Planning and

Strategic
Management
Chapter Four

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 Quote

Manage your destiny, or someone

else will.

Jack Welsh

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 Learning Objectives
LO1 Summarize the basic steps in any
planning process.
LO2 Describe how strategic planning
should be integrated with tactical and
operational planning.
LO3 Identify elements of the external
environment and internal resources
of the firm to analyze before
formulating a strategy.
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 Learning Objectives (cont.)
LO4 Define core capabilities and
explain why they provide the
foundation for business strategy.
LO5 Summarize the types and choices
available for corporate strategy.
LO6 Discuss how companies can
achieve competitive advantage
through business strategy.
LO7 Describe the keys to effective
strategy implementation.
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 Decision Making
Stages and
Formal Planning Steps

Exhibit 4.1
5
 Planning
Conscious, systematic process of
making decisions about goals and
activities that an individual, group,
work unit, or organization will pursue
in the future.

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 The Basic Planning Process

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 Situational Analysis
A process planners use, within time
and resource constraints, to gather,
interpret, and summarize all
information relevant to the planning
issue under consideration.

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 Alternative Goals and Plans
Should stress creativity and encourage
managers and employees to think in
broad terms about their jobs.
Goal
A target or end that management
desires to reach.
SMART goals are effective:
Specific, measurable, attainable, relevant,
time-bound.

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 Question
___________ are the actions or means
managers intend to use to achieve
organizational goals.
A. Missions
B. Plans
C. Strategies
D. Services

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 Alternative Goals and Plans
Plans
The actions or means managers intend
to use to achieve organizational goals.
Contingency plans
Actions to be taken when the initial
plans have not worked well or events in
the external environment require a
change.

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 Goal and Plan Evaluation

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 Goal and Plan Selection

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 Implementation

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 Monitor and Control
Managers must:
Continually monitor the actual
performance of their work units against
the units goals and plans.
Develop control systems to measure
that performance and allow them to
take corrective action when the plans
are implemented improperly or when
the situation changes.

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 Social Enterprise
Novo Nordisk Monitors Progress
Regarding its Triple Bottom Line (TBL)
Novo Nordisk, follows a TBL strategy meaning
decisions are based on the belief that a
healthy economy, environment, and society
are fundamental to long-term business
success.
To ensure that the TBL philosophy would
stick, Novo Nordisk took the uncommon step
of incorporating it into their company bylaws.

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 Social Enterprise Questions
Novo Nordisk Monitors Progress Regarding
its Triple Bottom Line (TBL)
Why do you think so few companies
have incorporated TBL reporting into
their bylaws?
Assume you want your employer to
consider adopting a TBL philosophy.
How would you pitch the idea?

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 Strategic Planning

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 Effective Strategies Answer
Five Questions

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 Hierarchy of Goals and Plans
Exhibit 4.4

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 Tactical and Operational
Planning
Tactical planning
Set of procedures for translating broad
strategic plans into specific goals and
plans that are relevant to a distinct portion
of the organization (e.g., marketing
department).
Operational planning
The process of identifying the specific
procedures and processes required at
lower levels of the organization.
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 The Strategy Map
Exhibit 4.5

22
 Strategic Management
A process that involves managers from all
parts of the organization in the formulation
and implementation of strategic goals and
strategies
Exhibit 4.6

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 Question
An organizations __________ is the
basic
purpose and scope of operations.
A. Mission
B. Strategy
C. Goal
D. Policy

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 Establishment of Mission,
Vision,
and Goals
Mission
An organizations basic purpose and
scope of operations.
Strategic vision
The long-term direction and strategic
intent of a company.
Provides a perspective on where the
organization is headed and what it can
become.
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 Analysis of External Opportunities
and Threats
Stakeholders
Groups and
individuals who
affect and are
affected by the
achievement of
the
organizations
mission, goals,
and strategies.
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 Analysis of Strengths
and Weaknesses

Exhibit 4.8
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 Resources and Core
Competencies
Exhibit 4.9

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 Analysis of Strengths and
Weaknesses
Benchmarking
Process of assessing how well one
companys basic functions and skills
compare with those of another company
or set of companies.
Goal of benchmarking is to thoroughly
understand the best practices of other
firms and to undertake actions to
achieve both better performance and
lower costs.
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 SWOT Analysis
A comparison of strengths,
weaknesses, opportunities, and
threats that helps executives
formulate strategy.

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 Strategy Formulation
Corporate strategy
Set of businesses, markets, or industries
in which an organization competes and
the distribution of resources among
those entities.
Concentration
A strategy employed for an organization
that operates a single business and
competes in a single industry.

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 Strategy Formulation
Vertical integration
The acquisition or development of new
businesses that produce parts or
components of the organizations
product.
Concentric diversification
A strategy used to add new businesses
that produce related products or are
involved in related markets and
activities.
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 Summary of Corporate
Strategies
Exhibit 4.11

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 BCG Matrix
Exhibit 4.12

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 Strategy Formulation
Low-cost Differentiation
strategy strategy
A strategy an A strategy an to
organization uses
build competitive
to build
competitive advantage by
advantage by being unique in
being efficient and its industry along
offering a standard, one or more
no-frills product. dimensions.

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 Strategy Implementation

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 Strategic Control
Strategic control system
A system designed to support managers
in evaluating the organizations progress
regarding its strategy and, when
discrepancies exist, taking corrective
action.

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 Management in Action - Onward
Walt Disney Companys Strategy
Under Robert Iger
Walt Disney Companys mission
statement once was Make people
happy.
The statement has evolved to: to be
one of the worlds leading producers
and providers of entertainment and
information, using its portfolio of
brands to differentiate its content,
services and consumer products.
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 Management in Action - Questions
Walt Disney Companys Strategy
Under Robert Iger
How clear is Walt Disney Companys
mission and how well does its
strategy support the mission?
In the BCG matrix where would you
place Disneys main businesses?

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