1. © Prentice Hall, 2005 1 - 1

2. © Prentice Hall, 2005 1 - 2ObjectivesObjectives 1.Definitions of both strategic planning and strategy 2.An understanding of the strategy management process 3.A knowledge of the impact of environmental analysis onstrategy formulation 4.Insights into how to use critical question analysis and SWOT analysis to formulate strategy 5.An understanding of how to use business portfolio analysis and industry analysis to formulate strategy 6.Insights into what tactical planning is and how strategic and tactical planning should be coordinated

3. © Prentice Hall, 2005 1 - 3 Strategic Planning Fundamentals of Strategic Planning Defining Strategic Planning Defining Strategy

4. © Prentice Hall, 2005 1 - 4 Strategic Planning

5. © Prentice Hall, 2005 1 - 5 Strategic Planning Strategy Management Environmental Analysis The General Environment The Economic Component The Social Component The Political Component The Legal Component The Technology Component The Operating Environment The Customer Component The Competition Component The Labor Component The Supplier Component The International Component The Internal Environment

6. © Prentice Hall, 2005 1 - 6 Strategic Planning

7. © Prentice Hall, 2005 1 - 7 Strategic Planning

8. © Prentice Hall, 2005 1 - 8 Strategic Planning

9. © Prentice Hall, 2005 1 - 9 Strategic Planning Strategy Management (continued) Establishing Organizational Direction Determining Organizational Mission Developing a Mission Statement The Importance of Organizational Mission The Relationship Between Mission and Objectives

10. © Prentice Hall, 2005 1 - 10 Strategic Planning Strategy Management (continued) Strategy Formulation:Tools Critical Question Analysis What are the purposes and objectives of the organization? Where is the organization presently going? In what kind of environment does the organization now exist? What can be done to better achieve organizational objectives in the future? SWOT Analysis Strengths Weaknesses Opportunities Threats

11. © Prentice Hall, 2005 1 - 11 Strategic Planning Strategy Management (continued) Strategy Formulation:Tools (continued) Business Portfolio Analysis The BCG Growth-Share Matrix. Strategic business units (SBUs) 1. It is a single business or collection of related businesses 2. It has its own competitors 3. It has a manager who is accountable for its operation 4. It is an area that can be independently planned for within the organization Categorize each SBU as: Stars Cash Cows Question Marks Dogs The GE Multifactor Portfolio Matrix. Porter’s Model for Industry Analysis

12. © Prentice Hall, 2005 1 - 12 Strategic Planning

13. © Prentice Hall, 2005 1 - 13 Strategic Planning

14. © Prentice Hall, 2005 1 - 14 Strategic Planning

15. © Prentice Hall, 2005 1 - 15 Strategic Planning Strategy Management (continued) Strategy Formulation:Types Differentiation Cost Leadership Focus Sample Organizational Strategies Growth Stability Retrenchment Divestiture

16. © Prentice Hall, 2005 1 - 16 Strategic Planning Strategy Management (continued) Strategy Implementation 1. Interacting skill 2. Allocating skill 3. Monitoring skill 4. Organizing skill Strategic Control Monitor and evaluate the whole strategy management process

17. © Prentice Hall, 2005 1 - 17 Tactical Planning Comparing and Coordinating Strategic and Tactical Planning Basic differences between strategic and tactical planning: 1. Strategic plans are usually developed by upper-level management and tactical plans by lower-level management 2. Facts to base strategic plans are more difficult to gather 3. Strategic plans are generally less detailed than tactical plans 4. Strategic plans cover a relatively long period of time whereas tactical plans cover a relatively short period of time

18. © Prentice Hall, 2005 1 - 18 Tactical Planning

19. © Prentice Hall, 2005 1 - 19 Planning and Levels of Management

20. © Prentice Hall, 2005 1 - 20 Questions