Strategic plan = long term plan for the whole organisation

Strategic plan is also called corporate plan or long range plan

Three levels of strategy in an organisation is : Corporate plan, Strategic business

units and Operational level

Rational model of strategy

Rational method has typically four steps:

 Know or learn the objective and understand where we stand

 Strategic choice
 Strategic implementation

Position analysis means to make appraisal of the internal and external environments
plus stakeholder appraisal.

While choosing an adoptable strategy, it must go through the SAF test which is
Suitability, Acceptability and Feasibility

Implementation is a crucial stage as it is a matter of detail. The strategic plan has to

be broken down by department and by year. These small parts can be regarded as
discrete projects. The project objectives and constraints have to be communicated to
the departments by budgets and reviewed

The review process is essentially periodical and is called the control process which is
intended to cater to the changing environment and hence a good one for
modifications of plans when necessary plus we need to make sure if the
performance is adequate

Intended strategy

Deliberate strategy

Unrealised strategy

Emergent strategy

Realised strategy

Logical incrementalism

Small additions to past policies. This is based on the view that managers don’t or
can’t have a full knowledge (all relevant facts) [This is called bounded rationality]
because of which all the options cannot be evaluated. When all options cannot be
evaluated, there is huge risk of getting locked into a bad long term plan. There are
known unknowns and unknown unknowns which are potential flaggers that caution
us while making a long term strategic plan. Hence to make an ignorant strategic plan
signifies arrogance and is putting the company at stake. This is why there needs to
be logical steps that incrementally puts a strategic plan in place as time goes by.

Freewheeling opportunism

People who support these are compared to entrepreneurs who are quite agile in their
decision making as and when opportunities arise rather than sticking to a plan. They
believe that planning restricts their thoughts and their ability to see such
opportunities that arise their way. However, these people don’t have the knowledge
of all facts to come to proper conclusions which may lead to drastic results. But on
the other hand, this approach has also produced amazing results for many
companies.

Political approach to strategy

The political approach to strategy is neither rational nor logical nor is it freewheeling.
It is the method by which the internal political negotiations are taken into
considerations and manoeuvring the power of various participants and the outcome’s
success is based on the result of the power struggle amongst individuals

Mission and mission statement

Stakeholders

The management has to enter into a series of negotiations with several of the
stakeholders of the company to strike a balance and try to keep all of them happy.

Managing stakeholder conflict? Mendelow’s matrix

Power vs Interest

-Key players High I, High P

-Keep satisfied High P, Low I

-Keep informed High I, High P

-Minimal effort Low I, Low P

Resources and competencies

What the strategic capability (what the company is capable of doing better than the
others to gain a sustainable competitive advantage in the market) of the company is
based upon is ----Resources plus competencies

 Threshold capabilities (Minimum—to exist)

 Additional capabilities
o Unique resources (what we have that others don’t)
o Core competencies (These are hard to identify and define. How the
organisation uses its resources better than its competitors and this is
how the company retains a competitive advantage)

M’s of the organisation

Man Machine Money MIS Materials Make Markets Management Manufacturing

Methods

Position base strategy

Resource based strategy

Ansoff’s matrix

Product development

Market development

Penetration

Diversification

Porter’s value chain

Primary activities – Inbound logistics, outbound logistics, Operations, Service,

Marketing and sales

Secondary activities – Firm infrastructure, Technology development, Human

resources, Procurement

Extra value adding is for what the customer is willing to pay for called the profit
margin
Resources that give competitive advantage – both tangible and intangible

Valuable

Rare

Imitable

Non-substitutable

Environmental influences on the organisation – PESTEL //LoNG-PEST

Political

Economical

Social

Technological

Environmental

Legal

Important points are industry convergence and international dimension

Porter’s diamond model – Four influences

 Firm strategy, structure and rivalry

 Factor Conditions
 Demand conditions
 Related and supporting industries

Porter’s five forces

 Rivalry
 Threat of new entrants (barriers to entry)
 Power of suppliers
 Power of buyers (switching costs)
 Threat of substitutes
SWOT analysis

Strengths and weaknesses are internal

Opportunities and threats are external

The point of any analysis is to stimulate action

By SWOT analysis, we need to look for strategies to address the weaknesses, look
for opportunities that can utilise the strengths. Look for strategies to use the
strengths in order to avoid or minimise the threats.

Competitor analysis is analysing the strengths and weaknesses of our company

relatively to that of the competitor’s so that a successful competitive strategy can be
built. Competitor analysis is the analysis of the business which competes with ours
directly or indirectly at least in one market/product.

4 types of competitors?

Industry

Form

Brand

Generic

Competitor response profile –

 What drive the competitor? (Mission and objectives)

 What the competitor is capable of doing? (Resources, strategy and
capabilities)

Process needed to complete the competitor analysis is the 4C’s

 Collecting
 Converting
 Communicating
 Countering
Product life cycle

Introduction

Growth

Maturity

Decline

Boston consulting group model (BCG)

If there is more than one product in the company’s portfolio, this model comes to
rescue analysis. This model is also called as the portfolio analysis.

The axes are Relative market share vs the Market growth rate

Question mark/problem child

Star

Cash cow

Dog

Big data – 4Vs (characteristics)

Volume

Variety

Veracity

Velocity

Management is getting things done through other people

Social arrangement with collective goals in a controlled environment with the

performance being evaluated
Planning

Organising

Controlling

Commanding

Co-ordinating

Leading, inspiring, motivating

Train people

Make employees feel heard and ask them for suggestions

Group behaviour

Manage a business

Manage other managers

Manage the workers and the work

5 activities

 Setting objectives
 Organising the group
 Motivating and communicating
 Measuring performance
 Developing people

Qualities

Integrity

Magnanimity, Humility

Dedication

Openness

Creativity
Important ones:

Power

Authority

Responsibility

Delegation

Culture

 Symbols and titles

 Power relations
 Organisational structure
 Control systems
 Rituals and routines
 Myths and stories
 Organisational assumptions

Types of culture

 Power
 Role
 Task
 Person

Levels of culture (Organisational iceberg- what can be seen and what can’t be
seen)

 Artefacts
 Espoused values
 Underlying assumptions

National cultures impact on organisations

 Power/distance
 Masculinity/Femininity
 Uncertainty avoidance
 Individualism/Collectivism
  Forming
 Storming
 Norming
 Performing
 Dorming

Form thought—encode—receive—decode—feedback—repeat

Thomas Killman Conflict mode instrument

Co-cooperativeness vs assertiveness

 Competing – Low C, High A

 Collaborating – High C, High A
 Avoiding – Low C, Low A
 Accommodating – High C, Low A

1. Re-engineering
2. Simplification
3. Value added analysis
4. Analyse gaps and disconnects

Types of change

 Automation
 BPR
 Rationalisation
Scope of change (Realignment/ Transformation) vs Nature of change
(Incremental/ Big bang)

R/I – Adaptation

T/I – Evolution

R/B – Reconstruction

T/B – Revolution

TARA Framework

 Transfer
 Avoid
 Reduce
 Accept

Project risk can be assessed by the following independent factors:

 Complexity
 Project scope definition
 Size of the project

Project feasibility analysis?

 Financial
 Operational
 Technical
 Social

Types of benefits

 Observable
 Measurable (Can be measured but not predicted)
 Quantifiable (Can be measured and predicted)
 Financial
Project management controls

 Time
 Cost
 Quality

Work breakdown structures

PRINCE2 methodology

Critical path analysis

GNATT chart
WACC can be used in the evaluation of projects (investment appraisal) if:

 No change in financial risk

 No change in business risk
 Small project
 Pooled funds
 Perfect capital markets