Description
This is a ppt explaining Strategic planning .
STRATEGIC PLANNING “A”
?Objectives and Nature of Planning Process ?Overview of Planning Process ?Mission Statement & Marketing Objective statement ?SWOT – External and Internal Analysis ?Sources of Competitive advantage ?Ansoff?s Matrix – Identifying strategic objectives
“When we went into red, our pride was hurt. We turned around because our people cared for the company”
-- V. K. Verma Tata Motors, October 2003
Strategic Planning
• A book • Annually • Done by expert
• A Way of life • Daily • Done by all
Who in the organization is best positioned to dream our future? Dreaming is a job competency.
• Intel Inside
STRATEGY A fundamental pattern of present and planned objectives, resource deployment and interaction of an organization, markets, competitors and other environmental factors.
• • Manufacturing strategy Marketing strategy
•
HR Strategy …..
STRATEGIC MARKETING PLAN Lays out the target markets and the value proposition the firm will offer, based on analysis of the best marketing opportunities. Example: Kingfisher Airlines
• low cost / high customer attention
STEPS OF STRATEGIC PLANNING PROCESS
• STEP 1: INFORMATION GATHERING AND ANALYSIS 1a -EXTERNAL 1b - INTERNAL 1c – MARKET ASSESSMENT IDENTIFICATION OF CRITICAL ISSUES FACING THE ORGANIZATION DEVELOPMENT OF A STRATEGIC VISION STATEMENT THAT SETS FUTURE DIRECTION FOR THE AGENCY MISSION STATEMENT REVIEW/REVISION DEVELOPMENT OF STRATEGIC GOALS FORMULATION OF STRATEGIES FOR EACH GOAL PREPARATION FOR OPERATIONAL PLANNING BASED ON THE STRATEGIC PLAN (DEVELOPING ANNUAL OBJECTIVES)
• • • • • •
STEP 2: STEP 3: STEP 4: STEP 5: STEP 6: STEP 7:
MISSION STATEMENT
“ To become a world class teaching and training organization, shaping career though innovative products and services and the use of human Education PT technology”
MISSION STATEMENT : PURPOSE
• Signifies the existence of the organization • Share with employees and customers to signify sense of purpose, direction and opportunity • Provide best reflection of vision (an impossible dream) that provides the direction for the company
– Walkman – Nano
DEFINING MISSION
• A company can define their mission statement by addressing the classical Peter Drucker?s questions :
– – – – – What is our business ? Who is the customer ? What is of value to the customer ? What will be our business be ? What should our business be?
CONTENTS OF A GOOD MISSION STATEMENT
1. Focus on limited number of goals 2. Stress the company?s major policies and values 3. Define the major competitive sphere within which the companies will operate 4. Takes a long term view Signifies the existence of the organization 5. Short, memorable and meaningful as possible
MISSION : Definition
• The mission statement of a company sets apart one company from the other companies in the same area of business. • The mission identifies the scope of the company?s operations, describes the company?s product, market and technological areas of thrust and reflects the values and practices of strategic decisions
MISSION STATEMENT : DEFINITION
product
“ To become a world class teaching and training organization, shaping Scope career though innovative products and services and the use of human Technological areas of thrust technology”
VISION
• The company?s vision is a description of what the organization is trying to do and become. It gives the view of an organization?s future direction and course of business activity. • Vision is a powerful motivator and keeps an organization moving forward in the intended direction. • Vision is communicated through the mission statement
VISION – AN EXAMPLE
Vision Statement • Enrich the quality of life by meeting essential needs of people through chemistry and agriculture Whereas a Mission statement We shall be the most respected Company in the businesses and geographies we operate in. Our growth and success will be achieved by: • Attaining globally competitive cost levels. • Enhancing the value we deliver to customers. • Improving shareholder value. • Commitment to corporate sustainability. • Strengthening stakeholder relationships. Employees are our strength, and we will create an environment that fosters achievement, innovation and teamwork.
COMPANY PROFILE
• Depicts the quantity and quality of company?s financial, human and physical resources, strengths and weakness of companies management and organizational structure. • Analyses company?s past success and traditional concerns in the context of the company?s current capabilities in an attempt to justify its future capabilities.
COMPANY PROFILE
Established in 1939, Tata Chemicals Limited (TCL) is part of the Rs 52,100 crore Tata Group and operates India?s largest and most integrated inorganic chemicals complex at Mithapur, Gujarat and the country?s most energy efficient fertilizer complex at Babrala, U.P. The corporate office is based in Mumbai, while the regional offices are located in Ahmedabad, Mumbai, Chennai, Kolkata, Noida, Delhi, Lucknow, Chandigarh, Agra, Barielly, Patna & Siliguri. The Company has a turnover of Rs 1700 crore with exports of Rs. 90 crore through its product portfolio covering soda ash, iodized branded salt and urea . As a part of its growth plans, TCL acquired and merged M/s. Hind Lever Chemicals Limited, a company with manufacturing base in Haldia. This merger brought synergies in terms of markets and customers while strengthening the product portfolio of fertilisers like PARAS brand DAP, NPK etc and chemicals like STPP. The company has gained competitive edge in the market place with improved basket of offerings to both its agri-input customers and detergent customers.
Post approval from the Mumbai and Haryana High Courts in June 2004, the company has initiated the integration process. Urea 39% Soda Ash 34% Branded Salt 14% Others 13% The company has now clearly entered the 3rd phase of its development under the 3-step evaluation process adopted by it several years ago, viz. „Defend?, „Consolidate? and „Grow?. It has set itself a target of becoming $2 Bn. Company by year 2010. There are several growth platforms, which will bring about this result and two are in evidence this year. 1. Global expansion of business. 2. Innovation e.g. Licensing of new Technologies and initiation of work on our own innovation centre.
SWOT ANALYSIS
STRENGTHS :
Attributes of the organization that are helpful to achieve the objective
• • • • • • • • • • • • • Capabilities of delivering optimum output. Competitive advantages/good brand name. Unique selling points. Easy availability of resources and assets. Intelligent & efficient manpower. Experience, knowledge and data in relevant field. Financial reserves. Good distribution system. Awareness among people. Innovative aspects. Location and geographical advantages. Good price and quality. Advanced processes, IT and communication systems.
WEAKNESS
Attributes of the organization that are harmful to achieve the objective • • • • • • • • • • • Gaps in capabilities. Lack of access to good resources. Lack of competitive strength. Damaged reputation in market. Financial problems. Time limits, dead lines and pressures. Improper management of cash flow. Disrupted supply chain system. Lack of coordination between different parts of the organization. Not standing by commitments. Conflicted management policies.
OPPORTUNITIES
External conditions that are helpful to achieve the objective. • • • • • • • • • • • • Development in market trends. Competitors vulnerabilities. Loosening of international trade barriers. Technology development and innovations. Global influences. New markets. New USPs Business and product development. Partnerships and agencies. Suitable season and weather. Better economy conditions in country. Reliable information's.
THREATS:
External conditions which could do damage to the business's performance. • • • • • • • • • Negative political/legislative effects. Bad environmental effects. Competitors intentions. Unable to equip with new technologies, ideas. Vital contracts and partners. Shift in customer's taste away from firm?s product Substitute product. Tough rules and regulations by Govt. Bad Economy – home/abroad.
COMPETATIVE ADVANTAGES
Competitive Advantage is defined by Grant as follows: When two or more firms compete within the same market, one firm possesses a competitive advantage over its rivals when it earns (or has the potential to earn) a persistently higher rate of profit.
SOURCES OF COMPETATIVE ADVANTAGE
• •
A Superior Market Position A Superior Knowledge and relationship base • A Superior Resource Base
SUSTAINING COMPETATIVE ADVANTAGE
Three possible way of sustaining advantage are: • Advantages residing in the organisation • Advantages stemming from specific functional area • Advantages based on relationships with external entities.
STRATEGIC ALTERNATIVES
ANSOFF’s MATRIX
What is an Ansoff?s matrix ? What is its significance ?
ANSOFF’s MATRIX
• A firm?s competitive situation and its marketing decisions are concerned with two major elements: a) Products b) Markets
• Ansoff put forward his product/market matrix based on the fundamental marketing objectives that should be given explicit consideration
ANSOFF’s GROWTH VECTOR MATRIX
1 Market Penetration 3 Market extension
2 Product development 4 Diversification
ANSOFF’s GROWTH VECTOR MATRIX
1,2,3 and 4 in the figure stand for: 1? Selling existing products to existing markets; 2? Extending existing products to new markets; 3? Developing new products for existing markets; 4? Developing new products for new markets. ? Provides convenient and easily understood framework within which marketing objectives and strategies can be developed. ? It follows that setting objectives and strategies in relation to products and markets is a fundamental element in marketing planning process.
ANSOFF’s GROWTH VECTOR MATRIX
• Nature and direction of the decisions in the Ansoff?s matrix is influenced by two characteristics: 1)Product life cycle 2)Current shape of company?s product portfolio This leads to a series of choices for each product/market condition, choices which can be expressed in terms of 5 types of strategy namely :
ANSOFF’s GROWTH VECTOR MATRIX
i. ii. iii. Maintenance of current competitive position. Improvement of current competitive position. Harvesting which involves reducing or relinquishing the current competitive position in order to capitalize upon short-term profit and improve cash flow. Exiting. This typically occurs when the company is suffering from a weak competitive position or recognizes that the cost of staying in the market and/or improving upon the position is too high. Entry to a new sector.
iv.
v.
Caution !!!
• Recognize the danger of adhering to any particular set of rules relating to the five categories.
The most commonly used and useful frameworks for identifying the above is the concept of limiting factor and the techniques of gap analysis which are designed to highlight any gaps that exist between long-term forecasts of performance and the sales or financial objectives that have been set.
•
THANK YOU
doc_998709801.ppt
This is a ppt explaining Strategic planning .
STRATEGIC PLANNING “A”
?Objectives and Nature of Planning Process ?Overview of Planning Process ?Mission Statement & Marketing Objective statement ?SWOT – External and Internal Analysis ?Sources of Competitive advantage ?Ansoff?s Matrix – Identifying strategic objectives
“When we went into red, our pride was hurt. We turned around because our people cared for the company”
-- V. K. Verma Tata Motors, October 2003
Strategic Planning
• A book • Annually • Done by expert
• A Way of life • Daily • Done by all
Who in the organization is best positioned to dream our future? Dreaming is a job competency.
• Intel Inside
STRATEGY A fundamental pattern of present and planned objectives, resource deployment and interaction of an organization, markets, competitors and other environmental factors.
• • Manufacturing strategy Marketing strategy
•
HR Strategy …..
STRATEGIC MARKETING PLAN Lays out the target markets and the value proposition the firm will offer, based on analysis of the best marketing opportunities. Example: Kingfisher Airlines
• low cost / high customer attention
STEPS OF STRATEGIC PLANNING PROCESS
• STEP 1: INFORMATION GATHERING AND ANALYSIS 1a -EXTERNAL 1b - INTERNAL 1c – MARKET ASSESSMENT IDENTIFICATION OF CRITICAL ISSUES FACING THE ORGANIZATION DEVELOPMENT OF A STRATEGIC VISION STATEMENT THAT SETS FUTURE DIRECTION FOR THE AGENCY MISSION STATEMENT REVIEW/REVISION DEVELOPMENT OF STRATEGIC GOALS FORMULATION OF STRATEGIES FOR EACH GOAL PREPARATION FOR OPERATIONAL PLANNING BASED ON THE STRATEGIC PLAN (DEVELOPING ANNUAL OBJECTIVES)
• • • • • •
STEP 2: STEP 3: STEP 4: STEP 5: STEP 6: STEP 7:
MISSION STATEMENT
“ To become a world class teaching and training organization, shaping career though innovative products and services and the use of human Education PT technology”
MISSION STATEMENT : PURPOSE
• Signifies the existence of the organization • Share with employees and customers to signify sense of purpose, direction and opportunity • Provide best reflection of vision (an impossible dream) that provides the direction for the company
– Walkman – Nano
DEFINING MISSION
• A company can define their mission statement by addressing the classical Peter Drucker?s questions :
– – – – – What is our business ? Who is the customer ? What is of value to the customer ? What will be our business be ? What should our business be?
CONTENTS OF A GOOD MISSION STATEMENT
1. Focus on limited number of goals 2. Stress the company?s major policies and values 3. Define the major competitive sphere within which the companies will operate 4. Takes a long term view Signifies the existence of the organization 5. Short, memorable and meaningful as possible
MISSION : Definition
• The mission statement of a company sets apart one company from the other companies in the same area of business. • The mission identifies the scope of the company?s operations, describes the company?s product, market and technological areas of thrust and reflects the values and practices of strategic decisions
MISSION STATEMENT : DEFINITION
product
“ To become a world class teaching and training organization, shaping Scope career though innovative products and services and the use of human Technological areas of thrust technology”
VISION
• The company?s vision is a description of what the organization is trying to do and become. It gives the view of an organization?s future direction and course of business activity. • Vision is a powerful motivator and keeps an organization moving forward in the intended direction. • Vision is communicated through the mission statement
VISION – AN EXAMPLE
Vision Statement • Enrich the quality of life by meeting essential needs of people through chemistry and agriculture Whereas a Mission statement We shall be the most respected Company in the businesses and geographies we operate in. Our growth and success will be achieved by: • Attaining globally competitive cost levels. • Enhancing the value we deliver to customers. • Improving shareholder value. • Commitment to corporate sustainability. • Strengthening stakeholder relationships. Employees are our strength, and we will create an environment that fosters achievement, innovation and teamwork.
COMPANY PROFILE
• Depicts the quantity and quality of company?s financial, human and physical resources, strengths and weakness of companies management and organizational structure. • Analyses company?s past success and traditional concerns in the context of the company?s current capabilities in an attempt to justify its future capabilities.
COMPANY PROFILE
Established in 1939, Tata Chemicals Limited (TCL) is part of the Rs 52,100 crore Tata Group and operates India?s largest and most integrated inorganic chemicals complex at Mithapur, Gujarat and the country?s most energy efficient fertilizer complex at Babrala, U.P. The corporate office is based in Mumbai, while the regional offices are located in Ahmedabad, Mumbai, Chennai, Kolkata, Noida, Delhi, Lucknow, Chandigarh, Agra, Barielly, Patna & Siliguri. The Company has a turnover of Rs 1700 crore with exports of Rs. 90 crore through its product portfolio covering soda ash, iodized branded salt and urea . As a part of its growth plans, TCL acquired and merged M/s. Hind Lever Chemicals Limited, a company with manufacturing base in Haldia. This merger brought synergies in terms of markets and customers while strengthening the product portfolio of fertilisers like PARAS brand DAP, NPK etc and chemicals like STPP. The company has gained competitive edge in the market place with improved basket of offerings to both its agri-input customers and detergent customers.
Post approval from the Mumbai and Haryana High Courts in June 2004, the company has initiated the integration process. Urea 39% Soda Ash 34% Branded Salt 14% Others 13% The company has now clearly entered the 3rd phase of its development under the 3-step evaluation process adopted by it several years ago, viz. „Defend?, „Consolidate? and „Grow?. It has set itself a target of becoming $2 Bn. Company by year 2010. There are several growth platforms, which will bring about this result and two are in evidence this year. 1. Global expansion of business. 2. Innovation e.g. Licensing of new Technologies and initiation of work on our own innovation centre.
SWOT ANALYSIS
STRENGTHS :
Attributes of the organization that are helpful to achieve the objective
• • • • • • • • • • • • • Capabilities of delivering optimum output. Competitive advantages/good brand name. Unique selling points. Easy availability of resources and assets. Intelligent & efficient manpower. Experience, knowledge and data in relevant field. Financial reserves. Good distribution system. Awareness among people. Innovative aspects. Location and geographical advantages. Good price and quality. Advanced processes, IT and communication systems.
WEAKNESS
Attributes of the organization that are harmful to achieve the objective • • • • • • • • • • • Gaps in capabilities. Lack of access to good resources. Lack of competitive strength. Damaged reputation in market. Financial problems. Time limits, dead lines and pressures. Improper management of cash flow. Disrupted supply chain system. Lack of coordination between different parts of the organization. Not standing by commitments. Conflicted management policies.
OPPORTUNITIES
External conditions that are helpful to achieve the objective. • • • • • • • • • • • • Development in market trends. Competitors vulnerabilities. Loosening of international trade barriers. Technology development and innovations. Global influences. New markets. New USPs Business and product development. Partnerships and agencies. Suitable season and weather. Better economy conditions in country. Reliable information's.
THREATS:
External conditions which could do damage to the business's performance. • • • • • • • • • Negative political/legislative effects. Bad environmental effects. Competitors intentions. Unable to equip with new technologies, ideas. Vital contracts and partners. Shift in customer's taste away from firm?s product Substitute product. Tough rules and regulations by Govt. Bad Economy – home/abroad.
COMPETATIVE ADVANTAGES
Competitive Advantage is defined by Grant as follows: When two or more firms compete within the same market, one firm possesses a competitive advantage over its rivals when it earns (or has the potential to earn) a persistently higher rate of profit.
SOURCES OF COMPETATIVE ADVANTAGE
• •
A Superior Market Position A Superior Knowledge and relationship base • A Superior Resource Base
SUSTAINING COMPETATIVE ADVANTAGE
Three possible way of sustaining advantage are: • Advantages residing in the organisation • Advantages stemming from specific functional area • Advantages based on relationships with external entities.
STRATEGIC ALTERNATIVES
ANSOFF’s MATRIX
What is an Ansoff?s matrix ? What is its significance ?
ANSOFF’s MATRIX
• A firm?s competitive situation and its marketing decisions are concerned with two major elements: a) Products b) Markets
• Ansoff put forward his product/market matrix based on the fundamental marketing objectives that should be given explicit consideration
ANSOFF’s GROWTH VECTOR MATRIX
1 Market Penetration 3 Market extension
2 Product development 4 Diversification
ANSOFF’s GROWTH VECTOR MATRIX
1,2,3 and 4 in the figure stand for: 1? Selling existing products to existing markets; 2? Extending existing products to new markets; 3? Developing new products for existing markets; 4? Developing new products for new markets. ? Provides convenient and easily understood framework within which marketing objectives and strategies can be developed. ? It follows that setting objectives and strategies in relation to products and markets is a fundamental element in marketing planning process.
ANSOFF’s GROWTH VECTOR MATRIX
• Nature and direction of the decisions in the Ansoff?s matrix is influenced by two characteristics: 1)Product life cycle 2)Current shape of company?s product portfolio This leads to a series of choices for each product/market condition, choices which can be expressed in terms of 5 types of strategy namely :
ANSOFF’s GROWTH VECTOR MATRIX
i. ii. iii. Maintenance of current competitive position. Improvement of current competitive position. Harvesting which involves reducing or relinquishing the current competitive position in order to capitalize upon short-term profit and improve cash flow. Exiting. This typically occurs when the company is suffering from a weak competitive position or recognizes that the cost of staying in the market and/or improving upon the position is too high. Entry to a new sector.
iv.
v.
Caution !!!
• Recognize the danger of adhering to any particular set of rules relating to the five categories.
The most commonly used and useful frameworks for identifying the above is the concept of limiting factor and the techniques of gap analysis which are designed to highlight any gaps that exist between long-term forecasts of performance and the sales or financial objectives that have been set.
•
THANK YOU
doc_998709801.ppt