1

2
RESPONSES TO UNCERTAINTY
Defenders:
Rely on primary technology and/or a narrow
product line to remain competitive.

Prospectors:
Seek first-mover advantage by aggressively making
things happen rather than waiting.

Analysers:
Follow the market leader and imitate what works.

Reactors:
Wait for adversity to occur before taking corrective
action.

3
4
Corporate
Greater risk, cost and profit potential
Greater need for flexibility
Longer time horizons.

Tactical or business level planning:
Translates broad strategic goals into specific goals and
plans for defined portions of the firm.
Focuses on major actions that a unit must take to meet
its part of the strategic plan.
Bridge decisions at corporate and functional level
Are less costly, risky and potentially profitable that
corporate level decisions.
Are more costly, risky and potentially profitable than
functional level decisions

Operational or functional planning:
Identifies specific procedures and processes required at
lower organisational levels.
Plans intended for short periods of time and focus on
routine tasks.
Implementation of overall strategy broken down into
smallest components.
Involve action orientated operational issues
Low risk
Incur modest costs

Strategic, operational & tactical plans must be balanced &
mutually supportive.


UNCERTAINTY
Arises from Complexity and Dynamism.
As uncertainty increases techniques must be
developed to collect, sort and interpret information
about the environment.

COMPLEXITY
The number of issues to which a manager must attend
as well as their inter-connections OR the number of
elements in an organisations environment and their
degree of similairyt. As environments become more
heterogenous managers face more variables.

DYNAMISM
The degree of discontinuous change that occurs within
the industry OR rate of predictability of change in the
elements of an organisations environment. When
change is slow and predictable environments are stable.
As environmental elements become less stable
managerial challenges increase.

5
6
7
Statements are enduring and generally
non-specific documents. Only objectives
tend to be a bit more explicit

A corporate vision requires a company to
ask:
Who are our customers?
What are our major products/services?
Where do we compete
(market/segments)?
What technology do we have?
Are we aiming for survival, profit or
growth?
What do we believe, what are our values?
What image do we wish to portray?
Who are our employees?

S.M.A.R.T

8
STUDENTS TO COMPLETE EXERCISE

TEST YOUR VISION
It should say why you are here not what
you do or who you are.


9
IMPORTANCE OF OBJECTIVES
Targets sets specific goals to achieve
Measuring sticks gauges how much was achieved
Commitment encourages pursuit of the objective
Motivation provides a challenge for achievement

ABC PRIORITY SYSTEM
A Must Do Objective critical to successful
performance
B Should do objective necessary for improved
performance
C Nice to do (could do) objectives desirable for
improved performance but not critical to survival or
improvement

80/20 PARETO PRINCIPLE
A majority of causes, inputs, or efforts tend to produce
a majority of results, outputs or rewards.

MBO
Comprehensive management system based on
measurable participative set objectives that leverage
motivational power of those objectives
10
11
Must also consider industry life cycle as this has an important
impact on the types of strategies open to firms

INTRO or EMERGING
New industry based on break through technology or product
No product standard has been reached
No dominant firm has been established
New customers come from non-consumption not competitors
Sales develop slowly and profits are small or non-existent
Strategy e.g., first mover advantage

GROWTH
Sales grow rapidly as profit and competition increases
Strategy e.g., market penetration, market segmentation and
differentiation, market leadership

MATURITY
Sales growth slows, pressure on profits and focus starts to switch
to cost reduction
Technology and product standards usually set
Strategy e.g., Efficiency or cost reduction strategies come to
fore, relocation of operations, defence of market position

DECLINE
Price competition increases, cost controls and cyclicality of
industry stronger factors
Industry sales have hit a sustained decline firms may have
stopped investing in product development and maintenance
Strategy e.g., cost reduction becomes paramount, exit strategies
start to emerge, focus on reinventing market or industry


12
13
14
Low staff turnover and high retention rates
Mean that the companys staff roster doesnt
change or go through a process of renewal as with
other companys. A lack of new staff means an
absence of new ideas and the possible stagnation
of company thinking. It can also have a major cost
factor. Long-service staff typically have higher
rates of pay and better employment conditions,
pay and conditions that only improve over time. It
may also mean an aging workforce one that as it
approaches retirement age means the company
faces a possible retirement bubble, a period of
time in which a large number of employees leave
all at once. Retiring employees typically attract
large redundancy packages notably in unionised
firms, and for US firms the cost of health insurance
for aging workers is also a problem.


15
16
17
18
19
The managerial process of developing and
maintaining a strategic fit between the
organisation's objectives and resources and its
changing market opportunities.

20
21
22
Business units are
A set of products or product lines With clear independence from
other products or product lines for which a business or marketing
strategy should be designed

Basic rules
Build market share with stars and question marks
Hold market share with cash cows
Harvest (milk) as much short-term cash as possible
Divest a business unit or dog
Balance of all four determines which of the 3 generic options you
should go for

QUESTION MARKS
Require substantial investment to improve their position otherwise
diversiture is recommended

STARS
Require heavy investment but generate needed revenue

CASH COWS
Generate revenues in excess of their investment needs used to
fund other business units and products

DOGS
Remaining revenues are realisesd and then firms should divest
23