Strategic Management

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Strategic Management

• Dr. Hala Hattab
• November 21-23
• Venue

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Course Introduction

• Welcome
• About Me
• About You (why you?)
• Why Strategy?
• Overview of Topics and Calendar
• Expectations
• Introduction of Concepts

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Who are You? Self Introduction

• Name
• Company
• Undergraduate Studies
• Work experience, if any
• What are you interested in?
• What do you hope to gain from this course?

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Why You?

• You will be principals in firms
• You will have to decide what to do What markets?
• What services?
• Where to dedicate your time?
• What kinds of people?
• You probably will be part of a team.

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Why Strategy?

• Its about how businesses compete.
• How to earn above average returns.
• Selection of industries
• Selection of segments
• Choice of tactics
• How to IMPLEMENT!

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Overview of Topics and Calendar

• Day 1
• Introduction to Strategic Planning and Management
  
• Why strategic management is important?
• Strategic Management Key Concepts
• Strategic Planning for SMEs
• Day 2
• Design a business plan for your organization
• Day 3
• Design a business plan for your organization

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Expectations for the Course You Will

• Struggle with figuring out what to do
• Be prepared to participate in planning for your
  own firms
• Study real business situation

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Introduction of Concepts

• Strategic Management The set of managerial
  decisions and actions that determines the
  long-run performance of an organisation.
• Strategic Planning The process of determining a
  company's long-term goals and then identifying
  the best approach for achieving those goals

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Why is strategic management important?

• Gives everyone a role
• Makes a difference in performance levels
• Provides systematic approach to uncertainties
• Coordinates and focuses employees

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Basics of Strategic Management

• Four aspects that set strategic management apart
• Interdisciplinary
• Capstone of the Business degree
• External focus
• Competition
• Internal focus
• Future direction

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Strategic Management Process
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Strategic Management Process

• Step 1 Identifying the organisations current
  mission, objectives, and strategies
• Mission the firms reason for being
• Who we are,
• What we do, and
• Where we are now
• Goals the foundation for further planning
• Measurable performance targets
• Step 2 Conducting an external analysis
• The environmental scanning of specific and
  general environments
• Focuses on identifying opportunities and threats

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Strategic Management Process (contd)

• Step 3 Conducting an internal analysis
• Assessing organisational resources, capabilities,
  activities and culture
• Strengths (core competencies) create value for
  the customer and strengthen the competitive
  position of the firm.
• Weaknesses (things done poorly or not at all) can
  place the firm at a competitive disadvantage.
• Steps 2 and 3 combined are called a SWOT analysis
  (Strengths, Weaknesses, Opportunities, and
  Threats)

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Strategic Management Process (contd)

• Step 4 Formulating strategies
• Develop and evaluate strategic alternatives
• Select appropriate strategies for all levels in
  the organisation that provide relative advantage
  over competitors
• Match organisational strengths to environmental
  opportunities
• Correct weaknesses and guard against threats

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Strategic Management Process (contd)

• Step 5 Implementing strategies
• Implementation effectively fitting
  organisational structure and activities to the
  environment
• Effective strategy implementation requires an
  organisational structure matched to its
  requirements.
• Step 6 Evaluating results
• How effective have strategies been?
• What adjustments, if any, are necessary?

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Levels of strategy
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End of part One
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Part Two Business Plan
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What is a BP ?

• A written document that
• outlines an organization's overall direction,
  philosophy, and purpose
• examines its current status in terms of its
  strengths, weakness, opportunities, and threats
• sets long-term objectives, and
• formulates short-term tactics to reach them.

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The Strategic Mind behind BP

• Focus the strategic parts of your plan related
  to
• Time and Energy to attain goals (predefine what
  is to be achieved)
• Resource allocation (Count chickens before they
  hatch dont take in too much. Promise what can be
  delivered)
• Your Business and Competition (Analyze your
  strengths and weakness)
• Employee communication (nice trick, dont take
  the blame over you)

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Extended Tricks

• Divide the work. Take The Correspondence.
• Editable BP make BP in revisions as you go in
  depth, make it finalized when you are sure about
  zero loopholes
• Make another BP as a Plan 2, so that anytime you
  can seek in more resource (handy but a tough
  trick)

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How to Draft a Simple BP

• Work on These lines
• Vision of organisation
• Goal of future
• Clients, Users, Target market
• Edge of you / your team / company
• Barriers to achieve the target
• Better serve clients..how ??
• Ad more to target..possible ??
• Adding new customers / users / target market
  share
• Accountings
• Starting of the plan dates

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• In theory, there is no difference between theory
  and practice. But, inpractice, there is." -
  Jan L.A. van de Snepscheut

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Simply Stated...
Make your points clearly and crisply.
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Style counts

• Use bulleted or enumerated points whenever
  possible.
• Leave a wide margin.
• Try to utilize meaningful graphs and diagrams
  throughout the entire plan

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Basic Structure

• Executive Summary
• The Market
• The Product
• The Team
• The Strategy
• The Forecasts
• Appendices

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Market Analysis

• It should be as useful for you as it is for the
  investor.
• Situation Analysis
• Market Opportunity
• Competitive Factors
• Technical Feasibility
• Risk/Reward Assessment

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The Product

• Know when less is more
• Readability geared for layman
• Deep technical points can be reserved for an
  appendix
• Market Driven Engineering

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The Forecasts

• Lets be realistic!
• 4 year model
• Monthly detail only in years 1 and 2
• Drive data from unit model
• Use ordinal numbers for months
• Understand your DCF

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Executive Summary

• This may be the only document that gets read
  distill the most important points
• Write it after the rest of the document, but put
  it 1st
• Use same terminology, wording, and images
• Provide your sense of valuation and likely deal
  structure

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Appendices

• Stuff you wanted to put in the plan
• Technical white-paper(s)
• More detailed financial analysis, DCF, etc.
• Additional competitive data
• Additional market data/published reports
• Articles about the company, product, market,
  team, etc

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Concluding Remarks

• Impress the reader with the thoroughness of your
  understanding of the market.
• Make it understandable.
• Value white-space.
• Develop realistic, flexible financial forecasts