Planning, Strategy, and Competitive Advantage

‘There is nothing more wasteful than becoming highly efficient at doing the wrong thing.’ Peter Drucker

Planning- Identifying and selecting appropriate goals and courses of action for an organization. Planning is necessary to give the organization a sense of direction and purpose. Can be used to coordinate and control the managers.

Strategy- decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals

Mission Statement- declaration of an organization’s purpose that identifies the organization’s products and customers and distinguishes the organization from its competitors (usually very generally written, but with a clear purpose)

Steps of planning:

1. Determining the mission and goals
2. Formulating strategy
3. Implementing strategy –allocating resources and responsibilities

Strategy is the most general. Goal has to be evaluated – whether we are achieving it or not. It HAS to be concrete, measurable.

Purpose of plans goals:

-Plans and goals are neccesary for company to function OR

-Developing them is more important than plans and goals themselves

-they guide the organization

-you can’t plan without goals- good plan needs good goals

-is motivating

-good point of refference

Strategic goals- goals set by and for the top management.

TOP-DOWN – top management dictates what to do – strategy provides

BOTTOM-UP- strategy is being updated

INTERACTIVE- everyone is equal, common effort (THE BEST)

Strategic planing is a self-containing process (you also plan a strategy for planning a strategy)

STRATEGIC MANAGEMENT (!) – management adopting strategic decisions (long term, agressive resource usage)

EFFECTIVE strategies are strongly bound to nature of the environment and mean to improve the average: net profit, market share or management philosophy (planning efficiency)

COMPETITIVE ADVANTAGE

Distinctive competence- something you’re the best at

You CAN’T be the best in all aspects

Scope- range of competitive markets – sometimes it’s very difficult to find the real competition – products: how many? –geography- which markets to be present on?

Resource deployment- distribution of resources across the markets

IGOR ANSOFF-

MARKET PENETRATION- Introducing existing product to an existing market

MARKET DEVELOPMENT- introducing existing product to a new market

PRODUCT DEVELOPMENT- intr. new product to an existing market

INTEGRATION- intr. new product to a new market

Horizontal integration enables producing new products off same resources (bikes from BMW leftovers :D) or makes you less voulnerable to economic cycles (Chrystler- hamburgers)

Resource deployment- KNOWLEDGE- accummulate, but can’t ‘activate’ it, ACCESS to resources

Corporate strategy- choosing of markets we wanna compete on, product design

Business strategy- core product, target, ways of distribution

Functional strategy- HR, production, distribution.

INTERNAL RNAL

Strengths (e.g., superior marketing skills)

Weaknesses (e.g., outdated production facilities)

EXTERNAL RNAL

Threats (increased competition)

^ CONCLUSIONS are the most tricky part, for what seems to be a threat might in fact be a great opportunity.

Date: 2015-02-16; view: 1261