strategic management assoc. prof. dr. wongsa laohasiriwong faculty of public health, khon kaen...

Strategic Strategic ManagementManagement

Assoc. Prof. Dr. Wongsa Laohasiriwong

Faculty of Public Health,

Khon Kaen University

Strengths

Opportunities

Weakness

Threats

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.. . . management . . .system . . . that links strategic planning and decision making with the day-to-day business of operational management.

[Gluck, Kaufman, and Walleck, 1982]

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Strategic ManagementStrategic Management

Source: Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation.


.... the process by which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future..(Goodstein, Nolan, and Pfeiffer, 1992)

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A systems approach to identifying and makingthe necessary changes and measuring the organization’s performance as it moves towards its vision.

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What are the benefits of strategic What are the benefits of strategic management?management?

Breakthrough thinking about the future; organizational boundaries are more flexible.

A shift in focus from the inputs that are used to run the business to the outputs and outcomes the organization desires to achieve.

A focus on optimizing organizational performance and process quality as keys to delivering quality products and services.

A move toward an organizational culture that adapts easily to change.

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VisionVision An idealized view of a desirable and

potentially achievable future state.

A short statement describing the ideal state an organization is striving to achieve for its clients or the ideal state that an organization sees for society.

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Source: Government of Newfoundland and Labrador. 2005. Excellence in Strategic Planning.

Definition of Term Definition of Term

MissionMission An enduring statement of purpose.

Describes what the organization does, who it does it for, and how it does it.

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GoalGoal A specific statement of the desired

results to be achieved over a specified period of time.

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ObjectiveObjective An objective is a measurable statement

or incremental milestone which specifies a change or benefit that the entity hopes to achieve as it strives to achieve a specific goal. Success in meeting the objectives can be readily evaluated using qualitative and quantitative measures.

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Strategic PlanStrategic Plan The plan which the guiding members of

an organization envision its future and develop the necessary procedures and operations to achieve that future [Goodstein, Nolan, and Pfeiffer,1992].

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VisionVision The destiny that we want to reach/ to be (end point)

MissionMission Scope of action that we want to implement, Target group (Customer), philosophy or principle of our implementation.

Strategic IssuesStrategic Issues Agenda or Focusing Area or Key Result Area

GoalGoal Things that we want to achieve.

Key Key Performance Performance Indicators Indicators ((Targets)Targets)

Indicator that show what we achieves. (Benchmark or Milestone)

StrategiesStrategies Methods, Procedure that lead us to the achievement of Goals/KPI/Target (Means)

Example: Starbucks Example: Starbucks CoffeeCoffee

The first Starbucks location opened in 1971 in Pike Place market in Seattle, WA.

Eleven years later, Howard Schultz was hired by the company to be the director of retail operations and marketing.

The first Starbucks with the current coffee house look and feel was opened in 1984 in downtown Seattle.

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Source: http://www.starbucks.co.th/en-US/_About+Starbucks/

Example: Starbucks VisionExample: Starbucks Vision

To "inspire the "inspire the human spirit," human spirit," is a something that can't be served in a cup with whipped cream.

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Source: http://www.starbucks.co.th/en-US/_About+Starbucks/Mission+Statement.htm

1) Provide a great work environment and treat each other with respect and dignity.

2) Embrace diversity as an essential component in the way we do business.

3) Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.

4) Develop enthusiastically satisfied customers all of the time.

5) Contribute positively to our communities and our environment.

6) Recognize that profitability is essential to our future success.

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Example: Starbucks MissionExample: Starbucks Mission


Mission statement is more than words on a piece of paper – it’s the philosophy that guides how we do business/work every day.

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Mission statement

What is SWOT?What is SWOT?

SWOT is the acronym for Strengths, Weaknesses, Opportunities, and Threats.

SWOT is very effective when applied to a specific objective or project.

Source: Business.govt.nz. SWOT analysis.

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Albert S Humphrey

AWOT Analysis is…

… A strategic planning tool that separates influences on an organization’s future success into internal and external factors

Source: Business.govt.nz. SWOT analysis.

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SWOT Analysis

S – StrengthsW – WeaknessesO – Opportunities

T – Threats

Source: Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique

Internal FactorsInternal Factors

External FactorsExternal Factors

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SWOT: TOWS

External Factors Internal Factors

PESTor

PESTLEAnalysis

PESTor

PESTLEAnalysis

7S Analysis7S Analysis

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SWOT: External Factors

ThreatsThreats External factors, beyond an

organization’s control, which could place the organization mission or operation at risk.

The organization may benefit by having contingency plans to address them if they should occur.

Classify them by their “seriousness” and “probability of occurrence”.


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Threats

Who is your competition and what do they offer that you can’t do as well or at all?

Are there “environmental” changes or situations that could cause problems for you and your programs?

What other roadblocks are being thrown in your path?


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SWOT: External Factors

OpportunitiesOpportunities External attractive factors

that represent the reason for an organization to exist and develop.

What opportunities exist in the environment, which will propel the organization?

Identify them by their “time frames”


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OpportunitiesOpportunities

Are there new situations coming down the road that you can take advantage of (new programs being offered, new faculty joining the department, new tools available to you)?

Are there gaps in the “market” that you can fill?

Are there partnerships that might be fruitful?


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PEST stands for the analysis of the external factors which is beneficial when conducting research before beginning a new project or to help conduct market research. These factors are:

PESTPESTPESTPEST

Source: Nishadha, SWOT analysis vs PEST analysis, When to use them. http://creately.com/blog/diagrams/swot-analysis-vs-pest-analysis/

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PEST AnalysisPEST AnalysisPEST AnalysisPEST AnalysisPPolitical – olitical – Laws, global

issues, legislation and regulations which may have an effect on your business either immediately or in the future.

EEconomic – conomic – Taxes, interest rates, inflation, the stock markets and consumer confidence all need to be taken into account.

SSocial – ocial – The changes in lifestyle and buying trends, media, major events, ethics, advertising and publicity factors.

TTechnological – echnological – Innovations, access to technology, licencing and patents, manufacturing, research funding, global communications.Source: Nishadha, SWOT analysis vs PEST analysis, When to use them. http://creately.com/blog/diagrams/swot-analysis-vs-pest-analysis/

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PESTLE

Pest can also be known as Pest can also be known as PESTLEPESTLE which includes which includes other factors such as:other factors such as:

Legal – Legal – Legislation which have been proposed and may come into effect and any passed legislation’s.

Environmental – Environmental – Environmental issues either locally or globally and their social and political factors.


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WeaknessesWeaknesses Factors that are

within an organization’s control that detract from its ability to attain the core goal.

Which areas might the organization improve?


SWOT: Internal Factors30

SWOT: Internal Factors

StrengthsStrengths Positive tangible and

intangible attributes, internal to an organization.

They are within the organization’s control.


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Strengths

What do you do particularly well? What do you do that is unique in the

“market place” ? What do your customers/clients ask for

you to do over and over again? What do you have the right

tools/resources to accomplish?


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Internal Factor :McKinsey Internal Factor :McKinsey 7S Analysis7S Analysis

This model was developed in the 1980's by Robert Waterman, Tom Robert Waterman, Tom Peters and Julien Philips Peters and Julien Philips whilst working for McKinsey and originally presented in their article

" Structure is not " Structure is not Organisation"Organisation"

Source: Lindsay Sherwin, McKinsey 7S Model, http://www.lindsaysherwin.co.uk/guide_managing_change/html_change_strategy/06_mckinsey.htm

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McKinsey

McKinsey 7S AnalysisMcKinsey 7S Analysis

The 7S Analysis Model became extensively used by mangers and consultants and is one of the cornerstones of organisational analysis.

Essentially the model says that any organisation can be best described by the seven interrelated elements.


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7S Analysis 7S Analysis ModelModel


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1. Strategy1. StrategyPlans for the allocation of a firm's scarce resources, over time, to reach identified goals. Environment, competition, customers.


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2. Structure2. StructureThe way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc.


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3. Systems3. SystemsThe procedures, processes and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems.


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4. Skills4. SkillsDistinctive capabilities of personnel or of the organization as a whole.

5. Staff5. StaffNumbers and types of personnel within the organization.Source: Lindsay Sherwin, McKinsey 7S Model, http://www.lindsaysherwin.co.uk/guide_managing_change/html_change_strategy/

06_mckinsey.htm

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6. Style6. StyleCultural style of the organization and how key managers behave in achieving the organization’s goals.

7. Shared Value7. Shared ValueThe interconnecting centre of McKinsey's model is: Shared Values. What the organization stands for and what it believes in. Central beliefs and attitudes.Source: Lindsay Sherwin, McKinsey 7S Model, http://www.lindsaysherwin.co.uk/guide_managing_change/html_change_strategy/

06_mckinsey.htm

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SWOT MATRIX

Simple Rules SWOT Analysis

Be realistic about the strengths and weaknesses of your organization or group

Distinguish between where your organization is today, and where it could be in the future

Be specific: Avoid gray areas.


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Simple Rules SWOT Analysis

Always analyze in relation to your core values, mission, mandate, goals, vision.

Keep your SWOT short and simple.

Avoid complexity and over analysis

Empower SWOT with a logical conceptual framework.


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Create a Plan of Action

Set goals and objectives, like with any other plan. Limit 3-5

What steps can you take to: Respond to the threat Take advantage of some new opportunities

Capitalize on your strengths Overcome or minimize your weaknesses


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SWOT Analysis allows organization to…

Define realistic goals Improve capability Overcome weaknesses with strengths Identify threats than can be turned into

opportunities

Business.govt.nz. SWOT analysis.

Brainstorming is a great way of introducing all the relevant internal and external factors for each section of the analysis.


Goals from SWOT

Create a page summary for the department to laminate and post

Ensure priorities for action/goals are addressed on meeting agendas throughout the year

Note progress on an ongoing basis.

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A Tool for Strategy Selection

Boston Four Cell BCG

STARS Question Marks

Cash cows Dogs

High Low

Possib

ilit

y a

nd

G

row

thSuit to the Needs

High

Low

Source: BCG Matrix. http://www.managementstudyguide.com/bcg-matrix.htm

Stars represent business units having large market business units having large market share in a fast growing industry. share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead.

StarStar


Cash Cows represents business units having a business units having a large market share in a mature, slow growing large market share in a mature, slow growing industryindustry. Cash cows require little investment and generate cash that can be utilized for investment in other business units.

Cash Cows


Question marks represent business units having low business units having low relative market share and located in a high growth relative market share and located in a high growth industry. industry. They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable.

Question Marks


Dogs represent businesses having weak market shares having weak market shares in low-growth markets.in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages.

Dogs


WeaknessStrength

Opportunity

Threat

Penetration Strategy

(SO)

Strengthening

Strategy (WO)

Holding Strategy

(ST)

Terminating Strategy(WT)

Strategy Strategy FormulatioFormulatio

nn


http://images.google.co.th/imgres?imgurl=http://www.ucscrecreation.com/images/Group_Rec.jpg&imgrefurl=http://www.ucscrecreation.com/%3Flink_id%3D47&usg=__nRTtdZYu-EwJP1kPO8qJhPp9KeE=&h=300&w=400&sz=96&hl=th&start=3&um=1&tbnid=PDhaxIxPvQxWvM:&tbnh=93&tbnw=124&prev=/images%3Fq%3Dgroup%26hl%3Dth%26sa%3DG%26um%3D1

Strategic Management Process

Strategic Planning

Strategic Implementatio

n

Strategic Control

VisionGoals KPI/TargetStrategiesStrategy Map

Improve/Adjust• Process• Structure• Technology • Human Resource

Action Plan

Monitoring & Evaluation

Review to improve Strategic Plan

VISIONVISION

Goal 4

Goal 4

Goal 3

Goal 3

Goal 2

Goal 2

Goal 1Goal 1 Objective 1

Objective 1

Objective 12

Objective 12 Objective 1 2

Objective 1 2 Objective 1

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Objective 1

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Mission

Mission

Strategy 1Strategy 1Strategy 2Strategy 2Strategy 3Strategy 3

ActionPlan 1. A 2. B 3. C 4. D

ActionPlan 1. A 2. B 3. C 4. DActionPlan 5. E 6. F 7. G

ActionPlan 5. E 6. F 7. G ActionPlan 8. H 9. I 10. J

ActionPlan 8. H 9. I 10. J

Effective

Efficiency

Quality

Organizational Development

Action PlanAction Plan

Title of the Plan Rationale Objectives, KPI Process (Activities) Gant chart Budget Responsible persons Monitoring and

evaluation

References

Centre for Instructional Development. Strategic Planning and Visioning: SWOT Technique

Business.govt.nz. SWOT analysis. Lindsay Sherwin, McKinsey 7S Model,

http://www.lindsaysherwin.co.uk/guide_managing_change/html_change_strategy/06_mckinsey.htm

Nishadha, SWOT analysis vs PEST analysis, When to use them. http://creately.com/blog/diagrams/swot-analysis-vs-pest-analysis/

Denise Lindsey Wells. Strategic Management for Senior Leaders: A Handbook for Implementation.

Government of Newfoundland and Labrador. 2005. Excellence in Strategic Planning. http://www.starbucks.co.th/en-US/_About+Starbucks/

BCG Matrix. http://www.managementstudyguide.com/bcg-matrix.htm

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strategic management assoc. prof. dr. wongsa laohasiriwong faculty of public health, khon kaen...

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