the basis for objectives and policies of the organisation

16 GOALS (VISIONS) Goals must exhibit several characteristics: be understandable contain a time be carefully drawn be subject to alignment 16

17 OBJECTIVES Often used interchangeably with goal Usually refer to specific targets for which measurable results can be obtained The end points of an organization's mission Refer to the specific kinds of results the organizations seek to achieve through its existence and operations Define what it is the organization hopes to accomplish, both over the long and short term 17

18 OBJECTIVES 18

19 10 Most Important Business Objectives by George N. Root III, studiod PROFITABILITY PRODUCTIVITY CUSTOMER SERVICE EMPLOYEE RETENTION CORE VALUES GROWTH MAINTAIN FINANCING CHANGE MANAGEMENT MARKETING COMPETITIVE ANALYSIS 19

20 Setting Goals and Objectives in Business Plan Well-chosen goals and objectives point a new business in the right direction and keep an established company on the right track. When establishing goals and objectives, try to involve everyone who will have the responsibility of achieving those goals and objectives after you lay them out. APPROACH #1: TIE GOALS TO YOUR MISSION APPROACH #2: USE GOAL-SETTING ACES APPROACH #3: COVER ALL THE BASES 20

21 APPROACH #1: TIE GOALS TO YOUR MISSION If your mission statement doesn t suggest a list of goals, you may want to reevaluate it to see whether it really captures what your business is all about. 21

22 APPROACH #2: USE GOAL-SETTING ACES Most goals define: positive outcomes to avoid pitfalls to eliminate To help develop goals that cover all the bases, use the acronym ACES as you tick through the following key questions: Achieve: What do you want to attain in the future? Conserve: What do you want to hang on to? Eliminate: What do you want to get rid of? Steer clear: What do you want to avoid? 22

23 APPROACH #3: COVER ALL THE BASES Day-to-day work goals are directed at increasing your company s everyday effectiveness. order tracking, office management, customer follow-up Problem-solving goals address specific challenges that confront your business. low employee morale, low quality of service issues Development goals encourage the acquisition of new skills and expertise. for employees, for yourself, freelancer or an independent contractor Innovation goals help you find new ways to improve the: products or services that the company offers, how you market your company, how you distribute and deliver what your company sells Profitability goals set your sights on where you want your bottom line to be 23

24 MAKE FINAL CHOICES To fine-tune each goal, it is good to follow these guidelines: Keep each goal clear and simple. Be specific. Be realistic. Don t be afraid to push yourself and think big. Make sure that your goals are in sync with your mission. 24

25 The Strategic Management Process Long-run perspective 5 or 10 years into the future Dynamic industries The system of corporate values The corporate culture All managerial process of change, such as leadership, planning, control, and human resources management 25

26 The Strategic Management Process Identify the business's fundamental values and the goals and objectives Assess the business's environment Assess the business' resources and capabilities Identify or form the organization's component's (internal units, organizational structure) Develop the management and decision-making structure Without knowledge of its values, an organization cannot develop a mission, goals, and objectives. 26

27 The Strategic Management Process BUSINESS'S ENVIRONMENT MANAGEMENT AND DECISION- MAKING STRUCTURE FUNDAMENTAL VALUES BUSINESS' RESOURCES AND CAPABILITIES ORGANIZATION'S COMPONENT'S 27

28 The Strategic Management Process Strategic management a "total" system perspective and not the process of choosing from among alternative long-range plans. An accelerating rate of change in technical, social, political, and economic forces. The management process has become more difficult, requiring greater skills in planning, analysis, and control. 28

29 Product-Market Evolution Matrix Competitive position of the company Determined by its internal and external factors 15 squares matrix was created by ch. W. Hofer Matrix is created on the basis of two criteria: The maturity of the sector, divided into 5 phases The competitive position of companies in the sector Circles: Represent different areas of activity in the company The size of the circle is proportional to size of the sector Sometimes segments could be added to the circle, which reflect the market share of company in the sector 29

30 Product-Market Evolution Matrix 30

31 Product-Market Evolution Matrix Products A dilemmas that have chance of success with appropriate marketing strategies and financial aid a developing winner relatively large share of the market combined with its being at the development stage of product-market evolution and its potential for being in a strong competitive position make it a good candidate for receiving more corporate resources Products B winners, require appropriate marketing strategies and financial aid if company has limited resources for advertising managers must make a choice between products A and B somewhat similar to A a strategy would have to be developed to overcome the low market share in order to justify more investments Products C potential losers, the weak position, the sector in the growth phase managers should make additional analyses to rule out the possibility of going through the shock phase need to overcome the low market share and weak competitive position in order to justify future investments Products D despite the current difficulties can become market leaders or profitable producers is in a shakeout period, has a relatively large share of the market, and is in a relatively strong position investment should be made to maintain that position Products E and F profitable, so it is possible to introduce other products in the phase of shock and generate considerable profits cash cows and should be used for cash generation Products G and H the losers are in the exit phase of the market, ahead of the full withdrawal managers should use strategies for "gathering the harvest" a dog should be managed to generate cash in the short run, if possible; however, the long-run strategy will more the likely be divestment or liquidation. 31

32 Operational Planning Day to day activities To support the strategic planning Short run objectives Middle-level management Operational plans should contain: clear objectives activities to be delivered quality standards desired outcomes staffing and resource requirements implementation timetables a process for monitoring progress 32

33 Operational Planning BASIS FOR COMPARISON STRATEGIC PLANNING OPERATIONAL PLANNING Meaning The planning for achieving the vision of the organization is Strategic Planning. Operational Planning is a process of deciding in advance of what is to be done to achieve the tactical objectives of business. Time Horizon Long term planning, years, decades Short term planning, up to year, day-to-day Approach Extroverted, external and internal environment Introverted, internal environment Modifications Generally, the plan lasts longer. The plan changes every year. Performed by Top level management Middle level management, junior Scope Emphasis on Wide, general manner Planning of vision, mission and objectives. Narrow, give fine details on how tasks shoul be carried out Planning the routine activities of the company. 33

34 Thank you. 34