Upload
willow-congdon
View
226
Download
4
Tags:
Embed Size (px)
Citation preview
1
STRATEGIC PLANNING
2
A Definition of Strategy
‘Strategy is the direction and scope of an organisation over the long term which achieves advantages for the
organisation through its configuration of its resources within a
changing environment and to fulfil stakeholder expectations’
Johnson and Scholes (2002)
3
“What is strategy anyway?”
• "Strategy is the direction and scope of an organisation over the long term: ideally, which matches its resources to its changing environment, and in particular its markets, customers or clients so as to meet stakeholder expectations.”Johnson & Scholes 'Exploring Corporate Strategy: Text and Cases'
4
Strategic planning is a process which takes into account an organization’s external and internal environments while helping it define its purposes,
what it intends to become, and how it will attain its goals.
5
Why Some Firms Do No Strategic Planning
1. Poor Reward 2. Fire-fighting3. Waste of Time4. Too Expensive 5. Laziness6. Content with Success7. Fear of Failure8. Prior Bad Experience9. Self-Interest10. Fear of the Unknown11. Honest Difference of Opinion12. Suspicion
6
What if we don’t plan?
1. Decision-making by crisis2. Plans driven by budget3. Wasted/inefficient use of resources4. Unnecessary conflict – mostly over
resource allocations5. No clear direction/vision6. Unable to quickly respond to
opportunities and threats
7
What makes planning strategic?
• Considers the environment – external and internal in relation to the organization
• Involves issues of significance having an impact on the organization's future
• Involves both analysis and insight
8
Strategic planning is a processStrategic planning is a process..
Purpose is not to produce a document but to result in strategic thinking and acting by the people doing the work in the organization.
Documents are used to record both intentions and accomplishments – but they are not the goal of strategic planning.
9
SP should answer the following questions:
• Where should the organization be going?
• Why and how has a particular direction/vision been chosen?
• What strategies and actions will be necessary to reach our vision?
• How will resources be marshaled?
10
In other words ---
Strategic planning should help us envision our desired future and then put us on course to realize
that vision.
11
Strategic planning is not a substitute for:
1. Leadership
2. Strategic thinking and acting
3. Competence
• They will work together for the benefit of the members of the organization and stakeholders.
12
Overall process often includes:
• Initiation– Awareness of need– Training– Commitment by key people– Establishment of key committee(s)– Identification of resources needed– Discussion of what is to be accomplished
13
• Formation of planning groups– Coordinating committee– Working group– Other groups as needed
• Environmental scan– Internal and external contexts – Planning assumptions– Mandates
• Vision/vision of success– Values/guiding principles
• Mission
Overall process often includes:
14
• Identification of strategic issues/initiatives and selection of issues for action
• Outcome criteria/expectations for each action item
• Strategies and action plans
• Plan for monitoring progress and revising
• Write the document
• Implement the process
Overall process often includes:
15
A strategic issue is:
• A significant challenge or situation the organization can do something about.
• Involves factors (e.g., mission, mandates, SWOT’s) that make the issue strategic.
• Entails consequences of not addressing the issue
16
Identifying strategic issues is useful because:
• Focuses attention on what is really important.• Emphasizes issues rather than answers.• Can create “useful tension” necessary for true
change.• Helps in identifying solutions.• Process becomes real for some at this point
17
Strategic Planning
• The Vision– Communicating to all staff where the
organisation is going and where it intends to be in the future
– Allows the firm to set goals
• Aims and Objectives:– Aims – long term target– Objectives – the way in which you are
going to achieve the aim
18
Strategic Planning
• Example:• Aim may be for a chocolate manufacturer to
break into a new overseas market• Objectives:
– Develop relationships with overseas suppliers– Identify network of retail outlets– Conduct market research to identify consumer
needs– Find location for overseas sales team HQ
19
Strategic Planning
• Once the direction is identified:Analyse positionDevelop and introduce strategyEvaluate:
– Evaluation is constant and the results of the evaluation feeds back into the vision
20
Political/Legal
Political/Legal
EconomicEconomic
TechnologicalTechnological
GlobalGlobal
DemographicDemographicSocioculturalSociocultural
CompetitiveCompetitiveEnvironmentEnvironment
Industry Environment
Industry Environment
Components of the General EnvironmentComponents of the General Environment
21
The SWOT The SWOT AnalysisAnalysis
22
SWOT Analysis
• Strengths
• Weaknesses
• Opportunities
• Threats
23
Basic Assumption of a SWOT Analysis
• Align internal activities with external realities
• The SWOT analysis provides a framework for analyzing: – strengths and weaknesses (internal);
and – opportunities and threats (external)
24
The SWOT diagram may summarise the results of analyses
Strengths Weaknesses
OpportunitiesThreats
InternalAnalyses
InternalAnalyses
ExternalAnalyses
ExternalAnalyses
25
The GAP / SWOT AnalysisThe GAP / SWOT AnalysisThe GAP / SWOT AnalysisThe GAP / SWOT Analysis
Vision3-5 years
Situation Audit
The
“GAP”
Where you Where you want to go.want to go.
Where you Where you are today.are today. What you have What you have
to do to get thereto do to get there.
26
The purpose of SWOT Analysis
• It is an easy-to-use tool for developing an overview of a company’s strategic situation– It forms a basis for matching your
company’s strategy to its situation
27
SWOT is the starting point
• It provides an overview of the strategic situation.
• It provides the “raw material” to do more extensive internal and external analysis.
28
The External The External Environment: Environment:
SWOT SWOT AnalysisAnalysis
29
The External Environment:Opportunities, Threats,
e.g.: Industry Competition, and Competitor Analysis
The External Environment:Opportunities, Threats,
e.g.: Industry Competition, and Competitor Analysis
30
Opportunities
• An OPPORTUNITY is a chance for firm growth or progress due to a favorable juncture of circumstances in the business environment.
• Possible Opportunities:– Emerging customer needs– Quality Improvements– Expanding global markets– Vertical Integration
31
Threats
• A THREAT is a factor in your company’s external environment that poses a danger to its well-being.
• Possible Threats:– New entry by competitors– Changing demographics/shifting demand– Emergence of cheaper technologies– Regulatory requirements
32
Opportunities and Threats form a basis for EXTERNAL analysis
• By examining opportunities, you can discover untapped markets, and new products or technologies, or identify potential avenues for diversification.
• By examining threats, you can identify unfavorable market shifts or changes in technology, and create a defensive posture aimed at preserving your competitive position.
33
Opportunities and Threats• Primarily external in nature• Represent characteristics of:
– the research environment– growth in potential markets– changes in the competitive, economic, political/legal,
technological, or socio-cultural environments
• A threat to some is an opportunity to another.
34
• Questions on opportunities:– Is there a product/service area that others
have not yet covered?– Are there emerging trends that fit with your
company's strengths?
• Questions on threats:– Are your competitors becoming stronger?– Are there emerging trends that amplify one of
your weaknesses?
35
The Internal The Internal Environment: Environment:
SWOT SWOT AnalysisAnalysis
36
The Internal Environment: The Internal Environment: StrengthsStrengths, , WeaknessesWeaknesses,,
e.g.: Resources, Capabilities e.g.: Resources, Capabilities and and
Core CompetenciesCore Competencies
37
Strengths
• A STRENGTH is something a company is good at doing or a characteristic that gives it an important capability.
• Possible Strengths:– Name recognition– Proprietary technology– Cost advantages– Skilled employees– Loyal Customers
38
Weaknesses
• A WEAKNESS is something a company lacks or does poorly (in comparison to others) or a condition that places it at a disadvantage
• Possible Weaknesses:– Poor market image– Obsolete facilities– Internal operating problems– Poor marketing skills
39
Strengths and Weakness form a basis for INTERNAL analysis• By examining strengths, you can
discover untapped potential or identify distinct competencies that helped you succeed in the past.
• By examining weaknesses, you can identify gaps in performance, vulnerabilities, and erroneous assumptions about existing strategies.
40
Strengths• Consider from both the view of the firm (product)
as well as from customers and competitors• Realistic and not modest• One’s strength is another’s weakness• Questions:
– What are the firm’s advantages over others?– What does the firm do well?– What makes you stand out from your competitors?
41
Weaknesses• Consider from internal and external viewpoint• Be truthful so that weaknesses may be
overcome as quickly as possible• One’s strength is another’s weakness• Questions.
– What is done poorly?– What can be improved?
– What should be avoided?
42
SWOT Analysis Framework
S tre n g thsW e a kne sses
In te rna l A na lys is
O p po rtu n it iesT h re a ts
E x te rna l A na lys is
E nv iron m en ta l S can
SWOT Matrix
43
SWOT Matrix
Internal External
+ Strengths Opportunities
- Weaknesses Threats
44
Getting Started
• Be realistic about the strengths and weaknesses
• Analysis should distinguish between where you are today and where you could be in the future
• Be specific. Avoid grey areas. • Keep the SWOT short and simple. Avoid
complexity and over analysis • SWOT is subjective.
45
Suggestions for conducting SWOT Analysis:• Be realistic; no need to inflate strengths or be in
denial about shortcomings.• Distinguish between where your technology is
today, and where it could be in the future.• Be specific. Avoid grey areas.• Always analyze in the context of your
competitive environment.• Keep your SWOT short and simple.
46
Using the SWOT Analysis• Weaknesses should be looked at in order
to convert them into strengths.• Try to match your strengths with external
opportunities.• Threats should be converted into
opportunities.• Strengths and opportunities should be
matched.
47
Expanding Your SWOT Analysis
• Delve deeper into the details of the technology.
• Include more detailed competitor information in the analysis.
• Take a closer look at the business environment.
• Expand the reach of a SWOT analysis through surveys.
48
Simple rules for a successful SWOT analysis
• Establish the objectives• Establish the team • Allocate research and information
gathering tasks• Evaluate listed ideas against Objectives• Evaluate the List• Action Plan• Build the Strategies• Review the SWOT
49
Drawbacks of SWOT
1. Usually reflects an existing position and viewpoint
2. Can look for 'fit' rather than to 'stretch'
3. Snapshot
4. SWOT analysis can very subjective
5. May be too close or far away from the actual activities of the organization
6. Focusing on the internal state vs. The external
7. Align internal efforts with external opportunities• Caution:
– Do not rely on it too much– Two people rarely come-up with the same final
version of SWOT
50
Conclusion
• A SWOT analysis when correctly applied, is one tool that could provide an overall picture of the current situation and the outstanding requirements for business organizations.
• Used creatively, SWOT can form a foundation upon which to construct strategic plans for implementation
51
PEST
52
PEST
• Political: Local, national and international political developments – how will they affect the organisation and in what way/s?
• Economic: what are the main economic issues – both nationally and internationally – that might affect the organisation?
• Social: what are the developing social trends that may impact on how the organisation operates and what will they mean for future planning?
• Technological: changing technology can impact on competitive advantage very quickly!
53
PEST• Examples:1. Growth of China and India as manufacturing centres2. Concern over treatment of workers and the
environment in less developed countries who may be suppliers
3. The future direction of the interest rate, consumer spending, etc.
4. The changing age structure of the population5. The popularity of ‘fads’ like the Atkins Diet6. The move towards greater political regulation of
business7. The effect of more bureaucracy in the labour market
54
Five-Forces
• Developed by Michael Porter: forces that shape and influence the industry or market the organisation operates in.
– Strength of Barriers to Entry - how easy is it for new rivals to enter the industry?
– Extent of rivalry between firms – how competitive is the existing market?
– Supplier power – the greater the power, the less control the organisation has on the supply of its inputs.
– Buyer power – how much power do customers in the industry have?
– Threat from substitutes – what alternative products and services are there and what is the extent of the threat they pose?
55
Strategy Requires Good Analyses & Choices
56
RESPONSIBILITIES RESPONSIBILITIES FOR MANAGERSFOR MANAGERS
57
RESPONSIBILITIES FOR RESPONSIBILITIES FOR MANAGERSMANAGERS
1. Establishing the mission
2. Formulating an organizational philosophy
3. Establishing policies
4. Setting Objectives
5. Developing a strategy
6. Planning the organizational structure
7. Providing personnel
58
RESPONSIBILITIES FOR MANAGERS
8. Establishing procedures
9. Providing facilities
10. Providing capital
11. Setting standards
12. Establishing management programmes and operational plans
13. Providing control information
14. Activating people
59
HOW CAN WE APPLY STRATEGIC PLANNING
IN THE JUDICIARY
(THE CASE OF LESOTHO)
60
THANK YOU