Lecture 1

Lecture Notes of Strategic Planning and Decision Making
EM-503
Strategic Planning
& Decision Making
Resource Person
Dr. Muhammad Wasif, PMP
Assistant Professor
Deputy Director, Quality Enhancement Cell,
NED University of Engineering and Technology.
Resource Person
Qualification
• 2003 – B.E. in Mechanical Engineering from NED University.
• 2007 – M. Engg. In Industrial & Manufacturing Engineering from NED University.
• 2013 – Ph.D. in CAD/CAM (Mechanical Engineering) from Concordia University,
Montreal (Quebec) Canada.
• 2016 – Project Management Professional, PMI, USA.
Experience
• 2004 ‐2006 – Worked in Assembly Operations Plant of Hinopak Motors Ltd.
• 2006 ‐ to date – Worked as “Lecturer” and “Asst. Professor” in IMD, NED University.
• Worked 6 months to run Product Development Center of NED University.
• Deputy Director – QEC.
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Topic 1 ‐ Overvier of Strategic Management © Dr. Muhammad Wasif, PMP
(c) Dr. M. Wasif, PMP 1
Course Contact
Class contact hours : Tuesday ‐ 6:00pm to 9:00pm
Consulting hours : Monday or Wednesday ‐ 4:30pm to 6:00pm
Consulting Office : Room 2 Ground floor – IM Building.
e‐mail : mwasif@hotmail.com
URL : www.drmwasif.com
Go to “Student Resource” Link and Click on your subject
Facebook : www.facebook.com/Muhammad.wasif
Linkedin : pk.linkedin.com/in/muhammadwasif
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Class Room Decorum

• Punctuality of time is necessary.
• Two attendances will be marked in each class after 10
minutes of session start.
• Mobile phone, tablet and PCs are strictly not allowed in the
class.
• Food, smoking and Drinks not allowed.
• Submission of assignments and conduction of tests will be
on prescribed dates.
• Students are welcomed to add their experiences or raise
queries during the session.
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Marks Distribution
 Quiz 05%
 Assignment 20%
 Mid Term 10%
 Class participation
& attendance 05%
 Final Examination 60%
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Assignment
 Case Studies 4 to 5
 Assignment 5 to 7
 Each Assignment is based on your
company/organization study relevant to the strategic
management topic.
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Recommended Books
Book : Strategic Management Concepts And Cases
Author : Fred R. David, Forest R. David
Edition : 16th Global Edition
Publishers : Prentice Hall
Book : Strategic Management
Author : Frank R. Rothaeral
Edition : 3rd
Publishers : McGraw Hill
Book : Strategic Management and Business Policy
Author : Thomas L. Wheelen & J. David Hunger
Edition : 15th
Publishers : Prentice Hall
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Topic # 1
Overview of Strategic
Management
Resource Person
Dr. Muhammad Wasif, PMP
Assistant Professor
Department of Industrial and Manufacturing Engineering,
NED University of Engineering and Technology.
Strategic Management
 Strategy: What do we have to do
today to be ready for tomorrow?
 A road map to lead an organization

to where it would like to be in five to
ten years
 Art & science of formulating,

implementing, and evaluating,
cross‐functional decisions that
enable an organization to achieve its
objectives. [David]
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Strategic Management & Planning

 Strategic management: refer to strategy formulation,
implementation, and evaluation,
 Strategic planning referring only to strategy formulation.
 Long‐range planning: The purpose of strategic management
is to exploit and create new and different opportunities for
tomorrow;
 A strategic plan results from tough managerial choices among
numerous good alternatives, and it signals commitment to
specific markets, policies, procedures, and operations.
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Stages of Strategic Management
Strategy
Strategy Strategy
Evaluation
Formulation Implementation
and control
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Strategy Formulation
Strategy‐formulation decisions commit an
organization to specific products, markets, resources,
and technologies over an extended period of time.
Vision & Mission
External Opportunities & Threats
Internal Strengths & Weaknesses
Long‐Term Objectives
Alternative Strategies
Strategy Selection
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Initial Stage;
 New business opportunities
 Businesses to abandon
 Allocation of resources
 Expansion or diversification
 International markets
 Mergers or joint ventures
 Avoidance of hostile takeover
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14
15
Strategy Implementation
Implementing strategy means mobilizing employees

and managers to put formulated strategies into action.
Annual Objectives
Policies
Employee Motivation
Resource Allocation
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Phases of Strategic Management

Long Term planning 3 years
 Objectives can be defined as specific results that an organization seeks to
achieve in pursuing its basic mission
 create synergy; reveal priorities; focus coordination;
Strategies 5 years
 Strategies are the means by which long‐term objectives will be achieved.
 geographic expansion, diversification, acquisition, Product development,
market penetration, retrenchment, divestiture, liquidation, and joint ventures
Annual Objective 1 year
 Annual objectives are short‐term milestones that organizations must achieve to
reach long term objectives
 Annual objectives should be stated in terms of management, marketing,
finance/accounting, production/operations, R&D, and MIS accomplishments
Policies
 Policies are the means by which annual objectives will be achieved.
 Policies include guidelines, rules, and procedures established to
support efforts to achieve stated objectives.
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Strategy Implementation
Action stage;
 Developing strategy‐supportive culture
 Creating effective organizational structure
 Redirecting marketing efforts
 Preparing budgets
 Developing and utilizing information systems
 Linking employee compensation to organizational
performance
 Requires personal discipline, commitment, and sacrifice
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Strategy Evaluation
Managers desperately need to know when particular
strategies are not working well; strategy evaluation is
the primary means for obtaining this information.
Internal Review
External Review
Performance Metrics
Corrective Actions
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Strategy Evaluation
Final stage;
 Strategy evaluation is needed because success today is no
guarantee of success tomorrow
 Success always creates new and different problems
 Complacent organizations experience demise
 Three fundamental strategy‐evaluation activities are
1. Reviewing external and internal factors that are the bases for
current strategies,
2. Measuring performance (through KPIs and Annual Reports),
3. Taking corrective actions.
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Integrating Intuition and Analysis

 Based on past experiences, judgment, and feelings, most
people recognize that intuition is essential to making good
strategic decisions
 Qualitative and Quantitative information to make effective
decisions to be made under conditions of uncertainty
 Where to invest, where not?
 What product is needed? What to discontinue?
 What feature are demanding in products
 What services are in demand?
 What customer wants?
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Adapting Changes
 Organizations should continually monitor internal and
external events and trends so that timely changes can be made
as needed
 Rate and magnitude of changes that affect organizations are
increasing dramatically
 Survival: Most of the organization in Forbes and Fortune 500
ten year ago are vanished now.
 Changing demand of customer?
 Changing trends?
 Changing Technology?
 Changing Cultural aspects?
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Key Terms
Competitive Advantage: any activity a firm does especially well
compared to activities done by rival firms, or any resource a firm
possesses that rival firms desire
 E.g. Toyota : TPS, Quality System, Unilever: Customer Care,
Standard Chartered: state-of-the-art web banking
Strategists: individuals most responsible for the success or failure

of an organization
 such as chief executive officer, president, owner, chair of the
board, executive director, chancellor, dean, and entrepreneur
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Key Terms
Vision: “What do we want to become?”
 Vision of the NED UET (I proposed and prepared the vision,
Dean Committee reviewed the vision statement) is;
“Be a leader in enabling Pakistan's social and economic
transformation.”
Mission: “What we do?” Enduring statements of purpose that
distinguish one business from other similar firms.
 Mission of the NED UET (Same as vision of NED UET) is;
“Acquire education and research excellence in engineering and
allied disciplines to produce leadership and enabling application
of knowledge and skills for the benefit of the society with integrity
and wisdom.” 24
Key Terms
Vision: “What do we want to become?”
 Vision of the NED UET (I proposed and prepared the vision,
Dean Committee reviewed the vision statement) is;
“Be a leader in enabling Pakistan's social and economic
transformation.”
Mission: “What we do?” Enduring statements of purpose that
distinguish one business from other similar firms.
 Mission of the NED UET (Same as vision of NED UET) is;
“Acquire education and research excellence in engineering and
allied disciplines to produce leadership and enabling application
of knowledge and skills for the benefit of the society with integrity
and wisdom.” 25
Strategic Management Framework
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Assignment 1
1. Identify the top three strategists in your organization?
2. Write Vision and Mission statement of your organization?
3. Identify the long term objective of your organization?
4. Identify the strategy your organization is pursuing to achieve
long term objective?
5. Write annual objective of your Marketing department,
production department, quality department and customer care
department?
6. What are the core policies of your organization?
7. Identify three (3) competitors/rivals of your organization?
8. Compare and perform the some from Q3 to Q6 on rivals and
how your organization is different from these rivals?
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Lecture Notes of Strategic Planning and Decision Making

• 2004 ‐2006 – Worked in Assembly Operations Plant of Hinopak Motors Ltd.

• 2006 ‐ to date – Worked as “Lecturer” and “Asst. Professor” in IMD, NED University.

Consulting hours : Monday or Wednesday ‐ 4:30pm to 6:00pm

Consulting Office : Room 2 Ground floor – IM Building.

Class Room Decorum

 A road map to lead an organization

 Art & science of formulating,

Strategic Management & Planning

Stages of Strategic Management

Implementing strategy means mobilizing employees

Phases of Strategic Management

Integrating Intuition and Analysis

Strategists: individuals most responsible for the success or failure

Strategic Management Framework

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