STRATEGIC THINKING AND PLANNING FOR BUSINESS STRATEGIC PLANNING

WHAT IS STRATEGIC PLANNING EXERCISE IN GROUPS OF TWO DISCUSS THE STATEMENT ABOVE AND FEEDBACK YOUR ANSWERS TO THE GROUP

STRATEGIC PLANNING Is a process for making decisions which will match organisational strengths and opportunities in the external environment, so that the organisation can survive and achieve the best results possible (SWOT) Addresses the organisation as a complex system Takes the whole organisation as its unit of analysis – not biased towards a particular unit e. g. finance, marketing

STRATEGIC PLANNING CONT’D Addresses macro issues, may be triggered by local problems e. g. environmental, cultural etc Requires decisive leadership from the top plus inputs from particular divisions Underpinned by strategic thinking Attempts to anticipate future environmental conditions – it is proactive. However sometimes needs to react to an immediate event e. g. 911

STRATEGIC PLANNING CONT’D Not the same as other organisational planning Not a totally quantitative process – avoids over reliance on hard data and historic trends Gives direction to organisation

PROCESS SITUATION – where are we right now? How did we get there? TARGET – Where do we want to be? PATH – How can we get there?

METHODS OF STRATEGIC PLANNING Incremental Emergent Classical Rational

Methods of Strategic Planning Activity In pairs investigate the above methods of strategic planning and prepare a seminar paper for next session to present to the rest of the group; you must include relevant examples for each

ELEMENTS OF STRATEGIC PLANNING Environmental auditing Pestle analysis Porters five forces Competitor analysis Boston matrix Internal auditing Mc. Kinsey’s 7’s SWOT Strategic direction Ansoff matrix Strategy implementation

REASONS STRATEGIC PLANS FAIL EXERCISE 2 IN GROUPS OF TWO DISCUSS WHY YOU THINK STRATEGIC PLANS MAY FAIL – GIVE FEEDBACK TO THE REST OF THE GROUP

CHARACTERISTICS OF STRATEGIC DECISIONS Rare E. g. Environmental change Consequential Leads to other things Directive To get things done

BENEFITS OF STRATEGIC MANAGEMENT Research indicates that organisations pursuing strategic management generally outperform those that do not. Attainment of appropriate match or ‘fit’ between organisations environment and its strategy, structure and processes has positive effects on performance

BENEFITS CONT’D Clearer sense of vision for the firm Sharper focus on what is strategically important Improved understanding of a rapidly changing environment

EXAMPLES OF BENEFITS A study of the impact of deregulation on U. S. railroads found that those railroads that changed their strategy as their environment changed outperformed those railroads that did not change their strategies