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Mba 700 2 process of strategic planning (1)
1. Process of Strategic Planning
Massood V. Samii, Ph.D.
Professor and Chair
International Business Department
2. Operational vs Strategic
Performance
Parameters Operational Strategic
Objective Profit Max. . Competitive Advantage
Assumption Continuity Change
Emphasis Control Creativity
Document Budget Plan
Framework Accounting Accountability through
Critical Success factors
3. What is Strategy
• Strategy consist of competitive moves that
are employed by the management of
company to grow the company, improve
profitability, and achieve target level of
performance in the short and the long run.
• Companies sustainable competitive
advantage is when customers see value in
the product or services company is
producing relative to its comptitors.
4. Tasks of Strategic Planning
Revision based on external changes
and implementation
5. Mission Statement
• The mission statement of an organization
identifies the main business and
philosophy of the organization.
• Mission statement focuses on one or
more of the following;
– Product
– Technology
– Customers and services
– Employee
6. Vision
• Vision statement focuses on what the
company is to become (its scope) in the
future
• “It lays out the company’s strategic course
in preparing for the future
• Mission describes the present business
focus of the company while the vision is
the future intention of the enterprise.
7. Vision
• A clear and effective vision will have the
following dimensions
– Graphic: What is the future form of the company, in
terms of market, customers, technology, product,
size, and employee relation?
– Directional: How are we going to achieve it?
– Focused: Is it broad enough to provide guidance for
resource allocation?
– Feasibility: What is the time frame for achieving the
vision?
– Desirability: Why does it make sense to take this
course as oppose to others.
8. Core Values
• Company’s core values are the specific beliefs, traits,
behaviors that it display in achieving its strategic vision.
• Factors such as;
– Innovation
– Customer service
– Ethics
– Social responsibility
– Quality
– Fair treatment
9. SNHU Mission Statement
Southern New Hampshire University trains intellectually and
culturally enriched individuals to be successful in their
careers and contribute to their communities. SNHU's
educational philosophy challenges students' intellectual
potential and prepares them for professional lives in an ever-
changing and increasingly interconnected world. It provides
a supportive and close-knit learning community, delivering
engaging instruction in a flexible variety of formats. Students
develop the knowledge to understand a complex world, the
skills to act effectively within that world and the wisdom to
make good choices. They do so within a community of
teachers, staff and peers that is encouraged to add its
scholarly, creative and pedagogical contributions to the
larger social good.
10. Objective
• Strategic objectives are needed as yardstick for
evaluation of performance of business from
stockholders point of view
• Objectives must have the following
characteristics
– Achievable
– Challenging
– Consistent
• Firm must have both strategic and financial
objectives (balance score card)
• Multiple objectives
• Hierarchy of objectives
11. Strategic Management Model
Company Mission and Vision
Internal Analysis Situation Analysis External Analysis
Distinctive
Competence
Strategic Analysis and Choice
Long Range Objectives Grand Strategy
Short Run Objectives Operating Strategy
Implementation
Control and Evaluation
12. Situation Analysis
Internal Analysis External Analysis
Resources Economic Situation
Management Industry Structure
Technology Competitive Environment
Name Recognition Regulatory Situation
Culture Social Trends
Work Force Political Landscape
Strength-Weakness- Opportunity- Threat
SWOT
15. Strategic Pyramid
Information Flow:
Initially subsequently
Mission Corporate
Vision Strategy
Objective
Business Strategy
Functional Strategy
16. Types of Strategy
• Fixed base strategy
– Develop strategy for a period of five or ten years
• Moving base strategy
– -Develop five years strategy, but every year
review and add another year base on success or
failure and new external factor of previous year
• Nimble and flexible strategy
– Highly flexible strategy with changes based on
the new external factors
17. Other Relevant Points
• Strategy should focus on how to take
advantage of opportunities
• Distinction must be made between
industry opportunity and firm’s opportunity
within the industry
18. Continue.
• Timing of action is important. First comer
has advantages and disadvantages
– Advantages: create customer base, name
recognition, gain an edge on supplier and
technology
– Disadvantages: High cost of product
introduction, technological obsolescence,