Strategic Management H Edu 4790/6790. Strategic Planning Where do we want to be? Where are we now?...

Strategic Management

H Edu 4790/6790

Strategic Planning

Where do we want to be? Where are we now? How do we get there? Did we get there?

Type of planning

Mission Organization Departmental

Type of planning

Strategic Operational

Production plans Financial plans Facilities plans Marketing plans Human resource plans

Who plans

Senior managers Mid-level manager Front-line managers

Planning process

Define your objectives Determine where you stand Develop premises regarding the future Analyze alternatives Implement and evaluate

Approaches to planning

Proactive versus reactive Developmental versus incremental

Benefits of planning

Focus and flexibility Reduces uncertainty, ambiguity and risk Improves coordination Improves control Time management

Foundations of good planning

Forecasting Use of scenarios Benchmarking Participation and involvement

Three types…

Strategic planning MBO PRECEDE - PROCEED

Strategic planning

Mission, Vision, Values Objectives

Good objectives Benchmarking

Assessment Primary and secondary research PEST analysis SWOT analysis

PEST Analysis

Political Economic Social Technological

PEST

PoliticalEcological/environmental

Current legislation

Future legislation

Regulatory bodies

Government policies

EconomicHome economy situation

Home economy trends

General taxation issues

Seasonality/weather issues

Market and trade cycles

SocialLifestyle trends

Demographics

Consumer attitudes and opinions

Media views

Law changes

TechnologicalCompeting technology

Research funding

Associated/dependent tech

Replacement tech/solutions

Maturity of technology

SWOT

Strengths Weaknesses

Opportunities Threats

Strategic planning

Grand strategy Growth

Concentration Diversitifcation

Retrenchment Stability

Portfolio analysis

Question Marks Stars Dogs Cash cows

Life Cycle

Introduction Growth Maturity Decline

Management by Objectives (MBO)

Edwin Locke – Goal-Setting Theory Peter Drucker Types of objectives

Improvement objectives Personal development objectives Maintenance objectives

PRECEDE - PROCEED

Characteristics of Entrepreneurship

Internal locus of control High energy Achievement oriented Tolerance for ambiguity Self-confidence Action oriented Desire for independence

Small businesses

Physicians Dentists Physical therapists Consultants

Life Cycles

Birth Growth Breakthrough Maturity Decline

Business plan

Executive Summary Industry analysis Company description Products and services Market description Operations Staffing Financial projection Capital needs

Ownership

Sole proprietorship Partnership Corporation

Financing

Debt financing Equity financing Venture capitalists Angel investor

Control

Management model review Steps of the control process

Establish performance objectives Measure actual performance Compare actual to objectives Take necessary action

Points of control

Feedforward (inputs) Concurrent (processes) Feedback (outputs)

Work inputs

Budgeting Cost allocation Input-to-output ratios Inventory control

Work throughputs - processes

Quality improvement Risk management

Identifying risk Evaluating risk Eliminating risk Transferring risk

Work outputs

Key indicators Control loops

In Control Loop

Change--inputs

--process

ImprovementPossible ?

Do resultsMeet

Expectations?

DevelopNew

standards

ActualResults

StandardsExpectations

Measurement Comparison

No

Yes

Yes

No

Exceed

Positive Control Loop

ImprovementPossible ?

Do resultsMeet

Expectations?

ActualResults

StandardsExpectations

Measurement Comparison

No

Yes

No

Exceed

IsExceedDesirable

?

Determinecause

Reinforce/continue

Acceptance Control Loop

ImprovementPossible ?

Do resultsMeet

Expectations?

ActualResults

StandardsExpectations

Measurement Comparison

No

Yes

No

ContinueDeterminecause

Is deviation acceptable?

Is cause controllable?

No

No

Yes

Required Change Control Loop

ImprovementPossible ?

Do resultsMeet

Expectations?

ActualResults

StandardsExpectations

Measurement Comparison

No

Yes

No

Continue

Determinecause

Is deviation acceptable?

Is cause controllable?

YesChange

No

Considerations

Managerial Design

Financial Control

Liquidity Capital Structure Profitability

Liquidity

Current =Current assets

current liabilities

Collection Period (A/R) =New accounts receivable

average daily operating revenue

Capital Structure

Long-term dept to fixed assets = Long-term debt

Net fixed assets

Long-term Dept to Equity Ratio = Long-term debt

Unrestricted fund balance

Profitability

Mark-up =Gross patient revenue

Operating expenses

Operating margin =Operating income

Operating revenue

Locus of Control