BS Course Outline

Week 1
Week 2

Introduction to Strategy
Strategic Views and Approaches

Week 3
Week 4

The External (macro) Environment

The Industry Environment

Week 5
Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12

Internal Resources and Competencies

Assignment Guidelines Stakeholder Analysis/Cultural Drivers Strategic Options and Methods + Going International Evaluating Strategic Options Exam Prep and Recap Exam Prep and Recap Group Presentations
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STRATEGIC DETAIL
Environment Develop Options Org Structure and resource s

Stakeholder Expectations

Strategic Analysis

Strategic Choice

Strategic Implementation

Detailed Planning

Company Capability

Evaluate/Risk Analysis

Select Strategy

Manage Change

May 22, 2011

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STRATEGY EVALUATION
Three categories of tests/criteria: Suitability Acceptability
Feasibility
Note: There is overlap between these three criteria
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Evaluation -- Suitability
Useful for screening/eliminating ideas Does the strategy exploit organisational strengths? (e.g. unique resources, core competences)

Does the strategy address organisational weaknesses? (e.g. competitive standing, liquidity, dependence on particular suppliers/customers) Does the strategy option fit with the organisations objectives? (e.g. profit targets, growth ambitions)

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Evaluation -- Acceptability
Who are the key stakeholders who need to accept the strategic option? (e.g. shareholders, employees, bankers, customers, government, trade unions, community) Will any of the following changes be acceptable to key stakeholders? Profitability Departmental/individual Functions

Risk
Capital Structure

Relationships with Outside Stakeholders

Environmental Impact

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Mendelows Stakeholder Mapping Matrix

Low
POWER High
Keep satisfied Intervention required Key Players Need participation Minimal effort Can be directed Keep Informed

Low
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LEVEL OF INTEREST

High
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Sources and indicators of stakeholder power

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Acceptability Analysing Risk

Approach 1. Financial ratio projections 2. Sensitivity analysis 3. Simulation modelling Used to Assess: Robustness of strategy Examples: Break-even analysis Impact on gearing and liquidity What if analysis Test factors separately Quality of data on causal relationships Limitations

Test assumptions/ robustness

Aggregate impact of Comprehensive many factors models Risk Analysis

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Acceptability Financial Payback

Payback Period Discounted Payback Period Capital Investment

Internal Rate of Return

Net Present Value

Accounting Rate of Return

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Acceptability -- Financial Ratios

Profitability and return Long term solvency and stability Short term solvency and liquidity Efficiency Shareholders

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Evaluation - Feasibility
Examples of Potential Internal Constraints
Finance Technology Marketing Skills Quality Structure Culture Management Skills Operational Skills

Examples of Potential External Constraints

Customer Acceptance Competitor Reaction Government Regulation Supplier Cooperation
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Analysis
Suitability S W Obj Acceptability etc Feasibility Total

Option 1 Option 2 Option 3

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Implementation Failure
Strategy is not worth implementing People unclear as to how the strategy will be implemented Customers/staff do not fully understand the strategy Individual responsibilities for implementation are not clear CEOs and senior managers step out of the picture once implementation begins The brick walls are not recognised Forgetting to mind the shop

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