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CHAPTER 4-MGT 230
Transcript of CHAPTER 4-MGT 230
LO2 Describe how strategic planning should be integrated with tactical and operational planning
LO3 Identify elements of the external environment and internal resources of the firm to analyze before formulating a strategy
LO4 Define core competencies and explain why they provide the foundation for business strategy Learning Objectives LO5 Summarize the types and choices available for corporate strategy
LO6 Discuss how companies can achieve competitive advantage through business strategy
LO7 Describe the keys to effective strategy implementation Learning Objectives Figure 4.1 Decision Making Stages and
Formal Planning Steps Planning
conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future.
a purposeful effort that is directed and controlled by managers and often draws on the knowledge and experience of employees throughout the organization. Planning Step 1 Situational Analysis
Step 2 Alternative Goals and Plans
Step 3 Goal and Plan Evaluation
Step 4 Goal and Plan Selection
Step 5 Implementation
Step 6 Monitor and Control The Basic Planning Process Situational analysis
A process planners use, within time and resource constraints, to gather, interpret, and summarize all information relevant to the planning issue under consideration. Situational Analysis Goal
A target or end that management desires to reach
Specific, measurable, attainable, relevant, time-bound - SMART Should stress creativity and encourage managers and employees to think in broad terms about their jobs. Alternative Goals and Plans ___________ are the actions or means managers intend to use to achieve organizational goals.
Services Question Contingency plans
sets of actions to be taken when a company’s initial plans have not worked well or if events in the external environment require a sudden change Plans
The actions or means managers intend to use to achieve organizational goals Alternative Goals and Plans Managers will evaluate the advantages, disadvantages, and potential effects of each alternative goal and plan.
Must prioritize those goals and even eliminate some of them.
Managers must consider carefully the implications of alternative plans for meeting high priority goals. Goal and Plan Evaluation Managers will select the option that is most appropriate and feasible
The evaluation process will identify the priorities and trade-offs among the goals and plans
A narrative that describes a particular set of future conditions. Goal and Plan Selection Managers and employees must understand the plan, have the resources to implement it, and be motivated to do so
Successful implementation requires a plan to be linked to other systems in the organization, particularly the budget and reward systems Implementation Managers must continually monitor the actual performance of their work units against the unit’s goals and plans.
Manager’s also need to develop control systems to measure that performance and allow them to take corrective action when the plans are implemented improperly or when the situation changes Monitor and Control Strategic goals
major targets or end results that relate to the long-term survival, value, and growth of the organization. Strategic planning
A set of procedures for making decisions about the organization’s long-term goals and strategies Strategic Planning Strategy
A pattern of actions and resource allocations designed to achieve the organization’s goals Strategic Planning Where will we be active?
How will we get there?
How will we win in the marketplace?
How fast will we move and in what sequence will we make changes?
How will we obtain financial returns Strategic Planning Figure 4.2 Hierarchy of Goals and Plans Tactical planning
A set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing. Tactical and Operational Planning Operational planning
The process of identifying the specific procedures and processes required at lower levels of the organization. Tactical and Operational Planning Figure 4.3 The Strategy Map Strategic management
A process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies. Strategic Planning Figure 4.4 The Strategic Management Process An organization’s __________ is the basic purpose and scope of operations.
Policy Question Mission
An organization’s basic purpose and scope of operations. Establishment of Mission, Vision, and Goals Table 4.1 Environmental Analysis Stakeholders
Groups and individuals who affect and are affected by the achievement of the organization’s mission, goals, and strategies Analysis of External Opportunities and Threats Resources
Inputs to a system that can enhance performance
Tangible, intangible assets Analysis of Internal Strengths and Weaknesses Table 4.2 Internal Resource Analysis Figure 4.5 Resources and Core Competencies Benchmarking
process of assessing how well one company’s basic functions and skills compare with those of another company or set of companies.
goal of benchmarking is to thoroughly understand the “best practices” of other firms and to undertake actions to achieve both better performance and lower costs Analysis of Internal Strengths and Weaknesses SWOT analysis
A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy. SWOT Analysis and Strategy Formulation Corporate strategy
The set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities
A strategy employed for an organization that operates a single business and competes in a single industry. SWOT Analysis and Strategy Formulation Figure 4.6 Summary of Corporate Strategies Vertical integration
The acquisition or development of new businesses that produce parts or components of the organization’s product
A strategy used to add new businesses that produce related products or are involved in related markets and activities. SWOT Analysis and Strategy Formulation Differentiation strategy
A strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions. Low-cost strategy
A strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills product SWOT Analysis and Strategy Formulation Define strategic risks
Assess organization capabilities
Develop an implementation agenda
Create an implementation plan Strategy Implementation Strategic control system
A system designed to support managers in evaluating the organization’s progress regarding its strategy and, when discrepancies exist, taking corrective action. Strategic Control Figure 4.7 BCG Matrix What is a key strength of V.F. Corp.?
Discuss the pros and cons of moving manufacturing facilities overseas.
Destination CEO: V.F. Corp.