Professional Documents
Culture Documents
Strategic Planning in a
Global Environment
Pamela S. Lewis
Stephen H. Goodman
Patricia M. Fandt
Copyright 2004 by South-Western, a division of Thomson Learning.
All rights reserved.
Slides Prepared by
Zulema Seguel
Learning Objectives
slide 1 of 2
39
Learning Objectives
Slide 2 of 2
39
39
Competitive Advantage
Central to the concept of strategic
planning is the notion
of competitive
advantage.
Competitive advantage
can only be sustained if an organization
continues to out-innovate competitors.
39
slide 1 of 2
Economic
Organizations that plan strategically
outperform those that do not.
Behavioral
Identification of organizational and
environmental conditions that may create
problems in the long run.
Better decisions as a result of the group
decision-making process.
Copyright 2004 by South-Western, a division of Thomson Learning. All rights reserved.
39
slide 2 of 2
Behavioral (cont.)
More successful implementation of
organizational strategy because
organizational members who participated in
the planning process understand the plan and
are more willing to change.
39
Strategic
Analysis
Strategy
Formulation
Strategy
Implementation
Strategic
Control
How
How
What
will
canisthe
the
theorganization
organization
current position
know
get where
ofwhen
the itit
Feedback
Where does the organization
want to be?
organization?
has
wants
arrived?
to be?
39
39
Assessing the
Mission of an Organization
The mission of an organization reflects its
fundamental reasons for existence.
Though mission statements vary greatly,
every mission statement should describe
three primary aspects of an organization:
The organizations primary products or
services.
The organizations primary target markets.
The organizations overall strategy for
ensuring long-term success.
Copyright 2004 by South-Western, a division of Thomson Learning. All rights reserved.
10 39
Internal Analysis
Purpose is to identify assets, resources, skills,
and processes that represent either strengths or
weaknesses for the organization.
Strengths
Aspects of the organizations operations
that represent potential competitive
advantages or distinctive competencies.
Weaknesses
Areas that are in need of improvement.
11 39
External Analysis
Purpose is to identify those aspects of the
environment that represent either an opportunity
or a threat for the organization.
Opportunities:
Those environmental trends on which the
organization can capitalize and improve its
competitive position.
Threats
Conditions that jeopardize the
organizations ability to prosper in the
long term.
Copyright 2004 by South-Western, a division of Thomson Learning. All rights reserved.
12 39
SWOT Analysis
The combined internal and external analysis
is referred to as a SWOT analysis.
Strengths
Weaknesses
Opportunities
Threats
13 39
Image
Research &
Development
Customer
Service
Brand Equity
Leadership
Marketing
Productivity
Training &
Development
Sales Force
Culture
Information
Technology
Distribution
Channels
Finance
Liquidity
Human
Resources
14 39
Task Environment
Includes environmental forces that are within
the organizations operating environment and
may be influenced to some degree.
15 39
External
Analysis
Factors
16 39
General Environment
Economic factors
Technological factors
Socio-cultural factors
Political-legal factors
17 39
Task Environment
Competition
Customer Profiles
Resource Availability
18 39
Strategic
Analysis
Strategy
Formulation
Strategy
Implementation
Strategic
Control
Feedback
19 39
Strategy Formulation
Answers the question, Where does the
organization want to be?
The steps in strategy formulation include:
Casting the vision for the organization.
Setting strategic goals.
Identifying strategic alternatives.
Evaluating and choosing strategies that
provide a competitive advantage and
optimize the performance of the organization
in the long term.
Copyright 2004 by South-Western, a division of Thomson Learning. All rights reserved.
20 39
21 39
22 39
23 39
Grand Strategy
Grand strategies fall into three broad
categories:
Stability strategies: intended to ensure
continuity in the operations and performance
of the organization.
Growth strategies: designed to increase the
sales and profits of the organization.
Retrenchment strategies: designed to reverse
negative sales and profitability trends.
24 39
Generic Strategy
The primary way an organization
competes in its markets.
Cost leadership: designed to compete on the
basis of price.
Differentiation: designed to compete by
offering products or services that are
differentiated from those of competitors in
some way.
Focus: designed to avoid competing in broad
markets by targeting a narrow market
segment.
Copyright 2004 by South-Western, a division of Thomson Learning. All rights reserved.
25 39
Decision Matrices
A decision matrix provides a method for
evaluating alternative strategies according to
the criteria that the organizations leaders
consider more important.
26 39
Strategic
Analysis
Strategy
Formulation
Strategy
Implementation
Strategic
Control
Feedback
27 39
Strategy Implementation
Answers the question, How can the
organization get to where it wants to be?
Functional strategy must be developed.
The organizations system must be
designed to ensure that strategies can be
institutionalized.
28 39
29 39
Institutionalizing Strategy
Institutionalizing a strategy means that every
member, work group, department, and
division of the organization subscribes to
and supports the organizations strategy with
its plans and actions.
There must be a fit between strategy and:
Organizational structure
Organizational culture
Organizational leadership
Copyright 2004 by South-Western, a division of Thomson Learning. All rights reserved.
30 39
Organizational Structure
Most commonly associated with the
organizational chart.
Defines the primary reporting
relationships that exist within an
organization.
The structure of an organization
establishes its chain of command and its
hierarchy of responsibility, authority and
accountability.
Copyright 2004 by South-Western, a division of Thomson Learning. All rights reserved.
31 39
Organizational Culture
Refers to the shared, emotionally charged
beliefs, values, and norms that bind
people together.
Helps people make sense of the systems
within an organization.
Culture guides the behavior of and gives
meaning to the members of the
organization.
32 39
Organizational Leadership
If an organization is to implement its strategy
effectively, it must have the appropriate
leadership.
Without effective leadership, it is unlikely
that the organization will realize the benefits
of its selected strategy.
33 39
Strategic
Analysis
Strategy
Formulation
Strategy
Implementation
Strategic
Control
Feedback
34 39
Strategic Control
slide 1 of 2
35 39
Strategic Control
Slide 2 of 2
Feedforward Controls
Designed to identify changes in the external
environment or the internal operations of the
organization that may affect its ability to
fulfill its mission and meet its strategic goals.
Feedback Controls
Compare the actual performance of the
organization to its planned performance.
36 39
Information Technology
and Strategic Planning
The increasing availability of information
technology has had a tremendous impact
on the ability of organizations to develop
effective strategic plans.
However, many organizations fail to use
the information made available by
management information systems to
ensure effective strategic planning.
37 39
Implications for
Leaders: Strategic Planning
slide 1 of 2
38 39
Implications for
Leaders: Strategic Planning
Slide 2 of 2
39 39