Strategic Planning

Prepared By:

 Mirza Atif Baig (55383)

 Syed Ghufran Hasan (55019)
 Kazim Junaid (55491)
 Presentation No. 05

Strategic Planning and



Management
 Strategic Planning Process
 Business Level Strategy
 Corporate Level Strategy
 Functional Level Strategy

 FAQ’s about strate gic
planning and mana gement

 What is strategic
management?
   
Strategic management  can
be used to determine
mission, vision, values,
goals, objectives, roles and
responsibilities, timelines,
 FAQ’s about strate gic
planning and mana gement

What is strategic planning?



Strategic planning is a
management tool. As with
any management tool, it is
used for one purpose only:
to help an organization do a
better job.
 An Introduction

 In today’s competitive business

environment budget-oriented planning
or forecast based planning is
insufficient for any large organization
to grow and prosper. The company
must need to rely and undertake
strategic planning that clearly defines
the goals and objectives of the
organization keeping all the
competitive and limited resources.
Mission and Objectives

Environmental Scanning

Strategy Formulation

Strategy Implementation

Evaluation and Control

 Mission and Objectives

T h e m issio n sta te m e n t d e fin e s th e

co m p a n y ’ s b u sin e ss visio n , in clu d in g
th e u n ch a n g in g va lu e s a n d p ro p o se o f
th e firm a n d fo rw a rd lo o kin g visio n a ry
g o a ls th a t g u id e th e p u rsu it o f fu tu re
o p p o rtu n itie s
 Environmental Scanning
The Environmental Scan includes the following
components:
qInternal Analysis of the Firm
qExternal Environment(PSET Analyses)
Political
Economic
Social
Technological
qIndustrial Firm’s Environment
q
 Strategy Formulation

G ive n in fo rm a tio n fro m th e

e n viro n m e n ta lsca n , th e firm
sh o u ld m a tch its stre n g th s w ith
o p p o rtu n itie s th a t it h a s
id e n tifie d w h ile a d d re ssin g its
w e a kn e sse s w ith th re a ts.
 Strategy
Implementation

T h e se le cte d stra te g y is
im p le m e n te d b y m e a n s o f
p ro g ra m s, b u d g e ts a n d
p ro ce d u re s. Im p le m e n ta tio n
in vo lve s firm ’ s re so u rce s a n d
m o tiva tio n o f th e sta ff to
a ch ie ve o b je ctive .
 Evaluation and control
The implemented strategy must be monitored
and adjustments must be made as needed:
qDefines parameters to be measured
qDefine target values for those parameters
qPerform measurements
qPerform measurements
qCompare measured results with pre-defined
standards
qMake necessary changings

Simplified Strategic
Planning by:
Bradford, Robert W.
 Types of strategies

qB u sin e ss le ve lS tra te g y
qC o rp o ra te Le ve lS tra te g y
qFu n ctio n Le ve lS tra te g y
Business Level Strategy
It is an integrated and co-ordinate set of
commitments and actions the firm uses to gain
a competitive advantage by exploiting core
competencies in specific product markets.
Who
What
How
 Costumer Relations by
superior Offer

qH e lp co stu m e rs to d e ve lo p a
n e w co m p e titive a d va n ta g e
qE n h a n ce th e va lu e o f existin g
se rvice s/ g o o d s.
 Generic Competitive
Strategies
Co
mp
Broad
et Target
it
iv
e
Sc
op Narrow
e Target

Competitive
Advantage
 Cost Leadership
Strategy

O rg a n iza tio n s co m p e te fo r a w id e
cu sto m e r b a se d o n p rice . Price is b a se d
o n in te rn a le fficie n cy in o rd e r to h a ve a
m a rg in th a t w illsu sta in a b o ve a ve ra g e
re tu rn s a n d co st to th e cu sto m e r so
th a t cu sto m e rs w illp u rch a se yo u r
p ro d u ct/ se rvice .
 Differentiation Strategy

 Value is provided to customers through unique

features and characteristics of an organization's
products rather than by the lowest price. This is done
through high quality, features, high customer service,
rapid product innovation, advanced technological
features, image management, etc.
(Some companies that follow this strategy: Rolex, Intel,
Ralph Lauren) 
Focused Cost Leadership

Organizations not only compete on price, but

also select a small segment of the market to
provide goods and services to. For example a
company that sells only to the Pakistani
government. 
Focused Differentiation

 Organizations not only compete based on

differentiation, but also select a small
segment of the market to provide goods and
services. 

Reference:
Mintzberg, Henry, Lampel, J.,
Ahlstrand, B., Strategy
Safari
 What is Corporate Level
Strategy?

S tra te g y co n ce rn e d w ith
d e cid in g w h ich in d u strie s a firm
sh o u ld co m p e te in a n d h o w th e
firm sh o u ld e n te r a n d exit
in d u strie s.
 Vertical Integration

M o vin g u p stre a m in to a
b u sin e ss th a t su p p lie s in p u t to
th e firm ’ s co re b u sin e ss o r
d o w n stre a m in to th e b u sin e ss
th a t u se o u tp u ts o f th e firm ’ s
co re b u sin e ss.
 Apple in Vertical
Integration

In 2 0 0 1 A p p le d e cid e d to o p e n
its o w n sto re s to se llth e ir
p ro d u cts in clu d in g la p to p s a n d
iPo d s . T h is is a n exa m p le o f
d o w n stre a m V e rtica lIn te g ra tio n .
 Competitive Contract
W h e re in th e co rp o ra tio n co m p e titio n is
to b e lo ca lize d . Ta ke th e ca se o f
in su ra n ce : In th e m id -1 9 9 0 's, A e tn a a s a
co rp o ra tio n w a s cle a rly id e n tifie d w ith its
co m m e rcia la n d p ro p e rty ca su a lty
in su ra n ce p ro d u cts. T h e co n g lo m e ra te
Textro n w a s n o t. Fo r Textro n , co m p e titio n
in th e in su ra n ce m a rke ts to o k p la ce
sp e cifica lly a t th e b u sin e ss u n it le ve l,
th ro u g h its su b sid ia ry , Pa u lR e ve re .
( Textron divested itselfof The Paul
 Managing Activities and
Business Interrelationships
 
C o rp o ra te stra te g y se e ks to d e ve lo p
syn e rg ie s b y sh a rin g a n d co o rd in a tin g
sta ff a n d o th e r re so u rce s a cro ss
b u sin e ss u n its, in ve stin g fin a n cia l
re so u rce s a cro ss b u sin e ss u n its, a n d
u sin g b u sin e ss u n its to co m p le m e n t
o th e r co rp o ra te b u sin e ss a ctivitie s.
Ig o r A n so ff in tro d u ce d th e co n ce p t o f
syn e rg y to co rp o ra te stra te g y.
 Management Practices

C o rp o ra tio n s d e cid e h o w b u sin e ss u n its

a re to b e g o ve rn e d : th ro u g h d ire ct
co rp o ra te in te rve n tio n ( ce n tra liza tio n )
o r th ro u g h m o re o r le ss a u to n o m o u s
g o ve rn m e n t ( d e ce n tra liza tio n ) th a t
re lie s o n p e rsu a sio n a n d re w a rd s.
Principles of Management:
South Asian Edition by:
Charles W L Hill, Steven L
McShane
 Functional Level
Strategy

The functional level of the organization is the level

of the operating divisions and departments. The
strategic issues at the functional level are related to
business processes and the value chain. Functional level
strategies in marketing, finance, operations, human
resources, and R&D involve the development and
coordination of resources through which business unit
level strategies can be executed efficiently and
effectively.

Reference:
Mintzberg, Henry, Lampel, J.,
Ahlstrand, B., Strategy Safari
THANK YOU