WEEK 2: Designing a Competitive Business Model & Building a Solid Strategic Plan

Strategic Management
 A very crucial area in building a successful business.
 Involves developing a game plan to guide a company as it strives to accomplish its mission, goals , and
objectives, and to keep it on its desired course.
Strategic Management and Competitive Advantage
 Developing a strategic plan is crucial creating a sustainable competitive advantage, the aggregation of
factors that sets a company apart from its competitors and gives it a unique position in the market that is
superior to its competition.
Example: Blockbuster Video
Building a Competitive Advantage
Consider four aspects of a small company:
1. The products they sell.
2. The service they provide.
3. The pricing they offer.
4. The way they sell.
Key: Core Competencies
 Unique set of capabilities a company develops in key areas, such as superior quality, customer service,
innovation, team building, flexibility, responsiveness, and others that allow it to vault past competitors.
 They are what a company does best.
 Best to rely on a natural advantage.
Strategic Management Process
1. Develop a vision and translate it into a mission statement.
2. Assess strengths and weaknesses.
3. Scan environment for opportunities and threats.
4. Identify key success factors.
5. Analyze competition.
6. Create goals and objectives.
7. Formulate strategies.
8. Translate plans into actions.
9. Establish accurate controls.
Develop a Vision and Create a Mission Statement
 Vision - the result of an entrepreneur's dream of something that does not exist yet and the adaptability to
paint a compelling picture of the dream for everyone to see.
 Clearly defined vision:
 Provides direction.
 Determines decisions.
 Motivate people.
 Addresses question: “What business are we in?”
 The mission is a written expression of how the company will reflect an entrepreneur's values, beliefs and
vision more than just” making money”.
 Serves as a “strategic compass.”
 Survey of employees: 89 percent of employees say their companies have a mission statement but ..
 Only 23 percent of workers believe their company's mission statement has become a way of doing
business.
Assess Company Strengths and Weakness
 Strengths
 - Positive internal factors a company can draw on to accomplish its mission, goals and objectives.
 Weakness
- Negative internal factors that inhibit a company's ability to accomplish its mission, goals, and
objectives.
 Opportunities
- Positive external factors the company can exploit to accomplish its mission, goals, and objectives.
 Threats
- Negative external factors that inhibit the firm’s ability to accomplish its mission , goals and
objectives.
Identify Key Success Factors
 Focus on your strengths and weaknesses that determine the relative success of market participants.
 The keys to unlocking the secrets of competing successfully in a particular market segment.
Analyze Competitors
 Analyzing key competitors allow an entrepreneur to:
 Avoid surprises from existing competitors' new strategies and tactics.
 Identify potential new competitors and the threats they pose.
 Improve reaction time to competitors' actions.
 Anticipate rivals next strategic moves.
Create Company Goals and Objectives
 Goals - broad, long-range attributes to be accomplished.
 “BHAGS” Big Hairy Audacious Goals
- -encourage the companies to define the visionary goals that are more strategic and emotionally
compelling.
S.M.A.R.T
 Objectives - more detailed, specific targets of performance that are:
 SPECIFIC
 MEASURABLE
 ATTAINABLE
 REALISITC
 TIMELY
Formulate Strategies
 Strategy-a Road map of the actions an entrepreneur draws up to achieve a company's mission, goals, and
objective s. It is the companies game plan for gaining a competitive advantage.
Three Basic Strategies

COST DIFFERENTIATION
FOCUS
LEADERSHIP

STRATEGY?
Translate Strategies into Action Plans
 Survey of senior executives: Companies achieved only 63 percent of the results in their strategic plans
- Create projects by defining:
 Purpose
 Scope
 Contribution
 Resource Requirements
  Timing
Establish Accurate Controls
 Plan establishes the standards against which actual performance is measured.
 Entrepreneur must:
 Identify and track key performance indicators.
 Take corrective actions.
Balanced Scorecards
 A set of measurements unique to a company that includes both financial and operational measures.
 Four Perspectives:
1. Customer: How do customers see us?
2. Internal Business: At what must we excel?
3. Innovation and Learning: Can we continue to improve and create value?
4. Financial: How do we look to shareholders?

WEEK 3: DEFINING STRATEGIC VISION MISSION, FORMULATION OF GOALS AND

OBJECTIVES

VISION
WHAT IS COMPANY VISION?
 WHAT IS COMPANY VISION? DEFINES THE DESIRED OR INTENDED FUTURE STATE OF
AN ORGANIZATION OR ENTERPRISE IN TERMS OF ITS STRATEGIC DIRECTION. VISION IS
A LONG TERM VIEW, SOMETIMES DESCRIBING HOW THE ORGANIZATION WOULD LIKE
THE WORLD IN WHICH IT OPERATES TO BE.
  IT IS THE IMAGE OF WHAT THE ORGANIZATION HOPES TO ACHIEVE AT SOME POINT IN
THE FUTURE.
REASONS FOR HAVING A VISION STATEMENT
 GETS TEAM FOCUSED.
 SHOWS A PICTURE OF WHERE THE COMPANY IS GOING.
 INSTILLS FOCUS, DISCIPLINE, AND STRUCTURE WITHIN THE ORGANIZATION.
 ENSURES THAT TEAM UNDERSTANDS COMPANY DIRECTION.
HOW TO WRITE A VISION?
 DETERMINE THE ORGANIZATION'S OVERRIDING GOAL
 STATE WHAT THE ORGANIZATION ENVISIONS ITSELF TO BE IN TERMS OF VALUES,
EMPLOYEES, GROWTH AND CONTRIBUTIONS TO SOCIETY.
 USE WORDING THAT WILL INSPIRE YOUR TEAM. THINK OF ADJECTIVES AND
SENTENCES THAT WILL GET THE TEAM EXCITED AND WILL MAKE THEM THINK THEY
ARE PART OF SOMETHING THAT IS MUCH BIGGER THAN SOMETHING THEY COULD
HAVE THOUGHT OF THEMSELVES.
 GET OTHER PEOPLE ON THE TEAM TO CRITIQUE THE DRAFT OF THE VISION TO MAKE
SURE IT'S EFFECTIVE AND INSPIRING. IF THERE ARE ANY KEY CUSTOMERS THE
ORGANIZATION TRUSTS, ASK THEM TO REVIEW THE DRAFT TOO.
VISION LEVELS OF PEOPLE
 SOME PEOPLE NEVER SEE IT. (WANDERERS)
 SOME PEOPLE SEE IT BUT NEVER PURSUE IT ON THEIR OWN. (FOLLOWERS)
 SOME PEOPLE SEE IT AND PURSUE IT. (ACHIEVERS)
 SOME PEOPLE SEE IT AND PURSUE IT AND HELP OTHERS SEE IT. (LEADERS)
EXAMPLE
 TOWARDS A SUSTAINABLE GROWTH AND INCREASE OF TOURISTS THAT WOULD
CONTRIBUTE SIGNIFICANTLY TO THE GROWTH OF ECONOMIC ACTIVITIES WHICH IS
RELATED TO TOURISM.

MISSION
WHAT IS COMPANY MISSION?
 THE UNIQUE PURPOSE THAT SETS A COMPANY APART FROM OTHERS OF ITS TYPE
AND IDENTIFIES THE SCOPE OF ITS OPERATION. IN PRODUCT, MARKET, AND
TECHNOLOGY.
 DEFINITION: A SENTENCE DESCRIBING A COMPANY'S FUNCTION, MARKETS AND
COMPETITIVE ADVANTAGES; A SHORT WRITTEN STATEMENT OF YOUR BUSINESS
GOALS AND PHILOSOPHIES .
 A MISSION STATEMENT DEFINES WHAT AN ORGANIZATION IS, WHY IT EXISTS, ITS
REASON FOR BEING. AT A MINIMUM, YOUR MISSION STATEMENT SHOULD DEFINE
WHO YOUR PRIMARY CUSTOMERS ARE, IDENTIFY THE PRODUCTS AND SERVICES YOU
PRODUCE, AND DESCRIBE THE GEOGRAPHICAL LOCATION IN WHICH YOU OPERATE.

HOW TO WRITE A MISSION?

 ASK "WHAT DO WE DO?"; "HOW DO WE DO IT?"; AND "FOR WHOM DO WE DO IT,"
 CREATE A DRAFT MISSION STATEMENT DESCRIBING HOW THE COMPANY UNIQUELY
ANSWERS THESE QUESTIONS. TOUCH ON THE ORGANIZATION'S CURRENT OPERATIONS
AND THE INDUSTRY IT IS IN.
  LOOK AT COMPETITORS IN THE INDUSTRY AND USE THEIR MISSION STATEMENTS FOR
RESEARCH. ASK YOURSELF WHAT WORKS AND WHAT DOES NOT WORK. REVISE YOUR
MISSION STATEMENT AS NEEDED.
 GET FEEDBACK FROM OTHER MEMBERS OF THE ORGANIZATION ONCE THE
STATEMENT IS DRAFTED.
EXAMPLE
 TO INCREASE GROWTH IN THE NUMBER OF TOURISTS BY FOCUSING ON
STRENGTHENING THE ATTRACTIVENESS AND DIVERSITY OF TOURISM PRODUCTS AND
IMPROVE THE QUALITY OF TOURISM SERVICES.
THE DIFFERENCE BETWEEN VISION & MISSION
VISION - THE FUTURE
- DEFINITION: THE WAY IN WHICH ONE SEES OR CONCEIVES SOMETHING; A MENTAL
IMAGE; AN OVERALL STATEMENT OF THE GOAL OF THE ORGANIZATION.
- VISION SHOULD DESCRIBE WHAT WILL BE ACHIEVED IN THE WIDER SPHERE IF THE
ORGANIZATION AND OTHERS ARE SUCCESSFUL IN ACHIEVING THEIR INDIVIDUAL
MISSIONS.
MISSION - THE PRESENT
- DEFINITION: AN ASSIGNMENT ONE IS SENT TO CARRY OUT; A SELF-IMPOSED DUTY.
A MISSION STATEMENT IDENTIFIES THE REASON FOR THE EXISTENCE OF THE
ORGANIZATION. THE STATEMENT SHOULD BE LINKED TO THE OVERALL
OPERATIONS AND BUSINESS OF THE ORGANIZATION.
- A MISSION STATEMENT IS MORE SPECIFIC TO WHAT THE ENTERPRISE CAN ACHIEVE
ITSELF.
ORGANIZATIONAL GOALS AND OBJECTIVES
 TO OPERATIONALIZE THE MISSION STATEMENT, ORGANIZATIONAL GOALS AND
OBJECTIVES ARE DEFINED. ALL ORGANIZATIONS HAVE SET GOALS. THESE ARE
REFERRED TO AS ORGANIZATIONAL GOALS. ORGANIZATIONAL GOALS VARY AND
ARE ESSENTIALLY DEPENDENT ON THEIR RESPECTIVE PURPOSE AND DIRECTION.
GOALS
GOALS REPRESENT THE OVERALL VISION OF AN ORGANIZATION. GOALS HAVE THE
FOLLOWING PROPERTIES:
 GOALS PROVIDE ORGANIZATIONS FOCUS AND DIRECTION.
 GOALS MOVE ORGANIZATIONS TO ACTION.
 GOALS DEVELOP IN ORGANIZATIONS THE TRAIT OF PERSISTENCE.
D.O.T GOAL
 TO INCREASE THE TOURIST’S ARRIVAL.
OBJECTIVES
FOR GOALS TO BE ATTAINED, THEY HAVE TO BE SUPPORTED BY OBJECTIVES. ADD
SPECIFICITY BEYOND GOALS.
Objectives should contain the SMART Elements
 SPECIFIC
 MEASURABLE
 ATTAINABLE
 REALISTIC
 TIME BOUND
D.O.T OBJECTIVES
 TO INCREASE TOURISTS’ ARRIVAL FROM 44 MILLION TO 80 MILLION BY THE YEAR
2019.
WEEK 4: Strategy Analysis and Choice

Nature of Strategy Analysis and Choice

 Seek to determine alternative courses of action that could best enable the firm to achieve its mission and
objectives.
 Generating alternative strategies.
 Selecting strategies to pursue.
 Best alternative – achieve mission and objectives.
Strategic - Management Model

Top Outline
 Describe a three-stage framework for choosing among alternatives strategies.
 Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Process of Generating and Selecting Strategies
 Identifying and evaluating alternative strategies should involve many of the managers and employees
who earlier assembled the organizational vision and mission statement, performed the external audit,
and conducted the internal audit.
Process of Generating and Selecting Strategies
 A manageable set of the most attractive alternative strategies must be developed.
 The advantages, disadvantages, trade-offs, costs, and benefits of these strategies should be determined.
Process of Generating and Selecting Strategies
 Alternative strategies proposed by participants should be considered and discussed in a series of
meetings.
 Proposed strategies should be listed in writing.
 When all feasible strategies identified by participants are given and understood, the strategies should be
ranked in order of attractiveness.
Stage 1: The Input Stage
 Summarizes the basic input information needed to formulate strategies.
 Consists of the EFE Matrix, the IFE Matrix, and the Competitive Profile Matrix.
 Requires strategies to quantify subjectivity early in the process.
 Good intuitive judgement always needed.

Stage 2: The Matching Stage

 Focuses on generating feasible alternative strategies by aligning key external and internal factors.
 Techniques include the Strengths – Weaknesses – Opportunities – Threats (SWOT) Matrix, the Strategic
Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal –
External (IE) Matrix and the Grand Strategy Matrix.