PLANNING & STRATEGIC MANAGEMENTChapter 10 Management Mrs. A

WHAT IS THE PLANNING PROCESS? Section 10.1 THE STRATEGIC MANAGEMENT PROCESS Section 10.2

WHY PLAN?? Section 10.1 To decide the company’s

goals and ways to achieve those goals.

Prepares businesses for changes and crisis situations.

What is an example of a technological change businesses have had to adapt to? Hint: You probably use it every day to obtain and receive information.

The Internet!

EFFECTIVE PLANNING Effective managers encourage employees to

participate in planning. WHY? Get employee buy-in Employees have a better understanding of

the company overall. Employees feel they are part of the

process and become committed to the plan.

Positive participation and pro-company attitudes of employees improved morale and loyalty to the organization.

FORMAL PLANNING IS…

A systematic study of an issue and the preparation of a written document to deal with the problem. Short Range Plans Long Range Plans Intermediate Plans

OPERATIONAL VERSUS STRATEGIC PLANS Operational Planning is…

Short range Short range planning that focuses on forming ideas for dealing with a specific functionspecific function in the company, such as the production of new products.products.

Strategic Planning is… Long range Long range planning done by the highest the highest

management levels in the companymanagement levels in the company. .

LEVELS OF STRATEGIES What is a Strategy?

An outline of the basic steps management is basic steps management is going to take to achieve a goalgoing to take to achieve a goal..

3 levels of Strategies Grand or Corporate Strategies

4 types Business Strategies

3 types Functional Strategies

5 types

Grand Strategies

These strategies provide overall direction for the company.

1. Growth Concentration Vertical Diversification

2. Stability3. Retrenchment

Turnaround Divestiture Liquidation

4. Combination

Business Strategies

These types of strategies only affect one or two departments. Overall Cost Leadership Differentiation Focus

Functional Strategies

These strategies are short-range operational plans that support business strategies. Sales and Marketing Production Financial Research and Development Personnel

STRATEGIC MANAGEMENT PROCESS Section 10.2

What is Strategic Management? Applying the planning process Applying the planning process created by

the top level managers. 3 Phases:

Formulation Implementation Evaluation

STRATEGIC MANAGEMENT APPROACH

3 Phases of the Strategic Management Approach 1. Formulation – obtaining a clear understanding

of the current position of the company. Mission Statement Identify and diagnose past and present strategies Diagnosing past and present performance Setting goals Policies, procedures and rules SWOT Analysis

STRATEGIC MANAGEMENT APPROACH (cont.)

2. Implementation Taking Action Making changes

3. Evaluation – “Post-Mortem Review” Monitoring the company’s progress toward

long-term goals Basic Strategic Evaluation Activities

Reviewing External and Internal factors Measuring performance Taking corrective action

SUMMARY

Planning and Strategic Management are vital to the survival and growth of a business.

Even more important is individual individual planning and strategic management for planning and strategic management for your life.your life. Planning enables you to set goals to

strive toward. It gives you direction and purpose.

Change is inevitable, be ready for it!