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HBRJuly-August 1980
Strategic Management for Competitive Advantage
By: Frederick W. Gluck, Stephen P. Kaufman, and A. Steven Walleck
Presented By:
SANAULLAH
ZOHAIB AHMED
SOFIA FATIMA
SUNDAS SETHI
INTRODUCTION
The planners all have turned
into strategists
Performances of some large,
complex multicultural
corporations turned to the
strategic management
The question is raises Why the
companies like Apple,
Mitsubishi are so successful
INTRODUCTIONCont…
In the case:
Companies are segmented into four sequential phases:
Explicit formulation of issues and alternatives
Quality of stake holders
Top management to prepare and guide
strategic decision process
Effectiveness of implementations
The four phase model is used to evaluate corporate planning system
and processes and for indicating ways of improving their effectiveness
THE 4-PHASE MODEL
Phase 1 : Basic financial planning
Phase 2 : Forecast based planning
Phase 3 : Externally oriented planning
Phase 4 : Strategic management
THE 4-PHASE MODEL
Phase 1 : Basic financial
planning
Phase 2 : Forecast based
planning
Phase 3 : Externally
oriented planning
Phase 4 : Strategic
management
It is the annual budgeting process
The things are changed to the financial
problem
There is a financial forecasting done at the
annual bases which content the revenues and
costs
THE 4-PHASE MODEL
Phase 1 : Basic financial
planning
Phase 2 : Forecast based
planning
Phase 3 : Externally
oriented planning
Phase 4 : Strategic
management
Internal trend analysis:
Past financial status of the company
External trend analysis: (PESTL elements)
Political
Economical
Social
Technological and
Legal
THE 4-PHASE MODEL
Phase 1 : Basic financial
planning
Phase 2 : Forecast based
planning
Phase 3 : Externally
oriented planning
Phase 4 : Strategic
management
Following factors are put in glance before developing the planning• Developing new business capabilities• Defining markets according to
companies Strengths
PESTL factor oriented The SBU concept:
• Grouping of related business• Strategic planning Packed in pieces• SBU recognizes two distinct strategic
levelso Corporate decisionso Business decisions
THE 4-PHASE MODEL
Phase 1 : Basic financial
planning
Phase 2 : Forecast based
planning
Phase 3 : Externally
oriented planning
Phase 4 : Strategic
management
Strategic management + Planning = a single
process by SM
It include:
1. Planning framework
2. Planning process
3. Corporate values
4-PHASES IN EVALUATION OF FORMAL STRETEGIC PLANNING
Phase 1:Basic financial planning
Phase 2:Forecast-based planning
Phase 3:Externally oriented planning
Phase 4:Strategic management
Effectiveness of formal business planning
Meet budget Predict the future Think strategically Create the futureValue system