MNO1001 Management & Organization

Planning and Strategy

[Ch2 pp.44-60 & Ch4]
By Dr. Ruolian Fang

1-1

Key Points
Strategic planning and strategic management process
Mission versus vision
SWOT analysis: Analysis of external opportunities and

threats, and Analysis of internal strengthens and

weaknesses
Corporate strategy and strategic maneuvering
Business strategy

2-2

In-class Question

Can company be successful by luck?

Why or why not?

2-3

In-class Question
GEs former CEO Jack Welch said: Manage your
destiny, or somebody else will. What does this mean
for strategic management? What does it mean when
Welch adds, or somebody else will?

2-4

Strategic Planning
Strategic planning
A set of procedures for making decisions on the
organizations long-term goals and strategies

Strategic goals
Major targets or end results that relate to the long-term
survival, value, and growth of the organization

Strategy
A pattern of actions and resource allocations designed to
achieve the organizations goals
2-5

Strategic Planning
An effective strategy provides a basis for answering five
broad question about how an organization will meet its
objectives:
1.
2.
3.
4.

Where will we be active?

How will we get there?
How will we win in the marketplace?
How fast will we move and in what sequence will we
make changes?
5. How will we obtain financial returns?
4-6

The Strategic Management Process

Strategic management is a process that involves
managers from all parts of the organization in the
formulation and implementation of strategic goals and
strategies. It integrates strategic planning and
management into a single process.

4-7

Mission and Vision

Mission Statement
An organizations basic purpose and scope of operations
Guide the actions of the organization, spell out its
overall goal, provide a sense of direction, and guide
decision-making

Vision Statement
Take into account the current status of an organization
and serves to point the direction of where the
organization wishes to go

4-8

Vision vs. Mission

Vision Statement

Mission Statement

About

Outlines WHERE you want

to be. Communicates both
the purpose and values of
your business

Talks about HOW you will get to

where you want to be. Defines the
purpose and primary objectives
related to your customer needs and
team values

Answer

Where do we aim to be?

What do we do? What makes us

different?

Develop a Where do we want to be

statement going forward? When do
we want to reach that
stage? How do we want to
do it?

What do we do today? For whom do

we do it? What is the benefit? In
other words, Why we do what we do?
What, For Whom and Why?
12-9

Vision vs. Mission

12-10

Wal-Mart Stores
Vision:
To become the worldwide leader in retailing
Mission:
To help people save money so that they can live better

2-11

Carrefour
Vision:
The Carrefour group has one single ambition: making Carrefour
the preferred retailer wherever it operates.

Mission:
Over the past 40 years, the Carrefour has grown to become one
of the worlds leading distribution groups. The worlds secondlargest retailer and the largest in Europe, the group currently
operates four major grocery store formats: hypermarkets,
supermarkets, hard discount and convenience stores

2-12

In-class Question

Peter Drucker said that The essence of a business is

outside itself. What do you think this statement means?
Do you agree?

2-13

External Opportunities and Threats

- External Environment

2-14

The Macroenvironment

Natura
l
Enviro
nment
Socia
l
Issue
s

Econ
omy

Macro
enviro
nment

Demo
graphi
cs

Techn
ology
Laws
and
Regul
ation
s

2-15

Google

2-16

Google

2-17

Google

2-18

Google

2-19

Google

2-20

Google

2-21

Google

2-22

Google
External Environment
D Like Demographics

Diversity at Google
http://www.youtube.com/user/DiversityatGoogle
Google is famous for its workplace diversity and
2-23
inclusion

Google

2-24

The Competitive Environment

Conclusion: In
an attractive
industry, there is
low supplier
bargaining
power, low
buyer bargaining
power, high
barriers of entry,
few substitute
products, and
few rivalry.
2-25

Environmental Analysis
Industry and Market Analysis
Industry profile: major product lines and significant market segments in the industry
Industry growth: growth rates for the entire industry, growth rates for key market segments,
projected changes in patterns of growth, and the determinants of growth
Industry forces: threat of new industry entrants, threat of substitutes, economic power of
buyers, economic power of suppliers, and internal industry rivalry
Competitor Analysis
Competitor profile: major competitors and their market shares
Competitor analysis: goals, strategies, strengths, and weaknesses of each major competitor
Competitor advantages: the degree to which industry competitors have differentiated their
products or services or achieved cost leadership
Political and Regulatory Analysis
Legislation and regulatory activities and their effects on the industry
Political activity: the level of political activity that organizations and associations within the
industry undertake

2-26

Environmental Analysis
Social Analysis
Social issues: current and potential social issues and their effects on the industry
Social interest groups: consumer, environmental, and similar activist groups that attempt to
influence the industry
Human Resources Analysis
Labor issues: key labor needs, shortages, opportunities, and problems confronting the
industry
Macroeconomic Analysis
Macroeconomic conditions: economic factors that affect supply, demand, growth,
competition, and profitability within the industry
Technological Analysis
Technological factors: scientific or technical methods that affect the industry, particularly
recent and potential innovations

2-27

Internal Strengths and Weaknesses

- Internal Environment

2-28

Internal Strengths and Weaknesses

- Internal Environment
Resources

Resources and Core Competence

Inputs to a system that can

enhance performance
Tangible: real estate,
production facilities,
raw materials etc.
Intangible: reputation,
culture, accumulated
learning and experiences

2-29

Core Competence: VRIO Framework

Core capacity: A unique skill and/or
knowledge an organization possesses that
gives it an edge over competitors

2-30

Example
What are their core competences?

2-31

SWOT Analysis

4-32

Facebook SWOT Analysis 2013

Company Background
Name

Facebook, INC

Current CEO

Mark Zuckerberg

Revenue

$5.08 billion (2012)

Proftt

$53 million (2012)

Employees

4619 (2012)

Competitors

Google+, Twitter, MySpace,

LinkedIn, and IGLOO

2-33

Facebook SWOT Analysis 2013

Strengths
Integration with websites and
applications
More than a billion active
monthly users
Excellent users experience
Understanding of users needs
and behavior

Weaknesses
Social network lacks of some
features
One source of revenues
advertisement on Facebook
Attitude towards users
privacy
Lack of website customization
Weak protection of users
information

Opportunities
Increasing number of people
using Facebook through
mobile devices
Expansion to China
Diversity sources of revenue
Open Facebook marketplace

Threats
Increasing number of mobile
internet users
Users using ad-block
extensions
Slow growth rate of online
advertising 2-34

Corporate Strategies
Corporate strategy: The set of businesses,
markets, or industries in which an organization
competes and the distribution of resources among
those entities

4-35

Corporate Strategies
Concentration
A strategy employed for an
organization that operates a
single business and competes
in a single industry

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

Conglomerate Diversification
A strategy used to add new
businesses that produce
unrelated products or are
involved in unrelated markets
and activities
2-36

Portfolio the
diversified
businesses of an
organization.

BCG Matrix

BCG matrix is one

of the most popular
techniques for
analyzing a
corporates
strategy for
managing its
portfolio.
It helps a company
to weigh the
relative merits of
many business

4-37

Strategic Maneuvering
Strategic maneuvering
An organizations conscious efforts to change the
boundaries of its task environment

Domain selection
Diversification
Merger or Acquisition
Divesture

2-38

Business Strategy
Business Strategy
The major actions by which a business competes in a
particular industry or market
Low-cost strategy
Differentiation strategy
A strategy an organization A strategy an organization
uses to build competitive
uses to build competitive
advantage by being
advantage by being unique
efficient and offering a
in its industry or market
standard, no-frills product
segment along one or more
dimensions
Example: Wal-Mart and
Southwest Airlines
Example: Apple
2-39

Case: Meli Marine

2-40