Strategy and strategic planning Lecture 5

Strategy and strategic planning Strategy is an element of the internal environment of the organization. It consists of the following characteristics: - scope. It includes all the markets the organization serve; - Resource deployment; how organization will distribute the resources across various areas; - Distinctive competence- something that organization does well; - Synergy; how different areas of the business are expected to complement or enhance to one another.

Levels of strategy Corporate strategy. It is the course charted for the total organization. It gives answers to the questions: ”Where we compete?” Business strategy. Focuses on how the organization will compete in each of the chosen areas; Functional strategy. It is a strategy for a single functional area.

Strategic process Strategic formulation is the process in creating or determining the strategy. What is the strategy? Strategic implementation includes methods by which strategies are executed. How the strategy will be achieved?

Strategic formulation It starts with establishing the organizational goals. Environmental analysis. It includes PEST analysis. It gives opportunities and threats for the organization. Industry analysis to define the attractiveness of the industry. Internal analysis. It includes analysis of human resources, financial resources, market position, research and development effortd, information resources.

Strategic formulation The results of the analysis is SWOT. It matches the strengths and weakness of the organization with the opportunities and threats of the external environment. Develop corporate level strategy.

Strategy definitions Strategy is the long term direction of an organization; Strategic decisions are concerned with the scope of organization's activities; Strategy means to achieve some advantage over competition; Strategic decisions are influenced by values and expectations of those who have power in the organizations.

Vocabulary of strategy Mission Be healthy and fit Vision- the desired future state To run the London marathon Goal Objective- quantification or more precise statement of the goal Strategic capability- resources, processes and activities Business model – how product, service and information flow between participating parties; Control- access effectiveness of strategies and actions

Strategic terms Business model is a structure of product, service and information flows and roles of the participating parties; Strategic business unit. It is a separate division inside the company that has its own mission, competitors and unique strategy; The BCG matrix classifies SBU into 4 categories according to the market share and market growth rates: - stars; - Cows; - Questions; - dogs

Group task Develop marketing strategy for the restaurant with traditional Bulgarian cuisine or the dot.com company;