Strategic management Speaker :

Heba Eldaly

Why write a business plan? Strategic management define difference between strategic management vs. strategic planning . Strategic management process strategy formulation Strategy implementation Strategy evaluation

Contents:-

Becouse I have to ------- - needed for financing - strategic partnering - attract key people / investors - organize my thoughts

Why write a business plan ?

because I need to understand my business

- the plan is the result of a planning process

- people don’t plan to fail ; they fail to plan how are my customer? Why will they buy my product or service? What will they pay? How will I make and deliver/sell the service/product? What resources ( people, money , technology) do I need? Can I make money / create value? Do I have the right team on board ?

Why write a business plan ?

Art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Basic of strategic management:-

strategic management consist of four basic elements:- - environmental scanning

- strategy formulation

- strategy implementation

- Evaluation & control

Strategic management define

Strategic management Used more often in academia

Strategic planning Used more often in the business

world

strategic management VS.

strategic planning

Strategic managementRefers to: Strategy formulation Strategy implementation Strategy evaluation

Strategic planning Refers to: strategy formulation

strategic management VS.

strategic planning

Strategic management process

Environmental

scanni

ng

Strategy

for

mulation

Strategy

imple

mentation

Eval

uation

&

control

Environmental scanning

Environmental scanning and industry analysis

Environmental scanning is the monitoring, evaluating and disseminating of information from the external and internal environments to keep people within the corporation. It is a tool that a corporation uses to avoid strategic surprise and to ensure long-term health.

The social environment includes general forces that do not directly touch on the short-run activities of the organization but those can, and often do, influence its long-run decisions.

These forces are:- • Economic forces • Technological forces • Political-legal forces • Social cultural forces

Scanning of external environmental variables

A TEAM with Relevant Experience Market Size Idea Technology Competitive Advantage Reasonable Projections Exit Strategy

The Right Ingredients

Company structure

idea

Market

Competitive edge

Marketing

strategy

Team

Operations

& production

Financials

Strategy formulation

Elements of the Business Plan1.Executive Summary2.The opportunity, company, product/service, vision,

mission & objectives3.Market research/analysis / SWOT Analysis4.Marketing plan5.Design and development plan6.Manufacturing& operation plan 7.Management team8.Financial plan (Capital Required, Projections,

Returns)9.Action plan

1.Idea generation, Vision, Mission, Objectives, Strategies

2.Market research and Analysis3.Marketing strategy4.Production planning5.Management and Organization6.Financial plan7.Company formulation

Business planning steps

1. The Idea

• Innovative product or service

• Visualize a market gap – youcan add value

• Imported idea

1st Objective

2nd Objective

3rd Objective

4th Objective

vision

How will you reach

your objectives?

Strategy

Where do you want to go at the end?

What is the road map and major mile stones?

SMARTSpecific

Measurable

AchievableRelevant

Time-Bound

Mission:Stakeholde

rs

Family

Work

Friends

Religion

Community

Country

Who are your stakeholders and what is your mission to

each one of them?

Mission:Stakeholde

rs

Shareholders

Employees

Customers

Suppliers

Community

Country

Who are your stakeholders and what is your mission to

each one of them?

Amazon:  Amazon’s vision is to be earth’s most customer

centric company; to build a place where people can come to find and discover anything they might want to buy online.

Apple:   Apple is committed to bringing the best

personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

Examples of vision& mission statements

Face book:  Face book's mission is to give people the

power to share and make the world more open and connected.

Microsoft:  Microsoft’s mission is to enable people and

businesses throughout the world to realize their full potential.

Yahoo!:  Yahoo!’s mission is to be the most essential

global Internet service for consumers and businesses

2. Market Analysis Market size –How big is it NOW?–Trends –how fast is it or will it grow? Market Players –Competitors–Competitive Advantage–Estimated market shares –Existing/planned products in the

marketplace Is this the RIGHT TIME for my product? Is there a GAP that I can fill?

SWOT Analysis

Strengths

Weaknesses

How maximize them

minimize their effects Strengths

Opportunities

Threats

How you capitalize on

themHow you avoid

them

Internal

External

3. Marketing Strategy

•Who are my TARGET customers?•Why would they buy my product? •How much would they pay?•What are the special features in my product?•What is my competitive advantage

It is all about your EDGE

Marketing Plan Process

Marketing Mix 4 Ps

Defining Target Market Needs, Wants, Demand

Marketing Research

segmentin

g

Targeting

Positioning

ProductVarietyQualityDesignFeaturesBrandPackagingSizeServicesWarrantyReturn

PricePrice ListDiscountsAllowancesPaymentsCredit

PromotionPromotionsAdvertisingSales ForcePublic relationDirect marketing

PlaceChannelsCoverageLocationInventoryTransportPush / Pull

4. Production plan

•Technology

•Equipment

•Raw Material Sourcing

•Operation Plan and Capacity

5. Management Plans

•Getting the RIGHT Team on board

•Training

•Delegation

•Empowerment

6. Financial Plans•Income Statement Projections –Revenues Assumptions –Costs/Expenses Assumptions–Depreciation Assumptions –Interest Expenses Assumptions –Taxes •Cash Flow Projections–Initial investment –Working Capital –Capital Expenditure (Capex) –Debt Assumptions

Income Statement Objective: provides information about the firm’s operating activities over a

specific period of time. Revenue: 100 100%-Cost of Goods Sold (COGS): 60 60%Gross Profit (Profit Margin) 40 40%

Operating Expenses: General & Administration 8 8% Sales & Marketing 12

12% -Total Operating Expenses 20 20%Earning Before Interest, Tax, Depreciation & Amortization (EBITDA) 20 20%-Depreciation & Amortization 5 5%Earning Before Interest and Tax (EBIT) 15 15%-Interest Expenses 5 5% Net Income Before Tax 10 10%-Taxes 2 2%Net Income 8 8%

• Name – logo – slogan • Legal structure • Location

Mission – values – objectives

7. The company

Annual objectives

Policies

Motivate

employees

Resource

allocation

Strategy implementatio

n

Review

External

&

Internal

Measure

perfor

mance

Corrective

action

Evaluation& control

Finally: No Risk … No Gain ... يعش) الجبال صعود يتعلم ال ومن

) الحفر بين أبدالدهر

“If we all did the things we are really capable of doing, we would literally astound ourselves”

Thomas Edison

Heba Eldaly