Developing a strategic business plan

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Information about Developing a strategic business plan
Business-Finance

Published on May 17, 2009

Author: earl58

Source: authorstream.com

Developing a strategic business plan : Developing a strategic business plan Toolbox Strategic Planning : Strategic Planning …is the managerial process of developing and maintaining a strategic fit between the organization's objectives and resources and its changing market opportunities. The Role of Strategy : The Role of Strategy Vision and Strategy : Vision and Strategy Sun Tze on Strategy : Sun Tze on Strategy “Know your enemy, know yourself, and your victory will not be threatened. Know the terrain, know the weather, and your victory will be complete.” Strategic Marketing : Strategic Marketing “Marketing Strategy is a series of integrated actions leading to a sustainable competitive advantage.” John Scully Corporate Mission : Corporate Mission Broad purposes of the organization General criteria for assessing the long-term organizational effectiveness Driven by heritage & environment Mission statements are increasingly being developed at the SBU level as well Examples of Corporate Mission : Examples of Corporate Mission SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company Examples of Corporate Mission (cont’d)? : Examples of Corporate Mission (cont’d)? MARRIOTT’S Mission Statement: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value Corporate Culture : Corporate Culture The most abstract level of managerial thinking How do you define culture? What is the significance of culture to an organization? How does marketing affect culture in the organization? Corporate Objectives & Goals : Corporate Objectives & Goals An objective is a long-range purpose Not quantified and not limited to a time period E.g. increasing the return on shareholders’ equity A goal is a measurable objective of the business Attainable at some specific future date through planned actions E.g. 10% growth in the next two years Strategic planning : Strategic planning STRATEGIC PLAN DEVELOPMENT : STRATEGIC PLAN DEVELOPMENT The Usual Business Planning Hierarchy : The Usual Business Planning Hierarchy Strategic Planning – Many Sub Plans : Strategic Planning – Many Sub Plans Framework of a Successful Organisation : Framework of a Successful Organisation Business Planning and Delivery : Business Planning and Delivery Vision is a Critical Driver : Vision is a Critical Driver To succeed in the long term, our business needs a vision of how we will change and improve in the future. “without a vision, the people perish”  The vision of the business gives its energy. It helps motivate us. It helps set the direction of corporate and marketing strategy. Values underpin all we do : Values underpin all we do Values form the foundation of a business’ management style. Values provide the justification of behaviour and, therefore, exert significant influence on marketing decisions.  An example is provided by BT Group - defining its values:  BT's activities are underpinned by a set of values that all BT people are asked to respect: We put customers first We are professional We respect each other We work as one team We are committed to continuous improvement.  These are supported by our vision of a communications-rich world - a world in which everyone can benefit from the power of communication skills and technology.  A society in which individuals, organisations and communities have unlimited access to one another and to a world of knowledge, via a multiplicity of communications technologies including voice, data, mobile, internet - regardless of nationality, culture, class or education.  Our job is to facilitate effective communication, irrespective of geography, distance, time or complexity. Source: BT Group plc website Has the Company got a strong Clear Mission? : Has the Company got a strong Clear Mission? The Business Mission is important to our sales & marketing planning It provides an outline of how the marketing plan should seek to fulfil the mission It provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission? It provides an incentive to implement the marketing plan Slide 21: "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations". Strategic Audit - ensuring that the Company resources and competencies are understood and evaluated : Strategic Audit - ensuring that the Company resources and competencies are understood and evaluated Need to work within Company Resources & Constraints : Need to work within Company Resources & Constraints Objectives - Corporate & Functional : Objectives - Corporate & Functional Value Chain Analysis : Value Chain Analysis Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Michael Porter suggested that the activities of a business could be grouped under two headings: Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities. Value Chain Analysis is one way of identifying which activities are best undertaken by our business and which are best provided by others ("outsourced"). Linking Value Chain Analysis to Competitive Advantage What activities a business undertakes is directly linked to achieving competitive advantage. For example, if we wish to outperform our competitors through differentiating ourselves through higher quality then we will have to perform our value chain activities better than the opposition. But if we adopt a strategy based on seeking cost leadership this will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used. Value Chain : Value Chain Primary ActivitiesPrimary value chain activities include: : Primary ActivitiesPrimary value chain activities include: Support ActivitiesSupport activities include: : Support ActivitiesSupport activities include: Steps in a Value Chain Analysis : Steps in a Value Chain Analysis Core competencies : Core competencies Core competencies are those capabilities that are critical to a business achieving competitive advantage. The starting point for analysing core competencies is recognising that competition between businesses is as much a race for competence mastery as it is for market position and market power. Senior management cannot focus on all activities of a business and the competencies required to undertake them. So the goal is for management to focus attention on competencies that really affect competitive advantage. Core Competencies are not seen as being fixed. Core Competencies should change in response to changes in the company's environment. They are flexible and evolve over time. As a business evolves and adapts to new circumstances and opportunities, so its Core Competencies will have to adapt and change. We need to understand what we are good and what makes us better and to hone these advantages and to develop new ones to underpin the business strategy Identifying Core CompetenciesPrahalad and Hamel suggest three factors to help identify core competencies in any business: : Identifying Core CompetenciesPrahalad and Hamel suggest three factors to help identify core competencies in any business: What is Competitive Advantage? : What is Competitive Advantage? “Competitive advantage is a company’s ability to perform in one or more ways that competitors cannot or will not match.” Philip Kotler “If you don’t have a competitive advantage, don’t compete.” Jack Welch, GE Four Generic Strategies : Four Generic Strategies Other Characteristics of Competitive Advantage : Other Characteristics of Competitive Advantage Substantiality Is it substantial enough to make a difference? Sustainability Can it be neutralized by competitors quickly? Ability to be leveraged into visible business attributes that will influence customers (Source: Strategic Marketing Management, Aakers)? Seeking Competitive Advantages : Seeking Competitive Advantages Positions of advantage Superior customer value Lower relative total cost Performance advantages Customer satisfaction, Loyalty, Market Share, Profit Sources of advantages Superior skills & knowledge, Superior resources, Superior business process WHERE TO COMPETE? : WHERE TO COMPETE? Capability platform: assessment of sources of competitive advantage (1/2) : Capability platform: assessment of sources of competitive advantage (1/2) Capability platform: assessment of sources of competitive advantage (2/2) : Capability platform: assessment of sources of competitive advantage (2/2) Competitor capability comparison : Competitor capability comparison Porter’s 5 Forces of Competitive Position Diagram : Porter’s 5 Forces of Competitive Position Diagram Porter 5 Forces : Porter 5 Forces Porter’s 5 Forces of Competitive Position version #2 : Porter’s 5 Forces of Competitive Position version #2 Porter’s 5 Forces of Competitive Position #3 : Porter’s 5 Forces of Competitive Position #3 Forces at work framework : Forces at work framework Ninety ways to measure demand (6 x 5 x 3) : Ninety ways to measure demand (6 x 5 x 3) Strategic Planning Link with Marketing Planning : Strategic Planning Link with Marketing Planning Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition. Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”). The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning. Strategic vs. Marketing Plans : Strategic vs. Marketing Plans Strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues. The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives. Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”. Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!). However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. Keeping control of marketing decision-making in such a complex situation calls for well-organised marketing planning. Key issues in strategic and marketing planning? : Key issues in strategic and marketing planning? The following questions are key in the marketing and strategic planning process: Where are we now? How did we get there? Where are we heading? Where would we like to be? How do we get there? Are we on course? A marketing plan helps to: The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected Identify sources of competitive advantage Gain commitment to a strategy Get resources needed to invest in and build the business Inform stakeholders in the business Set objectives and strategies Measure performance Situation Analysis : Situation Analysis Internal Analysis—company; capability etc. External Analysis—customers, market definition, industry structure SWOT Analysis Strengths, Weaknesses, Opportunities & Threats Identify & prioritize major problems and opportunities: selection of key issues Based on the firm’s core competencies, decide on future options SWOT : SWOT SWOT ANALYSIS : SWOT ANALYSIS SWOT Analysis is still a useful Tool : SWOT Analysis is still a useful Tool TOWS matrix : TOWS matrix S-O strategies pursue opportunities that are a good fit to the companies strengths. W-O strategies overcome weaknesses to pursue opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats. PEST analysis : PEST analysis A scan of the external macro-environment in which the company wants to operate (or operates) and can be expressed in terms of the following factors: Political Economic Social Technological PEST Analysis - market, business, proposition, etc. : PEST Analysis - market, business, proposition, etc. PEST or SWOT : PEST or SWOT A PEST analysis most commonly measures a market; a SWOT analysis measures a business unit, a proposition or idea. Generally speaking a SWOT analysis measures a business unit or proposition, whereas a PEST analysis measures the market potential and situation, particularly indicating growth or decline, and thereby market attractiveness, business potential, and suitability of access - market potential and 'fit' in other words. PEST analysis uses four perspectives, which give a logical structure, in this case organized by the PEST format, that helps understanding, presentation, discussion and decision-making. PEST analysis can be used for marketing and business development assessment and decision-making, and the PEST template encourages proactive thinking, rather than relying on habitual or instinctive reactions. Structure-conduct-performance (SCP) model : Structure-conduct-performance (SCP) model Definition of risks : Definition of risks Management : Management Management, control and evaluation Five disciplines – Peter Senge : Five disciplines – Peter Senge Personal Mastery: Aspiration involves formulating a coherent picture of the results people most desire to gain as individuals, alongside a realistic assessment of the current state of their lives today. Learning to cultivate the tension between vision and reality can expand people's capacity to make better choices, and to achieve more of the results that they have chosen. Mental Models: Reflection and inquiry skills is focused around developing awareness of the attitudes and perceptions that influence thought and interaction. By continually reflecting upon, talking about, and reconsidering these internal pictures of the world, people can gain more capability in governing their actions and decisions. Five disciplines – Peter Senge : Five disciplines – Peter Senge Shared Vision: Establishes a focus on mutual purpose. People learn to nourish a sense of commitment in a group or organization by developing shared images of the future they seek to create, and the principles and guiding practices by which they hope to get there. Team Learning: Group interaction. Through techniques like dialogue and skillful discussion, teams transform their collective thinking, learning to mobilize their energies and actions to achieve common goals, and drawing forth an intelligence and ability greater than the sum of individual members' talents. Five disciplines – Peter Senge : Five disciplines – Peter Senge Systems Thinking: People learn to better understand interdependency and change, and thereby to deal more effectively with the forces that shape the consequences of our actions. Systems thinking is based upon a growing body of theory about the behavior of feedback and complexity - the innate tendencies of a system that lead to growth or stability over time. To help people see how to change systems more effectively and how to act more in tune with the larger processes of the natural and economic world. Project management - processes : Project management - processes Project management – a process : Project management – a process Project management – process chain : Project management – process chain Project management – risk analysis : Project management – risk analysis Success Keys - Deployment : Success Keys - Deployment Success Keys - Communication : Success Keys - Communication Success Keys - Implementation : Success Keys - Implementation Success Keys - Implementation : Success Keys - Implementation Success Keys - Measurement : Success Keys - Measurement Success Keys - Measurement : Success Keys - Measurement Success Keys - Evaluation : Success Keys - Evaluation Best Companies Spend more time on Forward Planning than Historical Analysis : Best Companies Spend more time on Forward Planning than Historical Analysis Achieving Agility Through a New Approach to Forecasting In today’s turbulent economy, rolling forecasts are proving to be an important new tool in changing the way budgeting and planning has traditionally been handled. Mary Brandel Benefits of Rolling Forecasts : Benefits of Rolling Forecasts

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