Strategic Planning

(part of Strategic
Management)

Content
Development

of Strategic Management
Levels of Strategy
Strategic Management Process
SWOT Analysis

Development of Strategic
Management
Early

1970s

Managers do not bother to plan ahead in detail

Managers assume there are always better times
ahead

Late

70s and 90s

Companies faced with hostile business

environment
Energy

crisis
Deregulation
Technological change
Global competition

Development of Strategic
Management
Late

70s and 90s

Rule of the game change

Managers develop systematic approach to
Analyse

environment
Assess organisations strength and
weakness
Identify opportunities

Beginning of Strategic Management

Levels of Strategy
Types

of strategy developed by
managers depends on the product/
service produce by the firms/
organisation
Levels of Strategy

Corporate Level Strategy

Business Level Strategy
Functional Level Strategy

Corporate Level Strategy

Useful

for organisation which is

involved in more than one type of
business.
Formulated by top management to
oversee the interest and
operations of multi line
corporations

Business-Unit Strategy
Also

called line of business strategy

Formulate to meet the goals of a
particular business

Functional Level Strategy

Strategy

formulated by a specific
functional area in an effort to carry out
business-unit strategy

Strategic Management Process

Eight

Steps consisting of

Strategic planning
Implementation
Evaluation

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Strategic Management Process

1.
2.
3.
4.
5.
6.
7.

Identify organisations mission, and

objectives
Identify the opportunities and threats
Analyse the organisations resource
Identify strengths and weaknesses
Formulate Strategies
Implement Strategies
Evaluate results

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Vision, Mission and Objectives

Vision

What is the organisation set to do to in long term?

Mission

How to achieve the vision?

Identify scope of services or product to be
produced
State organisational goals

Objectives

More specific goals

Can be used to assess achievement
Can be use as guide in changing focus of the
organisation in future

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SWOT ANALYSIS
S

=
W =
O =
T
=

STRENGTH
WEAKNESS
OPPORTUNITY
THREAT

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SWOT ANALYSIS
STRENGHTS
Analyse

organisational environment
Strengths are activities that can be
carried out well by the organisation

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SWOT ANALYSIS
WEAKNESS

Activities which cannot be carried out well

by the organisation
Activities which require resources not
available in the organisation

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SWOT ANALYSIS
OPPORTUNITY

Assess opportunity that can be exploited

by the organisation
Positive factors in the environment

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SWOT ANALYSIS
THREAT
Negative

factor in the environment

Obstacles to achieve organisational
objectives
Opportunity in one organisation can
be a threat in another organisation

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Formulate Strategy
Types

of Strategies

Stabilisation Strategy
No

significant changes
Produce same services
Provide services to same clients
Suitable if the performance of organisation
is good and environment is stable

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Formulate Strategy
Developmental

Strategy

Increase

level of organisational operations

Involved activities:

To increase service quantity

To increase staffing

Can

be carried out through:

Increase in organisational size

Merging
Acquisition of other firms
Diversification

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Formulate Strategy
Contraction

Reduce
Reduce
Reduce
Reduce

Strategy

organisational
diversification
operational cost
Human Resource