Dynamic

Environment in
Strategic
Management
Dr. Ir. Mombang Sihite, MM
 Agile Strategy Management : Techniques for
Book Continuous Alignment and Improvement, Soren
Lyngso
References
Building the Agile Business through Digital
Transformation
Neil Perkin & Peter Abraham

Transformasi Strategi - Membangun Kinerja

Berkelanjutan pada Era Ketidakpastian – VUCA
Mombang Sihite – Bambang Poerwoko

Managing Uncertainty, Strategies for surviving

and thriving in turbulent times, Michel syrett and
Marion Devine
Understanding the process of strategic management

Wheelen Hunger
Step-1 Environmental Factors Analysis

EFE
External
Factors The TOWS Matrix
Evaluation
Developing Strategic Options by
Performing an External-Internal Analysis

IFE
Internal
Factors
Evaluation
Step-2 Strategy Formulation

What is strategy formulation?

Strategy formulation is the process of establishing goals and
determining the proper plan of action to achieve those goals.

An organization uses strategy formulation to plan for success

and make improvements to workplace strategies as needed.

Strategy formulation is essential for achieving and measuring

the attainability of goals.

After creating strategies, an organization typically educates its

employees so they know the organization's purpose, workplace
objectives and goals.
 What is
Strategic Analysis?
Strategic analysis is a process essential to
Formulate strategic planning for decision
making and smooth working of that
organization.
In a constant strive to improve,
organizations must periodically conduct a
strategic analysis which will, in turn, help
them determine what areas need
improvement and areas that are already
doing well.
For an organization to function efficiently,
it is important to think about how
positive changes need to be
implemented.
 What is
Strategic Analysis?
The main question that a company should
consider when performing a strategic analysis
is: How is the market constituted? How are
the active clients in this sector?
While conducting strategic analysis,
organizations must know their competitors
and thus be able to define a strategy that will
help them an unbeatable player in that
market.
One of the most important functions of
strategic planning is to predict future events
and deduce alternative strategies if a certain
plan doesn’t work out as expected.
 What’s your company strategy

Types of Strategic Analysis RBV or MBV

The analysis of the strengths of the

company should be oriented to the
market, focusing on the client.

The strengths only make sense when they

help the company to fulfill client’s needs.

When doing an internal strategic analysis

one should also know the weaknesses
and limitations that a company faces
existentially or in the future.
SWOT
analysis
is one of the most
reputed techniques for
internal strategic analysis.
There is no better way to
benefit from a strategically
performed analysis than
to use it to detect the
strengths, opportunities,
weaknesses, and threats
that your project may
suffer.
Threats
to an organization:
1. To detected and a risk management
strategy needs to be put in place so that
threats like stronger brand value of the
competitors,
2. Better relationship of competitors with
retailers etc.
3. Don’t have an adverse effect on the
company’s growth.
4. Also, threats like multiple players in the
market with the same products,
5. Downturn in economy,
External
strategic analysis:
Need to know how the market
functions and how consumers react
or behave to certain products or
services.
Measuring customer satisfaction is
a common external analysis
method.
PESTLE analysis is one of the most
widely used external analysis
techniques. The process one is
most likely to adopt when using a
PESTLE technique is relatively a
simple one.
PESTLE analysis
(Political, Economic, Social, Legal and Environmental)

Describes a framework of macro-

environmental factors used in the
environmental scanning component of
external strategic analysis.
The model has been extended by adding
Ethics and Demographic factors.
It is a part of the external analysis when
conducting a strategic analysis or doing
market research and gives an overview of
the different macroenvironmental factors
that the organization has to take into
consideration.
By using PESTLE analysis
can be:

1. Find out the key issues beyond the

organization’s control, like changes in
political scenario changing rules that
can be implemented at any point in
time.
2. Identify the impact of each issue.
3. See how important these issues are
to the organization.
Strategic Analysis and
Market Research
Market research can provide you with the
necessary information to know the different
market scenarios and suggest strategies to
achieve more sales.
Market research is either qualitative or
quantitative in nature of conduct.
Introduction of a new product into the market,
or innovate through the new ideas of customers
Ask the right questions to customers and get
their feedback.
For example, in case your competitors lower
their prices, or are there changes in the
behaviour of your consumers?
Analytical Tools
for Business
Analysis
Analytical Tools for Business Analysis

1. SWOT analysis
2. PEST analysis
3. MOST analysis is an acronym for Mission, Objectives,
Strategies, and Tactics
4. Heptalysis is an analyzing by market opportunity,
product or solution, execution plan, financial engine,
human capital, potential return, and margin of safety.
5. De Bono’s Six Thinking Hats analysis there are 6
moods you should think about: pure and logical facts,
creativity, positivity, negativity, emotions, and ability
to control.
Analytical Tools for Business Analysis

6. Catwoe analysis, there are 6 essential factors:

customers, actors, transformation process, world view,
owners, and environmental
7. Five whys analysis
8. MoSCoW analysis, there are 4 factors in this analytical
tool, which are: Must have, Should have, Could have, and
Won’t have.
9. SCRS analysis for 4 steps respectively which are: Strategy,
Current state, Requirements, and Solution.
10.VPEC-T analysis, this tool stands for Values, Policies,
Events, Content, and Trust.
Essential tools
for strategy
analysis
Essential tools for
strategy analysis
1. SWOT
2. Porter's Value Chain, main functions and
understanding how they contribute to value
creation
3. The Strategy Canvas, to understand how a firm
differentiates itself from its competitors.
4. The Business Model Canvas, to exploring
alternative business models. (learn more)
5. PESTEL represent the Political, Economic, Social (or
Socio-economic), Technological, Environmental and
Legal
Essential tools for
strategy analysis
6. McKinsey 7S stand for: Structure, Systems, Style,
Staff, Skills, Strategy and Shared Values.
7. Porter's 5 Forces considers the bargaining position of
suppliers and customers (including distributors), the
threat of new entrants and substitutes, as well as
competitive factors within the industry itself.
8. Pareto Analysis that 20% of the products, services,
customers or distribution deliver 80% of the profits.
9. BCG Matrix /GE Matrix, Plot the market share against
the market growth rate for each product, service or
customer segment
Levels of strategy
formulation
You can develop a strategy on three
different levels:

• Corporate level: The foundation of

what you want to achieve in your
organization

•Business level: How you're going to

compete with other organizations in
your industry

•Functional level: How you plan to

grow your organization in its industry
1. Develop a strategic mission
A strategic mission is a part of the foundation of an organization and includes the organization's values and
long-term goals.

To identify your company values, think of practices you would like to see your employees implementing on a
daily basis.

The three major components of a strategic mission are:

Time: Think of where you'd like your business to be in one, five and 10 years from now. Having long-term
perspective can help you identify aspects of your strategic mission which may involve your target market,
customers and challenges.

Core values: Understanding core values can help you decide how to achieve goals and identify why you're
working towards those goals, how they will affect the company and what outcome they will produce. A mission
often includes core values that have a deeper meaning to the organization.

Business description: A description of what the organization does and hopes to achieve can also assist with
developing a strategic mission. Ask yourself what industry your organization is in, what you hope to create and
how you plan to sell your goods or services.
2. Establish organizational goals
The first step to forming an effective strategy is to establish business goals.
Understanding what you're working towards can help you develop appropriate processes and procedures to
reach your business goals efficiently.
To identify organizational goals, a company should first consider the following factors:

Target market: This factor identifies a specific demographic and market an organization would like to sell its
products or services to.

Customers: Identifying purchasing habits and behaviors of target customers is a large part of developing a
business goal. Consider asking yourself questions like: Why do customers use your products? How do they make
purchasing decisions?

Offerings or goods: This includes the products or services you would like to sell to customers. Some questions
to help you identify what you're selling can explore the benefits of your products or services and what price
point is best to sell the products or services.

Adaptation tchanges and challenges: o Anticipating obstacles and planning solutions to them can help an
organization develop a plan of action to reduce the chances of the obstacle of occurring.
3. Define strategic objectives
Strategic objectives define what an organization is to achieve so it can be sustainable and
competitive over a long term.
Objectives also help with creating tasks for employees to reach company goals. Allowing
employees to recognize what goals they're working towards and why they're important for
the company to reach can motivate an employee by showing them what potential they have
in the company and how their job role is important to meeting goals.

Here are some example objectives:

Develop and use a customer database

Improve workplace safety

Invest in customer management

Increase community outreach

Increase company revenue by 15%

Tips for using strategy
formulation Ask for feedback from employees
After creating and implementing a new strategy, ask
There are many factors that can contribute to
your peers and employees how they feel about the
successful strategy formulation.
strategy and its effectiveness. Promote an open
It's important to adapt and allow for new ideas and
communication policy and allow them to give their
ask for feedback throughout the strategy
opinions and express ideas for alternative approaches
formulation process.
and perspectives. Feedback can help you revise
While planning a new strategy, it may be helpful for
strategies and apply the ideas from employees who
you to review the following tips:
use them daily.

Use SMART goals Keep and compare drafts

SMART stands for specific, measurable, achievable, Throughout the strategy formulation process, you
relevant and time-based goals. Smart goals can help may design many drafts of a strategy and how to use
you craft a specific goal that is easy to measure or it. Consider keeping a copy of each draft and
track and has a clear and concise plan for success. comparing them to each new draft. You can use these
Using the SMART acronym as a framework for drafts as a baseline to refer to while determining the
identifying organizational goals can ensure you're relativity of each idea for a strategy to the goals you're
planning a strategy that can make your organization trying to reach.
highly
What is strategy implementation?
Strategy implementation is the act of executing a plan to reach
the desired goal or set of goals.

The brainstorming process helps formulate these ideas, while

the implementation process puts those strategies or plans into
action.

Strategy implementation depends heavily on feedback and

status reports to ensure the strategy is working and to rework
any areas that may need improvement.
How to experience a successful strategy implementation
You can measure successful strategy implementation by determining if the
organization has reached its desired goals
. Here are some steps on how to experience a successful strategy implementation:

1. Define clear goals and strategies

The most important component of successful strategy implementation is defining
clear goals and the process to help the team reach those goals. Consider displaying
the goals and desired strategy on a whiteboard or PowerPoint presentation for the
team. Including a visual aid can help the team get a clearer picture of the strategy,
including what the goals are and what it looks like when they've reached them. It's
also a good idea to ensure the goals and strategy align with the company’s values and
vision. Review your goals to see if any components don't align and adjust them
accordingly. That way, everyone is confident in what they're doing.
2. Determine roles and leadership
The next step in successful implementation is to define the roles of the team. Consider
hosting a separate meeting where you explain the roles of everyone on the team.

This can help improve accountability among team members and the overall transparency of
the project.

You can determine your leadership structure at this phase as well. If your team only needs
one leadership role, be sure to explain why you chose that person for the role.

Determining roles also means discussing responsibilities. You can determine who’s
responsible for each part of the project and any individual deadlines you might have.

If you're the manager, keeping yourself accessible can help the team if they encounter
challenges in the project.
3. Execute your plan
Once you've communicated the strategy and assigned roles, you can begin the execution of the plan.

The team typically makes initial progress within the first few days or weeks, and that can be a good time
to give a progress report. Progress reports
help everyone better understand the team's weaknesses and strengths, how far they've come and what
they need to do to reach the end goals.

It can be helpful to give progress reports or team updates at certain milestones throughout the project.

These can include:

•At the start of the project
•The first major challenge of the project
•The midpoint of the project
•The final stage of the project
•Anytime a major challenge becomes a failure to deliver
•After the team has completed the project and has reached or missed the goals
Evaluatiom and Control

Wheelen Hunger
So what is the issue today …..
Dynamic environment permanently turbulence your strategy

Everyday VUCA attack your Performance

Failed to
Innovate
Failed to
Innovate
Today global issues
• National and International Policies
• Social and environmental issues
• Sustainable Development Goals
• Green Technology
• Smart Technology
• Digital Disruption
• Technology Digital
• Big Data
• Analytical
• Artificial Intelligent
• IoT
• Automation
• etc
Three elements constitute sustainable management:
Long-term profit: The estimated future incomes of the enterprises are added together to
calculate corporate value. As a result, from a financial standpoint, businesses should avoid
making decisions that are solely profitable in the short term and consider long term
consequences of their actions.

Environmental sustainability: Earth has finite resources and waste capacity, and pressuring it to
the point of exhaustion yields no long term economic benefit to anyone. As a result, sustainable
management measures the environmental impact of its operations and develops strategies like
adopting:
• Circular economy practices,
• Minimizing corporate carbon footprint and
• Ensuring supply chain sustainability to minimize its environmental burden.

Societal sustainability: Harmony inside the firm, which

enables effective division of labor, has an impact on long-term profits.
Corporate harmony is associated with employee satisfaction.
As a result, sustainable management implements policies to
improve corporate inclusivity and uses societal metrics
like gender pay gap to track progress.
What the issues in Management Short-Run

The short-term benefits of green

Green Management
management include:
is when a company does its best to minimize processes
that harm the environment. Environmental issues are a
Improved health
company priority. company engages in green management
Reusable items, and
because it recycles and has reduced the amount of waste
Recycling
dumped in landfills.
Long-Run

Benefits of Green Management In the long-run, companies can focus on:

In addition to helping the environment, a company can
also expect to see many internal benefits of green Improved brands
management. the short-term and long-term benefits a Stronger relationships
company can expect as a result of green management. Technology upgrades
Reduced energy
Discussion
What company fail due to technology
1. Toshiba
2. Panasonic
3. Blackberry
4. Kodak
5. Disk Drive
6. ??
Discussion
Industry has been disrupted What next industry disrupt by
due to technology ?? technology ??
1. Mail
2. Travel company What the key of disruption ??
3.
What the driver of sustainable
performance ??