Post on 14-Apr-2018
transcript
7/27/2019 Med_Chapter_04.ppt
1/41
4-1
7/27/2019 Med_Chapter_04.ppt
2/41
Ch
apte
r
Ch
apte
r
Planning and Strategic Management
4
McGraw-Hill/Irwin
Management, 7/e Copyright 2007 The McGraw-Hill Companies, Inc. All rights reserved.
7/27/2019 Med_Chapter_04.ppt
3/41
4-3
Learning Objectives
After studying Chapter 4, you will know:
How to proceed through the basic steps in any planningprocess
How strategic planning integrates with tactical andoperational planning
Why I is important to analyze both the externalenvironment and the internal resources of the firm beforeformulation a strategy
The choices available for corporate strategy
How companies can achieve competitive advantage
through business strategy How core competencies provide the foundation for
business strategy
The keys to effective strategy implementation
7/27/2019 Med_Chapter_04.ppt
4/41
4-4
Overview of Planning Fundamentals
Planningis the conscious, systematic process ofmaking decisions about goals and activities that anindividual, group, work unit, or organization willpursue in the future
Planningis a purposeful effort that is directed andcontrolled by managers and often draws on theknowledge and experience of employees throughoutthe organization
Planningprovides individuals and work units with aclear map to follow in their future activities
7/27/2019 Med_Chapter_04.ppt
5/41
4-5
The Basic Planning Process
Planning is a decision process (youre
deciding what to do and how to go aboutdoing it)
Steps in the planning process are is similar tothe decision making process
Planning is a cyclical process because plans
are evaluated and revised if necessary
7/27/2019 Med_Chapter_04.ppt
6/41
4-6
Comparing Decision Making and Planning
4 7
7/27/2019 Med_Chapter_04.ppt
7/41
4-7
The Basic Planning Process
The basic planning process includes the
following
Situational Analysis
Alternative Goals and Plans Goal and Plan Evaluation
Goal and Plan Selection
Implementation
Monitor and Control
4 8
7/27/2019 Med_Chapter_04.ppt
8/41
4-8
Levels of Planning
Strategic Planning
Tactical Planning
Operational Planning
4 9
7/27/2019 Med_Chapter_04.ppt
9/41
4-9
Levels of Planning
4 10
7/27/2019 Med_Chapter_04.ppt
10/41
4-10
Strategic Planning: Defined
A set of procedures for making decisionsabout the organizations long-term goals andstrategies
Strategic goals are major targets or endresults relating to the organizations long-term survival, value, and growth
Strategy is a pattern of actions and resourceallocations designed to achieve the
organizations goals
4 11
7/27/2019 Med_Chapter_04.ppt
11/41
4-11
Strategic Planning
How does one of the
worlds most respected
news sources, The New
York Times, continue to
succeed after a year(2004) of journalistic
scandal, a quick-as
lightening and dynamic
media world, and
weak earnings?
4-12
7/27/2019 Med_Chapter_04.ppt
12/41
4-12
Tactical and Operational Planning
Tactical Plans are a set of procedures for
translating broad strategic goals and plansinto specific goals and plans that are relevant
to a distinct portion of the organization, suchas a functional area like marketing
Operational Planning is the process of
identifying the specific procedures and
processes required at lower levels of theorganization.
4-13
7/27/2019 Med_Chapter_04.ppt
13/41
4 13
Aligning Tactical, Operational, and
Strategic Planning
To be fully effective, the organizations
strategic, tactical, and operational goals andplans must be aligned
Consistent Mutually supportive
Focused on achieving the common purpose
and direction
4-14
7/27/2019 Med_Chapter_04.ppt
14/41
4 14
Strategic Map
4-15
7/27/2019 Med_Chapter_04.ppt
15/41
Strategic Planning
Historically strategic planning emphasized a
top-down approachsenior executives andspecialized planning units developed goals
and plans for the entire organization
Today senior executives increasingly are
involving managers throughout the
organization in the strategy formation
process
4-16
7/27/2019 Med_Chapter_04.ppt
16/41
Strategic Planning
Strategic management is the new term that
has emerged for the strategic planningprocess
Strategic Management is a process thatinvolves managers from all parts of the
organization in the formulation and
implementation of strategic goals and
strategies
4-17
7/27/2019 Med_Chapter_04.ppt
17/41
Strategic Management Process
4-18
7/27/2019 Med_Chapter_04.ppt
18/41
Strategic Management: Step 1
Establishment of mission, vision, and goals
Mission is an organizations basic purpose and
scope of operations
Strategic vision is the long-term direction andstrategic intent of a company
Strategic goals evolve from the mission and
vision of the organization
4-19
7/27/2019 Med_Chapter_04.ppt
19/41
Strategic Management: Step 2
Analysis of External Opportunities andThreats
Successful strategic management depends on
an accurate and thorough evaluation of the
environment
Begins with an examination of the industry
Stakeholders are examined next
Managers should also examine other forces inthe environment, such as macroeconomic
conditions and technological factors
One critical task is forecasting future trends
4-20
7/27/2019 Med_Chapter_04.ppt
20/41
Analysis of External Opportunities and
Threats
4-21
7/27/2019 Med_Chapter_04.ppt
21/41
Strategic Management: Step 3
Analysis of Internal Strengths and Weaknesses
This kind of internal analysis provides strategic
decision makers with an inventory of the
organizations existing functions, skills, and
resources as well as its overall performance level
This step will also include looking at the firms
resources and core competencies
A final area may include benchmarking with other
firms
4-22
7/27/2019 Med_Chapter_04.ppt
22/41
Analysis of Strengths and Weaknesses
4-23
7/27/2019 Med_Chapter_04.ppt
23/41
Strategic Management: Step 3
4-24
7/27/2019 Med_Chapter_04.ppt
24/41
Strategic Management: Step 4
SWOT Analysis and Strategy Formulation
By completing steps 2 and 3 managers will be
able to analyze the companies strengths,
weaknesses, opportunities and threats (SWOT) Once the SWOT has been completed
management will be able to begin to formulate
a strategy
4-25
7/27/2019 Med_Chapter_04.ppt
25/41
Corporate Strategy
Corporate Strategy The set of businesses, markets, orindustries in which an organization competes and thedistribution of resources among those entities
Concentration A strategy employed for an organizationthat operates a single business and competes in a
single industry Concentric Diversification A strategy used to add new
businesses that produce related products or areinvolved in related markets and activities
Vertical Integration The acquisition or development ofnew businesses that produce parts or components ofthe organizations product
4-26
7/27/2019 Med_Chapter_04.ppt
26/41
Summary of Corporate Strategies
4-27
7/27/2019 Med_Chapter_04.ppt
27/41
Boston Consulting Group
4-28
7/27/2019 Med_Chapter_04.ppt
28/41
Business Strategy
Business Strategy is the major actions by which abusiness competes in a particular industry or market.
Low-Cost Strategy is a strategy that an organizationuses to build competitive advantage by being efficientand offering a standard, no frills product.
Differentiation Strategy is a strategy that anorganization uses to build competitive advantage bybeing unique in its industry or market segment alongone or more dimensions.
Functional Strategies are strategies implemented byeach functional area of the organization to support theorganizations business strategy.
4-29
St t i M t St 5
7/27/2019 Med_Chapter_04.ppt
29/41
Strategic Management: Step 5
Implementation
There are two major trends related toimplementation
Organizations are adopting a more comprehensiveview of implementation
Managers at all levels of the organization are beinginvolved with the implementation process
Implementation generally involves four relatedsteps
Define strategic tasks
Assess organization capabilities Develop an implementation agenda
Create an implementation plan
4-30
7/27/2019 Med_Chapter_04.ppt
30/41
Barriers to Implementation
4-31
7/27/2019 Med_Chapter_04.ppt
31/41
Strategic Management: Step 6
Strategic Control
A system designed to support managers in
evaluating the organizations progress regarding its
strategy and, when discrepancies exist, taking
corrective action
The organization must develop performance
indicators, an information system, and specific
mechanisms to monitor progress
Normally includes a budget
4-32
7/27/2019 Med_Chapter_04.ppt
32/41
Looking Ahead
Chapter 5 Ethics and Corporate Responsibility How different ethical perspective s guide decision
making
How companies influence the ethics environment
A process for making ethical decisionsThe important issues surrounding corporate social
responsibility
The importance to business of our natural
environment Action managers can take to manage with the
environment in mind
4-33
7/27/2019 Med_Chapter_04.ppt
33/41
Situational Analysis
Aprocess planners use, within time andresource constraints, to gather, interpret, andsummarize all information relevant to the
planning issue under consideration
Return
4-34
7/27/2019 Med_Chapter_04.ppt
34/41
Alternative Goals and Plans
Based on the situational analysis, theplanning process should generate alternativegoals that may be pursued in the future and
the alternative plans that may be used to
achieve those goals
Goals are a target or end that management
desires to reach
Plans are the actions or means managersintend to use to achieve organizational goals
Return
4-35
7/27/2019 Med_Chapter_04.ppt
35/41
Goal and Plan Evaluation
This step is made up oftwo activities
Managers will evaluatethe advantages,disadvantages, and
potential effects of eachalternative goal andplan.
They will prioritize thosegoals and even eliminate
some of them fromconsideration.
Return
4-36
7/27/2019 Med_Chapter_04.ppt
36/41
Goal and Plan Selection
Managers will select the goal and plan that is mostappropriate and feasible once they have assessed all of
the various goals and plans
Some organizations will generate planning scenarios to
aid in the evaluation and selection process Scenarioa narrative that describes a particular set of
future conditions
This approach helps the firm avoid crises and allows
greater flexibility and responsiveness
Return
4-37
7/27/2019 Med_Chapter_04.ppt
37/41
Implementation
Managers and employees must: Understand the plan
Have the resources necessary to implementthe plan
Be motivated to implement the plan
The implementation phase probably will bemore effective and efficient If both managersand employees have participated in theplanning process
Return
4-38
7/27/2019 Med_Chapter_04.ppt
38/41
Monitor and Control
This step is essential in a formal planningprocess
Managers will need to develop control
systems that measure thee plans
performance
Managers should take corrective action when
the plans implemented improperly or when
the situation changes
Return
4-39
7/27/2019 Med_Chapter_04.ppt
39/41
Stakeholders
Groups and individuals who affect and areaffected by the achievement of the
organizations mission, goals, and strategies.
Return
4-40
7/27/2019 Med_Chapter_04.ppt
40/41
Resources and Core Competencies
Resources are inputs to a system that can enhanceperformance
Tangible assets such as real estate, production facilities,raw materials and so on
Intangible assets such as company reputation, culture,
technical knowledge, patents, and accumulated learningand experience
Resources can create a competitive advantage if:
They are instrumental for creating customer value
They are rare and not equally available to allcompetitors
They are difficult to imitate
Finally they must be well organizedReturn
4-41
C C i
7/27/2019 Med_Chapter_04.ppt
41/41
Core Competencies
Core competencies are the unique skillsand/or knowledge an organization possessesthat give it an edge over competitors.
Generally it refers to a set of skills or
expertise in some activity, rather than
physical or financial assets.
Return