MGMT 7001 – CHAPTER 1 – PowerPoint Notes

[Slide no. 1: Title Slide]
This Power Point slide begins the lecture portion of the class. If you haven’t already done so, I suggest you print out the PowerPoint slides from the homepage so that you can take notes. Your exams will come from your notes on my lecture notes.
The lecture is in the form of narrated PowerPoint. It is divided up into modules using one-way voice over Power Point slides so that you can listen to them whenever you want … and you can do so over and over again.
So! Let’s get started.

[Slide no. 2: What is Strategic Planning?]
Strategic planning is a rational process of deliberate analysis, designed to maximize long-term advantage in an unpredictable environment.

[Slide no. 3: Strategic Planning is….] This is one definition of strategic planning. It means that we, as the heads of our organization, are going to sit down and logically determine our future by analyzing our situation…”deliberately.” We know very well what our internal situation is but we can’t know our external situation because it is outside the organization and in the future. It is unpredictable.

It can be prescriptive from the top-down or can emerge from a pragmatic process of learning and compromise.
There are several aspects of management most of which deal with the organizations strengths and weaknesses, their assets and competencies. Like TQM (remember total quality management?), they’re very important, and need to include the opinions of the entire company. But that’s not what this course is about. This course is about you, as president. It is deliberately TOP-DOWN, therefore prescriptive.

There are four Key components to understanding strategic planning: it is long-term, it requires commitment of substantial resources, it is external to the organization, and it is about being different not better.

When I say it’s long term, I mean really long term … not just over 1 year as the accountants’ tell us. But over 10 years, over 20 … a lifetime. The U.S. government has a 2030 plan which projects their thinking over 15 years into the future. The city has a 2020 plan. Most businesses try to establish a position in the market place that will keep … for a long time.

Now, there are some industries, like telecommunications and others using the Internet, that can’t think that far into the future. But, even they plan several years ahead.

The next component to understanding strategic planning is that the organization must be willing to commit substantial resources to their strategic plan and will demand commitment from those who have to implement it. Many times the organization will actually have to shift resources from one department to another in order to seize the opportunities which present themselves. It will also require commitment because the organization will have to change the way they do business many times.

Strategic Plans are external to the organization. It’s not about correcting weaknesses inside the firm. It’s about looking for opportunities outside the firm. This is an important point. Strategic planning is about using a company’s strengths to seize opportunities and avoid threats. You’ll hear me say that over and over again in this course.

The last component to understanding strategic planning is that it’s about being different from your competitors, not better. Now, this should clearly distinguish strategic planning from business planning. Being better means to continue to lower your price, increase the quality of your product, or develop faster delivery methods for satisfying your customers. That’s being “better” than your competitors. Being different is offering low price (like Southwest Airlines) while all their competitors are offering something else … higher quality transportation in this case. Being different is adding a new product line than those offered by your competitors … like when the first super market