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1. Define strategic planning. Distinguish its difference from long range planning.

Explain the significance of strategic planning in rapid changing business environment. a. Strategic planning is a means of establishing major directions for the organisation. Through strategic planning, resources are concentrated in a limited number of major directions in order to maximize benefits to stakeholders--those we exist to serve and who are affected by the choices we make. In higher education, those stakeholders include students, employers of graduates, funding agencies, and society, as well as internal stakeholders such as faculty and staff. Strategic planning is a structured approach to anticipating the future and "exploiting the inevitable." The strategic plan should chart the broad course for the entire institution for the next five years. It is a process for ensuring that the budget dollars follow the plan rather than vice versa. Strategic planning is not just a plan for growth and expansion. A strategic plan can and often does guide retrenchment and reallocation. b. It is sometimes thought that strategic planning is just another buzz word for long-range planning. There are major differences between strategic planning and garden variety long-range planning. First, strategic planning is much more sensitive to the external environment than long-range planning. Traditionally, long-range planning was inwardly focused. The goals and objectives were formulated with minimal attention to the larger system in which the institution functioned. Traditional long-range planning could be conducted with minimal involvement of stakeholders, those affected by the plan. Strategic planning, particularly the model in Figure 1.1 which has been used in a variety of departments, offices, and colleges on the UW-Madison campus, relies on information from internal and external stakeholders regarding their needs, expectations and requirements as the foundation for planning. Related to the first difference is the fact that traditional long-range planning tends to maintain the status quo over time. Assuming that the future will be a linear extension of the present, planners typically spend little time attempting to reshape the organization. Strategic planning is much more likely to result in a deliberate shift in direction or refocusing of mission in light of changes, actual or anticipated. Since long-range planning has generally been oriented to the status quo, visioning was not a critical component. Strategic plans, however, are developed around a vision of success or a vision of the desired future. This idealized word picture represents the best possible future for the institution. The plan helps the make this shared vision a reality.

2. Discuss major components of strategic management process Company Mission The mission of a company is the unique purpose that sets it apart from other companies of its type and identifies the scope of its operations. In short, the mission describes the companys product, market, and technological areas of emphasis in a way that reflects the values and priorities of the strategic decision makers.

Social responsibility is a critical consideration for a companys strategic decision makers since the mission statement must express how the company intends to contribute to the societies that sustain it. A firm needs to set social responsibility aspirations for itself, just as it does in other areas of corporate performance. Internal Analysis The company analyzes the quantity and quality of the companys financial, human, and physical resources. It also assesses the strengths and weaknesses of the companys management and organizational structure. Finally, it contrasts the companys past successes and traditional concerns with the companys current capabilities in an attempt to identify the companys future capabilities. External Environment A firms external environment consists of all the conditions and forces that affect its strategic options and define its competitive situation. The strategic management model shows the external environment as three interactive segments: the remote, industry, and operating environments. Strategic Analysis and Choice Simultaneous assessment of the external environment and the company profile enables a firm to identify a range of possibly attractive interactive opportunities. These opportunities are possible avenues for investment. However, they must be screened through the criterion of the company mission to generate a set of possible and desired opportunities. This screening process results in the selection of options from which a strategic choice is made. Long-Term Objectives The results that an organization seeks over a multiyear period are its long-term objectives. Such objectives typically involve some or all of the following areas: profitability, return on investment, competitive position, technological leadership, productivity, employee relations, public responsibility, and employee development. Generic and Grand Strategies Many businesses explicitly and all implicitly adopt one or more generic strategies characterizing their competitive orientation in the marketplace. Low cost, differentiation, or focus strategies define the three fundamental options. Enlightened managers seek to create ways their firm possesses both low cost and differentiation competitive advantages as part of their overall generic strategy. They usually combine these capabilities with a comprehensive, general plan of major actions through which their firm intends to achieve its long-term objectives in a dynamic environment. Called the grand strategy, this statement of means indicates how the objectives are to be achieved. Action Plans and Short-Term Objectives Actions plans translate generic and grand strategies into action by incorporating four elements. First, they identify specific functional tactics and actions to be undertaken in the next week, month, or quarter as part of the businesss effort to build competitive advantage. The second element is a clear time frame for completion. Third, action plans create accountability by identifying who is

responsible for each action in the plan. Fourth, each action in an action plan has one or more specific, immediate objectives that are identified as outcomes that action should generate. Functional Tactics Within the general framework created by the businesss generic and grand strategies, each business function needs to identify and undertake activities unique to their function that help build a sustainable competitive advantage. Managers in each business function develop tactics which delineate the functional activities undertaken in their part of the business and usually include them as a core part of their action plan. Functional tactics are detailed statements of the means or activities that will be used to achie ve short-term objectives and establish competitive advantage. Policies that Empower Action Speed is a critical necessity for success in todays competitive, global marketplace. One way to enhance speed and responsiveness is to force/allow decisions to be made whenever possible at the lowest level in organizations. Policies are broad, precedent-setting decisions that guide or substitute for repetitive or time-sensitive managerial decision making. Creating policies that guide and preauthorize the thinking, decisions, and actions of operating managers and their subordinates in implementing the businesss strategy is essential for establishing and controlling the ongoing operating process of the firm in a manner consistent with the firms strategic objectives. Restructuring, Reengineering, and Refocusing the Organization Until this point in the strategic management process, managers have maintained a decidedly market-oriented focus as they formulate strategies and begin implementation through action plans and functional tactics. Now the process takes an internal focusgetting the work of the business done efficiently and effectively so as to make the strategy successful. What is the best way to organize ourselves to accomplish the mission? Where should leadership come from? What values should guide our daily activateswhat should the organization and its people be like? How can we shape rewards to encourage appropriate action? The intense competition in the global marketplace has made this traditional internally focused set of questionshow the activities within their business are conducted recast itself with unprecedented attentiveness to the marketplace. Downsizing, restructuring, and reengineering are terms that reflect the critical stage in strategy implementation wherein managers attempt to recast their organization. Strategic Control and Continuous Improvement Strategic control is concerned with tracking a strategy as it is being implemented, detecting problems or changes in its underlying premises, and making necessary adjustments. In contrast to postaction control, strategic control seeks to guide action in behalf of the generic and grand strategies as they are taking place and when the end results are still several years away. The rapid, accelerating change of the global marketplace of the last 10 years has made continuous improvement another aspect of strategic control in many organizations. Continuous improvement provides a way for managers to provide a form of strategic control that allows their organization to respond more proactively and timely to rapid developments in

hundreds of areas that influence a businesss success. Exhibit 1 -6 describes how Yahoos e-commerce strategy was significantly undermined by its managements failure to see fundamental shifts in its industry.

3. What is environmental analysis? Briefly Explain ETOP as a technique of environmental analysis An environmental analysis evaluates internal and external factors affecting an organization's performance, especially its marketing effort. Internal factors are referred to as the strengths and weaknesses of the organization. External factors are opportunities and threats presented by forces outside of the company. In general, this information is used by strategic planners in forecasting trends a year or more in advance. This method is distinct from surveillance, which focuses on a specific area or time. A common synonym for environmental analysis is SWOT analysis, an acronym for strengths, weaknesses, opportunities, and threats. Another equivalent term is environmental scanning, referring to the ongoing nature of evaluating trends. In this type of analysis, internal strengths may include a stable workforce, proprietary systems and methods, and other factors. Internal weaknesses may include labor-union problems, obsolete equipment, or aging facilities. External opportunities can include new-market creation, beneficial alliances, and positive trade agreements. External threats may be comprised in part of negative governmental regulations, international conflict, or natural disasters. Using environmental analysis, strategic planners evaluate the operating environment and establish organizational goals. They determine whether or not the goals are obtainable with existing strategies. If they are not, new strategies must be developed or old ones must be adjusted. Several sources of information guide their strategic decisions. A constant stream of pertinent information is necessary to perform an analysis. Online, printed, and TV business news sources report on external conditions that may impact operations and performance. Planners evaluate and use this data to determine the best course of action to avoid problems or to capitalize on opportunities. Metrics evaluating overall performance are another data stream used in strategic planning. An organization's health and performance as a whole, rather than focusing on the performance of one part, is an important aspect. With a comprehensive overview of external forces, an organization is more able to respond to positive events as part of its growth strategy. Conversely, early threat identification allows organizational leadership to take timely action in developing a survival strategy. Environmental analysis uses internal metrics in evaluating employee performance, customer satisfaction, maintenance costs, and similar factors. These metrics can be used to take early corrective action or to offer rewards to workers or customers. The outcomes of these measures should be monitored closely and adjusted as necessary.

There are more uses for this type of analysis than just fine-tuning performance. It is also central in identifying opportunities, such as new markets or the acquisition of new technology before its competitors. Its on-going nature makes it a valuable tool for evaluating the financial potential of various strategies. 4. Identify any five anticipated changes in business information technology. Explain them with examples. environment for

5. Define SWOT analysis. Identify various internal strengths of automobile company in various functional areas A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, straightforward model that assesses what an organization can and cannot do as well as its potential opportunities and threats. The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results. Internal Factors: Strengths and Weaknesses (S, W) Internal factors include your resources and experiences. General areas to consider are: Human resources - staff, volunteers, board members, target population Physical resources - your location, building, equipment (Does your building have a prime location? Does it need renovations?) Financial - grants, funding agencies, other sources of income Activities and processes - programs you run, systems you employ Past experiences - building blocks for learning and success, your reputation in the community

External Factors: Opportunities and Threats (O, T) Cast a wide net for the external part of the assessment. No organization, group, program, or neighbourhood is immune to outside events and forces. Consider your connectedness, for better and worse, as you compile this part of your SWOT list. Forces and facts that your group does not control include: Future trends - in your field (Is research finding new treatments?) or the culture (Do current movies highlight your cause?) The economy - local, national, or international Funding sources - foundations, donors, legislatures

Demographics - changes in the age, race, gender, culture of those you serve or in your area The physical environment (Is your building in a growing part of town? Is the bus company cutting routes?) Legislation (Do new federal requirements make your job harder...or easier?) Local, national or international events

Example David gives an example for Campbell Soup Company that stresses financial goals, but it also illustrates how you can pair the items within a SWOT grid to develop strategies. (This version of the chart is abbreviated.)
STRENGTHS 1. Current profit ratio increased 2. Employee morale high 3. Market share has increased OPPORTUNITIES 1. Western European unification 2. Rising health consciousness in selecting foods 3. Demand for soups increasing annually THREATS 1. Low value of dollar 2. Tin cans are not biodegradable Opportunity-Strength (OS) Strategies WEAKNESSES 1. Legal suits not resolved 2. Plant capacity has fallen 3. Lack of strategic management system Opportunity-Weakness (OW) Strategies

Acquire food company Develop new in Europe (S1, S3, O1) Pepperidge Farm products (W1, O2, O3) Develop new healthy soups (S2, O2) Threat-Strength (TS) Strategies Develop new biodegradable soup containers (S1, T2) Threat-Weakness (TW) Strategies Close unprofitable European operations (W3, T1)

This example also illustrates how threats can become opportunities (and vice versa). The limitation of tin cans (which aren't biodegradable) creates an opportunity for leadership in developing biodegradable containers. 6. Discuss briefly the factors which govern the choice of appropriate strategy from different alternatives. How this choice is influenced by the past strategy? 7. Under what circumstances the CEO of the company prefers

a. Stable growth strategy b. Strategy of diversification 8. Discuss the role of quality leadership and structure of the organisation in the implementation of strategy. 9. Write notes on any three a. Value chain approach to an internal analysis b. Product/Market evolution c. Mission statement of an organisation d. Approach to resource allocation in the implementation of strategy e. Strategy formulation process.