“

PLANNING
AND

”
STRATEGIC PLANNING
 “
Planning

The process of setting objectives and determining how to accomplish them

Objectives and goals

”
Identify the specific results or desired outcomes that one intends to achieve

Plan
A statement of action steps to be taken in order to accomplish the
objectives
“
Steps in the planning process:

✔Define your objectives

✔ Determine where you stand vis-à-vis objectives
✔ Develop premises regarding future conditions
✔ Analyze alternatives and make a plan
”
✔ Implement the plan and evaluate results
“ PLANNING IS THE PROCESS OF

”
“PLANNING IS THE PROCESS OF
• Setting objectives
• Determining what should be done to accomplish them
• Implementing the plan
• Evaluating the results of the plan
”
“STAGES INVOLVED IN THE PLANNING
PROCESS

• Analyze the external environment

• Analyze the internal environment
• Define the business and mission
• Set corporate objectives
”
• Formulate strategies
• Make tactical plans
• Build in procedures for monitoring and controlling
 THE PLANNING PROCESS
“ (ADAPTED FROM FIGURE 7.3)

Task 2:
Diagnose
opportunities
and threats
Task 1:
Task 4: Task 5:

”
Develop vision,
Develop Prepare strategic
mission
strategies plan
and Goals
Task 3:
Diagnose
strengths
and weakness

Task 8: Task 7: Task 6:

Continue Control and Prepare tactical
planning diagnose results Copyright © 2005 by South-
plans
Western, a division of Thomson
7
Learning
All rights reserved
“ PLANNING HELPS MANAGEMENT

ANSWER THE FOLLOWING QUESTIONS:

⮚Where are we now?
⮚How did we get here?
⮚Where would we like to be?
⮚How do we get there?
”
⮚Are we on course to achieve our targets?
“STAGES INVOLVED IN THE PLANNING
PROCESS
⮚ Analyze the external environment
⮚ Analyze the internal environment
⮚
⮚
Define the business and mission
Set corporate objectives
”
⮚ Formulate strategies
⮚ Make tactical plans
⮚ Build in procedures for monitoring and controlling
 PLANNING TAKES PLACE AT
“
DIFFERENT LEVELS OF A BUSINESS – THE
MAIN LEVELS BEING:

”
• Strategic plan
• Tactical plan
• Operational plan
“

”
 “ STRATEGIC PLANS

• Strategic plans are designed with the entire organization in mind

and begin with an organization's mission.

”
• To develop long-term strategies for achieving growth, improving
productivity and profitability, boosting return on investments,
improving customer service and finding ways to give back to the
community in which it operates.
• Strategic plans also tend to require multilevel involvement so that
each level of the organization plays a significant role in achieving
the goals being strategically planned for.
 “ TACTICAL PLANS
• Tactical plans support strategic plans by translating them into
specific plans relevant to a distinct area of the organization.
Tactical plans are concerned with the responsibility and

”
functionality of lower-level departments to fulfill their parts of
the strategic plan.
EXAMPLE: As a tactical planner, Martha needs to create a set of
calculated actions that take a shorter amount of time and are
narrower in scope than the strategic plan is but still help to bring
the organization closer to the long-term goal
 “ OPERATIONAL PLANS
• Operational plans are the plans that are made by frontline, or low-level, managers.
All operational plans are focused on the specific procedures and processes that occur
within the lowest levels of the organization.

Example : Operational planning activities would include things like scheduling

employees each week; assessing, ordering and stocking inventory; creating a
monthly budget; or outlining an employee's performance goals for the year.
”
Operational plans can be either single-use or ongoing plans. Single-use plans are those
plans that are intended to be used only once. Ongoing plans are those plans that are
built to withstand the test of time. Ongoing plans are typically a policy, procedure
or rule.
 “ CONTINGENCY PLANS
• Even the best plans can fail, especially in today's fast-paced,
chaotic business environment, and as such, it is important for

”
managers at all levels to engage in contingency planning.

• Contingency plans allow a manager to be flexible and change-

savvy by providing an alternative course of action, which can
be implemented if and when an original plan fails to produce
the anticipated result.
“ PURPOSE OF BUSINESS
PLANNING
 Clarify direction of the business

❖ Ensure efficient use of resources

❖
❖
Provide a way of measuring progress
Support effective decision-making
”
❖ Co-ordinate activities
❖ Allocate responsibility
❖ Motivate & guide people
 “ DON’T FORGET THAT PLANNING IS
DIFFERENT FROM FORECASTING:
• Forecasts are predictions - they concern events and trends over
which the business has little or no control

”
• Plans are about what the business intends to do
• But forecasts (especially sales forecasts) are essential in planning
 “ WHAT IS STRATEGY
♣ Strategy is that which top management does that is of great
importance to the organization.
♣ Strategy refers to basic directional decisions, that is, what are
the purpose and mission of the organization.
”
♣ Strategy consists of the important actions necessary to realize
these purpose and mission
♣ Strategy answers the question: What should the organization be
doing?
♣ Strategy answers the question: What are the ends we seek and
how should we achieve them?
“ STRATEGY ACCORDING TO HENRY
MINTZBERG

♣ Strategy is a plan, a "how," a means of getting from

here to there.
”
“ DEFINITION

• Major, Comprehensive ,Integrated plan of action to reach objective

”
“ STRATEGIC MANAGEMENT

♣ Set of decisions and actions used to implement strategies

”
that will provide a competitively superior fit between the
organization and its environment so as to achieve
organizational goals

♣ Responsibility = top managers & chief executive

“ STRATEGIC MANAGEMENT

Managers ask such questions as...

❶What changes and trends are occurring?

❷Who are our customers?

”
❸What products or services should we offer?

❹How can we offer these products or services most efficiently?

 “ GRAND STRATEGY

• General plan of major action to achieve long-term goals

• Falls into three general categories

”
1. Growth
2. Stability
3. Retrenchment
“ GRAND STRATEGY: GROWTH
• Growth can be promoted internally by investing in
expansion or externally by acquiring additional business
divisions
- Internal growth = can include development of new or changed products ”
- External growth = typically involves diversification – businesses related to
current product lines or into new areas
“GRAND STRATEGY: STABILITY
• Stability, sometimes called a pause strategy, means that the
organization wants
• to remain the same size or
”
• to grow slowly and in a controlled fashion
“ GRAND STRATEGY:
RETRENCHMENT
• Retrenchment = the organization goes through a period of
forced decline by either shrinking current business units or
selling off or liquidating entire businesses
”
 “ PURPOSE OF STRATEGY
• The plan of action that prescribes resource
allocation and other activities for dealing
with the environment, achieving a
competitive advantage, that help the
organization attain its goals
Strategies focus on:
”
● Core competencies
● Developing synergy
● Creating value for customers
“ PLANNING VS STRATEGIC
PLANNING

”
 “ THREE LEVELS OF STRATEGY IN
ORGANIZATIONS
Corporate-Level Strategy:
What business are we in?
Corporation

”
Business-Level Strategy:
How do we compete?

Textiles Unit Chemicals Unit Auto Parts Unit

Functional-Level Strategy:
How do we support the business-level
strategy?

Finance R&D Manufacturing Marketing

“

”
“ STRATEGIC MANAGEMENT
PROCESS

Scan External Identify Strategic

”
Environment – Factors –
National, Opportunities,
Global Threats Implement
Strategy via
Evaluate Formulate Changes in:
Current Define new Strategy – Leadership
SWOT Mission culture,
Mission, Goals, Corporate,
Strategies Goals, Grand Business, Structure, HR,
Strategy Functional Information &
control
Scan Internal systems
Identify Strategic
Environment – Core
Factors –
Competence,
Strengths,
Synergy, Value
Weaknesses
Creation
“ STRATEGY FORMULATION VS.
IMPLEMENTATION

• Strategy Formulation = stage of strategic management that

involves planning and decision making that lead to the

”
establishment of the organization’s goals and of a specific
strategic plan

• Strategy Implementation = stage of strategic management

that involves the use of managerial and organizational tools
to direct resources toward achieving strategic outcomes
 COMPETITIVE EDGE THROUGH
“
Competitive Strategies

• Differentiation = attempt to distinguish products or services

”
from that of competitors

• Cost leadership = aggressively seeks efficient facilities, pursues

cost reductions, and uses tight cost controls to produce products
more efficiently than competitors

• Focus = concentrates on a specific regional market or buyer

group
“ STRATEGY ACCORDING TO
MICHAEL PORTER

♣ Competitive strategy is "about being different." It

means deliberately choosing a different set of
”
activities to deliver a unique mix of value." It is about
competitive position, about differentiating yourself in
the eyes of the customer, about adding value through
a mix of activities different from those used by
competitors.
POTER’S FIVE COMPETITIVE FORCES
“ MODEL

”
 TOOLS FOR PUTTING STRATEGY INTO
“
Environment ACTION
Organization
Leadership
■ Persuasion
■
Motivation

”
■
Structural Design Culture/values
■ Human Resources
Organization Chart ■
Strategy Recruitment/selection Performance
■ Teams
■
■ Centralization Transfers/promotions
■ Training
■Decentralization,
Information and Control
■ Layoffs/recalls
■ Facilities,Systems
task design
■ Pay, reward system
■ Budget allocations
■
Information systems
■
Rules/procedures