MANAGEMENT:

A GLOBAL AND ENTREPRENEURIAL PERSPECTIVE

by Weihrich, Cannice, and Koontz

Chapter

Strategies, Policies, and Planning Premises

2008 Weihrich and Cannice

Chapter 5. Strategies, Policies, and Planning Premises

KEY IDEAS AND CONCEPTS FOR REVIEW

Strategy
Policy
Tactics
Key elements in the
strategic planning
process
TOWS Matrix by
Weihrich
TOWS Merger Matrix
Blue ocean strategy

2008 Weihrich and Cannice

Portfolio matrix by the

Boston Consulting
Group
Major kinds of
strategies
Hierarchy of strategies
Porters generic
strategies
Planning premises
Environmental
forecasting
Delphi technique

Chapter 5. Strategies, Policies, and Planning Premises

After studying this chapter, you should

understand:
1.
2.
3.
4.
5.
6.

The mission, strategies, and policies.

The strategic planning process.
The TOWS Matrix and the business portfolio
matrix.
Some major kinds of strategies/policies and the
hierarchy of strategies.
Porter's generic strategies.
The nature of premises and forecasts.

2008 Weihrich and Cannice

Chapter 5. Strategies, Policies, and Planning Premises

Definition of Strategy and Policies

Strategy is the determination of the mission
(or the fundamental purpose) and the basic
long-term objectives of an enterprise, and the
adoption of courses of action and allocation
of resources necessary to achieve these
aims.
Policies are general statements or
understandings that guide managers' thinking
in decision making.
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Chapter 5. Strategies, Policies, and

Fig. 5-1 The Strategic Planning Process

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Chapter 5. Strategies, Policies, and

The Strategic Planning Process

(Figure 5-1)

Inputs to the organization

Industry analysis
Enterprise profile
Orientation, values, and vision
Mission (purpose), major objectives, and
strategic intent
Present and future external environment
Internal environment
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Chapter 5. Strategies, Policies, and

The Strategic Planning Process

cont.

Development of alternative strategies

Evaluation and choice of strategies
Medium- and short-range planning
Implementation through reengineering,
staffing, leadership, and control
Consistency testing and contingency
planning
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Chapter 5. Strategies, Policies, and

Mission, Objectives, and

Strategic Intent

Mission relates to the kind of business.

Objectives are the end points for
activities.
Strategic intent is the commitment to
win in the competitive environment.

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Chapter 5. Strategies, Policies, and

Definition of the TOWS Matrix

The TOWS Matrix is a conceptual

framework for a systematic analysis that
facilitates matching the external threats
and opportunities with the internal
weaknesses and strengths of the
organization.

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Chapter 5. Strategies, Policies, and

Fig. 5-2 TOWS Matrix for Strategy

Formulation

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Chapter 5. Strategies, Policies, and

10

TOWS Matrix: 4 Alternative Strategies

SO strategy:
WO strategy:
ST strategy:
WT strategy:

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MaxiMaxi
MiniMaxi
MaxiMini
MiniMini

Chapter 5. Strategies, Policies, and

11

Fig. 5-3 Dynamics of the TOWS Matrix

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Chapter 5. Strategies, Policies, and

12

Application of the TOWS Matrix for Mergers,

Acquisitions, Joint Ventures, and Alliances

Develop a TOWS Matrix for both

companies before the merger, etc.
Develop a TOWS Matrix of the joint
company after the merger, etc.
See Illustration of DaimlerChrysler
merger in the closing section of Part 2

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Chapter 5. Strategies, Policies, and

13

Blue Ocean Strategy by Kim & Mauborgne

and TOWS Matrix by Weihrich

Explore opportunities in uncontested markets

(Opportunities in the TOWS Matrix) Example:
Southwest Airline
Be aware of competition in red ocean markets
(bloody competition). Example, todays
personal computers
Value innovation: total company commitment
to create value for the customer
Blue ocean strategy and the TOWS Matrix (SO
or WO strategies in uncontested markets)
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Chapter 5. Strategies, Policies, and

14

Fig. 5-4 Business Portfolio Matrix

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Chapter 5. Strategies, Policies, and

15

Business Portfolio Matrix

Two dimensions
Relative competitive position (market share)
Business growth rate

Four positions

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Question marks
Stars
Cash cows
Dogs
Chapter 5. Strategies, Policies, and

16

Major Kinds of Strategies and Policies

Products or Services
What are some of the key questions to
ask?

Marketing
What are some of the key questions to
ask?

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Chapter 5. Strategies, Policies, and

17

Hierarchy of Company Strategies

The corporate-level strategy. Executives craft
the overall strategy for a diversified company.
Business strategies are developed usually by
the general manager of a business unit.
Functional strategies. The aim is to support
the business and corporate strategies.

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Chapter 5. Strategies, Policies, and

18

Five Forces in Industry Analysis

(Porter)

The competition among companies

The threat of new companies entering
the market
The possibility of using substitute
products or services
The bargaining power of suppliers
The bargaining power of the buyers or
customers
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Chapter 5. Strategies, Policies, and

19

Porters Generic Strategies

Overall Cost Leadership Strategy

Differentiation Strategy
Focused Strategy (low cost or
differentiation)

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Chapter 5. Strategies, Policies, and

20

Premising and Forecasting

Planning premises are the anticipated

environments in which plans are
expected to operate.
Environmental Forecasting
Values and areas of forecasting
Forecasting with the Delphi technique
What are the typical steps of the
technique?
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Chapter 5. Strategies, Policies, and

21