2- 2
  Strategic Planning Process                                      2- 2
   Strategic Planning Process
    • Strategic  Planning  involves  developing  an 
      Strategic  Planning 
      overall     company  strategy  for  long-run 
      survival and growth.
    • This process involves:
       –Defining a Mission: Statement of an organization’s 
        purpose; should be market oriented.
       –Setting Company Objectives: Supporting goals and 
        objectives to guide the entire company.
       –Designing a Business Portfolio: Collection of businesses 
        and products that make up the company.
       –Planning Functional Strategies: Detailed planning for each 
        department designed to accomplish strategic objectives.
                         
                                                               2-3
                                                             2- 3
                                                               2-3
    Mission Statements                                        2- 3
     Mission Statements
                              Market
                               Market
                             Oriented
                             Oriented
                                                 Realistic
       Motivating                                Realistic
        Motivating
                         Characteristics
                         Characteristics
                        of Good Mission
                        of Good Mission
                           Statements
       Distinctive          Statements
       Distinctive                               Specific
    Competencies                                 Specific
     Competencies
                            Fit Market 
                            Fit Market 
                          Environment
                           Environment
                       
                         Copyright 1998 Prentice Hall
                                                                 2- 4
  Designing the Business Portfolio                                2- 4
   Designing the Business Portfolio
    • The  best  portfolio  is  the  one  that  best  fits  the 
      company’s  strengths  and  weaknesses  to  the 
      opportunities in the environment.
    • The company must:
       – analyze  its  current  business  portfolio  or  Strategic 
         Business Units (SBU’s)
       – decide which SBU’s should receive more, less, or no 
         investment
       – develop growth strategies for adding new products or 
         businesses to the portfolio
                         
                                                                                 2- 5
  Analyzing Current SBU’s:                                                        2- 5
   Analyzing Current SBU’s:
  Boston Consulting Group Approach
   Boston Consulting Group Approach
                         Relative Market Share
                       High                           Low
       e            Stars                     Question Marks
       t  h                                    Question Marks
       a  g
       R  i
             •                          •
          H   High growth & share         High growth, low share  
                                         •
                                           High growth, low share  
             •                          •
       h      Profit potential            Build into Stars/ phase out 
                                         •
       t                                   Build into Stars/ phase out 
             •                          •
              May need heavy              Requires cash to hold 
                                         •
       w                                   Requires cash to hold 
                                         
                investment to grow          market share
                                          
       o                                     market share
       r   
           
           
       G          Cash Cows                     Dogs
                   Cash Cows                     Dogs
       t   
           
           
       e   
                                        •
       k    •                             Low growth & share 
          w   Low growth, high share     •
             •                             Low growth & share 
       r  o    Low growth, high share •
            •                             Low profit potential
              Established, successful    •
       a     •                             Low profit potential
          L    Established, successful
             
               SBU’s
       M      
                SBU’s
            •
             Produces cash
             •
              Produces cash
                               
                                                                         2- 6
   Analyzing Current SBU’s:                                               2- 6
   Analyzing Current SBU’s:
   GE Strategic Business-Planning 
   GE Strategic Business-Planning 
   Grid
   Grid
       s                           Business Strength
       s                 Strong           Average             Weak
       e
       n                                                       C
       e
       v    High
       i
       t
       c                  A
       a
       r
       t
       t
       A   Medium
                                                              D
       y                       B
       r
       t
       s
       u
       d     Low
       n
       I
                            