Strategic Management

Dr. Hala Hattab November 21-23 Venue

Course Introduction
Welcome About Me About You (why you?) Why Strategy? Overview of Topics and Calendar Expectations Introduction of Concepts

Who are You? Self Introduction

Name Company Undergraduate Studies Work experience, if any What are you interested in? What do you hope to gain from this course?

Why You?
You will be principals in firms You will have to decide what to do:

What markets? What services? Where to dedicate your time? What kinds of people?

You probably will be part of a team.

Why Strategy?
Its about how businesses compete. How to earn above average returns. Selection of industries Selection of segments Choice of tactics How to IMPLEMENT!

Overview of Topics and Calendar

Day 1

Introduction to Strategic Planning and Management Why strategic management is important? Strategic Management: Key Concepts Strategic Planning for SMEs

Day 2

Design a business plan for your organization

Day 3

Design a business plan for your organization

Expectations for the Course: You Will

Struggle with figuring out what to do

Be prepared to participate in planning for your own firms Study real business situation

Introduction of Concepts

Strategic Management: The set of managerial decisions and actions that determines the long-run performance of an organisation.
Strategic Planning: The process of determining a company's long-term goals and then identifying the best approach for achieving those goals

Why is strategic management important?

Gives everyone a role Makes a difference in performance levels Provides systematic approach to uncertainties Coordinates and focuses employees

Basics of Strategic Management

Four aspects that set strategic management apart

Interdisciplinary
Capstone of the Business degree

External focus
Competition

Internal focus Future direction

10

Strategic Management Process

11

Strategic Management Process

Step 1: Identifying the organisations current mission, objectives, and strategies Mission: the firms reason for being
Who we are, What we do, and Where we are now

Goals: the foundation for further planning

Measurable performance targets

Step 2: Conducting an external analysis The environmental scanning of specific and general environments Focuses on identifying opportunities and threats

12

Strategic Management Process (contd)

Step 3: Conducting an internal analysis

Assessing organisational resources, capabilities, activities and culture:

Strengths (core competencies) create value for the customer and strengthen the competitive position of the firm. Weaknesses (things done poorly or not at all) can place the firm at a competitive disadvantage.

Steps 2 and 3 combined are called a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats)
13

Strategic Management Process (contd)

Step 4: Formulating strategies

Develop and evaluate strategic alternatives Select appropriate strategies for all levels in the organisation that provide relative advantage over competitors Match organisational strengths to environmental opportunities Correct weaknesses and guard against threats

14

Strategic Management Process (contd)

Step 5: Implementing strategies

Implementation: effectively fitting organisational structure and activities to the environment Effective strategy implementation requires an organisational structure matched to its requirements.

Step 6: Evaluating results

How effective have strategies been? What adjustments, if any, are necessary?

15

Levels of strategy

16

End of part One

17

Part Two: Business Plan

18

What is a BP ?
(1)

(2)

(3) (4)

A written document that outlines an organization's overall direction, philosophy, and purpose examines its current status in terms of its strengths, weakness, opportunities, and threats sets long-term objectives, and formulates short-term tactics to reach them.

19

The Strategic Mind behind BP

Focus the strategic parts of your plan related to:

Time and Energy to attain goals (predefine what is to be achieved) Resource allocation (Count chickens before they hatch dont take in too much. Promise what can be delivered) Your Business and Competition (Analyze your strengths and weakness) Employee communication (nice trick, dont take the blame over you)

20

Extended Tricks
Divide the work. Take The Correspondence. Editable BP make BP in revisions as you go in depth, make it finalized when you are sure about zero loopholes Make another BP as a Plan 2, so that anytime you can seek in more resource (handy but a tough trick)

21

How to Draft a Simple BP

Work on These lines:

Vision of organisation Goal of future Clients, Users, Target market Edge of you / your team / company Barriers to achieve the target Better serve clients..how ?? Ad more to target..possible ?? Adding new customers / users / target market share Accountings Starting of the plan dates

22

In theory, there is no difference between theory and practice. But, in practice, there is."
- Jan L.A. van de Snepscheut

23

Simply Stated...
Make your points clearly and crisply.

Style counts
Use

bulleted or enumerated points whenever possible. Leave a wide margin. Try to utilize meaningful graphs and diagrams throughout the entire plan
25

Basic Structure
Executive Summary The Market The Product The Team The Strategy The Forecasts Appendices

Market Analysis

It should be as useful for you as it is for the investor.

Situation Analysis Market Opportunity Competitive Factors Technical Feasibility Risk/Reward Assessment

The Product
Know when less is more Readability geared for layman Deep technical points can be reserved for an appendix

Market Driven Engineering

The Forecasts
Lets be realistic! 4 year model Monthly detail only in years #1 and #2 Drive data from unit model Use ordinal numbers for months Understand your DCF

Executive Summary
This may be the only document that gets read; distill the most important points Write it after the rest of the document, but put it 1st Use same terminology, wording, and images Provide your sense of valuation and likely deal structure

Appendices

Stuff you wanted to put in the plan

Technical white-paper(s) More detailed financial analysis, DCF, etc. Additional competitive data Additional market data/published reports Articles about the company, product, market, team, etc

Concluding Remarks

Impress the reader with the thoroughness of your understanding of the market. Make it understandable.

Value white-space.
Develop realistic, flexible financial forecasts