Rock Paper Scissor Tournament
STRATEGIC
MANAGEMENT PROCESS
1.4
Planning
• Serves as a guide for making decisions
• The act of setting goals, developing strategies, outlining tasks,
creating timelines
• Each part of a business develops its own plan to guide its
operations
• All plans must work together toward the business’ overall goals.
Importance of Planning
• Most important function of management
• The difference between higher profits or huge loses, expansion or
failure
• All managers are involved with planning in some way
• Deciding to expand and build a new building to deciding on work
schedules
Importance of Planning
• Mangers use their plans to determine whether the business
is making progress
• It encourages managers to be more specific in their
decisions
• Planning in a large business is like a jigsaw puzzle. All the
pieces must work together
• Coordination to avoid conflict & missed opportunities
• Sharing plans between departments helps each see how their plans
effect another
Levels of Planning
Managers plan on two levels
• Strategic planning (upper management)
• Long term
• Provides broad goals & direction for the entire business
• Operational (mid-level management)
• Short term
• Identifies specific activities for EACH area of the business
Setting Goals
You will never know when you have arrived if you don’t know
where you are going.
Goal – Is a specific statement of a result the business expects
to achieve
Characteristics of Effective Goals:
1. Specific & Meaningful
2. Achievable (realistic)
3. Clearly Communicated
4. Consistent with each other
and overall company
Operation Planning
• Determines the:
• How it will be done
• Who will do it
• What resources are needed to do it
• Operational plans direct the day-to-day activities of a
business
Planning Tools
• Budgets –
most widely used tool
• Schedules – deadlines
• Standards – Quality, Quantity, Time, Cost
• Policies – general rule for the whole business
• Procedure – steps followed to perform certain work
• Research – Gathering information
What is Strategic Management?
 Application of the basic planning process
at the highest levels of the company
 Top management sets goals for the
performance of the company
◦ Carefully formulating, implementing, and
evaluating plans and strategies
What is Strategic Management?
• Most important part is developing strategic plans
• Plans must remain current as changes occur inside and
outside the company
• Involves many levels of management
• Top level formally develops basic plans
• Different departments may be asked to develop plans
for their own areas
• A solid plan guarantees that plans are coordinated and
are supported by everyone in the company
Strategic Management Approach
• Three phases critical to the success of the
process
• Formulation
• Developing the strategic plan
• Implementation
• Putting the formulated plan to work
• Evaluation
• Continuously evaluating and updating the strategic
plan
Formulating Strategy
Developing the grand- and business-level
strategies to be used by the company
• Company’s strengths/weaknesses and
threats/opportunities shape the strategies
• First step is to understand the current position of
the company
• Identify mission, identify past and present strategies,
diagnose the company’s past and present performance,
set objectives for the company’s operation
Formulating Strategy
• Identify the mission statement
• Outlines why the company exists
• Describes the company’s basic products and/or
services and defines markets and sources of
revenue
• Designed to accomplish several goals and
ensures a common purpose within the company
Identifying Past and Present Strategies
• Companies need to understand and
appreciate their corporate history
• Strategic managers should ask
• Has past strategy been developed?
• If not, can past history of the company be analyzed to
identify the strategy that has evolved?
• If yes, has the strategy been recorded in writing?
Diagnosing Past and Present
Performance
• A corporate planner must decide if past
strategies worked and if strategic changes
are needed by asking:
• How is the company currently performing?
• How has it performed during the past few
years?
• Is the performance trend moving up or down?
Setting Goals
• Concise statements that provide direction
employees and set standards for achieving
the company’s strategic plan
• Established in many areas (see handout)
• Goals must be reevaluated as the
environment and opportunities change
• Multiple goals are used to reflect the
desired performance
Policies, Procedures, and Rules
• Policies are broad general guides to action
that establish boundaries within which
employees must operate
• “answering all written customer complaints in
writing within 10 days”
Policies, Procedures, and Rules
• Procedures are detailed series of related
steps/tasks written to implement a policy
• Define methods through which policies are achieved
• “the customer service representative must note the
complaint of Form 622 and forward the yellow copy of
the form…”
• Rules detail specific and definite corporate
actions that employees must follow
• Leave little doubt about what is to be done
• “no smoking in the conference room”
Implementing Strategy
• Action stage of strategic management
• Managers determine and implement the
most appropriate company structure,
motivate employees, develop short-range
goals, and establish functional strategies
• Strategy must fit with current company
policies
• Or conflicting policies must be changed
Evaluating and Controlling the Strategic
Plan
• Process of continuously monitoring the
company’s progress toward its long-range goals
and mission
• Managers should ask:
• Does the grand strategy need revising?
• Where are problems likely to occur?
• Basic strategy evaluation strategies:
• Review external and internal factors that are the bases
for current strategies
• Measure performance
• Take corrective action
SWOT Analysis
•Strengths, Weaknesses, Opportunities,
Threats
• Process that allows companies to evaluate
overall health
• Internal (SW) – Can Control
• External (OT) – Can’t Control
• Most important result of a SWOT analysis is the ability to
draw conclusions about the attractiveness of the
company’s situation and the need for strategic action
SWOT Analysis for Santa
Evaluating and Controlling the Strategic
Plan
• Emphasis is making the company’s
managers aware of the problems that are
likely to occur and of the actions to take if
they do arise
• Plan ahead and avoid disaster
• Strategic planning and evaluation should
be done on a predetermined schedule and
as frequently as necessary, determined by
internal and environmental factors