Introduction to Strategic Management

HM 01.3.3The content

1.Concept2.Organizing direction 3.Feasibility 4.Strategy 5.Evaluation 6. Change

• From here to there !

• Preparation – forecast

• Operational & Strategic

What is Planning?

Planning categories

• Operational Planning

– Shorter course – 01 year

– Narrow more limited scope

– Finer detail

– Sub set of a Strategic plan

• Strategic planning

– Long term – few years - 05

– Wider scope , many organizational activities

– Broader details

• Alexander - 22 year old young man with an army of 220,000

conquered the massive Persian army consisted of 1,040,000

Strategy

The Battle of Gaugamela

• Took place in 331 BC

• Alexander the Great vs. Darius III of Persia.

• Ancient Macedonians Vs. Persians

• The video 01 ……………….

Lesson learnt from the Battle

• The dream & the pathway • The assessment of the opponent & Him self • Observing the battle environment • The challenge changing the mind set • The evening before the battle

– Direction – Motivation

• The battle – Before – During – After

The Dream & the pathway ……..!

“To be the empire of the whole world “

Direction !

Assessment of the opponent

•Strengths – largest army , many fighters, maximum variety, never lost a battle , large force, lack of experience •Weakness - language, training , flexibility , movement , undermining the opposition , traditional army with old equipments

Size of Persian armyUnits Number

Infantry 1,000,000

Calvary 40,000

Total 1,040,000

Assessment of him self

Strengths –, strong few fighters, minimum variety, never lost a battle , battle hardened, Flexibility, modern army and equipments Weakness - small army

Size of Macedonian Army

Units Numbers

Heavy Infantry 310,000

Palates 9,000 Calvary 7,000

Total 470,000

Assessment of the battle field

Opportunities – “Ideal for a smaller army”Threats - “If cornered nowhere else to go”

The Challenge

“Making uneasiness among the opponents” “Making the king laughing at him”

Evening before the battle

•Direction – one clear message “kill the king” • Motivation – “can do attitude “, •Culture - “with the people “/

- I vs. We attitude

The battle

Phase 1

Phase 1

After

• Strategic plan

– Comprehensive plan to accomplished goals &

objectives of the organization

• Strategic thinking

– Creative, Critical, Crucial , Forward , Out ward,

Collective

• Strategic Management

What is a Strategy?

• Comprehensive management process ,

• performed by considering

– the dynamic external environment ,

– Internal environment

– Industry Competition

• organizing a comprehensive plan

• to achieve organizational goals & objectives

• to be successful in the competition

• Process

Strategy formulation - Implementation - Evaluation - Change

Strategic Management

A. Strategy Formulation

– The Direction - Concepts and Vision , Mission & Values

– Formulation of Objectives and Goals

– Environmental assessment – External , Internal & Competitive

– Development of Strategies

B. Strategy Implementation

– Policy development, Organizational design, Quality & Resource allocation

C. Strategy Evaluation

– External & Internal Audit

D. Strategic change

– Organizational Culture / Behouvior

Process of Strategic Management

Video 02

1. Developing a Vision – Road Map

2. Developing a Mission – The Vehicle

3. Developing Values - The Fuel

4. Developing Objectives & Goals - The Milestones

5. Environmental assessment – the watch

6. Strategy – the most effective & efficient schedule

Formulation of Strategies “The Journey ”

Strategy Formulation 1. The Direction

2. Formulation of Objectives and Goals

3. Environmental assessment – External , Internal & Competitive

4. Development of Strategies

“If you don’t know where you

are going, any road will take

you there.”

The Koran

• A strategic vision concerns a organization’s future

path

• “Where we are going”

Vision

Video 03

• Picture of Destination – more than 05 years

clear, futuristic

• Inspiring

steers energies of employees in a common direction

• Challenging

about excellence, uncomfortable, nail biting

• Expose

management aspirations

Features of Effective Vision

• Empower

own people first & then clients

• Prepare

for future while honoring the past

• Make sense

to the relevant community

• Organizational identity

is distinctive and specific to a particular organization

Feature of Effective Vision

1. Current state - What are the areas of focus

now ?

– Teaching languages

2. Future state - What are the areas of focus in

future?

– Global market

3. Future aspirations

– Future aspirations staff / stake holders - What are the

expectations of our stakeholders?

Developing a Vision : Key Questions

4. Future market - What will our Clients want us to

do in future?

– International trade

5. Future environment

– Who will be our competitors and Partners?

– How will technological impact our industry?

6. Clearly demarcate the area of business - What

should our scope be?

Developing a Vision : Key Questions

03 AREAS TO FOCUS- Vision

• People – Aspirations • Process – Method • Perspective – long term

• Wyeth

“Our vision is to lead the way to a healthier world”

• Nike “ To bring innovation & inspiration to every athlete in the

world”IIHS “To bring innovation to the training of healthcare professional”

Vision examples

“ The Canadian Red Cross is the leading humanitarian

organization through which people voluntarily demonstrate

their caring for others in need.”

Canadian Red cross

Activity 01

• Come-up with a business idea from last weeks input from the opportunities in the healthcare industry

• Develop a Vision for future your organization• Look at effective features –” the spices”

Mission

Developing Mission

• The vehicle that drives the organization to the

destination…. …

• “How to get there ?”

• Why you exist in this world ? ?….....what was

said in vision !

• Core purpose !

Video 04

• The mission statement of most organizations focuses on and describes- current organizational activities - all present tense –

• DESCRIBE

“Who we are ?

What we do ?

Why are we here ?”

– Current service offerings

– Organizations needs & how it is being served

– Technological and organizational capabilities

Mission

FOCUS

What is the Key area of focus?

Who are the customer groups served?

METHOD

How customer needs are satisfied?

Technologies/resources/organizational approaches used and activities

performed

DISTINCTION

What is the Current Distinction from others?

Developing Mission

Features of an effective Mission – THE SPICES

• Short • Memorable • Market focus • People • Information • Process

The Canadian Red Cross mission is to improve the lives of

vulnerable people by mobilizing the power of humanity in

Canada and around the world

Canadian Red cross

“ We are a Healthcare training organization born to bring

innovation to healthcare training at a green campus, infusing

the traditional values of Healthcare professionalism, whilst

adhering to international training standards to improve the

quality of lives of healthcare professionals through developing

their personalities, by partnering with international

organizations, to provide a total solution to the global need of

healthcare professional.”

IIHS

Activity 02

• Develop a Mission for future your organization

• The driving force of the mission, the vehicle……….

fuel for the vehicle………

Values

Values

Video 05

– Should be between four and eight values

– Are ideally tightly connected to and reinforce

company’s vision, strategy, and operating practices

Values

Du Pont

Safety Ethics

Environmental stewardship

Respect for people

Organizational Values

• We are a caring organization

• We respect dignity honesty and compassion

• We encourage innovation and positively respond

to change.

• We are committed to excellence & highest

standards of quality

• We value team work

Teaching Hospital, Ragama – Value statements

• Accessibility

• Inclusivity

• Professionalism

• Quality

• Comfort

• Support

IIHS – Values

Triangle of care

• Convenience

• Comfort

• Confidence

IRC

1. Quality

2. Innovation

3. Caring

4. Confidence

Teaching Hospital, Ragama

Objectives and Goals

• Millstones of the journey

• Establishing objectives converts the vision into concrete

measurable performance outcomes!

• Milestones of the journey………..

• 03 to 05 year journey

• Profitability , Market share , Operational efficiency • More qualification no quantification – broad pictrue

– “To achieve ISO standards “– “To win the cricket world cup”

Objectives

V 06

• Represent commitment to achieve specific

performance targets within objectives

• Short term – 1- 3 years

• Spell-out

– what kind : Qualify

– how much : Measurable

– by when : Contain a deadline for achievement

• Long term / short term

Goals

V 07

• Establishing goals shows the direction of the vision• Short term 1 to 02 year

• S- specific

• M- measurable

• A- achievable

• R- realistic

• T – timely

Goals

V 08

Strategy Formulation 1. The Direction

2. Formulation of Objectives and Goals

3. Environmental assessment – External , Internal & Competitive

4. Development of Strategies

1. External environment

2. Internal environment

3. Competitive environment

Source : Word Health Report , World Bank 2002

Environment Assessment

Internal and external SWOT

• V 09

External Environment

PEST ANALYSIS

• Political

• Economical

• Social

• Technological

• Health sector related issues

OPPORTUNTIES - Major favorable situation

THREATS –Major unfavorable situation

• Identify the leading Opportunities & Threats for each PEST-H

about 03 each –

• Give marks scale of 1- 10

• Prioritize the key O & T 02 from each

• Place it on the matrix and select best 10

External Environment Assessment

External Environment Assessment

Opportunities

Threats Selection

Political 1.2.

1.2.

Best O & best T

Economical 1.2.

1.2.

Best O & best T

Social 1.2

1.2.

Best O & best T

Technological 1.2.

1.2.

Best O & best T

Health sector 1.2.

1.2.

Best O & best T

05 Opportunities & 05 Threats

Internal Environment

ORGANIZATIONAL CAPABILITY ANALYSIS

- Skill – Resources- Capabilities

1. Leadership (Management)

2. Personal (HR)

3. Services delivery capacity & structure

4. Information (MIS)

STREGNTHS – Distinctive competence in Skill & Resource & Capabilities

WEAKNESS - Limitation or deficiency in Skill & Resource & Capabilities

Internal Environment

5. Quality

6. Finance

7. Cost

8. Development

STREGNTHS – Distinctive competence in Skill & Resource & Capabilities

WEAKNESS - Limitation or deficiency in Skill & Resource & Capabilities

• Identify the leading Strengths & weakness for each of 08

items - about 03 each

• Give marks scale of 1- 10

• Prioritize the key O & T 02 from each

• Place it on the matrix and select the best

Internal Environment Assessment

Internal Environment Assessment

Strengths Weakness Selection Leadership 1.

2.1.2.

Best S & best W

Personnel 1.2.

1.2.

Best S & best W

Service delivery

1.2

1.2.

Best S & best W

MIS 1. 2. 1. 2. Best S & best W

Quality 1. 2. 1. 2. Best S & best W

Finance

Cost

Development

EEA + IEA = SWOT

• Strengths

– What are we good at?

• Weaknesses

– Where do we need improvement?

• Opportunities

– Where/What is the next big thing?

• Threats

– What can kill us?

SWOT Analysis

V 10

Competitive Analysis

http://www.youtube.com/watch?v=mYF2_FBCvXw

Michael Porter - Five force analysis

1. Revelry among competitors - FORCE & WEAPONS

2. Threat of new entry - ENTRY BARRIES

3. Threat of substitutes – FORCE & PROBABILITY

4. Power of supplies - FORCE

5. Power of consumers - FORCE

Grade it as WEAK , MODERATE & STRONG

Competitive Analysis

Description of the competition

WEAK MODERATE STRONG

Revelry among competitors

Threat of new entry

Threat of substitutes

Power of supplies

Power of consumers

Michael Porters Competitive Analysis

Strategy Formulation 1. The Direction

2. Formulation of Objectives and Goals

3. Environmental assessment – External , Internal & Competitive

4. Development of Strategies

TOWS matrix

• List strengths & weakness

• List Opportunities & Threats

• Use strengths to take advantage of opportunities

• Overcome weakness by taking advantage of opportunities

• Use strengths to avoid threats

• Minimize weakness and avoid threats

Developing Strategies

Always leave blank STRENGTHS - SList Strengths 1.2.

WEAKNESS – W List Weakness

OPPORTUNITIES - OList Opportunities 1.2.

SO STRATEGIES

Use strengths to take advantage of opportunities

WO STRATEGIES

Overcome weakness by taking advantage of opportunities

THREATS - T List Threats 1.2.

ST STRATEGIES

Use strengths to avoid threats

WT STRATEGIES

Minimize weakness and avoid threats

TOWS matrix

Use competitive analysis to improve the

effectiveness of the strategies….

http://www.youtube.com/watch?v=8DllJxaaU

Gc

Final product

CORE & GENERIC

A. CORE STRATEGIES

• Integration - MERGE

• Diversification – NEW MARKETS

• Intensification – DO BETTER WHAT YOU ARE GOOD AT

• Restructuring – NEW EFFECTIVE STRUCUTRE

Types of Strategies

B. GENERIC STRATEGIES

• Cost leadership – LOW COST

• Differentiation - SAME PRODUCT DIFFERENT MARKETS

• Focused – ONE SEGMENT

• Value chain – SAME PRODUCT ADD VALUE

Types of Strategies

B. Strategy Implementation

• Strategies are inculcate in to organizational policies

• “Operationalization of strategies “

• Policy development

– Organizational policies & Unit policies

• Organizational design

• Quality management

• Resource management

– HR

– Material

– Facility

– Equipment

Developing Policies

C. Strategy Evaluation

Strategy Evaluation

• External - Consumer & market studies

• Internal Audit – medical / accounting audits

D. Strategic Change

Strategic change

• Organizational Culture conducive for

strategies

• ORGANIZATIONAL BEHAVIOUR

• Continuous improvement

Strategy assignment

• Develop a strategic plan for your organized

business concept

– Individual presentation

– PowerPoint presentation

– 04 page word document

Thank You !