1. MGT492: Managing People & Organizations : The Strategic and Operational Planning Process Lecture 11:Chapter 5: The Strategic and Operational Planning Process Instructor: Dr. Aisha Azhar COMSATS Virtual Campus

2. Last lecture overview Planning Dimensions Types of plans – Standing versus single use plans Contingency plans Strategic and Operational Planning Industry and Competitive Situation Analysis 2

3. Situation Analysis – Draws out those features in a company’s environment that most directly frame its strategic window of options and opportunities. Five Competitive Forces (Porter) – Rivalry among competing sellers in the industry – Threat of substitute products and services – Potential new entrants – Power of suppliers – Power of buyers 3

4. Starbuck’s Five-Force Competitive Analysis Exhibit –5 4

5. Company Situation Analysis Steps Exhibit 5–6 1.Assessment of the present strategy based on performance. 2.SWOT analysis. 3.Competitive Strength Assessment (competitive advantage). 4.Conclusions concerning competitive position. 5.Determination of the strategic issues and problems that need to be addressed through strategic processes. 5

6. SWOT Analysis for Starbucks Coffee Exhibit 5–7 6

7. Competitive Strength Assessment for Starbucks Coffee Exhibit 5–8 7

8. Competitive Advantage Core Competency – A functional capability (strength) that the firm does well and one that creates a competitive advantage for the firm. Benchmarking – The process of comparing an organization’s products or services and processes with those of other companies. Environmental Scanning – Searching the external environment for opportunities and threats. 8

9. Setting Objectives Objectives – State what is to be accomplished in singular, specific, and measurable terms with a target date. Goals – Are general targets to be accomplished that are translated into actionable objectives. 9

10. Writing Objective Model Model 5–1 10

11. Criteria That Objectives Should Meet Exhibit 5–9 11

12. Management by Objective (MBO) Management by Objectives Step 1. Set individual objectives with plans jointly with employees. Step 2. Give feedback and evaluate. Step 3. Reward performance according to results. Sources of MBO Failures – Lack of top management commitment and follow-through on MBO. – Employees’ negative beliefs about management’s sincerity in its efforts to include them in the decision-making process. 12

13. Corporate-Level Strategy Grand Strategies – Growth – Stability – Turnaround and retrenchment – Combination Growth Strategies – Concentration – Backward and forward integration – Related and Unrelated diversification 13