Chapter 4 VISION – where do we go as an

Goal Setting organization or unit?

- describes to where the company or
organization hopes they will be
going in the future if they can fulfill
their mission.
MISSION – what is our reason for
existence?
- defines the overall purpose of the
organization.
WHAT ARE SMART GOALS?
Example:
S specific
Questions to help determine if your goal
is specific:
1. Is the quality product or service
observable?
2. Can a client verify the result?
3. What would the result look like?

M measurable Planning and decision making are

hierarchical in organizations.
“If you want it, measure it. If you can’t
measure it, forget it.” Peter Drucker

A achievable
Question to be consider:
1. Can the goal be achieved with the
available resources and within the given
timeframe?
2. Are the activities in the goal within the
business control to complete?
3. Is the goal appropriate for the capacity
of the business.

R relevant
STRATEGIC PLANNING FORMULATION
Establish relevance to:
▪ Business context
▪ Customer needs  Competitive Advantage - refers to
▪ Organization’s goals factors that allow a company to
produce goods or services better or
T time-bound
more cheaply than its rivals. These
factors allow the productive entity
Examples: to generate more sales or superior
▪ 15 March 09 margins compared to its market
▪ Within six months rivals.
▪ End of the quarter
▪ End of financial period  SWOT Analysis (Scanning of
Internal and External
 Environment) - is a strategic
planning and strategic
management technique used to
help a person or organization
identify strengths, weaknesses,
opportunities, and threats related
to business competition or project
planning. It is sometimes called
situational assessment or
situational analysis.
 PESTEL Analysis by Michael
Porter - is an acronym for a tool
used to identify the macro
(external) forces facing an
organization. The letters stand for
Political, Economic, Social,
Technological, Environmental
and Legal. This analysis should be
repeated every six months to
identify any changes in the macro-
environment.
 Balance Scorecard - is a strategic
management performance metric
that helps companies identify and
improve their internal operations
to help their external outcomes. It
measures past performance data
and provides organizations with
feedback on how to make better
decisions in the future.
- Financial Performance
- Client Satisfaction
- Internal Processes
- Knowledge Management and
Innovation
Strategy Formulation
(VMOKRAPiSPaTRes) by Eduardo
Morato
BUSINESS MODEL
Business model is a conceptual tool
containing a set of objects, concepts and
their relationships with the objective to
express the business logic of a specific firm.
It is a description of the value a company
offers to one or several segments of
customers and of the architecture of the
firm and its network of partners for
creating, marketing and delivering this
value and relationship capital to generate
profitable and sustainable revenue
streams.
Source: Osterwalder et al. (2005)
Elements of the Business Model
BUSINESS PLAN
 A business plan seeks to outline –
in a formal manner – the overall
‘blueprint’ for the business, and to
communicate to third parties what
the entrepreneur is seeking to
achieve with the venture
(Ackelsberg and Arlow 1985).
 The business plan is popularly
acknowledged to be a key
component in the success or failure
of a commercial venture – whether
new or established. However, the
possession of a business plan is not
a guarantee of success and there is
mixed evidence that firms with
formal plans are any more
profitable than firms without
(Pearce et al. 1987).
  According to Timmons (1999), the Note:
business plan is largely obsolete
the moment it leaves the printer.
This is due to the rapid pace of
change that occurs within most
markets as well as the dynamic
nature of technological change-
VUCA World. (Volatility,
Uncertainty, Complexity,
Ambiguity)

 Formal business planning among

entrepreneurs is likely to reduce
failure rates even if it does not
significantly enhance profitability,
and may be dependent on the level
of strategic orientation of the
entrepreneur (Sexton and Van
Auken 1985).

TYPES OF BUSINESS PLAN

There are at least three common types

of business plans:
1. an application for finance;
2. a supply chain driven plan; and
3. a plan for internal use