SESSION 1: WHAT IS STRATEGIC BUSINESS PLANNING

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SESSION 1 WHAT IS STRATEGIC BUSINESS
PLANNING?

• BUSINESS PLANNING FOR SMALL BUSINESSES
• COURSE
• APRIL 2-4, 2007

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SESSION OBJECTIVE

• Define and Introduce
• Strategic Business Planning

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What is Strategic Business Planning?

• Strategic Business Planning is a stream of
  decisions and actions that lead to development of
  an effective strategy or strategies to achieve
  goals of a business/company
• Source Glueck/Jauch, Business Policy and
  Strategic Management

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Think Music

• Think Symphony Orchestra delivering a musical
  performance
• Musical Composition Overall Plan for how the
  music should sound
• Conductors guidance and individual musicians
  efforts are the tactics for achieving the plan
• Remember tactics are only as good as the design
  of the instruments and the ability of the
  musicians

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Strategy and Tactics

• No matter how good the composition (plan) without
  the individual musicians (the tactics) the end
  result will be silence no performance at all
• Without the individual notes of the musical score
  (elements of the plan) working together, the
  result will be an unpleasant noise
• Without the conductor (manager in charge of
  implementing the plan through use of tactics)
  the end result is chaos

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Pros and Cons of Strategic Business Planning

• Pros
• Allows companies to anticipate and adapt to
  changing conditions
• Provides clear objectives and direction for
  employees
• Businesses using Strategic Planning are more
  effective
• Source Glueck/Jauch, Business Policy and
  Strategic Management

• Cons
• Conditions change too fast for managers to plan
  at all never mind long term planning
• Objectives often vague and general
• Managers pay little attention to research and
  information
• Plans often not well done
• Many companies seem effective without formal
  planning

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What is Strategic Business Planning?

• Strategic Business Planning is Long Term
  Planning
• Source Glueck/Jauch, Business Policy and
  Strategic Management

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Strategic Business Planning

• Results from understanding
• Whats our business? What should it be?
• What are our products?
• What are our markets?
• What can the business do to achieves its
  objectives?
• What are our Strengths (competitive advantage)
  and what are our weaknesses
• What business environment we are operating in?

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What is Strategic Business Planning? - Duh!!

• Strategic Business Planning is fundamentally
  about decision making the decisions that will
  determine whether a business excels, survives or
  dies
• Source Glueck/Jauch, Business Policy and
  Strategic Management

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Strategic Decisions

• Strategic decisions are means to achieve ends
• Source Glueck/Jauch, Business Policy and
  Strategic Management

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Strategic Decisions for Companies

• Include defining
• Business products and services
• Markets to be served
• Functions to be performed and
• Major policies needed to execute the strategic
  decisions to achieve objectives
• Source Glueck/Jauch, Business Policy and
  Strategic Management

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WHATS A STRATEGY?

• A Strategy is a means used to achieve
  Objectives
• Source Glueck/Jauch, Business Policy and
  Strategic Management

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Think Soccer

• Good Coach who wants to win a Soccer Game
  develops a Game Plan
• Coach analyses
• Other teams past performance
• Other Teams strengths and weaknesses
• Looks at his/her teams strengths and weaknesses
• Coach devises a Game Plan to achieve
  objective(s)
• Win the game using minimum number of best plays
  and with minimum number of injuries
• Not humiliate opponents

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Strategy versus Game Plan

• Companies deal simultaneously with
• Number of competitors
• Suppliers
• Government
• Owners
• Labor unions
• Others
• A Game Plan is designed to achieve victory over
  one opponent
• A Game Plan is not Exactly a Strategy

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Whats a Business Strategy?

• A Strategy is a unified, comprehensive
  integrated plan that relates the strategic
  advantages of a company to the challenges of the
  business environment and that is designed to
  ensure the basic objectives of the enterprise are
  achieved through proper execution
• Source Glueck/Jauch, Business Policy and
  Strategic Management

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So All I need is a Strategy?

• Strategies are only as good as their
  implementation
• Strategies must include operational concerns

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Aids to Strategic ThinkingAlways Remember These

• Which products/services do you plan to develop
  and support?
• What markets do you intend to serve?
• Where is your companies competitive advantage in
  these markets?
• How can you maintain/sustain competitive
  advantage over time?