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Strategic Planning

Strategic Planning. Strategy Development and Goal Setting Chapter 8 pages 204-216. Strategic Planning. Learning Objectives: Comprehend the differences among commonly-used business and corporate strategies Understand the value of goals as the “success measures” of the organization.

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Strategic Planning

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  1. Strategic Planning • Strategy Development and Goal Setting • Chapter 8 pages 204-216

  2. Strategic Planning • Learning Objectives: • Comprehend the differences among commonly-used business and corporate strategies • Understand the value of goals as the “success measures” of the organization

  3. Steps in the Strategic Planning Process 1. Review (set, clarify) organization’s mission & values 2. Evaluate external & internal environment 3. Select/confirm strategies for competitive advantage 4. Devise goals to achieve desired results (success measures)

  4. Strategy Definition • The major course of action an organization takes to achieve its mission and goals • An integrated set of choices which create sustainable competitive advantage

  5. Developing a Strategy • Answer the questions: • Who will be served? • What customer needs will be satisfied? • How will customer needs be satisfied?

  6. Developing a Strategy • Strategies are usually based on: • Unique strengths or competencies you already have or can develop • Identified customer needs or market segments not being well-served by current players • “Attractive” industry segments

  7. Major Business Strategies • Cost Leadership • Differentiation

  8. Cost Leaders • Value similar to competition • But at a lower cost • Gain competitive advantage by being ever vigilant about the cost of each activity the firm performs

  9. Differentiators • Offer greater perceived value to customers • Keep costs comparable to competitors • Requires high understanding of customer needs, and meeting them in a unique way

  10. Creating Value through Competitive Advantage

  11. Business Strategy Refinements • Apply sub-strategy based on which market segments you choose to serve

  12. Business Strategy Refinements • Different ways to segment a market: • price • need • customer type • geography

  13. Business Strategy Refinements

  14. Common Corporate Strategies • Stability • Growth • Retrenchment

  15. Common Corporate Strategies • Growth strategy • Horizontal integration • Vertical integration • Forward integration • Backward integration • Concentric diversification • Conglomerate diversification

  16. Steps in the Strategic Planning Process 1. Review (set, clarify) organization’s mission & values 2. Evaluate external & internal environment 3. Select/confirm strategies for competitive advantage 4. Devise goals to achieve desired results (success measures)

  17. Organizational Goals • What do you want to achieve? • Define success measures - what matters to you?

  18. Organizational Goals • Common Success Measures • Profitability • Stock price • Market share • Customer satisfaction • Employee well-being • Environmental sustainability • Community building

  19. What is a “good” goal? • Stated in terms of outcomes (vs. activity) • Measurable • Clear time frame • Challenging but attainable • Communicated • Documented

  20. Strategic Planning Process Summary 1. Set direction • mission, vision, values 2. Conduct a situation analysis • analyze internal and external environments 3. Develop strategies • competitive and growthstrategies 4. Devise goals to achieve desired results • your success measures

  21. The 8-Step Planning Process 1. Review (set, clarify) organization’s mission & values 2. Evaluate external & internal environment 3. Select/confirm strategies for competitive advantage 4. Devise goals to achieve desired results 5. Develop a operational plans 6. Allocate resources to accomplish the plans 7. Document and communicate 8. Review results, adjust, re-plan

  22. Friday • Operational Planning • Remaining steps in the planning process • Lab reports due • Might want to read ahead to Chapter 9: Planning Tools & Techniques

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