6/13/2019

An Overview of Planning Strategic vs. Operational Plans

 Planning: the process of deciding where to go (setting  Strategic plans

goals) and how to get there (developing procedure for
 Plans designed to meet organisation’s broad, and
action).
long‐term goals.
 Goal is important
An Overview of Planning  Goals provide a sense of direction.

Strategic vs. Operational Plans  Goals focus our efforts.  Operational plans
 Goals guide our plans and decisions.
Vision and Mission Statement  Plans made to work out details for carrying out, or
 Goals help us evaluate our progress.
Strategy and strategic Management implementing, strategic plans in day‐to‐day
Levels of Strategy activities.
Approaches to implementing corporate strategies

Strategic vs. Operational Plans Vision and Mission Statement Strategy and Strategic Management

 Vision:
 Strategic plans  Operational 
plans  Broad long‐term goals in an abstract form.  Strategy
1. Very long term.
 To be the best university in the country.
1. Time 1. Typically one   Broad programme for defining and achieving an
year or some 
Horizons relevant time  organisation’s objectives.
2. Broad and   period.  Mission Statement:  The organisation’s response to its environment
2. Scope unlimited
 Broad long‐term goals based on planning premises, over time
2. Narrow and 
limited. which justifies organisation’s existence.  The adoption of courses of action and allocation of
3. Degree 3. Simplistic and 
 To foster the national development process through the creation resources necessary to carry out basic long‐term
of generic. of a centre of excellence in higher education that is responsive to
detail 3. Stated in finer  objectives.
detail society’s needs and able to develop creative leaders and actively
contribute to learning and creation of knowledge.

Strategy and Strategic Management Strategic Management Process Levels of Strategy

 Strategic Management  Corporate level strategy

GOAL SETTING
 The management process that involves an  Formulated at the top to oversee the interests and
Strategic
operations of multi‐line organisations.
organisation’s engaging in strategic planning Planning
STRATEGY FORMULATION  What kinds of businesses should the company be engaged in?
(strategic planning) and acting on those plans
 What are the goals and expectations for each business?
(strategy implementation.)
 How should resources be allocated to reach these goals?
ADMINISTRATION
Strategy
Implementation
STRATEGIC CONTROL
feedback

Strategy and Strategic Management

 6/13/2019

Levels of Strategy Levels of Strategy Levels of Strategy

 Business‐unit strategy  Business‐unit strategy (contd.)
 Formulated to meet the goals and to manage the  Strategic business units:
 Functional‐level strategy
interests and goals of a particular business.  An approach of organising an organisation’s complex and
varied activities in which business activities that produce  Formulated by specific functional area in an effort to
 Attempts to determine what approach to its markets
the business should take, and how it should conduct a particular type of product or service are grouped and carry out business‐unit strategies and corporate
treated as a single unit. strategies.
itself, given its resources and the condition of the
 These SBUs then compete against each other.
market.
 The corporate level provides a set of guidelines for the
 How will the business compete in the market? SBUs, which develop their own strategies at the business‐  Operational plans follow from functional‐level
 What products/services should it offer? unit level. The corporate level then reviews SBU plans and strategies.
 Which customer does it seek to serve? negotiate changes if needed.

Portfolio Approach Portfolio Approach
Approaches to Implementing Corporate   Boston Consulting Group (BCG) Matrix
Strategy  Top management evaluates each of the
 Corporate strategy implies the idea about how people organisation’s business units with respect to STAR QUESTION
at an organisation will interact with people at other HIGH
the market place and the organisation’s modest MARK
organisations over time. internal makeup. + or – Large
 Two approaches to implementing corporate strategy MARKET cash flow – cash flow
are common. GROWTH
 Upon evaluation of all business units an RATE CASH COW DOG
 Portfolio approach
Large Modest
 Five‐forces approach appropriate strategic role is developed for LOW
+ + or –
each unit with the goal of improving the
cash flow cash flow
overall performance of the organisation.
HIGH LOW

RELATIVE MARKET SHARE

Approaches to Implementing Corporate Strategy Approaches to Implementing Corporate Strategy

Portfolio Approach Portfolio Approach Portfolio Approach

 Boston Consulting Group (BCG) Matrix
 The question mark:
 May be uncertain and expensive
 Large investment without subsequent increase in
market share may be fatal.
 Successful investment offers huge opportunity.
 The star:
Should be quite profitable
 
 More investment to keep up with the market rapid
growth may consume more cash than is being currently
earned
 Boston Consulting Group (BCG) Matrix
 The cash cow
 Profitable and source of extra cash.
 Slow market growth does not need large investment to
maintain market position.
 The Dog
 A moderate user or supplier of cash.
 Boston Consulting Group (BCG) Matrix
 Corporate strategy
 Use the cash from cash cows and more
successful dogs to invest in selected and
more prospective question marks so they
become future stars.
Over time, when market growth slows
down, the star will become cash cows,
generating excess cash to invest in the
next generation of promising question
marks.

Approaches to Implementing Corporate Strategy Approaches to Implementing Corporate Strategy Approaches to Implementing Corporate Strategy
 6/13/2019

Five Forces Model
THANK YOU
 Threat of new entrants
 Bargaining power of buyers
 Bargaining power of suppliers
 Threat of substitute products
 Rivalry among competitors

Approaches to Implementing Corporate Strategy