Levels of Strategy

and the
Strategic Planning Process

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 Strategic Planning Process

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 Developing a Strategic Vision, mission
and core values

• Involves thinking strategically about

• Firm’s future business plans
• Where to “go”

• Tasks include
• Creating a roadmap of the future
• Deciding future business position to stake
out
• Providing long-term direction
• Giving firm a strong identity

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 Strategic Planning Process

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 Setting Objectives

• Converts strategic vision and mission into

specific performance targets
• Creates standards to track performance
• Pushes firm to be focused on results
• Helps prevent complacency and coasting

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 Strategic Planning Process

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 Crafting a Strategy

• Deciding how to achieve our goals and

objectives. Usually involves:

• Responding to changing buyer preferences

• Responding to new market conditions

• Growing the business over the long-term

• Achieving performance objectives

• Outing compete rivals

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 Crafting a Strategy (cont.)

Situation Analysis

• External Analysis • Internal Analysis

• Environmental Analysis • SWOT

• PESTEL
• Five Forces Analysis
• Competitor Analysis
• Strategic group maps
• Benchmarking (comparing
business processes)
• Competitive strength
assessment
• Portfolio analysis

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 Strategic Planning Process

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 Implementing and Executing Strategy

• Taking new actions to put a freshly-chosen

strategy into place

• Supervising the ongoing pursuit of strategy

• Improving the competence and efficiency with

which the strategy is being executed

• Showing measurable progress in achieving the

goals and objectives

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 Strategic Planning Process

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 Monitoring, Evaluating, and Taking Corrective
Actions as Needed
 The tasks of crafting, implementing, and executing a strategy
are not a one-time exercise. It´s an ongoing process
◦ Customer needs and competitive conditions change
◦ New opportunities and threats appear (SWOT, PESTLE)
◦ One or more aspects of executing the strategy may not be
going well
◦ New managers with different ideas take over
◦ Organisational learning occurs

 All these trigger the need for corrective actions and

adjustments

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 Hierarchy of statements

Mission – Why we exist

Values – What we believe in and how we
will behave

Vision – What we want to be

Strategy
statement
1. Objective Strategy – What our competitive game
2. Scope plan will be
3. Advantage
Balanced Scorecard – How we will
implement and monitor that plan

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• Business strategy is strategy at the single-
business level, concerning how to improve the
performance or gain a competitive advantage in
a particular line of business.

• Corporate strategy is strategy at the multi-

business level, concerning how to improve
company performance or gain competitive
advantage by managing a set of businesses
simultaneously.
 Levels of Strategy-Making in
a Single-Business Company

Executive-Level
Managers Business
Strategy

Two-Way Influence

Functional / Middle
Managers Functional Strategies

Two-Way Influence

Operating/ Front line

Managers Operating Strategies

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 Levels of Strategy-Making in
a Diversified Company

Corporate-Level / Top Corporate

Managers Strategy

Two-Way Influence
Executive-Level
Managers Business Strategies

Two-Way Influence

Functional / Middle
Functional Strategies
Managers
Two-Way Influence
Operating/ Front line
Managers Operating Strategies

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Strategy making involves managers at all
organisational levels

• Chief Executive Officer (CEO)

• Has ultimate responsibility for leading the strategy-making process as
strategic visionary and as chief architect of strategy.
• Senior Executives
• Fashion the major strategy components involving their areas of
responsibility.
• Managers of subsidiaries, divisions, geographic regions,
plants, and other operating units (and key employees with
specialized expertise)
• Utilize on-the-scene familiarity with their business units to
orchestrate their specific pieces of the strategy.
Why is strategy-making often a collaborative
process?
• The many complex strategic issues involved and multiple
areas of expertise required can make the strategy-making
task too large for one person or a small executive group.

• When operations involve different products, industries and

geographic areas, strategy-making authority must be
delegated to functional and operating unit managers such
that all managers have a strategy-making role—ranging from
major to minor—for the area they head
The role of the board of directors in corporate governance

• Obligations of the Board of Directors:

• Oversee the firm’s financial accounting

• Reporting practices fulfillment.

• Critically assess the firm’s direction, strategy, and business

approaches.

• Evaluate the caliber of senior executives’ strategic leadership

skills.

• Institute a compensation plan that rewards top executives for

actions and results that serve stakeholder interests—
especially shareholders.
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