Learning objectives of this chapter include: Summarize the basic steps in any planning process, describe how strategic planning should be integrated with tactical and operational planning, identify elements of the external environment and internal resources of the firm to analyze before formulating a strategy,.and the other objectives. | Planning and Strategic Management Chapter Four Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objectives LO1 Summarize the basic steps in any planning process. LO2 Describe how strategic planning should be integrated with tactical and operational planning. LO3 Identify elements of the external environment and internal resources of the firm to analyze before formulating a strategy. LO4 Define core capabilities and explain why they provide the foundation for business strategy. 2 Learning Objectives (cont.) LO5 Summarize the types and choices available for corporate strategy. LO6 Discuss how companies can achieve competitive advantage through business strategy. LO7 Describe the keys to effective strategy implementation. 3 Decision Making Stages and Formal Planning Steps Figure Planning Planning conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future. a purposeful effort that is directed and controlled by managers and often draws on the knowledge and experience of employees throughout the organization. Situational Analysis Situational analysis A process planners use, within time and resource constraints, to gather, interpret, and summarize all information relevant to the planning issue under consideration. Alternative Goals and Plans Plans The actions or means managers intend to use to achieve organizational goals Contingency plans sets of actions to be taken when a company’s initial plans have not worked well or if events in the external environment require a sudden change Goal and Plan Evaluation Managers will evaluate the advantages, disadvantages, and potential effects of each alternative goal and plan. Must prioritize those goals and even eliminate some of them. Managers must consider carefully the implications of alternative plans for meeting high priority goals. Strategic Planning Strategic planning A set of procedures for making decisions about the organization’s long-term goals and strategies Strategic goals major targets or end results that relate to the long-term survival, value, and growth of the organization. Strategic Planning Strategy A pattern of actions and resource allocations designed to achieve the organization’s goals Hierarchy of Goals and Plans Figure Strategic Planning Strategic management A process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies. Establishment of Mission, Vision, and Goals Mission An organization’s basic purpose and scope of operations. SWOT Analysis and Strategy Formulation SWOT analysis A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy. Summary of Corporate Strategies Figure
