Strategic Management Assoc. Prof. Dr. Wongsa Laohasiriwong Faculty of Public Health, Khon Kaen University Strengths Opportunities Weakness Threats 1

.... management...system... that links strategic planning and decision making with the day-to-day business of operational management. [Gluck, Kaufman, and Walleck, 1982] 2 Strategic Management Source: Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation.

Strategic Management .... the process by which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future.. (Goodstein, Nolan, and Pfeiffer, 1992) 3 Source: Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation.

 A systems approach to identifying and making the necessary changes and measuring the organization’s performance as it moves towards its vision. 4 Strategic Management Source: Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation.

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What are the benefits of strategic management?  Breakthrough thinking about the future; organizational boundaries are more flexible.  A shift in focus from the inputs that are used to run the business to the outputs and outcomes the organization desires to achieve.  A focus on optimizing organizational performance and process quality as keys to delivering quality products and services.  A move toward an organizational culture that adapts easily to change. 6 Source: Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation.

Vision  An idealized view of a desirable and potentially achievable future state.  A short statement describing the ideal state an organization is striving to achieve for its clients or the ideal state that an organization sees for society. 7 Source: Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation. Source: Government of Newfoundland and Labrador Excellence in Strategic Planning. Definition of Term

Mission  An enduring statement of purpose. Describes what the organization does, who it does it for, and how it does it. 8 Source: Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation. Definition of Term

Goal  A specific statement of the desired results to be achieved over a specified period of time. 9 Source: Government of Newfoundland and Labrador Excellence in Strategic Planning. Definition of Term

Objective  An objective is a measurable statement or incremental milestone which specifies a change or benefit that the entity hopes to achieve as it strives to achieve a specific goal. Success in meeting the objectives can be readily evaluated using qualitative and quantitative measures. 10 Source: Government of Newfoundland and Labrador Excellence in Strategic Planning. Definition of Term

Strategic Plan  The plan which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future [Goodstein, Nolan, and Pfeiffer,1992]. 11 Source: Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation.

VisionThe destiny that we want to reach/ to be (end point) MissionScope of action that we want to implement, Target group (Customer), philosophy or principle of our implementation. Strategic Issues Agenda or Focusing Area or Key Result Area GoalThings that we want to achieve. Key Performance Indicators (Targets) Indicator that show what we achieves. (Benchmark or Milestone) StrategiesMethods, Procedure that lead us to the achievement of Goals/KPI/Target (Means)

Example: Starbucks Coffee  The first Starbucks location opened in 1971 in Pike Place market in Seattle, WA.  Eleven years later, Howard Schultz was hired by the company to be the director of retail operations and marketing.  The first Starbucks with the current coffee house look and feel was opened in 1984 in downtown Seattle. 13 Source:

Example: Starbucks Vision "inspire the human spirit," To "inspire the human spirit," is a something that can't be served in a cup with whipped cream. 14 Source:

1) Provide a great work environment and treat each other with respect and dignity. 2) Embrace diversity as an essential component in the way we do business. 3) Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. 4) Develop enthusiastically satisfied customers all of the time. 5) Contribute positively to our communities and our environment. 6) Recognize that profitability is essential to our future success. 15 Example: Starbucks Mission Source:

 Mission statement is more than words on a piece of paper – it’s the philosophy that guides how we do business/work every day. 16 Source: Mission statement

What is SWOT?  SWOT is the acronym for Strengths, Weaknesses, Opportunities, and Threats.  SWOT is very effective when applied to a specific objective or project. Source: Business.govt.nz. SWOT analysis. 17 Albert S Humphrey

AWOT Analysis is…  … A strategic planning tool that separates influences on an organization’s future success into internal and external factors Source: Business.govt.nz. SWOT analysis. 18

SWOT Analysis  S – Strengths  W – Weaknesses  O – Opportunities  T – Threats Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique Internal Factors External Factors 19

SWOT: TOWS External FactorsInternal Factors PEST or PESTLE Analysis PEST or PESTLE Analysis 7S Analysis 20

SWOT: External Factors Threats  External factors, beyond an organization’s control, which could place the organization mission or operation at risk.  The organization may benefit by having contingency plans to address them if they should occur.  Classify them by their “seriousness” and “probability of occurrence”. Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 21

Threats  Who is your competition and what do they offer that you can’t do as well or at all?  Are there “environmental” changes or situations that could cause problems for you and your programs?  What other roadblocks are being thrown in your path? Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 22

SWOT: External Factors Opportunities  External attractive factors that represent the reason for an organization to exist and develop.  What opportunities exist in the environment, which will propel the organization?  Identify them by their “time frames” Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 23

Opportunities  Are there new situations coming down the road that you can take advantage of (new programs being offered, new faculty joining the department, new tools available to you)?  Are there gaps in the “market” that you can fill?  Are there partnerships that might be fruitful? Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 24

 PEST stands for the analysis of the external factors which is beneficial when conducting research before beginning a new project or to help conduct market research. These factors are: PESTPEST Source: Nishadha, SWOT analysis vs PEST analysis, When to use them. analysis/ 25

PEST Analysis  P olitical –  P olitical – Laws, global issues, legislation and regulations which may have an effect on your business either immediately or in the future.  E conomic –  E conomic – Taxes, interest rates, inflation, the stock markets and consumer confidence all need to be taken into account.  S ocial –  S ocial – The changes in lifestyle and buying trends, media, major events, ethics, advertising and publicity factors.  T echnological –  T echnological – Innovations, access to technology, licencing and patents, manufacturing, research funding, global communications. Source: Nishadha, SWOT analysis vs PEST analysis, When to use them. 26

Source: Nishadha, SWOT analysis vs PEST analysis, When to use them. 27

Source: Nishadha, SWOT analysis vs PEST analysis, When to use them. 28

PESTLE Pest can also be known as PESTLE which includes other factors such as:  Legal –  Legal – Legislation which have been proposed and may come into effect and any passed legislation’s.  Environmental –  Environmental – Environmental issues either locally or globally and their social and political factors. Source: Nishadha, SWOT analysis vs PEST analysis, When to use them. 29

 Weaknesses  Factors that are within an organization’s control that detract from its ability to attain the core goal.  Which areas might the organization improve? Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique SWOT: Internal Factors 30

SWOT: Internal Factors  Strengths  Positive tangible and intangible attributes, internal to an organization.  They are within the organization’s control. Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 31

Strengths  What do you do particularly well?  What do you do that is unique in the “market place” ?  What do your customers/clients ask for you to do over and over again?  What do you have the right tools/resources to accomplish? Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 32

Internal Factor :McKinsey 7S Analysis Robert Waterman, Tom Peters and Julien Philips  This model was developed in the 1980's by Robert Waterman, Tom Peters and Julien Philips whilst working for McKinsey and originally presented in their article " Structure is not Organisation" Source: Lindsay Sherwin, McKinsey 7S Model, 33 McKinsey

McKinsey 7S Analysis  The 7S Analysis Model became extensively used by mangers and consultants and is one of the cornerstones of organisational analysis.  Essentially the model says that any organisation can be best described by the seven interrelated elements. Source: Lindsay Sherwin, McKinsey 7S Model, 34

7S Analysis Model Source: Lindsay Sherwin, McKinsey 7S Model, 35

7S Analysis 1. Strategy Plans for the allocation of a firm's scarce resources, over time, to reach identified goals. Environment, competition, customers. Source: Lindsay Sherwin, McKinsey 7S Model, 36

7S Analysis 2. Structure The way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc. Source: Lindsay Sherwin, McKinsey 7S Model, 37

7S Analysis 3. Systems The procedures, processes and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems. Source: Lindsay Sherwin, McKinsey 7S Model, 38

7S Analysis 4. Skills Distinctive capabilities of personnel or of the organization as a whole. 5. Staff Numbers and types of personnel within the organization. Source: Lindsay Sherwin, McKinsey 7S Model, 39

7S Analysis 6. Style Cultural style of the organization and how key managers behave in achieving the organization’s goals. 7. Shared Value The interconnecting centre of McKinsey's model is: Shared Values. What the organization stands for and what it believes in. Central beliefs and attitudes. Source: Lindsay Sherwin, McKinsey 7S Model, 40

Source: Nishadha, SWOT analysis vs PEST analysis, When to use them SWOT MATRIX

Simple Rules SWOT Analysis  Be realistic about the strengths and weaknesses of your organization or group  Distinguish between where your organization is today, and where it could be in the future  Be specific: Avoid gray areas. Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 42

Simple Rules SWOT Analysis  Always analyze in relation to your core values, mission, mandate, goals, vision.  Keep your SWOT short and simple.  Avoid complexity and over analysis  Empower SWOT with a logical conceptual framework. Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 43

Create a Plan of Action  Set goals and objectives, like with any other plan. Limit 3-5  What steps can you take to:  Respond to the threat  Take advantage of some new opportunities  Capitalize on your strengths  Overcome or minimize your weaknesses Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique 44

SWOT Analysis allows organization to…  Define realistic goals  Improve capability  Overcome weaknesses with strengths  Identify threats than can be turned into opportunities Business.govt.nz. SWOT analysis.  Brainstorming is a great way of introducing all the relevant internal and external factors for each section of the analysis. Source: Nishadha, SWOT analysis vs PEST analysis, When to use them.

Goals from SWOT  Create a page summary for the department to laminate and post  Ensure priorities for action/goals are addressed on meeting agendas throughout the year  Note progress on an ongoing basis. 46

A Tool for Strategy Selection Boston Four Cell BCG STARSQuestion Marks Cash cowsDogs HighLow Possibility and Growth Suit to the Needs High Low Source: BCG Matrix.

business units having large market share in a fast growing industry. Stars represent business units having large market share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Star Source: BCG Matrix.

business units having a large market share in a mature, slow growing industry Cash Cows represents business units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units. Cash Cows Source: BCG Matrix.

business units having low relative market share and located in a high growth industry. Question marks represent business units having low relative market share and located in a high growth industry. They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable. Question Marks Source: BCG Matrix.

having weak market shares in low-growth markets. Dogs represent businesses having weak market shares in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Dogs Source: BCG Matrix.

WeaknessStrength Opportunity Threat Penetration Strategy (SO) Strengtheni ng Strategy (WO) Holding Strategy (ST) Terminating Strategy (WT) Strategy Formulation Source: BCG Matrix.

Strategic Management Process Strategic Planning Strategic Implementation Strategic Control Vision Goals KPI/ Target Strategies Strategy Map Improve/Adjust Process Structure Technology Human Resource Action Plan Monitoring & Evaluation Review to improve Strategic Plan

VISI ON Goal 4 Goal 3 Goal 2 Goal 1 Object ive 1 2 Objec tive 1 2 Objec tive 1 2 Objec tive 1 2 Objec tive Objec tive Missi on Strate gy 1 Strate gy 2 Strate gy 3 Acti on Pla n 1. A 2. B 3. C 4. D Acti on Pla n 1. A 2. B 3. C 4. D Acti on Pla n 5. E 6. F 7. G Acti on Pla n 5. E 6. F 7. G Acti on Pla n 8. H 9. I 10. J Acti on Pla n 8. H 9. I 10. J Effective Efficiency Quality Organizational Development

Action Plan  Title of the Plan  Rationale  Objectives, KPI  Process (Activities)  Gant chart  Budget  Responsible persons  Monitoring and evaluation

References  Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique  Business.govt.nz. SWOT analysis.  Lindsay Sherwin, McKinsey 7S Model, rategy/06_mckinsey.htm  Nishadha, SWOT analysis vs PEST analysis, When to use them.  Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation.  Government of Newfoundland and Labrador Excellence in Strategic Planning.  BCG Matrix. 56