Strategy in planning
Characteristics of strategy
Strategic Formulation Process
Stages in strategy
Types of strategy
According to Koontz, "Strategies must often denote a
general programme of action and deployment of
emphasis and resources to attain comprehensive
Strategies are plans made in the light of the plans of the
competitors because a modern business institution
operates in a competitive environment.
4. Perfect strategy
A perfect strategy can be built only on perfect
knowledge of the plans of others in the industry. This
may be done by the management of a firm putting itself
in the place of a rival firm and trying to estimate their
5. Strategy in planning
When an organization has a long-term purpose,
articulated in clear goals and objectives, and these goals
and objectives can be rolled up into a coherent plan of
action, then we would say that the organization has a
when correctly formulated and communicated, strategy
provides leaders and employees with a clear set of
guidelines for their daily actions.
strategy is so critical to the principles of management
we are learning about.
strategy is about making choices
What do I do today?
What shouldn’t I be doing?
What should my organization be doing?
What should it stop doing?
8. Characteristics of strategy
It is the right combination of different factors.
It relates the business organization to the environment.
It is an action to meet a particular challenge, to solve
particular problems or to attain desired objectives.
Strategy is a means to an end and not an end in itself.
It is formulated at the top management level.
It involves assumption of certain calculated risks.
9. Strategic formulation process
Input to the Organization
Orientation, Values, and Vision of Executives
Mission (Purpose), Major Objectives, and Strategic
Present and Future External Environment
Development of Alternative Strategies
Evaluation and Choice of Strategies
Medium/Short Range Planning, Implementation
through Reengineering the Organization Structure,
Leadership and Control
Consistency Testing and Contingency Planning
12. Strategic Objectives and
The first step is to define the vision, mission, and values
statements of the organization.
This is done in combination with the external analysis of
the business environment (PESTEL) and internal
analysis of the organization (SWOT).
An organization’s statements may evolve as information
is discovered that affects a company’s ability to operate
in the external environment.
13. Strategic Formulation
Identify if the organization needs to find additional
resources and how to obtain them. Formulate targeted
plans to achieve the goals. Prioritize the tactics most
important to achieving the objectives. Continue to scan
the external environment for changes that would affect
the chances of achieving the strategic goals
14. Strategic Implementation
Sometimes referred to as strategic execution, this stage
is when the planning stops and the action begins. The
best plans won’t make up for sloppy implementation.
Everyone in the organization should be aware of his or
her particular assignments, responsibilities and
15. Strategic Evaluation and
Performance measurements (determined by the nature of
the goal) will help determine if key milestones are being
met. If actual results vary from the strategic plan,
corrective actions will need to be taken. If necessary,
reexamine the goals or the measurement criteria
16. Types of strategy
According to Michel Porter, the strategies can be
classified into three types.
a) Cost leadership strategy
b) Differentiation strategy
c) Focus strategy
17. Cost Leadership Strategy
This generic strategy calls for being the low cost
producer in an industry for a given level of quality. The
firm sells its products either at average industry prices
to earn a profit higher than that of rivals, or below the
average industry prices to gain market share.
In the event of a price war, the firm can maintain some
profitability while the competition suffers losses.
18. Internal strength
Access to the capital required
Skill in designing products for efficient manufacturing
High level of expertise in manufacturing process
Efficient distribution channels.
19. Differentiation Strategy
A differentiation strategy calls for the development of a
product or service that offers unique attributes that are
valued by customers and that customers perceive to be
better than or different from the products of the
20. Internal strength
Access to leading scientific research.
Highly skilled and creative product development team.
Strong sales team with the ability to successfully
communicate the perceived strengths of the product.
Corporate reputation for quality and innovation
21. Focus Strategy
The focus strategy concentrates on a narrow segment
and within that segment attempts to achieve either a
cost advantage or differentiation.
The premise is that the needs of the group can be better
serviced by focusing entirely on it
22. Implementing strategy
Implementation is initiated in three stages:
1. Identification of annual objectives
2. Development of specific functional strategies
3. Development and communication of concise
policies to guide decisions.