Strategic
Planning
Unit 4: Planning and
Controlling
Strategy
 Strategy
- is a planned course of action
undertaken to achieve the goals and
objectives of an organization
 The overall strategy of an organization is
known as corporate strategy
 But strategy may also be developed for any
aspect of an organization's activities such as
environmental management or
manufacturing strategy
A Strategic Plan
A
Strategic Plan - is a coordinated and
systematic direction for an organization
 Strategic Planning determines where an
organization is going and how it's going to get
there
 In today’s highly competitive business
environment, a solid Strategic Plan is essential
to the success of a business
The Strategic Planning Process
1.
2.
3.
4.
5.
Identify Mission and Objectives
Analyse Internal and External Environment
Formulate Strategy
Implement Strategy
Evaluate Results and Control
Management Tools for Analysis
 The
second step of the process is to analyse
the internal and external environment. There
are three commonly used methods for doing
this analysis:
1. SWOT Analysis
2. PEST Analysis
3. Porter’s 5 Forces
Management Tools for
Analysis: SWOT Analysis
 SWOT
Analysis - includes both an internal
analysis of organizational
 Strengths
 Weaknesses
 as well as an analysis of the external
 Opportunities
 Threats
 Successful organizations use their strengths to
create strategies that take advantage of
opportunities and minimize threats
Management Tools for
Analysis: PEST Analysis
 PEST
Analysis is a tool to examine the external
factors that provide opportunities and threats to
an organization




Political factors include: political stability, trade regulations,
taxation, labour laws, and safety regulations
Economic factors include: economic growth, stagnation,
recession, interest rates, exchange rates, and inflation
Social factors include: demographics and cultural aspects,
e.g., health consciousness, population growth, age
distribution, education, and attitudes to work and leisure
Technological factors include: new discoveries and
developments, rates of technological obsolescence,
changes in information technology, and research and
development activity
Management Tools for
Analysis: Porter’s Five Forces
 Porter's
Five Forces - Incorporate strategies to meet
opportunities and threats in the organization’s
external environment
 Porter identifies five competitive forces that shape
every industry and every market:





Competitors are the existing competitive rivalry within the
industry
New entrants involve the threat from new market entrants
Customers mean the bargaining power of buyers
Suppliers are the bargaining power of suppliers
Substitutes are the threat of substitute products which
includes technology change
Levels of Strategic Planning
 Large
corporations have three levels of
strategy that must all work together to
accomplish the organization’s objectives:
corporate, business, and functional
Levels of Strategic Planning
Strategy Level
Description
Main Question
corporate
Sets long-term direction for the
organization as a whole, e.g.,
Cara Operations Ltd.
In what industries and
markets should we
compete?
business
Each business unit or product
line is often called a strategic
business unit (SBU), e.g., Swiss
Chalet, Harvey’s, Kelsey’s.
How are we going to
compete for customers
in this industry and
market?
functional
Each business unit has the
How can we best utilize
same basic functional areas or resources to implement
departments, typically these
our business strategy?
include: human resources,
marketing, production, finance,
and information technology.
Types of Strategic Plans
1.
A Growth Strategy - involves expanding current
operations

One growth strategy is expanding in the same industry,
e.g., Tim Horton’s opens more stores, all of them selling
the same products



This is called concentration
Another growth strategy is vertical integration which
means expansion by buying suppliers or distributors,
e.g., a meat processing company buying farms
(suppliers) or grocery stores (distributors)
A third growth strategy is diversification which means
buying or starting businesses in other industries

Rogers Communications Inc. is an example of a
diversified Canadian corporation
Types of Strategic Plans
2.
A Retrenchment Strategy - ,is used when an
organization is in crisis


It seeks to correct weaknesses by making
changes to current business practices
Restructuring and downsizing are two commonly
used terms for retrenchment strategies
Types of Strategic Plans
An e-business Strategy - is the use of the
Internet to become more successful
 Businesses can use Internet technology to buy
materials from their suppliers and to sell
products to their customers
 Even businesses who don’t sell goods or services
online will use the Internet for advertising,
collecting information, and distributing
information
3.
Your Task
 You
will be split into 5 groups
 Read the case study assigned to your group
 As a group, discuss the answers to the questions
included at the end of each case
 Decide on a format to present the results (and
an overview of the case) of your work to your
teacher and peers (slideshow, video, etc.)

The presentation must present a brief introduction
to the business and its situation, as well as answers
to the questions. Be sure to use the concepts and
terms you studied.