1. No category

Strategic
Planning
Professor Amir Sharif
Professor of Operations Management
& Director of MBA Programmes
Brunel Business School
Member of
AACSB International
Agenda Overview - Themes
1. What is
Strategic
Planning?
2. Strategic
Planning
Process
3. Strategic
Planning Tools
for Defining
Strategy
4. Developing &
Implementing
Strategic Plans
in an Academic
Context /
COBRA
Brunel Business School
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“STRATEGIC PLANNING
IS
A PROCESS BY WHICH WE
CAN ENVISION THE FUTURE
AND DEVELOP THE
NECESSARY PROCEDURES
AND OPERATIONS TO
INFLUENCE AND ACHIEVE
THAT FUTURE”
Agenda Outline
Session
THEME 1
Topics
Introduction to Strategic Planning
What is Strategic Planning?
What to consider in Strategic Planning?
1
Benefits of Strategic Planning
Pitfalls of Strategic Planning
Characteristics of a Useful Strategic Plan
Critical Factors for Strategic Success: An Example
2
Types of Strategic Plans
Planning to Plan
Outline Components of a Business Plan
THEME 2
3
Strategic Planning Process
Strategic Planning Process – Overview
Some Key Questions to Ask in Planning Strategically
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Agenda Outline
Session
THEME 2
Topics
Strategic Planning Process
Exercise 1 – Asking Strategic Questions
Strategic Planning Process – Steps
3
Strategic Planning Process – Dynamic and Continuous Process
Generalised Strategic Planning Process
THEME 3
Strategic Planning Tools for Defining Strategy
Determining Who’s Involved When?
4
Strategic Planning – Summarising
Strategic Planning Tools
Exercise 2 – Carrying out a SWOT Analysis
4
Most Valuable Strategic Tools
Reasons for Using Strategic Tools
Exercise 3 - Generating a Risk Matrix
CONCLUDING REMARKS FOR DAY 1
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Agenda Outline
Session
Topics
Review of PVQTM Results
THEME 4
5
Developing & Implementing Strategic Plan within an Academic Context
Strategic Formulation and Implementation
Strategic Planning Outcomes within University Settings
Exercise 4 - Carrying out Scenario Planning
5
The COBRA Framework for Strategic Planning Success
CONCLUDING REMARKS FOR DAY 2
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Overview & Aims - Strategic Planning
The purpose of this two day programme is to
introduce you to the concepts and try out some
tools and techniques of “Strategic Planning”
Identify your organisation’s strengths and weaknesses
Take steps
organisation
to
prioritise
risks
confronting
your
Direct your organisation’s resources towards particular
goals
Increase awareness of internal and external factors
impinging upon your organisation (at present and in the
future)
Identify strategic scenarios for action (and required
resources and responsibilities)
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THEME 1 Introduction to Strategic
Planning
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What is Strategic Planning?
A strategy signifies a plan of action designed to accomplish
organisational aspirations and intentionally opting to be clear
about your organisation’s direction with regards to what’s
happening in the dynamic environment
Ultimately, strategy’s roots are from the battlefield – and the
art of war:
Creating a situation from which an outcome or desired
advantage can be realised with given resources and time
This is different as compared to tactics (which allow you to
achieve specific goals en route to the strategic outcome)
That is a definition but there are many more definitions of
strategy...
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Benefits of Strategic Planning
A prerequisite for better information for decisions making may be
recognised
Growth and development can be accelerated and enhanced
Deficient performing areas can be identified and eradicated
Gain control of operational problems
Develop better communication with those both inside and outside the
organisation
Provides a road map to illustrate where the organisation is going and
how to get there
Develop better internal coordination of activities
Develop a frame of reference for budgets and short and long range
operational plans
Gain a sense of security among employees that comes from better
understanding of the changing environment and the organisation’s
ability to adapt
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Source: http://www.entarga.com/stratplan/plngbenefits.htm
16
Pitfalls to Avoid in Strategic Planning
Jumping from mission formulation to strategy development
without sufficient time to determine the critical success indicators
embodied in the mission statement
Top management fails to communicate the plan to the other
employees, who continue working in the dark
Management rejecting the formal planning mechanism and
making intuitive decisions that may conflict with the formal plan –
this creates confusion for other employees on how the plan is to
be employed in their work activities
Failing to use the plans as a standard for measuring performance
Top management believing that it can create a plan by delegating
the planning function to a planner – while the planner may
facilitate the planning process, management must still take
ownership of the plan itself
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http://www.entarga.com/stratplan/pitfalls.htm
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Pitfalls to Avoid in Strategic Planning
Failure to involve key employees in all phases of the planning
process (preparation, strategy development, evaluation, and
implementation)
Failure to create a climate which is collaborative and not resistant
to change
Treating planning as something quite different and not an integral
part of the entire management process
Failing to use the plans as a standard for measuring performance
Becoming so engrossed in current problems that insufficient time
is spent on long-range planning
Becoming so formal that the process lacks the flexibility and
creativity needed to address the uniqueness of each company
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http://www.entarga.com/stratplan/pitfalls.htm
18
Characteristics of a Strategic Plan
A useful strategic plan exhibits many characteristics. Specifically,
it should be:
A Set of
Priorities
Achievable,
Measurable and
Time Sensitivity
A Unit, not a Menu
Flexible and
Responsive to
Changing
Conditions
A Means to an End,
not an End itself
Short and Simple
Based on Three- to
Five year Period
Source: Professional Practices in Association Management, John B. Cox, CAE, Editor,
American Society of Association Executives, 1997.
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Types of Strategic Plans
Following are some types of strategic plans:
Basic Strategic
Planning
Issue-based or
Goal-based
Strategic Planning
Scenario
Planning
Alignment Model Strategic Planning
Organic (or SelfOrganising)
Planning
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Components of a Strategic Plan
Vision
(Mission and Values)
Shareholder
Expectations
Objectives
Business
Environment &
Turbulence
Gap Analysis
Core
Competencies
Strategic Options and
Risks
Resource
Availability
(Gap between Objectives
& Expectations)
Markets and
Competitors
Capabilities,
Strengths &
Weaknesses
Selected Strategy
EXPECTED
FINANCIAL OUTCOME
GOALS
(Milestones)
ACTION PLANS
Actual Results
Monitoring and Controlling Process
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Source: Hussey, D. E. (1999). Strategy and Planning: A
Manager’s Guide, John Wiley & Sons Ltd. England.
36
THEME 2 –
Strategic Planning Process
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Strategic Planning Process – Overview
If organisational readiness, commitment and capacity is
available the strategic planning process is then available to:
Drive sustained success for companies at all levels of maturity.
Provide an alignment that helps the company evolve into a
strategically focused organisation.
Link a common corporate vision with executable objectives and
measures that improve operating results and growth.
Be a roadmap for companies trying to proactively address
opportunities or challenges in an evolving marketplace, a
blueprint for firms looking to acquire or be acquired, or a catalyst
of growth for organisations trying to reach the next level.
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Strategic Planning Process – Overview
But still WHY opt for a
strategic planning process?
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Strategic Planning Process – Overview
Significant facets to go through a process for developing a
strategic plan:
The process is strategic because it involves preparing the best way
to respond to the circumstances of the organisation’s environment,
whether or not its circumstances are known in advance; organisations
often must respond to dynamic and even hostile environments.
Being strategic, then, means being clear about the organisation's
objectives, being aware of the organisation's resources, and
incorporating both into being consciously responsive to a dynamic
environment.
The process is about planning because it involves intentionally
setting goals (i.e., choosing a desired future) and developing an
approach to achieving those goals. The process is disciplined in that it
calls for a certain order and pattern to keep it focused and
productive.
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Strategic Planning Process – Overview
The process raises a sequence of questions that helps planners
examine experience, test assumptions, gather and incorporate
information about the present, and anticipate the environment in
which the organisation will be working in the future.
Because it is impossible to do everything that needs to be done in this
world, strategic planning implies that some organisational decisions
and actions are more important than others – and that much of the
strategy lies in prioritising what is most important to achieving
organisational success.
Finally, the process is about fundamental decisions and actions
because choices must be made in order to answer the sequence of
questions mentioned above. The plan is ultimately no more, and no
less, than a set of decisions about what to do, why to do it, and how
to do it.
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Some Key Questions
Planning Strategically
to
Ask
in
Both leaders as well as the overall organisation must identify
and share the evaluation, planning, execution and management of
the overall strategic vision. Strategic planning helps to get there...
Some keys questions that should be asked at various areas and
levels of activity are:
Where are we now/what are we doing now?
Where are we going?
How are we going to get there?
What are we achieving by doing this?
Why are we doing this?
Does what we do fit the customer’s requirements?
How do we know this?
How does what we do compare with competitors, insofar as we are able to
deduce this?
Are there other ways we could achieve the same benefits?
Should we be using these?
How does this contribute to our corporate success?
How does it help the corporate vision?
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Source: Hussey, D. E. (1999). Strategy and Planning: A
Manager’s Guide, John Wiley & Sons Ltd. England.
42
THEME 2 – Exercise 1
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Exercise 1 – Asking Strategic Questions: try to
answer as many as possible
1.
What has happened in the past three years in the external
environment that could affect your work as an
organisation/project?
2.
What are the challenges and threats facing you as an
organisation/project in your external environment?
3.
What are the opportunities you should be taking advantage
of in the environment in order to: (a) Make you more
sustainable as a project/organisation? (b) Help you achieve
your vision?
4.
What information do you have that you think is important to
share with others in the strategic planning process?
5.
What
are
the
organisation/project?
important
strengths
of
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your
Exercise 1 – Asking Strategic Questions: try to
answer as many as possible
6.
What weaknesses are preventing your organisation/project
from achieving its vision?
7.
Do you think you are clear about your vision, values and
mission? Make some notes about what you think your vision,
values and mission are.
8.
What challenges have you failed to meet in the past two to
three years and why have you failed to meet them?
9.
What challenges have you met well in the past two to three
years and what helped you to meet them?
10. What is the most important outcome that you would like to
see emerging from this strategic planning process? Why do
you think it is so important?
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Strategic Planning Process – Step 1
Steps in the strategic planning process may vary from
organisation to organisation.
Many organisations have adopted a formalised top-down
strategic planning model in which executive management
periodically
formulates
the
organisation’s
strategy,
communicating this down the organisation for implementation.
It is now recognised that this approach should not just be
reserved for and include senior management however
The following is a flowchart model of the whole strategic
planning process:
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
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Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Source: Hussey, D. E. (1999). Strategy and Planning: A
Manager’s Guide, John Wiley & Sons Ltd. England.
Evaluation
and Control
44
Strategic Planning Process – Step 1
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
This step is based on the following:
Exploring specific issues and choices the process needs to address;
clarify the roles,
Creating a planning committee,
Developing an organisational profile, and
Identifying relevant information that must be collected to help make
sound decisions
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Strategic Planning Process – Step 1
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Questions for the audience:
Who do you think needs to be involved at this stage, e.g. in the
planning committee?
Give examples of issues and choices that need to be addressed at
this stage.
What details are required for developing the organisational profile
at this stage?
What type information is required that will assist in the decision
making process?
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Strategic Planning Process – Step 2
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
An organisation’s mission statement illustrates its reason for being
– about describing the organisation’s business vision, including
the unchanging values and purpose of the organisation and
forward-looking visionary goals that guide the pursuit of future
opportunities.
The mission statement conveys a sense of purpose to employees
and projects organisation image to customers.
In the strategy formulation process, the mission statement sets
the mood of where the company should go.
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Strategic Planning Process – Step 2
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Questions for the audience:
Who do you think needs to be involved at this stage, e.g. in
developing organisation’s mission/vision?
What information is required at this stage for developing the
mission/vision?
What is the mission?
What is the vision?
Where do you want to be in the future?
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Strategic Planning Process – Step 3
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
After specifying the mission and vision and indicating specific
objectives, organisations need to analyse their current situation
focusing on both external (e.g. PEST analysis) and internal (e.g.
SWOT analysis) environments.
Changes in the external environment often present new
opportunities and new ways to achieve the vision and reach the
objectives.
An environmental scan is performed to identify the available
opportunities.
More importantly, the organisation must know its own capabilities
and limitations to select the opportunities that it can pursue with a
higher probability of success.
This step, thus, involves the analysis of both external and internal
environment.
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Strategic Planning Process – Step 3
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Questions for the audience:
What does the organisation needs to analyse at this stage?
Who conducts this analysis?
What changes we need to take into consideration at this stage?
What are the types of external and internal environment factors?
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Strategic Planning Process – Step 4
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Now that the mission/vision is affirmed, critical issues identified
during the current situation analysis, commence on exploring the
broad approaches (strategies) for addressing critical issues and the
results to be sought i.e. long and short-term objectives and goals.
Identifying and agreeing on internal priorities that include everything
related to productivity improvement e.g. employees, training,
operations, technology, efficiencies, R&D, and anything else that deals
with the internal operations of your organisation.
Thereafter, agreeing on external priorities that include everything that
is related to revenue generation such as entering new target markets,
developing new products, and partnering with other organisations.
This is where the strategic planning process develops ideas and action
steps, which are most effectively generated when delegated
throughout management.
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Strategic Planning Process – Step 4
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Questions for the audience:
Who is involved in this stage and what type of approaches and or
strategies are explored?
What are the other different types of internal priorities besides
studied in the previous slide? Any examples?
What are the other different types of external priorities besides
studied in the previous slide? Any examples?
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Strategic Planning Process – Step 5
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Put the pieces together into one coherent document that is practical,
can be implemented, and easily managed and monitored – putting
the plan together and getting it ready for implementation.
Following steps are embarked on in this step:
Developing a detailed action plan for organisational short-term goals
Evaluating the financial feasibility of the strategic plan
Attainment of financial support for the strategic plan
Mapping out the overall strategy
Writing, reviewing, and finalising the strategic plan
Determining a solid process to execute your strategic plan
Determining how the management will roll out and communicate the
overall strategic plan across the organisation
Employing accountability measures to help achieve the overall goals
Scrutinising the strategic plan and evaluating the changes as required
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Strategic Planning Process – Step 5
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Risk Management
Risk management has been described as a managerial process involving
the executive functions of planning, organising, leading, and controlling
activities in a firm relative to specified risks with a view to reducing their
cost to the firm in order to maximise the firm's value.
Risk analysis and risk management can help organisations make plans to
better manoeuvre around obstacles. Assessing risks in advance may
facilitate the management to determine the most cost-effective strategies
to handle each type of risk.
The process further involves systematic identification and evaluation
of risks, selection and implementation of strategies for managing them,
and continuous monitoring and improvement of the risk management
program.
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Strategic Planning Process – Step 5
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Risk Management
Integrating risk management and strategic planning leverages the
benefits of both processes and makes them mutually reinforcing.
However, when risk management process is undertaken
effectively along with strategic planning, it can deliver a range of
benefits, by:
improving planning processes by enabling the key focus to remain
on core business and helping to ensure continuity of service
delivery;
reducing the likelihood of potentially costly ‘surprises’ and preparing
for challenging and undesirable events and outcomes;
contributing to the development of a positive organisational culture,
in which people and organisations understand their purpose,
roles and direction; and
improving accountability and governance — in relation to both
decision-making and outcomes.
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Strategic Planning Process – Step 5
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Questions for the audience:
What types of risks are involved? Any examples?
What type of information is required?
Can you rank each risk (likelihood, impact)?
Who will do this?
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Strategic Planning Process – Step 6
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Once a clear picture of the organisation and its environment is
organised, specific strategic alternatives can be developed.
Whilst different organisations have distinct alternatives depending
on their situation, to attain competitive advantage there also
exist generic strategies that can be applied across a wide range of
organisations.
Porter identified cost leadership, differentiation, and focus as
three generic strategies that may be considered when defining
strategic alternatives.
Porter advised against implementing a combination of these
strategies for a given product; rather, he argued that only one of
the generic strategy alternatives should be pursued.
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Strategic Planning Process – Step 6
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Questions for the audience:
Who is involved at this stage?
Are the planners involved in formulating the strategy at this
stage?
Besides generic strategies, what other strategies
considered while defining strategic alternatives?
can
What is the timeline for “success” for generating a strategy?
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be
Strategic Planning Process – Step 7
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
There is a high possibility that the strategy will be narrated using
complex abstract terminology. For effective implementation of
strategy, it needs to be interpreted into much detailed policies
using language that is unambiguous at the functional level of the
organisation.
In addition, implementation of strategy involves organisation of the
firm’s resources and motivation of the staff to achieve
objectives.
The way in which the strategy is implemented can have a significant
impact on whether it will be successful. In large organisations, those
who implement strategy likely will be different to those who
formulated the strategy. For this reason, care must be taken to
properly communicate the strategy and the reasoning behind the
development of such strategy.
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Strategic Planning Process – Step 7
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Questions for the audience:
Who is involved at this stage?
What type of policies are developed at this stage?
What type of resources are required and when?
When will “success” come – and what will it “look” like?
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Strategic Planning Process – Step 8
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Once strategy is implemented, the results of strategy need to
be measured and evaluated, with changes made as required to
keep the plan on track.
Control systems should be developed and implemented to
facilitate this monitoring.
Standards of performance need to be set, and the actual
performance measured, and suitable actions taken to ensure
success of the whole strategic planning process.
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Strategic Planning Process – Step 8
Getting
Ready
Develop
Mission /
Vision
Current
Situation
Analysis
Agree on
Priorities
Organise the
Plan
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Questions for the audience:
Who is involved at this stage?
What type of evaluation frameworks are available that can be
utilised at this stage?
What type of resources are required while performing the
evaluation process?
What are the steps needed to overcome challenges and address
failure?
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Strategic Planning Process – Dynamic
& Continuous Process
The strategic planning
process is dynamic and
continuous. A change in
one step may require a
change in the entire
strategy.
Getting
Ready
Develop
Mission /
Vision
Evaluation
and Control
Current
Situation
Analysis
Strategy
Implementation
Strategy
Formulation
Agree on
Priorities
Organise
the Plan
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As such, the process
must
be
repeated
frequently in order to
adapt the strategy to
environmental changes.
Throughout the process
the organisation may
need to cycle back to a
previous step and make
adjustments.
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Stakeholder Management
In order to understand stakeholders, we need to understand
their objectives and motivations
Business objectives are derived from the business strategy
Quantified statements of what business unit leaders expect to
achieve from pursuing a chosen set of processes and activities
Targets against which business unit leaders performance will be
evaluated
Formal and tacit objectives
Example: to increase market share from 12% to 30% in four
years
Motivations are inherent in the organisation and individual
Group, division, team and individual goals and priorities
Can be externally or internally focussed
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Stakeholder Management
Entities outside and within the unit of analysis who
can affect, have some power, or have a degree of
influence over whether or not a business objective is
achieved
External (e.g. customers, regulators) or internal
(staff, senior managers, board members)
Prioritisation: who will have the biggest impact on
objectives?
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Stakeholder Mapping
Method for identifying who is involved in your
change programme
1.
2.
3.
4.
5.
Identify Stakeholders
Analyze Needs and Wants
Identify Barriers to Change
Best Means for Communication
Ideas for Participation and leveraging their
Skills and Knowledge
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Comparison of Stakeholders
•
HEIs
President
•
Executive Management
•
Public Sector
Executive Management
•
Management
•
Management
•
Rector
•
Employees
•
Employees
•
Vice Rector
•
Customers
•
Citizens
•
Deans
•
Shareholders
•
Voters
• Heads of
Department
•
Distributors
•
Agencies
Private Sector
•
•
Faculty
•
Students
Retailers
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Managing Expectations
Expectations
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Analysis of Expectations
Stakeholder
Expectations
Category
Verified
Value to
stakeholder
Current Future
List each
stakeholder
by segment
Identify
each
expectation
Meet
Amend
Create
Eliminate
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Ask the
stakeholder?
•Important
•Desired
•Critical
Level of
fulfilment
Current Future
•Ignore
•Deflect
•Partially or
Completely
satisfy
•Delight
Measuring Expectations
Stakeholder Expectations
segment
Measures
must have
a number
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Change to suit
your organisation
Measures
Time
Cost
Quality Frequency Accuracy
If you struggle to
find a measure,
question the
expectation
Other
Strategic Planning – Summarising
Strategic planning is as much about planning
and execution as it is about decision making –
good decision making comes from getting the
right data on which to base your decisions.
Indeed, opportunities for your organisation
are substantial - you have more to do than
you have time to do it – and in order to move
your organisation into the future, you need to
select the right opportunities and the right
strategy to go with them.
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THEME 3 –
Strategic Planning Tools for
Defining Strategy
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Strategic Planning Tools
Strategists have devised a number of strategic planning tools
that can be used in strategic planning. These types of strategic
practices facilitate managers to deal with the challenges
confronted in managing their organisation’s strategic direction.
Following are the top 10 strategy tools highly addressed by
practitioners and academic researchers:
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Source: Jarzabkowski, P., Giulietti, M. and Oliveira, B. (2009) Building a Strategy Toolkit: Lessons from Business,
AIM Research.
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Those capabilities fundamental to a firm’s strategy and performance that
are deployed across strategic business units.
Core competencies are a set of unique internal skills processes and
systems that provide competitive advantage in the market. The benefit of
the analysis to the company includes the following.
A disciplined approach to identifying those activities that the business must
undertake to compete in the market.
A process for evaluation and prioritisation of the collective know how of the business.
A process for identifying values and prioritising the activities of the business in a way
that lends itself to making strategic decisions on the use of company resources or
the need for new or additional resources.
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Ansoff Matrix (Ansoff, 1965)
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Those variables that management can influence through its
decisions and that can significantly affect the overall
competitive position of the firm in an industry.
Types of CFSs that can be taken into consideration:
The structure of a particular industry (industry)
competitive strategy, industry position, and geographical location (strategy)
the macro environment (environmental)
problems or challenges to the organization (temporal)
management perspective (management)
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
5M model (Irani, Sharif and Love, 2001)
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Analysis of the four stages in a product’s life cycle:
Introduction (includes the product launch with its requirements to getting it launch in
such a way so that it will have maximum impact at the moment of sale. A good
example is the launch of “iPhone 4, iPAD 1 & 2” by Apple).
Growth (this phase offers the satisfaction of seeing the product take-off in the
marketplace. This is the appropriate timing to focus on increasing the market share.
If the product has been introduced first into the market, then it is in a position to
gain market share relatively easily).
Maturity (When the market becomes saturated with variations of the basic product,
and all competitors are represented in terms of an alternative product, the maturity
phase arrives. Moreover, the market share growth is at the expense of someone
else’s business, rather than the growth of the market itself).
Decline (The decision for withdrawing a product seems to be a complex task and
there a lot of issues to be resolved before with decide to move it out of the market.
Dilemmas such as maintenance, service competitions reaction in filling the market
gap are some issues that increase the complexity of the decision process to withdraw
a product from the market).
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Product Lifecycle (Levitt, 1965)
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Analysis of wider ‘meso-economic’ and ‘macro-economic’
environments, including: Political, Economic, Social, Technological,
Legal and Environmental factors.
Political (e.g. how and to extent the government intervenes in global, national
economy)
Economic (e.g. economic growth factors impact on how businesses operate and make
decisions)
Social (e.g. cultural and behavioural aspects and other developments in society)
Technological (developments such as R&D activities, automation, rate of technological
change)
Legal (e.g. how legislation affects an organisation’s operations, its costs, and demand
for its products)
Environmental (e.g. ecological and related aspects such as weather, climate.)
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
PESTLE
Political (e.g. how and to extent the government intervenes in global, national
economy)
Economic (e.g. economic growth factors impact on how businesses operate and
make decisions)
Social (e.g. cultural and behavioural aspects and other developments in society)
Technological (developments such as R&D activities, automation, rate of
technological change)
Legal (e.g. how legislation affects an organisation’s operations, its costs, and
demand for its products)
Environmental (e.g. ecological and related aspects such as weather, climate.)
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
A framework for analysing an industry and determine its
competitive intensity and market attractiveness.
The strategic business manager seeking to develop an edge
over rival organisations can use this framework to better
understand the industry context in which the firm operates.
It includes three sources of horizontal competition (substitutes,
entrants and rivals) and two sources of vertical competition
(power of suppliers and power of buyers).
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Porter (1985)
Bargaining
Power of
Suppliers
Threats of
New Entrants
Rivalry amongst
Existing Firms in the
Industry
Bargaining
Power of
Buyers
Threats of
Substitute
Products/Services
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Analyses the growth and profitability of potential of products.
This tool is based on the product life cycle theory that can used
to determine what priorities should be given in the product
portfolio of a business unit.
E.g. placing products in the BCG matrix results in 4 categories
in a portfolio of a company: Stars, Cash Cows, Dogs, Question
Marks
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Analysing the potential of firm’s resources to generate sustained
competitive advantage along four dimensions – value, rareness,
inimitability, and non-substitutability (VRIN) – Barney (1986):
Valuable (when they enable a firm to conceive or implement strategies that improve
its efficiency or effectiveness)
Rare (valuable firm resources possessed by large number of competing firms cannot
be sources of either a competitive advantage or a sustainable competitive advantage
Imperfectly Imitable (because of a combination of three reasons; unique historical
conditions, causally ambiguous, social complex)
Non-Substitutable (there must not be strategically valuable resources that are
themselves either not rare or imitable)
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Also known as Scenario Planning : “stories of the future”
Approach to develop flexible long-term plans. It is an attempt
to consider a diverse range of possibilities which can highlight
possible events that decision makers would otherwise ignore.
It involves looking into the future, anticipating possible events,
scenarios or changes, and analysing what will happen to the
company as a result of those things happening, AND, planning
to minimise any damage, and maximise opportunities.
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
This tool is usually used as part of undertaking an
environmental scan, that help identify external factors that
need to be planned for, and internal factors (i.e. strengths,
weaknesses, opportunities and threats) that need to be
planned for in determining where a business should be going in
the future.
The SWOT analysis can be done as part of strategic planning,
but it can also be done independently of the larger process as
a standalone.
More on this later...
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Strategic Planning Tools
Core
Competency
Analysis
Critical (Key)
Success
Factors
Industry Life
Cycle
PESTLE
Porter’s 5
Forces
Portfolio
Matrices, BCG
or McKinsey
ResourceBased View
Scenario
Building
SWOT
Value Chain
Analysis that categorises and evaluates the integration of the
primary and supporting value-adding activities within and
around an organisation.
A tool that facilitates better strategic planning in a business
setting.
Value chain analysis is a powerful tool for managers to identify
the key activities within the firm which form the value chain for
that organisation, and have the potential of a sustainable
competitive advantage for a company.
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THEME 3 – Exercise 2
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Exercise 2 – Carry out a SWOT Analysis
Arrange into groups
Fill in a grid with your Top 5 SWOT for your organisation
Let everyone speak
Capture all the main points
Prioritise the top / main five
HINT: go in sequence, O-T-S-W!
Strengths
(S)
Opportunities
(O)
Weaknesses
(W)
Threats
(T)
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THEME 4 –
Developing & Implementing
Strategic Plans within an
Academic Context
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Brunel Business School
THEME 4 – Exercise 4
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Exercise 4 – Scenario Planning
Now we need to bring it all together!
1.
From your SWOT matrix, identify those entries which are
Political, Economic, Social, Technological, Legal, Environmental
– hence carry out PESTLE on SWOT
2.
Create columns for P, E, S, T, L and E (this is a PESTLE matrix);
search for and remove any duplicate entries
3.
Select any one of the cells in the P column and then choose any
E, S, T, L and E cells to create a scenario: read this from left to
right
4.
Optional steps:
•
For one given scenario perform a risk analysis (likelihood /
impact and place on your risk matrix)
•
Identify the relevant stakeholders for each scenario / risk
combination
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The COBRA Framework for Strategic Planning
Success
You can’t keep a track on everything – but you can
remember some key aspects of the approach...
Within the strategic planning process, keeping sight
of all of the strategic, tactical and operational
aspects of an organisation is paramount
COBRA ensures that the essence of strategic
planning can be remembered:
Recognising Challenges facing your organisation
Involves stating Outcomes which are desired
In order for Benefits to be realised
Noting specific Requirements to meet plans
Which are reliant upon Actions to take place
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The COBRA Framework for Strategic Planning
Success
Challenges
Purpose:
To be able to reason and prioritise those
critical factors supporting or hindering
competitive
advantage
(internally
or
externally)
Method:
Asking / Answering strategic questions
SWOT
PEST / PESTLE
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The COBRA Framework for Strategic Planning
Success
Outcomes
Purpose:
To assess the impact of internal and external
factors on the strategic goals and future intent
of the organisation
Method:
BCG Matrix
Risk Matrix
Value Chain
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The COBRA Framework for Strategic Planning
Success
Benefits
Purpose:
To identify benefits within the organisation as
a result of process flows (products, services,
information or other resources)
Method:
Value Chain analysis
RBV / VRIN
Stakeholder Mapping
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The COBRA Framework for Strategic Planning
Success
Requirements
Purpose:
To outline the managerial and resource
commitment from the firm to achieve strategic
goals
Method:
Ansoff Matrix
Resource Based View (RBV)
Scenarion Planning
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The COBRA Framework for Strategic Planning
Success
Actions
Purpose:
To identify and plan for the implementation of
the strategic planning process – putting
theory into practice
Method:
5M model (CSFs)
Risk Matrix
Scenario Planning
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End of Day 2
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References
Al-Ghamdi, S. M, Roy, M.H., and Ahmed, Z.U. (2007). ‘How employees
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Cox, J.B. (1997). Professional Practices in Association Management,
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Crittenden, W. F. and Crittenden, V. L. (2000). ‘Relationships between
organizational characteristics and strategic planning processes in
non-profit organizations’, Journal of Management Issues, 12 (2):
150–168.
Elali, W., Sahroui, S. and Jenks, C. (2006). Higher Education in the 21st
Century, CRC Press.
Hussey, D. E. (1997). ‘Strategic Management: Past Experiences and
Future Directions’, Strategic Change, 6 (5).
Hussey, D. E. (1999). ‘Strategy and Planning: A Manager’s Guide’, John
Wiley & Sons Ltd. UK.
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References
Irani, Z., Sharif, A.M., and Love, P.E.D. (2001). ‘Transforming Failure
into Success through Organizational Learning: An analysis of a
Manufacturing Information System’, European Journal of
Information Systems, 10 (1) : 55 - 66.
Jarzabkowski, P., Giulietti, M. and Oliveira, B. (2009) ‘Building a
Strategy Toolkit: Lessons from Business’, AIM Research.
Johnson G., Scholes K. and Whittington, R. (2008). Exploring Corporate
Strategy: text and cases (8th ed), Harlow: Pearson Education,
UK.
Mintzberg,H (1996). ‘The Fall and Rise of Strategic Planning’, Harvard
Business Review.
Porter, M.E. (1985). Competitive Advantage. Free Press, NY, USA.
Porter, M. E. (1996). ‘What is strategy?’, Harvard Business Review, 74
(6): 61–81.
Sharrock, G. (1999). ‘Performance Management and Cultural Difference
in the Australian University’, Asia Pacific Journal of Human
Resources, 36 (3) : 87 – 101.
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