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Chapter 3 - Planning & Strategic Management PDF
Chapter 3 - Planning & Strategic Management PDF
Strategic
Management
Chapter Four
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Learning Objectives
LO1 Summarize the basic steps in any planning
process.
LO2 Describe how strategic planning should be
integrated with tactical and operational
planning.
LO3 Identify elements of the external environment
and internal resources of the firm to analyze
before formulating a strategy.
LO4 Define core capabilities and explain why they
provide the foundation for business strategy.
4-2
Learning Objectives (cont.)
LO5 Summarize the types and choices available for
corporate strategy.
LO6 Discuss how companies can achieve competitive
advantage through business strategy.
LO7 Describe the keys to effective strategy
implementation.
4-3
Decision Making Stages and
Formal Planning Steps
Figure 4.1
4-4
Planning
Planning
conscious, systematic process of making
decisions about goals and activities that an
individual, group, work unit, or organization will
pursue in the future.
a purposeful effort that is directed and controlled
by managers and often draws on the knowledge
and experience of employees throughout the
organization.
4-5
The Basic Planning Process
4-6
Planning Processes Examples
MH - An Airline of Excellence
Step 1 Situational Analysis
Analyse biz environment and internally
MH has to analyse global economic conditions and the
impact of 2 major plane incidents in 2014
Step 2 Alternative Goals and Plans - to regain customer’s
confidence and profit
Option 1: MH has to restructure – layoff and removed
unprofitable routes
Option 2: Cooperation with AirAsia
Step 3 Goal and Plan Evaluation
MH needs to check the advantages, disadvantages and
impacts for options above
4-7
© 2014 by McGraw-Hill Education. 4-7
Planning Processes Examples
Situational analysis
A process planners use, within time and resource
constraints, to gather, interpret, and summarize
all information relevant to the planning issue
under consideration.
4-9
Alternative Goals and Plans
4-10
Question
4-11
Alternative Goals and Plans
4-13
Goal and Plan Selection
4-14
Implementation
4-15
Monitor and Control
Managers must continually monitor the actual
performance of their work units against the
unit’s goals and plans.
Manager’s also need to develop control systems
to measure that performance and allow them to
take corrective action when the plans are
implemented improperly or when the situation
changes
4-16
Strategic Planning
4-17
Strategic Planning
Strategy
A pattern of actions
and resource
allocations designed
to achieve the
organization’s goals
4-18
Strategic Planning
4-19
Hierarchy of Goals and Plans
Figure 4.2
4-20
Tactical and Operational Planning
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, such as a functional area like
marketing.
E.g. To identify a location – Phnom Penh
E.g. To identify target customers
E.g. To identify advertising and promotion
method
4-21
Tactical and Operational Planning
Operational planning
The process of identifying the specific
procedures and processes required at lower
levels of the organization.
E.g. Promotional period – 30% discount
E.g. After 8.30pm – 50% discount
E.g. Rating of customer service
4-22
The Strategy Map
Figure 4.3
4-23
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.
4-24
The Strategic Management Process
Figure 4.4
4-25
Question
4-26
Establishment of Mission, Vision,
and Goals
Mission
An organization’s
basic purpose and
scope of operations.
McDonalds - Our
mission is to be our
customers' favorite
place and way to eat
and drink.
4-27
Establishment of Mission,
Vision, and Goals
Strategic vision
the long-term direction and strategic intent of a
company
provides a perspective on where the organization
is headed and what it can become
OldTown White Coffee - To be Asia Pacific’s
leading white coffee brand, providing high
quality products to customers globally.
4-28
Analysis of External Opportunities
and Threats
Stakeholders
Groups and
individuals who
affect and are
affected by the
achievement of the
organization’s
mission, goals, and
strategies
4-29
Analysis of Internal Strengths
and Weaknesses
Resources
Inputs to a system that can enhance
performance
Tangible, intangible assets
4-30
Internal Resource Analysis
Table 4.2
4-31
Resources and Core Competencies
-Compete through resources
Figure 4.5
Organized
processes/
procedures
Benefits
to
customers
4-32
Analysis of Internal Strengths and
Weaknesses
Benchmarking
process of assessing how well one company’s
basic functions and skills compare with those of
another company or set of companies.
goal of benchmarking is to thoroughly
understand the “best practices” of other firms
and to undertake actions to achieve both better
performance and lower costs
4-33
SWOT Analysis and Strategy
Formulation
SWOT analysis
A comparison of strengths, weaknesses,
opportunities, and threats that helps executives
formulate strategy.
Internal - strengths, weaknesses
External -opportunities, threats
4-34
SWOT Analysis and Strategy
Formulation
Corporate strategy
The set of businesses, markets, or industries in
which an organization competes and the
distribution of resources among those entities
AirAsia’s focus is on Asia Pacific region’s budget
travelers
Concentration
A strategy employed for an organization that
operates a single business and competes in a
single industry.
4-35
SWOT Analysis and Strategy
Formulation
Vertical integration
The acquisition or development of new businesses
that produce parts or components of the
organization’s product
Alibaba acquired complementary companies in
different areas such as delivery & payments (alipay)
Concentric diversification
A strategy used to add new businesses that produce
related products or are involved in related markets
and activities.
AirAsia’s sister company i.e. Tune Hotel Chains
4-36
Summary of Corporate Strategies
Figure 4.7
4-37
BCG Matrix- (Boston Consulting Group analysis portfolio diagram) is a chart
that was created by Bruce D. Henderson for the Boston Consulting Group in
1970 to help corporations to analyze their business units, that is, their
product lines
Figure 4.8
4-38
BCG Matrix
4-39 39
© 2014 by McGraw-Hill Education.
Name some examples of companies
here
4-40 40
© 2014 by McGraw-Hill Education.
SWOT Analysis and
Strategy Formulation
Low-cost strategy Differentiation
A strategy an strategy
organization uses to A strategy an
build competitive organization uses to
advantage by being build competitive
efficient and offering advantage by being
a standard, no-frills unique in its industry
product or market segment
along one or more
dimensions.
4-41
Strategy Implementation
4-42
Strategic Control
4-43