STRATEGIC PLANNING PROCESS: THE INTERNAL ENVIRONMENTAL ANALYSIS

اَلسَّلاَمُ عَلَيْكُمْ وَرَحْمَةُ اللهِ وَبَرَكَا تُهُ

WHAT HAVE I LEARNED TODAY

                                   

INTERNAL ANALYSIS

              ➥ Analysis of information obtained from within the company.

              ➥ Identifies and evaluates the strength and weaknesses of the company.

             ➥ Major functional areas :

                  {a}. Management

                  {b}. Marketing

                  {c}. Finance

                  {D}. Operation/Production

MANAGEMENT

       

         There are FIVE basic functions of management, as follows:

        

           1} Planning

           2} Organizing

           3} Motivating

           4} Staffing

           5} Controlling

MARKETING

    ⏩  Refers to the exchange of products or services from the producer to the user.

    ⏩Marketing 4ps :

             

         ➨ Product

         ➨ Price

         ➨Place

         ➨Promotion 

   ⏩Product cycle

OPERATION/PRODUCTION

    - The process of transforming input/resources (e.g. steel.oil) into products/outputs that are of higher value to the user.

    - Break-even point analysis

FINANCIAL

SWOT ANALYSIS

TOWS MATRIX

STRATEGIC PLANNING PROCESS: THE EXTERNAL ENVIRONMENT ANALYSIS

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WHAT HAVE I LEARNED TODAY

THE EXTERNAL ENVIRONMENT

↣ The firm operates can sometimes provide business with conditions that can either help the organization improve its performance.

↣ Example: increase in fuel prices around the world resulted in changes in the strategies employed by firms in various industries.

↣ There is two type of EXTERNAL ENVIRONMENT:

• The general environments
• The industry environments

THE GENERAL ENVIRONMENT   

       💬 Known as the MACROENVIRONMENT, include all the environmental factors that have an impact on all organization and firms within the economy.

      💬 Represents factors that will influence directly or indirectly all firms regardless of industry :

                 💁 P - POLITICAL FACTORS

                 💁 E - ECONOMIC FACTORS

                 💁 S - SOCIO-CULTURAL FACTORS

                 💁 T - TECHNOLOGICAl FACTORS

                 💁 E - ENVIRONMENTAL FACTORS

                 💁 L - LEGAL FACTORS

EXAMPLE FOR THE PESTEL FACTORS

            1. POLITICAL FACTORS

                   ■  Employment laws

                   ■  Tax policies

                   ■ Consumer Protection

             2. ECONOMIC FACTORS

                   ◆ Taxation Levels

                   ◆ Inflation rates

                   ◆  Production levels

            3. SOCIO-CULTURAL FACTORS

                   🔴 Lifestyle change

                   🔴 Education levels of population

                   🔴 Fashion

             

            4. TECHNOLOGICAl FACTORS

                  🔲 Genetics

                  🔲 Research

                  🔲 Communications

            5. ENVIRONMENTAL FACTORS

                  ► Glowing warming

                  ► Pollution of air

                  

             6. LEGAL FACTORS

                 ⬜ Minimum wages

                 ⬜ Price control act

FACTORS IN THE INDUSTRY ENVIRONMENT

                 🔵 The industry environment or the microenvironment refers to the factors that directly affect the firm and its competitive responses

                 🔵  Have the ability to affect the firm's profitability and shape the competition in an industry.

                 🔵  The FIVE FORCES MODEL BY MICHAEL PORTER comprises  of : 

                          - Threats posed by new entrants

                          - Bargaining power of suppliers and buyers

                          - Substitute products 

                          - Intensity of rivalry among competitors

            

ELEMENT OF STRATEGIC MANAGMENT

اَلسَّلاَ مُ عَلَيْكُمْ وَرَحْمَةُ اللهِ وَبَرَكَا تُهُ

WHAT HAVE I LEARNED TODAY

COMPETITIVE ADVANTAGE

⇨ Defined as anything that a firm does exceptionally well compare to its rivals.

      ✌✌  A company's competitive advantage may be its superior customer service, innovative products, strong distribution channels or low pricing- something unique that a firm offers and which sets them apart.

RESOURCE- BASED VIEW

👐 A firm's resource{such as skills, financial resources, human resources and physical resources} are most important in getting and sustaining a company's competitive advantage.

INDUSTRIAL/ORGANIZATION VIEW

👐  The industry in which the firm chooses to compete has a stronger influence on the firm's performance than the firm's internal resources such as management, marketing, and finance.

RESOURCES AND CAPABILITIES

Refer to inputs (such as equipment,human resources, processes,patents or finances) into a firm's production process.

There are divided into THREE CATEGORIES :
      👍TANGIBLE {asset that can be seen and quantified } = example production equipment and raw materials
     👍INTANGIBLE RESOURCES{ We cannot see or touch}= example patents, knowledge, and copyright.
      👍HUMAN RESOURCES{Skills, knowledge, abilities, intelligence, experiences and competencies}

While capabilities are referred to the firm's capacity to transform its resources into outputs valued by the firm's customer and which can generate profits for the firm.


THE RELATIONSHIP BETWEEN RESOURCES, ORGANIZATIONAL CAPABILITIES, COMPETITIVE ADVANTAGE AN STRATEGY
   

👏 A resource would be considered unique :

     

          💦Valuable

          💦Rare

          💦hard to Imitate and substitute

          💦Organized to exploit

{V-R-I-O}

VISION 

       🙀🙀Statement about what your organization wants to become.

       🙀🙀  Powerful motivator

       🙀🙀 must be aligned with the core values of both the individuals and the firm.

Example : 

MISSION

      😍 Is the purpose or reason for the organization's existence.

😽COMPONENTS OF MISSION STATEMENT

         ➤ Customers

         ➤products or services

         ➤Markets

         ➤Technology

         ➤Concern for survival, growth, and profitability

         ➤Philosophy

         ➤Self-concept

         ➤Concern for public image

         ➤Concern for employees

         

OBJECTIVES   

- Desired or specific result of a planned activity that should be achieved by a specific time.

- short, medium or long-term

- should be measured

{S-M-A-R-T} ⇉  Specific time, measurable, attainable/achievable, realistic, and time-phased.

LEVEL OF STRATEGIES

  

INTRODUCTION TO STRATEGIC MANAGEMENT

اَلسَّلاَ مُ عَلَيْكُمْ وَرَحْمَةُ اللهِ وَبَرَكَا تُهُ

WHAT HAVE I LEARNED TODAY 

1.0   DEFINITION

STRATEGIC MANAGEMENT

1          → What is strategic management????????

               

                    😼 Drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. 

          

    

            ⇒ Strategic Managment process is made up of THREE MAIN COMPONENTS:

                        😁  Strategy Formulation

                        😉  Strategy Implementation

                        😊 Stategy Evaluation                 

         

         STRATEGY

       

              👉  Refer to the action taken by manger to ensure that an organization is better off that its competitors or is able to fend off competitive actions from competitors.

      

             👉 A business strategy is based on the assumption of competition and the main purpose of the business strategy is to gain competitive advantage.

     

       PLANNING

        

              😸 Is a process of preparing ways to use resources more economically and efficiently, so that the purpose of the company is achieved. 

      

       

     CORPORATE PLANNING

        

             ✋ The terminology "corporate planning" is often used interchangeably with " long-term planning" and " strategic-planning"

       

            ✋Ringbakk (1969) defined it is a process of obtaining objectives and its components followed by a process of finding and evaluating various available alternatives.

      

     CORPORATE STRATEGY

         

              👌 As a gudline setting the scope where the company should be involved in and can be aligned in such a way to ensure that business objectives are met.

  

     THE STRATEGIC MANAGMENT PROCESS

          

          

   

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