Strategic Planning Model
Critical Success Factor:
Strategic Innovation
Environmental
Analysis
S trengths
W eaknesses
O pportunities
T hreats
Strategic
Formulation
Mission
Objectives
STRATEGY
Organizational
Structure
Policy Guidelines
Strategic
Implementation
Budgets
Programs
Procedures
Execution
& Control
Monitor
Feedback
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Life Cycle and Competitive
Advantage
Introduction
R&D
Tech change
Attention to
quality
Design change
Process change
Growth
Improve product
Econ of scale
Process improve
Distribution
Value added
Forecasting
Maturity
Decline
Focus on
Cost Control
Standardize
Reduce capacity
Efficiency
Cut products
Costs cuts
Few changes
Optimal capacity
Creating a Sustainable Competitive Advantage (David A. Aaker, 1989)
Stage of the Product Life Cycle, Business Strategy, and Business Performance
(Anderson & Zeithaml, 1984)
2
Competitive Forces Shape
Strategy
How Competitive Forces Shape Strategy:
“By being aware of competitive forces, an
organization can position itself to be less
vulnerable to attack” (Michael E. Porter,
1979)
3
Competitive Forces Shape
Strategy
Porter’s 5 Forces Model
Threat of New
Entrants
Bargaining
Power of
Suppliers
Industry
Competitive
Rivalry
Bargaining
Power of
Customers
Threat of
Substitutes
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Strategic Planning
Airline Industry
Industry Example:
United Airlines (Incorporated 1931)
1997
1998
2001
Dec 2002
Strategy Based on Global Growth
Aircraft fleet expansion (639 planned aircraft by 2001)
Failed attempt to buy US Airways
United files for Ch. 11 federal bankruptcy protection
* According to Air Transport Association, 127 airlines have filed for
bankruptcy since 1978 (ATA, 2005)
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Strategies for Survival
Strategic Innovation
Differentiation (RCA used its R&D strength and its
organizational structure to market successfully Color
TV)
Transformation: From ordinary to revolutionary
Low Cost (Southwest Airlines strives to recruit and
train the best personnel available, create innovative
flight schedules, stress strong customer support, and
provide high pay for employees)
Transformation: From in-state service to national to?
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Strategies for Survival
Strategic Innovation
Response (FedEx uses a hub-and-spoke system to
rapidly respond to request for package shipments
worldwide)
Transformation: From national letter carrier to global
cargo carrier
Diversification (Boeing reacts to the maturing
airframe market)
Transformation: From an airplane builder to a hightech product and service provider
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