ACED Planing and strategy.pptx

8/17/2019 ACED Planing and strategy.pptx

1/31

Planning and Strategy


2/31

Importance of Planning

• It precedes all other managerialfunctions.

• Prepares the organization to adapt tochanges in business environment-tangible and intangible changes

• Focus on attainment of objectives

• Better coordination.

• Brings about eectiveness.


3/31

Planning and Strategy

Planning

• Blue print for futurecourse of action toattain specic results.

Strategy

• Business strategy is a

!ell thought of plan ofaction for survivaland success bycareful analysis of

strengths and!ea"ness of rivalcompetitors.


4/31

#ypes of Plans

• $orporate Planning- Strategic % longterm&and operational % short term&

• Proactive Planning- in anticipation of future

change• 'eactive Planning-after changes have crept

in.

• Formal Planning ( rational)systematic)!ell

documented % big organisations&

• Informal Planning- guided managers gutfeelings% small organisations&


5/31

*ierarchy of Plans

Corporate Plans-(MissionStatement)- Top Management

Strategic Plans- Middle and TopManagement

Operational Plans- First Linemanagers and Middle Managers


6/31


7/311-7

Strategic +anagers for ,ll evels


8/31

Corporate Strategy BusinessStrategy

OperationFunctionalstrategy

Scope ntire organisation SB/ Functionalareas% Production.Finance0

+ar"eting&Source #op +gt #op evel- SB/

+anagers1perational)Functional+anagers

Time!ori"on

ong #erm +edium ( ongterm

Short- longterm


9/31

Strategic Intent of a$ompany• 'epresents the belief

about its state of thefuture. #he purpose it!ishes to pursue

% long term and shortterm&

• #ision$ Mission-ong #erm and fe!

•

%oals$ o&'ectives0plans- Short term andmany.

!ierarcy o

Strategic *ntent2isio

n+issio

n

3oals

1bjectives

Plans


10/31

#he $ontent of a $orporate Strategy

• 4uality- #4+

• Focus on "ey and critical issues+, onson and onson5 'edesigned its #4+ !ith three targets in

mindBoosting customer satisfaction0 cost cutting0 reducing productintroduction time.


11/31

Strategic Planning

• 'ational planning by topmanagement6

Defining the Mission and Setting Top-Level Goals

External Analysis of Opportunities and Threats

Internal Analysis of Strengths and Weanesses

Sele!tion of Appropriate Strategies

I"ple"entation of #hosen Strategies

$asi! Strategi! %lanning Model


12/31

Process 1f Strategic +anagement-SB/% Business Strategy&

+ission S71#3oal

Setting

Strategy

Formulation

Imple

mentation

$ontr

olFeedbac"

Implementation

Planning

Feedbac" oop

PS#


13/31

PS# ,nalysis


14/31

S71# ,nalysis


15/31

B$3 +,#'I8


16/31

,nalyzing Industry Structure

• 1pportunities and threats arecompetitive challenges arising forchanges in industry conditions.

• ,nalytic tools such as the fve orces model help

managers formulate

appropriate strategicresponses.


17/31

#he Five Forces +odel- +ichael

Porter


18/31

Potential $ompetitors

• 9e! entrants into an industry threatenincumbent companies.

• Barriers to entry5

– Brand loyalty – ,bsolute cost advantages

– conomies of scale

– S!itching costs

– 3overnment regulation

• ntry barriers reduce the threatof ne! and additional competition.


19/31

'ivalry ,mong stablished $ompanies

• #he intensity of competitive rivalry inan industry arises from5 – Industry:s competitive structure- nos

and size distribution of companies in it. – Fragmented industry- large number ; small size eg5 health

clubs0 real estate bro"erage.

– #hese have lo! entry barriers and no productdierentiation0 so easy to enter ne! mar"ets.

– $onsolidated industry-e< soft drin"s0 pharma0 automobile0fe! large players. *ere barriers to entry are high.


20/31

$ompetitive Structure

Continuum o *ndustry Structures

Fragmented

+any rms0no dominant

rm

Fe! rms0shared dominance

%oligopoly&

Consolidated

1ne rm orone

dominant rm

%monopoly&


21/31

#he Bargaining Po!er ofBuyers

• Buyers are most po!erful !hen5

– #here are many small sellers and fe! large buyers.

– Buyers purchase in large =uantities.

– , single buyer is a large customer to a rm.

– Buyers can s!itch suppliers at lo! cost.

– Buyers purchase from multiple sellers at once.

– Buyers can easily vertically integrate to compete !ithsuppliers.

–

< 7almart0 auto component supply industry !hosebuyers are large automobile manufacturers such as 3+0Ford0 #oyota. *ere buyers have a strong in>uence0 strongbargaining po!er and thus a strong competitive force.


22/31

#he Bargaining Po!er ofSuppliers

• Suppliers have bargaining po!er !hen5 – #heir products have fe! substitutes and are important

to buyers.

– #he buyer:s industry is not an important customer to

the supplier. – ?ierentiation ma"es it costly for buyers to s!itch

suppliers.

– Suppliers can vertically integrate for!ard to compete!ith buyers and buyers can:t integrate bac"!ard tosupply their o!n needs.

–


23/31

Substitute Products

• #he competitive threat of substituteproducts increases as they come closerto serving similar customer needs. Priceis mostly the determining factor here.

CloseFar


24/31

, Si


25/31

#* $1+P/#' S$#1'5 Industries and Segments

$omputer Sector

$omputer$omponent

Industries

$omputer*ard!are

Industries

$omputerSoft!are

Industry

?is" ?riveindustry

Semiconductorindustry

+odem industry

+ainframeindustry

Personalcomputerindustry

*andheldindustry

Supply

inputs

Provides$omplime

nts

9oteboo" P$+ar"et segment

?es"top P$mar"et Segment

Server +ar"et

segment


26/31

#he 'ole of the +acroenvironment


27/31

Strategic 3roups 7ithinIndustries

• #he concept of strategic groups – 7ithin an industry0 a competitor grouping using

similar strategies that dier from other industrygroups.

• Implications of strategic groups – #he closest industry competitors are those in

the group.

– #he various industry groups are dierentially

and competitively advantaged and positioned. – +obility barriers inhibit the movement of

competitors from one strategic group toanother.


28/31

Strategy Implementation•

+eaning5 #he administrative tas"sneeded to put strategy into practice.

• Strategy and 1rganization Structure

•

Institutionalized ( values$ norms$roles o &eaviour

• 1perationalized- policies$

procedures$ rules


29/31

Institutionalizing Strategy- 'ole of

$1

• Interpret

• nact

•

+otivate• ,daptable $ulture


30/31

+anagement by 1bjectives%+B1&

• , formal set of procedures that establishes and revie!sprogress to!ards common goals for managers andsubordinates.

+lements o MBO

@. #op evel 3oal SettingA. $ommitment

. Individual 3oals

C. Participation and autonomy in implementation of plans

D. Performance 'evie!+valuation o MBO5

3oal setting-Feedbac" on performance-participation


31/31

• ,nnual 1bjectives5 Identify precisely!hat must be accomplished eachyear in order to achieve an

organizations strategic 3oals.• 'e!ard Systems5 Incentives) bonuses

Documents

ACED Planing and strategy.pptx