Strategic Planning Process. Nature of Strategic Planning. Strategic Planning Video 6A Learning Objectives. Learning Goals

Transcription

1 Learning Goals Strategic Planning Video 6A Learning Objectives Assess the nature of strategic planning Describe the steps in the strategic planning process Discuss how SWOT analysis helps lead to strategy formulation. Review factors involved in implementing a strategy Nature of Strategic Planning Strategic Planning Determines the scope of the organization What is the organization s position in the market? What position do we wish to seek? Identifies core competencies Creates a competitive advantage Involves creating strategies Examples: Market Development, Market Penetration, Backward Integration etc. Step #1 Create or Evaluate the Mission/Vision Statement Step #2 Perform SWOT analysis Step #3 Reassess the Mission/Vision/Goals Step #4 Corporate, Business, Functional Step #5 Implement Strategies Step #6 Monitor & Evaluate 1

2 Step #1 Create or Evaluate the Mission/Vision Statement First step for a new enterprise or one considering a total redefinition. Review previous video clips on writing effective mission statements Step #2 Perform SWOT Analysis An analysis of the Strengths, Weaknesses, Opportunities, Threats Internal Strength & Weaknesses Controllable activities within an organization that are performed especially well or poor Management structure & philosophies Marketing Distribution channels Market share Level of customer satisfaction Production factors Efficiency Quality control Human Resource Factors Quality of employees Turnover rate Step #2 Continued Perform SWOT Analysis External Threats & Opportunities Less controllable activities which management must evaluate New competitors Substitute products Ex: MP3 filing sharing New market places Actions of suppliers New technology Changes in economy, political, legal trends Changing customer values Prefer remote-controlled T.V. rather than standard T.V. 2

3 Step #3 Reassess Mission/Vision/Goals Questions to answer: Possible to go forward? Should we alter our goals? Are there to many risks? Do the opportunities outweigh the threat of failure? Step #4 SO strategies Use firm s internal strength to take advantage of external opportunities. Opportunity #1 US/Mexico Free Trade Agreement Strength #1 Profit Margins increased 6.94% Strength #2 Market share has increased to 24% SO strategy=use financial resources to build a manufacturing plant in Mexico to expand operations. ST strategies Use a firm s strengths to avoid or reduce the impact of external threats Strength #1 Current ratio increased to 2.52 Threat #1 ConAgra s Banquet TV dinners lead market with 27.4% share ST strategies Develop new microwave TV dinners 3

4 WO strategies Aim at improving internal weaknesses by taking advantage of external opportunities Opportunity #1 Demand for soup increasing 10% annually in Europe Opportunity #2 Western European unification Weakness #1 Lack of a strategic-management system WO strategy Form a joint venture to distribute soup in Europe Make use of the synergistic effect WT strategies Defensive tactics directed at reducing internal weaknesses and avoiding environmental threats Threat #1 Food revenues increasing only 1% annually Weakness #1 Dealer incentives have not been effective WT strategy Diversify into non-soup foods. Companies pursuing WT strategies are fighting to survive, might declare bankruptcy, or choose liquidation Step #5 Implementing Strategies Requires Making the plans clear Provide training, support groups Hold people accountable for putting plans into motion Set deadlines Disperse funds, human resources to execute plans Allocate the planned expenses into the budget Provide positive leadership Observe rather than enforce Reward groups for executing plans Creative incentive systems which are fair Revise structure of organization if necessary Move toward a team environment Create a flatter organization 4

5 Step #6 Monitor & Evaluate Set pre-determined monitoring points Create/Utilize the Institutional Research and Statistics Department Correct Deviations 5