Global Strategic Planning Models

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Global Strategic Planning Models
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Corporate Strategy fora Diversified Company
Narrow or broad-based diversification
Is diversification related, unrelated or a mix?
Approach to capital allocation
Corporate Strategy
Scope of geographic operations
Efforts to capture cross-business strategic fits
Moves to add new new businesses
Moves to divest weak business units
Moves to build positions in new industries
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Identifying the Components ofa
Single-Business Companys Strategy
Planned, proactive moves to outcompete rivals
Responses to changing conditions
Efforts to build competitive advantage
Business Strategy
Scope of geographic coverage
RD strategy
Supply chain management strategy
Collaborative partnerships and strategic
alliances
Manufacturing strategy
Marketing strategy
Finance strategy
Human resources strategy
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Tasks of Corporate Strategy

• Actions to boost performance of individual
  businesses
• Moves to achieve diversification
• Capturing valuable cross-business strategic fits
  that result in 1 1 3 effects!
• Establishing investment priorities and
  steering corporate resources into the most
  attractive businesses

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Differences in MNC planning

• What regions to enter?
• What type of market entry?
• Opportunities/Risks in combination of country and
  mode of entry
• Where to expand existing efforts?
• Special changes for products/services for each
  country?
• Risk from government and social actions?
• Divestment from some countries
• Where to raise funds?
• Joint venture with governments or other firms?
• Management development?

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Issues

• Structured or Unstructured Decisions
• Centralized or Decentralized
• Integrated or Adaptive Plan

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Competitive Assessment
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Criteria For Assessment of Strategies
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Identification of Strategic Issues

• New, growing competitors
• Risk due to government actions
• Changes in regulations
• Product innovation
• New marketing efforts
• Managers
• Raw Materials

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What Are the Industrys Dominant Economic
Traits?

• Market size and growth rate
• Scope of competitive rivalry
• Number of competitors and their relative sizes
• Prevalence of backward/forward integration
• Entry/exit barriers
• Nature and pace of technological change
• Product and customer characteristics
• Scale economies and experience curve effects
• Capacity utilization and resource requirements
• Industry profitability

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Relevance ofKey Economic Features
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Portfolio Planning

• Define or Redefine Strategic Business Unit -(SBU)
• Product/Market/Area Basis
• Most critical step
• Use Portfolio Matrix
• Assign Missions to SBUs

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Experience and Learning Curves
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Cost Effects ofNew vs. Old Technology
Old Technology
Cost per Unit
New Technology
1 Million Units
2 Million Units
4 Million Units
8 Million Units
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BCG Growth-Share Matrix
Source B. Hedley, Strategy and the Business
Portfolio, Long Range Planning (February 1997),
p. 12. Reprinted with permission.
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Strategies by Portfolio Position
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Strategic Vocabulary
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General Electrics Business Screen Matrix
Source Adapted from Strategic Management in GE,
Corporate Planning and Development, General
Electric Corporation. Used by permission of
General Electric Company.
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Opportunity/Defense Matrix