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

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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)

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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

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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

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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

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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

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Figure 4.4 Levels of organizational culture—observable culture and core culture.

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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

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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

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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

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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