1. Strategic Planning Situational Analysis

2. Mission Statement The mission statement is a broad statement of what your business unit wants to become or achieve during the next 3 to 5 years. The statement also describes how you will make the mission a reality by focussing the attention of management and the resources of the organization. A good mission statement provides clear direction for the organization. It should define the breadth and scope of your business and allow you to consider a focussed set of business alternatives in its pursuit.

3. Sample Mission Statement The Arkansas SBU is and will remain the leading provider of health care in the Arkansas market. The Arkansas SBU will provide a large assortment of services, deliver the highest quality and have the lowest operating cost of any MCO in the market. The SBU will maintain its leading market share principally by retaining existing customers. We will focus on providing our Account Executives and Marketing Services reps with the skills, support, and tools needed to achieve this goal, while at the same time working to reduce marketing costs. We will examine opportunities to continuously improve the extent to which the structure of our organization is consistent with this market strategy. By 1998, revenues of the Arkansas SBU will be, representing a % increase/decrease over 1993 revenues. If practical, one of our major competitors will be acquired to increase our control over the market and stabilize prices and margins.

4. Vision Statement We will remain the leader in the market by providing low cost quality services. Retaining members through excellent customer service is our key objective.

5. Situational Analysis n S trengths n W eaknesses n O pportunities n T hreats

6. Strengths n Internal to organization can differentiate you from the competitioncan differentiate you from the competition is relatively sustainableis relatively sustainable

7. Weaknesses n Internal to organization could be pointed out by your competition as a failingcould be pointed out by your competition as a failing

8. Opportunities n External to your organization changes in the market that could advantage your businesschanges in the market that could advantage your business

9. Threats n External to your organization changes in the market which could impact your business negativelychanges in the market which could impact your business negatively

10. Strategic Alternatives Strategic alternatives are the pool of possible business strategies from which the final strategic initiatives are ultimately chosen. The use of valuation, and other criteria to review options and potential strategies, and/or newly feasible alternatives can help to assure that the chosen business strategy continues to optimize shareholder value while simultaneously contributing to the overall business mission and goals.

11. Strategic Alternatives AcquisitionDownsize ExpansionNew ServicesJoint Venture Increase prices Close business Reduce costs

12. Strategic Initiatives n 2 to 3 items that will help you reach your mission, maximizing your strengths and taking advantage of market opportunities. n Similarly could be aimed at reducing weakness and minimizing the likelihood of threats

13. Sample Strategic Initiatives Product/Service Development: Develop and effectively manage a portfolio of products and services to profitably meet our market retention goals. Health Care Qualitv: Achieve a high level of quality in our products, customer service, and internal operations, while at the same time controlling costs. M.G&A Efficiencies: To decrease G&A costs each year by % throughout our operations, while at the same time maintaining our standards of quality and customer service.

14. Strategic Action Plan n Each strategic initiative should have 2 to 3 goals necessary to complete the initiative along with specific tactics (objectives), timelines and responsible parties.

15. Sample Strategic Action Plan n Health Care Quality Develop monitoring system to measure member perspectives and satisfaction with servicesDevelop monitoring system to measure member perspectives and satisfaction with services –Form committee6/1 Fred –Develop draft system8/1 Fred –Obtain member input10/1Fred