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Strategic Management: Planning for Success

Learn about the importance of planning and strategy in achieving organizational goals, from identifying missions to implementing strategies effectively.

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Strategic Management: Planning for Success

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  1. Chapter 8 The Manager as a Planner and Strategist

  2. Planning and Strategy • Planning • Identifying and selecting appropriate goals and courses of action • Strategy • The cluster of decisions and actions that managers take to help reach those goals MGMT 321 – Chapter 8

  3. Three Steps in Planning MGMT 321 – Chapter 8

  4. The Planning Process • To perform the planning task, managers: • Establish where an organization is at the present time • Determine its desired future state • Decide how to move it forward to reach that future state MGMT 321 – Chapter 8

  5. Why Planning is Important • Gives a sense of direction and purpose • Encourages managers to participate in decision making • Helps coordinate managers of the different functions and divisions • Can be used to control managers • Provides unity and continuity MGMT 321 – Chapter 8

  6. Levels and Types of Planning MGMT 321 – Chapter 8

  7. Types of Plans • Standing Plans • Use in programmed decision situations • Single-Use Plans • Developed for a one-time, non-programmed issue • Scenario (Contingency) Planning • Generating multiple forecasts of future conditions followed by an analysis of how to effectively respond to those conditions MGMT 321 – Chapter 8

  8. Mission Statements An organization’s overriding purpose MGMT 321 – Chapter 8

  9. Determining the Organization’s Mission and Goals • Defining the Business • Who are our customers? • What customer needs are being satisfied? • How are we satisfying customer needs • Establishing Major Goals • Provides the organization with a sense of direction • Encourages higher levels of performance • Goals must be challenging but realistic with a definite period in which they are to be achieved MGMT 321 – Chapter 8

  10. Planning and Strategy Formulation MGMT 321 – Chapter 8

  11. The Five Forces MGMT 321 – Chapter 8

  12. The Five Forces • Hypercompetition • industries that are characterized by permanent, ongoing, intense, competition brought about by advancing technology or changing customer tastes and fads and fashions MGMT 321 – Chapter 8

  13. Business-Level Strategies • Low-Cost • Differentiation • “Stuck in the Middle” • Focused Low-Cost • Focused Differentiation MGMT 321 – Chapter 8

  14. Corporate-Level Strategies • Concentration in Single Business • Developing new kinds of products or expanding its locations • Appropriate when managers see the need to reduce the size to increase performance • Vertical integration • A company expands its business operations either: • Backward into a new industry that produces inputs or • Forward into a new industry that uses, distributes, or sells the company’s products MGMT 321 – Chapter 8

  15. Stages in a Vertical Value Chain MGMT 321 – Chapter 8

  16. Corporate-Level Strategies • Diversification • Expanding a company’s operations into a new industry • Related Diversification • Entering a new industry and establishing a new business division that is linked to a company’s existing divisions • Synergy • When the value created by two divisions cooperating is greater than the value created independently • Unrelated Diversification • Establishing divisions or buying companies in new industries not linked to a company’s existing divisions MGMT 321 – Chapter 8

  17. Corporate-Level Strategies • International Expansion • To what extent do we customize products and marketing for different national conditions? • Global strategy • Undertaking very little customization to suit the specific needs of customers in different countries. • Multi-domestic strategy • Customizing products and marketing strategies to specific national conditions MGMT 321 – Chapter 8

  18. International Expansion • Exporting • Importing • Strategic alliance • Joint venture • Licensing • Franchising • Wholly owned subsidiary MGMT 321 – Chapter 8

  19. Functional-Level Strategies • A plan that indicates how a function intends to achieve its goals • Seeks to have each department add value to a good or service • Value of a good or service is added through: • Lowering the costs of providing the products • Adding new value by differentiating • Must fit with business level strategies MGMT 321 – Chapter 8

  20. Planning and Implementing Strategy • Allocate implementation responsibility to the appropriate individuals or groups • Draft detailed action plans for implementation • Establish a timetable for implementation • Allocate appropriate resources • Hold specific groups or individuals responsible for the attainment of goals MGMT 321 – Chapter 8

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