1. IT Strategic Planning

2. Models For Strategic Planning
Boston Matrix
McFarlane Matrix
Porter’s Five Forces
Porter’s Value Chain
Zuboff’’s 3 Eras
Networked Organisation
Strategic Alignment

3. Boston Consulting Group Product Portfolios
High
Star
Wild Cat or
Problem Child
Cash Cow
Dog
Market growth
Cash use
Funds
Low
High
Low
Market share
Cash generation

4. Product Characteristics
Stars
Best profit and growth potential
High market growth potential, high market share
High in cash generation but needing significant cash investment
Cash cows
Stars that become established and generate cash without the need for significant new investment
Minor changes may sustain the product in the market

5. Product Characteristics
Dogs
Product becoming obsolete in the market
New products erode market position
Further investment may not be justified or considered beneficial
Wild Cats
High cash requirement with little cash return
Cash flow from cash cows may support development
Need to quickly divest “problem children”

6. Product Life Cycle
Net
cash
flow + -
Wild
cat
Cash
cow
Star
Dog

7. Mac Farlane Matrix Application Portfolio
High
Turnaround
Strategic
Support
Factory
Strategic impact of planned
application development
Low
Low
High
Strategic impact of
existing applications

8. Mac Farlane Matrix Application Portfolio
Strategic
Current and future applications are critical for success
Turnaround
Current applications beneficial but not critical
Future applications may be of strategic importance
Factory
Applications that are critical to sustaining existing business
Development portfolio not vital to the organisation
Support
Current and future applications improve management and performance but are not critical to the business

9. Porter’s Five Competitive Forces
Threats from
new entrants
Bargaining power
of suppliers
Rivalry among
existing competitors
Bargaining power
of customers
Threats from
substitutes

10. Rivalry Among Existing Competitors
Industry growth
Fixed costs/added value
Intermittent overcapacity
Product differences
Brand identity
Switching costs
Concentration and balance
Informational complexity
Diversity of competitors
Corporate stakes
Exit barriers

11. Bargaining Power Of Suppliers
Differentiation of inputs
Switching costs of suppliers
Presence of substitute inputs
Supplier concentration
Importance of volume to suppliers
Cost relative to total purchases in the industry
Impact of inputs on cost of differentiation
Supplier goods make up a large part of firm’s costs
Supplier size v customer size

12. Bargaining Power Of Customers
Buyer concentration
Buyer volume
Buyer switching costs
Buyer information
Substitute products
Price sensitivity
Price of total purchases
Brand identity
Impact on quality
Impact on performance

13. Threats From New Entrants
Economies of scale
Proprietary products
Brand identity
Switching costs
Capital requirements
Number of existing rivals
Access to raw materials
Access to distribution channels
Absolute cost advantage
Government policy
Expected retaliation
Existing patents
Skills required

14. Threats From Substitutes
Relative price/performance of substitutes
Switching costs
Customer awareness of substitute products
Buyer propensity to substitute
Existing customer loyalty
Customer sensitivity to value for money and ability to compare

15. Porter’s Value Chain Model
Firm infrastructure
General management, accounting, finance, strategic planning
Human resources management
Recruiting, training, development
Support activities
Product/technology development
R&D, product and process improvement
Procurement
Profit
margin
Purchasing of raw materials, machines, suppliers, services
Inbound
Logistics
(raw
materials
handling,
warehousing)
Operations
(maching,
assembling,
testing)
Outbound
Logistics
(warehousing,
distribution)
Marketing
and sales
(advertising,
promotion,
pricing,
channel
relations)
Services
(installation,
repair,
parts)
Primary activities

16. Zuboff’s 3 Eras Automate Informate Transformate
Basic transaction processing systems
Informate
Management information systems
Decision support systems
Transformate
Changing the structure of organisations and industries
Innovative uses of IT

17. Networked Organisations
Managing interdependence
Shared goals
Shared expertise
Shared work
Shared decision making
Shared timing and issue prioritisation
Shared responsibility, accountability and trust
Shared recognition and reward

18. Strategic Alignment Process
Competition and
Reconfiguration
Process
Global
Information
Technology
Platform
Information
Technology
Strategy
Organisational
Infrastructure
And Processes
Competitive
Potential
Technology
potential
Strategic
Alignment
Process
Embedded
Technology
Transformation
Business
Strategy
Information
Systems
Infrastructure
And Processes
Business
Value
Service
Level
Organisational
Change Processes
And Human
Resource Issues
IS Implementation
Processes, Tools
And Skills

19. Approach To Strategic Planning

20. Approach To Strategic Planning
Internal analysis
Marketing
Finance
Production
Organisation
External analysis
Society
Technology
Industry
Competitors
Customers
SWOT Analysis
Strengths Opportunities
Weaknesses Threats
Strategy Formulation
Business Idea
Strategic Direction
Main Goal
Critical Success Factors
Overall Plan
General Plans for Functional Units