revision kit 2_BBA GSO8 -strategic management (Autosaved)

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Question 1 a. The strategic planning and management process has changed over the years. Discuss at least 5 key characteristics that inform the development and implementation of strategic plans in the 21 st century In the changing world economy, strategic management processes and principles have to adapt to forces never experienced before in history. With the advent of the information age and globalization, the tactics and strategies necessary for success have become more complicated, sophisticated, and even radical. "To succeed in the long term, companies must compete effectively and outperform their rivals in a dynamic and often turbulent environment" a. One of the characteristics that inform contemporary strategic planning and implementation processes is flexibility. It is important for organizations to be flexible, using strategies that help the workforce adapt to change and modify strategies that don't work. b. The second characteristic of strategic planning and implementation in the 21st century is the integration of technology. In the 21st century, technology has taken centre stage in strategic planning processes. Information systems including Decision Support Systems(DSS) improve strategic management in several ways including faster setting of strategic goals, better implementation and also better assessment of strategic plans. Technology improves communication between the strategic planning teams and generally enhances understanding within the team. Digitization has significantly helped contemporary organizations prevent information overload which was common in the classical days when human employees used to handle large volumes of data leading to mistakes and other pitfalls. c. The third defining characteristic of 21st-century strategic planning is that it is participative/collaborative. Today, strategic planning and strategy implementation is not the sole responsibility of executives but a collective undertaking. The contemporary employee has opportunities to participate in strategic planning. As the hierarchical structure that defined traditional organizations blurs more and more employees are getting strategic responsibilities. This collaborative approach to strategic planning makes strategic management more adaptive to changes in the business world. d. The other characteristic of the contemporary strategic planning process is continuity. What this implies is that today businesses must actively plan and strategize to be able to absorb the environmental shocks they face in the highly fluid contemporary business environment. There is thus a sense of urgency in contemporary strategic planning and strategy implementation. Today strategic planning and strategy implementation is based on continuous environmental scanning and projection into environmental threats and opportunities and an effort to match them with the organization’s strengths and weaknesses. This attempt to adapt to environmental changes through strategic planning is a consistent effort in the contemporary business world.

e. Another definitive characteristic of contemporary strategic planning and strategy implementation is being data-driven. Classical planning was based on predictions while contemporary strategic planning is guided by data and experimental prototyping/modeling. Through access to a wide pool of accurate and reliable data, managers can now make informed forecasts that are not mere gut predictions. The availability of data and the integration of information systems has influenced a shift from simple predictions into a guided analysis of industry patterns. This shift to guided industry pattern recognition has also been necessitated by the increased complexity of our physical and social systems that have made the world more difficult to predict. Data is now at the center of strategic planning. https://ssir.org/articles/entry/the_strategic_plan_is_dead._long_live_strategy https://www.researchgate.net/publication/286853522_Strategic_planning_Predicting_or_shaping _the_future Question 1b. Briefly discuss the strategic planning process Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so that the organization can reach its stated vision. Strategic planning typically represents mid- to long-term goals with a life span of three to five years, though it can go longer. This is different than business planning, which typically focuses on short-term, tactical goals, such as how a budget is divided up. Identify . A strategic planning cycle starts with the determination of a business's current strategic position. This is where stakeholders use the existing strategic plan -- including the mission statement and long-term strategic goals -- to perform assessments of the business and its environment. These assessments can include a needs assessment or a SWOT (strengths, weaknesses, opportunities and threats) analysis to understand the state of the business and the path ahead. Prioritize . Next, strategic planners set objectives and initiatives that line up with the company mission and goals and will move the business toward achieving its goals. There may be many potential goals, so planning prioritizes the most important, relevant and urgent ones. Goals may include a consideration of resource requirements -- such as budgets and equipment -- and they often involve a timeline and business metrics or KPIs for measuring progress. Develop. This is the main thrust of strategic planning in which stakeholders collaborate to formulate the steps or tactics necessary to attain a stated strategic objective. This may involve creating numerous short-term tactical business plans that fit into the overarching strategy.

Stakeholders involved in plan development use various tools such as a strategy map to help visualize and tweak the plan. Developing the plan may involve cost and opportunity tradeoffs that reflect business priorities. Developers may reject some initiatives if they don't support the long-term strategy. Implement . Once the strategic plan is developed, it's time to put it in motion. This requires clear communication across the organization to set responsibilities, make investments, adjust policies and processes, and establish measurement and reporting. Implementation typically includes strategic management with regular strategic reviews to ensure that plans stay on track. Update. A strategic plan is periodically reviewed and revised to adjust priorities and reevaluate goals as business conditions change and new opportunities emerge. Quick reviews of metrics can happen quarterly, and adjustments to the strategic plan can occur annually. Stakeholders may use balanced scorecards and other tools to assess performance against goals. Question2a. The balanced score card is a useful tool in management. Using specific examples explain the key perspectives of the Balanced Score Card and how they can be used in the development of strategic objectives The balanced scorecard is a management system aimed at translating an organization's strategic goals into a set of organizational performance objectives that, in turn, are measured, monitored and changed if necessary to ensure that an organization's strategic goals are met The four perspectives of a traditional balanced scorecard are Financial, Customer, Internal Process, and Learning and Growth/organizational capacity. https://balancedscorecard.org/bsc-basics/articles-videos/the-four-perspectives-of-the-balanced- scorecard/ a. Financial perspective-How do we look to shareholders? Under the financial perspective, the goal of a company is to ensure that it earns a return on the investments made and manages key risks involved in running the business. The goals can be achieved by satisfying the needs of all players involved with the business, such as the shareholders, customers, and suppliers. How this perspective is used in the development of strategic objective Financial data, such as sales, expenditures, and income are used to understand financial performance. These financial metrics may include dollar amounts, financial ratios, budget variances, or income targets https://corporatefinanceinstitute.com/resources/management/balanced-scorecard/ b. Customer perspective-How do customers see us?

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The customer perspective monitors how the entity is providing value to its customers and determines the level of customer satisfaction with the company’s products or services. Customer satisfaction is an indicator of the company’s success. How well a company treats its customers can obviously affect its profitability. How this perspective is used in the development of strategic objectives Customer perspectives are collected to gauge customer satisfaction with the quality, price, and availability of products or services. Customers provide feedback about their satisfaction with current products. c. Internal business processes perspective-What must we excel at? A business’ internal processes determine how well the entity runs. A balanced scorecard puts into perspective the measures and objectives that can help the business run more effectively. Also, the scorecard helps evaluate the company’s products or services and determine whether they conform to the standards that customers desire. A key part of this perspective is aiming to answer the question, “What are we good at?” How this perspective is used in the development of strategic objectives Business processes are evaluated by investigating how well products are manufactured. Operational management is analyzed to track any gaps, delays, bottlenecks, shortages, or waste d. Learning and growth perspective-Can we continue to improve and create value? Organizational capacity is important in optimizing goals and objectives with favorable results. The personnel in the organization’s departments are required to demonstrate high performance in terms of leadership, the entity’s culture, application of knowledge, and skill sets. How this perspective is used in the development of strategic objectives Learning and growth are analyzed through the investigation of training and knowledge resources. This first leg handles how well information is captured and how effectively employees use that information to convert it to a competitive advantage within the industry. https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2 Question 2b. Describe at least 3 types of analysis conducted during the strategic planning process. There is no defined method to evaluate the organization’s work environment. However, multiple methods can help you collect the data you need to analyze and prepare the stage for strategy formulation . a. Internal environment analysis

The internal analysis focuses mainly on the organization’s performance by evaluating the potential organization to reach its goals. The most famous and commonly used internal strategic analysis technique is the SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. This technique checks the full factors inside an organization or its projects and determines how things may suffer. i. SWOT analysis Strengths – strengths of an organization are the positive areas that help it to grow consistently. These areas in an organization need to be protected and carried forward through all the changes. Weaknesses – where there are strengths, there are also weaknesses. These are the areas of an organization that need to be fixed so that they can benefit the company while giving it a competitive edge over its competitors. Threats – there are various factors that affect an organization, but they are mostly predictable too. With a proper risk management strategy, threats like competitors’ better performance do not affect the organization’s performance. Opportunities – discover the opportunities an organization has to grow towards its success. Identify external opportunities and make sure you use them to the fullest. b. External environment analysis Once the internal analysis is completed and the organization is foolproof from the inside, it is time to evaluate the external factors that might interrupt the organization’s growth. External analysis to be accurate, one needs to know how the market works and how customers are affected by certain marketing strategies, products, and services that the competitors present out there. i. PESTLE analysis PESTLE analysis is the commonly used external analysis technique. It stands for political, economic, social, legal, and environmental analysis, which determines the factors that affect the environment based on external strategic analysis. It is a model that helps you to: Point out these factors that an organization cannot control, like political changes or environmental changes. Determine how each issue can impact the organization’s growth. Identify the issues to the organization.

Measure the probability of that issue happening. C. Strategy development and forecasting analysis . This is after the business has established its current position and readiness to change using the internal and external business environment analyses. The main tool used here is the Balanced Score Card(BSC) To use the balanced scorecard, strategic planning teams seek to answer the following four questions: How do customers see us? What must we excel at? Can we continue to improve and create value? How do we look to shareholders? Teams should answer those questions in four quadrants, linking them together where possible (similar to SWOT analysis), then translate those answers into operational strategy, individual performance goals, and business planning https://onstrategyhq.com/resources/strategic-planning-process-basics/ Question 3a: Distinguish between strategies and strategic objectives Business strategies define the steps the company will take to achieve its objectives. Clearly- defined strategies analyze the business’ strengths, weaknesses, opportunities and threats and utilize the information to build appropriate approaches. Successful strategies not only approach the objectives from varying angles but use them in tandem to build toward the objective. As a result, a company may use several strategies to achieve one objective. An example of a strategy is starting a local phone manufacture company to become the cheapest provider in the smartphone industry. Objectives are more specific goals expressed in actionable and clear terms. Well laid out objectives include measurable performance factors, challenging but approachable deadlines and clearly-stated costs and quantities. Objectives are used as steps toward the business’ goals. Strategic objectives are purpose statements that help create an overall vision and set goals and measurable steps for an organization to help achieve the desired outcome. A strategic objective is most effective when it is quantifiable either by statistical results or observable data .

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Businesses create strategic objectives to further the company vision, align company goals and drive decisions that impact daily productivity from the highest levels of the organization to all other employees . An example of a strategic objective is: Enter 3 new overseas markets in the next 5 years to grow revenues by 30% Question 3b. Using the Boston Company Matrix, discuss how you would manage a product through different product lifecycle. The Product Life Cycle (PLC) has become a leading concept to successfully establish products and services on the market. The PLC consists of different phases that allow managers to visualise the projected sales and profit development of their product portfolio. This allows them to proactively plan the necessary marketing measures to extend the life cycle in phases where profits and market shares reach their highest point. The lifecycle has 5 phases What is the Product Life Cycle? Phase 1: Introduction Phase 2: Growth Phase 3: Maturity Phase 4: Saturation Phase 5: Decline Based on the basic product life cycle model above, the Boston Consulting Group developed its own BCG Matrix. It aims to identify the strategic potentials of a company’s existing product portfolio.

Stars Products with a high relative market share and high market growth are referred to as Stars . Managers should invest in products within this quadrant to benefit from the fast-growing market segment for as long as possible and to enable further growth. Question Marks A product in the Question Mark stage has a low relative market share and high market growth . At this stage, products have usually just entered the market. The question mark quadrant corresponds to the market introduction phase of the basic PLC model explained earlier. Further growth in relative market share is again achieved through investments in marketing activities. Cash Cows As soon as market growth slows down , but high relative market shares continue to be recorded, products are referred to as Cash Cows . These products continue to generate substantial profits due to lower cost structures and represent the most profitable quadrant of the BCG matrix. However, similar to the maturity phase of the basic PLC model, a higher market share can now only be achieved by poaching customers from existing customers. The market is saturated. Poor Dogs At the end of the product life cycle, products in the low market growth and relative market share range are referred to as Poor Dogs . They are the problem products within a product portfolio and increasingly generate losses. In this stage, the market exit or a product relaunch must be carried out to sustainably improve the financial situation of the product line. Question 4a. Assume that you operate an international business that was very successful before the emergence of COVID 19 pandemic but has now been adversely affected by the travel restrictions. The product portfolio for your business is still largely demanded overseas. Explain at least 3 strategic options you would consider implementing to sustain the business . The first challenge for our business is delivering products to overseas markets where there is great demand for our products. So the first strategic option should focus on bridging this logistics

gap by either moving some production capacity online or increasing our warehousing abilities . moving some production capacity overseas might be a bit costly but it will pay off in the long run. Also the company can consider improving its warehousing and inventory holding capacity overseas such that it will be able to ship larger amounts of its product overseas. These strategic options will reduce supply disruptions The second challenge that COVID-19 created for our company is raising concerns about the safety of the working environment . Here the strategic option here is investing in innovation. By leveraging technology to reduce the human workforce and taking the business online . Investing in innovation will create a safer environment for employees. The disruptions created by COVID-19 also affected the financial performance of our company. The strategic option in this case is rethinking and changing our current business model . There should be a shift from our current lean model to a more agile model. Agile business modeling is a new business strategy gaining momentum as a result of the pandemic. Business agility is an organization’s capability to adapt quickly, respond rapidly, be creative, lead change and maintain its competitive advantage when faced with difficult problems and uncertainty. Importantly, our company needs to reevaluate its business model of growth. The pandemic forced us to scale down and make other conservative decisions just to stay afloat. The pandemic came with restrictions in investment opportunities and we have to rethink our financial steps to ensure that we cut down on costs and invest elsewhere to diversify. Question 4 b. Organization culture and structure are crucial in the success of any organization. Discuss how organization culture and structure can affect the successful implementation of a strategic plan. The values, habits, beliefs, traditions and historic elements shape the corporate culture of an organization. Corporate governance of an organization influences the relations between the members of the organization, the board of directors, shareholders and stakeholders, but also elements of the corporate culture do. Culture forms the foundation of strategies and affects the elements of the communication process and strategic relationships. If the organization is able to implement strategies to take advantage of its strengths, in that case, management can be easily implemented and would be able to perform any changes very fast. On the other hand the organisational structure of your business is the ground on which you build a plan. It tells you which tactics are feasible and how you should go about implementing them. The lack of alignment between an organization structure and strategy creates problems for there will be no one designated to oversee the strategy's implementation. Also the implementation path for the strategy will not be clear. Without someone in charge of overseeing the process, the strategy is unlikely to be put into place as planned. A clear organizational structure also allows for greater communication between employees as well as between

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management and employees. This can make it easier for everyone involved with implementing a strategic plan to work together efficiently toward company goals.

revision kit 2_BBA GSO8 -strategic management (Autosaved)

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