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

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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?

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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.

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Why Strategy?

It’s about how businesses compete. How to earn above average returns. Selection of industries Selection of segments Choice of tactics How to IMPLEMENT!

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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

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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

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Why is strategic management important?

Gives everyone a role Makes a difference in performance

levels Provides systematic approach to

uncertainties Coordinates and focuses employees

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Basics of Strategic Management

Four aspects that set strategic management apartInterdisciplinary

• Capstone of the Business degree

External focus• Competition

Internal focusFuture direction

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Strategic Management Process

Strategic Management Process Step 1: Identifying the organisation’s current mission,

objectives, and strategies Mission: the firm’s 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

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Strategic Management Process (cont’d) 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)

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Strategic Management Process (cont’d) 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

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Strategic Management Process (cont’d) 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?

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Levels of strategy

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End of part One

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Part Two:Business Plan

What is a BP ?

A written document that (1)outlines an organization's overall

direction, philosophy, and purpose(2)examines its current status in terms of its

strengths, weakness, opportunities, and threats

(3)sets long-term objectives, and(4) formulates short-term tactics to reach

them.

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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 don’t take in too much. Promise what can be delivered)

Your Business and Competition (Analyze your strengths and weakness)

Employee communication (nice trick, don’t take the blame over you)

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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)

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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

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In theory, there is no difference between theory and practice. But, in

practice, there is."

- Jan L.A. van de Snepscheut

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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

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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 AnalysisMarket OpportunityCompetitive FactorsTechnical FeasibilityRisk/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

Let’s 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 planTechnical white-paper(s)More detailed financial analysis, DCF,

etc.Additional competitive dataAdditional market data/published

reportsArticles 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