Chapter 2

Business and IS/IT Strategic Planning Concepts

Agenda

• Business strategic planning model

• The strategic framework

• The Business and Product Life Cycle

• Product portfolios

• Generic business strategies

Business Strategic Planning Model

• By Gluck, Kaufmann and Walleck

• Four phases– Financial planning (meet the budget)– Forecast-based planning (predict future)– Externally oriented planning (think

strategically)– Strategic management (create future)

The Strategic Framework

• Three layers– The external environment– Pressure groups and stakeholders– Internal business planning

The External Environment

• Economy

• Society

• Politics

• Legal

• Ecology

• Technology

Pressure Groups and Stakeholders

• Pressure group makes demands of the enterprise

• Stakeholders have a direct financial interest in the enterprise

Internal Business Planning - I

• Set objectives• Current situation analysis

– Strengths, weaknesses, opportunities, and threats, (SWOT)

– Organization structure, resources, assets, R&D, sales and market, products, and competition

• Future strategies– Risk analysis in terms of SWOT– Offensive or defensive– Feasibility analysis in terms of abilities, resources,

processes, and culture

Internal Business Planning - II

• Implementation– Monitoring and control in terms of objectives

The Business and Product Life Cycle

• By Higgins (1985)

• Emerging

• Growth

• Mature

• Declining

Product Portfolios

• By Boston Consulting Group• Wild cat product (low market share in a high

growth market)• Star product (strong market position in an

attractive or high growth market)• Cash cow product (strong market position in a

mature lower growth market)• Dog product (weak position in a low growth or

declining market)

Generic Business Strategies

• Overall cost leadership

• Differentiation

• Focus (niche market)

Questions

• How can an IS/IT affect the nature and value of the product or service and its life cycle?

• How can an IS/IT affect the market for products and services?

• How can IS/IT affect the cost of products and services?

Points to Remember

• Business strategic planning model

• The strategic framework

• The Business and Product Life Cycle

• Product portfolios

• Generic business strategies