Strategies, Policies and Strategy Planning Premises

Game plan

Levels of Strategy

Corporate Strategy

Business Strategies

Functional Strategies

Levels of Strategy-Making

Levels of Strategy
1.

Corporate-level Strategy
The set of strategic alternatives that an organization chooses from as it manages its operations simultaneously across several industries and several markets.

2. Business-level Strategy
How the organization conducts business in a particular industry.
3.

Functional-level Strategy
Strategy developed for specific functional areas such as marketing, finance, and so forth.
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What is Strategic Planning?

Strategic planning is a systematic process through which an organization agrees on and builds commitment among key stakeholders to priorities that are essential to its mission and are responsive to the environment. Strategic Planning guides the acquisition and allocation of resources to achieve these priorities.
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Strategic Planning vs. Operational Planning

Strategic Planning
formulation What, where ends vision effectiveness risk

Operational Planning
implementation how means plans efficiency control

Three Big Strategic Questions

Where Are We Now?

Where Do we Want to Go? How Will We Get There?
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Strategic Planning Process

Developing a Vision and a Mission Assessment Setting Objectives Crafting a Strategy Implementing and Executing Strategy Evaluating Performance, Reviewing the Situation and Initiating Corrective Action

Strategic Planning

First Stage of Strategic Planning may involve: Futures Thinking

Thinking about what the business might need to do 1020 years ahead

Strategic Intents
Thinking about key strategic themes that will inform decision making

Strategic Planning

The Vision
Communicating to all staff where the organisation is going and where it intends to be in the future

Aims and Objectives:

Aims long term target Objectives the way in which you are going to achieve the aim
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Strategic Analysis

Constantly evaluate their position

Strategic analysis includes different methods of assessing the current position of the business in the market place Two basic methods:
Internal External
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Internal Audits

Productivity Efficiency Costs Other Internal Data Labour turnover, absenteeism Customer satisfaction surveys Quality procedures Cash flow statements Sales trends Skills audit Strengths and weaknesses analysis Core competencies
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External Audits

General business environment Inflation, competitiveness, unemployment/employment, growth, consumer spending Competitors

PEST factors Political e.g. change of government Economic Trends in economic growth, inflation, etc. Social-changed outlook, age structure of population, etc. Technological
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Vision & Mission

An organizations fundamental purpose

SWOT Analysis
To formulate strategies that support the mission

Strengths Weaknesses Opportunities Threats

Internal Analysis Strengths (distinctive competencies) Weaknesses

External Analysis Opportunities

Threats

SWOT Analysis

Good Strategies
Those that support the mission and: exploit opportunities and strengths neutralize threats avoid weaknesses

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Strengths
Strengths Those things that you do well, the

high value or performance points

Strengths can be tangible: Loyal customers, efficient distribution channels, very high quality products, excellent financial condition
Strengths can be intangible: Good leadership, strategic insights, customer intelligence, solid reputation, high skilled workforce
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Weaknesses
Weaknesses Those things that prevent you from

doing what you really need to do

Since

weaknesses are internal, they are within your control

Weaknesses include: Bad leadership, unskilled workforce, insufficient resources, poor product quality, slow distribution and delivery channels, outdated technologies, lack of planning, . . .
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Opportunities
Opportunities Potential areas for growth and

higher performance
External

in nature marketplace, unhappy customers with competitors, better economic conditions, more open trading policies, . . may be important for capitalizing on opportunities
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Timing

Threats
Threats Challenges confronting the

organization, external in nature

Threats can take a wide range bad press coverage, shifts in consumer behavior, substitute products, new regulations, . . . more accurate you are in identifying threats, the better position you are for dealing with the sudden ripples of change
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The

Gap Analysis
Vision Assessment

Gap = Basis for LongTerm Strategic Plan

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Setting Objectives

The purpose is to convert the mission into Specific Performance Targets Yardsticks for tracking company progress and performance.

Should be set at levels that require stretch and disciplined effort.

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Crafting a Strategy

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Strategy Implementation
Technology Human

Resource Reward System Decision Process

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Characteristic of the Good Strategy Implementation

An ongoing exercise Proper Communication Contingency Plan Emphasis on Organisation Culture Regular Review Importance of Planning

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DECISION-MAKING

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What is Decision-Making?
Decision making
The process of choosing a course of

action for dealing with a problem or opportunity.

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Types of Decisions
Programmed decisions.
Involve routine problems that arise regularly

and can be addressed through standard responses.

Nonprogrammed decisions.
Involve nonroutine problems that require

solutions specifically tailored to the situation at hand

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Decision environments
Certain environments. Risk environments. Uncertain environments.
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Certain environments.
Exist when information is sufficient to

predict the results of each alternative in advance of implementation.

Certainty is the ideal problem solving and

decision making environment.

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Risk environments
Exist when decision makers lack complete

certainty regarding the outcomes of various courses of action, but they can assign probabilities of occurrence.
Probabilities can be assigned through

objective statistical procedures or personal intuition.

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Uncertain environments.
Exist when managers have so little information

that they cannot even assign probabilities .

Uncertainty forces decision makers to rely on

individual and group creativity to succeed in problem solving.

Also characterized by rapidly changing: External conditions. Information technology requirements.

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Range of decision making

Too Slow Too Quick

Procrastination Indecision
Analysis paralysis

Ready, fire, aim Impulsive, compulsive

Arbitrary

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