STRATEGIC PLANNINGCHAPTER 9
Topics
BOH4M- Chapter 9
Strategic Management Process Analysis of Mission, Values, Objectives, Organizational Culture Analysis of Resources & Capabilities Analysis of Industry & Environment
Organizational Strategies Levels of Strategy Types of Strategic Plans
Group Company Research Assignment & Presentation
Strategic Management Process
BOH4M- Chapter 9
Basic concepts of strategy Strategy — a comprehensive action plan
that identifies long-term direction for an organization and guides resource utilization to accomplish organizational goals with sustainable competitive advantage.
Strategic Management Process
BOH4M- Chapter 9
Basic concepts of strategy:
Competitive advantage — operating with an
attribute or set of attributes that allows an
organization to outperform its rivals. Example:
Walmart (inventory IT)
Sustainable competitive advantage — one that
is difficult for competitors to imitate. Example:
Tim Horton’s (double double, Canadiana, over 2600 shops)
Strategic Management Process
BOH4M- Chapter 9
Strategic question for strategy formulation:
What is our business mission?
Who are our customers?
What do our customers consider value?
What have been our results?
What is our plan?
Strategic Management Process
BOH4M- Chapter 9
Analysis of mission: The reason for an organization’s existence. Good mission statements identify: http://www.youtube.com/watch?
v=fSi4HHNOnd0&safety_mode=true&persist_safety_mode=1&safe=active
CustomersProducts and/or servicesLocationUnderlying philosophy
An important test of the mission is how well it serves the organization’s stakeholders.
Examples
Figure 9.2 How external stakeholders can be valued as strategic constituencies of organizations.
BOH4M- Chapter 9
Strategic Management Process
BOH4M- Chapter 9
Analysis of values:
Values are broad beliefs about what is or is not
appropriate.
Strong core values for an organization helps build
institutional identity, gives character to an organization,
and it backs up the mission statement.
Organizational culture reflects the dominant value
system of the organization as a whole.
Apple Example
Strategic Management Process
BOH4M- Chapter 9
Organizational culture Shapes the values of managers and other
organization members. Points people in common directions. Helps build institutional identity. Gives character to the organization in the
eyes of employees and external stakeholders.
Backs up the mission statement. Guides the behaviour of organizational
members in meaningful and consistent ways.
BOH4M- Chapter 9
Strategic Management Process
Strong cultures: Commit members to do things that are in the
best interests of the organization. Discourage dysfunctional work behaviour. Encourage functional work behaviour.
The best organizations have strong cultures that: Are performance-oriented. Emphasize teamwork. Allow for risk taking. Encourage innovation. Value the well being of people.
Strategic Management Process
BOH4M- Chapter 9
2 Levels of Organizational Culture Core Culture - Underlying assumptions and
beliefs that influence behaviour and contribute to the observable culture.
Observable Culture - What one sees and hears when walking around an organization.
Google Video
BOH4M- Chapter 9
Figure 4.4 Levels of organizational culture—observable culture and core culture.
BOH4M- Chapter 9
I don’t know how it started, either. All I know is that it’s part of our corporate culture.
BOH4M- Chapter 9
Strategic Management Process Core culture and values:
Strong cultures have a small but enduring set of core values.
Commitment to core values is a key to long-term success.
Important cultural values include: Performance excellence Innovation Social responsibility Integrity Worker involvement Customer service Teamwork
Strategic Management Process
BOH4M- Chapter 9
Analysis of objectives: Operating objectives direct activities
toward key and specific performance results.
Typical operating objectives: Profitability Market share Human talent Financial health Cost efficiency Product quality Innovation Social responsibility
Strategic Management Process
BOH4M- Chapter 9
Analysis of organizational resources and capabilities: Important goal of assessing core
competencies. Potential core competencies:
Special knowledge or expertise.Superior technology.Efficient manufacturing approaches.Unique product distribution systems.
Figure 9.3 SWOT analysis of strengths, weaknesses, opportunities, and threats.
BOH4M- Chapter 9
Strategic Management Process
BOH4M- Chapter 9
Analysis of industry and environment: Assessment of macro environment:
Technology. Government. Social structures and population demographics. Global economy. Natural environment.
Analysis of industry environment: Resource suppliers. Competitors. Customers.
Strategic Management Process
Strategic forces to be examined in conducting an industry analysis: Industry
competitorsNew entrantsSuppliersBuyersSubstitutes
Unattractive
industry.5 forces are
favourable for the firm.
Attractive industry.5 forces are
unfavourable for the firm.
BOH4M- Chapter 9
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