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Strategic Planning Process


Question 1: Describe the benefits of Strategic Planning Process? Apply the Phase 1 of the Strategic Planning process to your own organization.

Answer: Strategic planning is defined as a documented organizational management process for analysing the present situation, setting priorities, and focusing resources to achieve competitive advantage (Wolf, & Floyd, 2017).

Some of the important benefits of implementing strategic planning process are described below:

• Makes organization proactive - Organizations that able to predict and prepare for the future through effective strategic planning. They become proactive and can avoid an unfavourable situation in future which would help them to remain ahead of the competition.

Increase market share - With the help of a dedicated strategy planning process, organizations are able to get insights of consumer demand, market trends and the product offerings contributing to its success. This approach who helped to increase the company's profitability as well as market share.

• Increases job satisfaction - Through strategy planning process employees are given the opportunity to provide innovative ideas which give them the meaning of doing work and strengthens their focus, which ultimately increases the job satisfaction level. This it helps to build enthusiasm among the employees of being on the same page (Wolf et al, 2017).

• Consistency - With effective strategy planning, business leaders are able to make the long-term, medium-term and short-term goals consistent. Thus, planning the organisational strategy effectively facilitates benefit in short-term as well as long-term goals.

• Improves communication - It helps managers and employees to show their commitment to achieve organizational goals. In this way, employers and employees communicate with each other. Strategy planning also creates focusses on delivering compensation based on work performance, which makes them innovative and fosters company growth.

There are basically four phases of the strategy planning process, that is, strategy formulation, strategy development, strategy implementation, and strategy evaluation. The phase 1 of strategy planning process,that is, strategy formulation involves the process of assembling and analysing organizational information such as its mission, vision, objective and goal. Additionally, potential threats and opportunities for the company are so identified through SWOT analysis. In this context, the organization selected is Ford motors. The vision statement of Ford motors is to develop a workforce which works together as a lean business to become global leadership in the automotive industry by emphasizing on key stakeholders. Its mission statement describes "one Ford - one team, one plan and one goal" which emphasizes on teamwork to achieve organisational objectives (Bryson, 2018). Swot analysis of Ford motors is described below:

• Strengths - Strong brand image, innovative design and global supply chain are some of the strengths of Ford motors (Bryson, 2018).

• Weaknesses - Weaknesses include a higher cost and limited global production facilities.

• Opportunities - Opportunities are global expansion, product development and cost reduction through effective supply chain management.

• Threats - Some of its major threats include oil price fluctuation, entry of high-tech companies, and competitive rivalry.

Question 2: Explain the concept of strategic management in a Multi Business Organization. Identify the levels of Strategy and how do goals and objectives vary at each level?

Answer: Strategic management is defined as a continuous process of planning, evaluating and assessing of all the requirements of an organisation to reach its goals and objectives (Meyer, Neck, & Meeks, 2017). It is all about recognising and describing those strategies which is appropriate for managers to improve organisational performance and competitive advantage. This process helps the company leaders to make strategic decisions to remain competitive and successful. It also provides a broader perspective to the employees about the organization to understand their job according to the organisational plan. A multi-business organization is a collection of two or more companies before it completely different business under a single corporate group. this kind of business organizations are mostly divisionalized, diversified and strategic management is conducted by divisional managers (Giarratana, & Santalo, 2018). However, the corporate managers have the responsibility to appraise and approve the divisional strategy proposals. In a multi-business organization, strategy planning is set at the corporate level and business level. The different phases included in strategic management in a multi-business organization are:

• Economic review

• Development of business plan

• Discussion with the contact director

• Approval from the management committee

• Corporate plan

• Financial forecast

• Operating and capital budget

• Investment reappraisals

The three levels of strategy comprise of (i) corporate level (ii) business level, (iii) functional level (Meyer et al, 2017).

The corporate level is associated with the selection of the particular business, in which the company can compete along with the improvement and coordination of the existing business portfolio. The primary goals and objectives involved in this level are: competitive contact, business interrelationships, managing activities and management practices.

The business level is defined as the strategic business unit which is to be independently planned from other business units of the parent organization. This level focuses less on strategy issues such as coordination of operating units. Here, the primary goal and objective is to develop and maintain the competitive advantage of their company goods and services.

The functional level is also called as the operating department focuses on the strategy to issues associated with business processes and value chain. Its objective is to provide inputs related to resources and capabilities into the corporate level and business level strategy.

The goals and objectives of different levels of strategy are mostly interchanged at each level, on the basis of organizational future requirements and the means to achieve it (Giarratana et al, 2018).


Question 3: What should be the key traits of a BSC (Balance Score Card)? Develop the balance score card for the organization you used in Question 1. Further explain how BSC helps in corporate governance?

Answer: Balanced scorecard is a specific management tool used for overall organizational evaluation (Hansen, & Schaltegger, 2016). There are four key traits which is measured by a good balance scorecard.

• Financial evaluation - This feature deals with profit generation with the intention of creating shareholder value. It includes measures such as profit margins, return on equity and return on assets.

• Measuring customer perception - This trait allows to understand the organization as being perceived by the customers. This is evaluated through survey or interview to know their opinion.

• Identifying internal business processes - It involves the understanding of the most valuable processes to achieve success. It focuses on measuring the company's efficiency perform these processes such as distribution, marketing and manufacturing (Hansen et al, 2016).

• Learning and growth - it is amazing to understand the capability of a company to develop new knowledge and processes and transform it into organizational growth.

Balanced score-card of Ford Motors is given below in a tabular format.


Strategic objective

Strategic measurements

Financial evaluation

Maintaining financial growth, enhancing sales on the emerging markets, and increasing profitability.

Growth in profit margin, cash flows

Customer perception

Sustaining customers trust, establishing as global automotive leader, incorporating ethical approach towards customers, and improving communication channel (Sanchez-Marquez, Guillem, Vicens-Salort, & Vivas, 2018).

Feedback on purchase of each car, brand recognition and trustworthiness.

Internal business processes

Improving R&D process, introducing innovative products, and focusing on quality improvement.

Customer satisfaction and product revenue.

Learning and growth

Responding to market and customer issues, emphasizing on employee recognition and implementing training programs.

Organizational growth and employee satisfaction

A balanced scorecard (BSC) improves the corporate governance system by making the board of directors, general managers, CEO and executive staff work smarter rather than harder. BSC is an effective tool for the corporate board members to manage their performance effectively in the limited time period. The BSC program enables the corporate members to become informed about the organizational strategy related to a financial outcome, marketing progress, and operations (Sanchez-Marquez et al, 2018). It is also useful to understand the current situation of the company and accordingly design strategies. Further, using this process business leader also analyse the effectiveness of the implemented strategies. Hence, with the use of BSC program corporate leaders are able to gain greater organisational visibility and can strengthen their corporate governance and performance.

Question 4: Discuss the benefits of Global Strategy and the concept of Globalization. What are the key differences in different global business structures?

Answer: Globalization is the process of the interconnection of different economies and culture through the global network, technology, trade media and capital flows (Lawrence, Praks, & Järvenpää, 2017). Global strategy is defined as a strategic guide towards globalization, which covers three areas, that is organisational, global and international strategies (Georgiadis, & Mehl, 2016). These three strategies are specifically incorporated in global strategy for achieving its objective of international expansion. In the international strategy, the objective of the organization is related more specifically to the home market. While, in the multinational strategy, the organisational objective is involved in several markets located beyond the home country. Finally, for the global strategy, the whole world is considered as one single market having one single source of supply.

Benefits of incorporating global strategy in an organisation includes:

• Expansion of customer base -Expansion of an organization on a global scale helps to meet multinational customer's demand for a similar product or service at different locations of the world (Lawrence et al, 2017). For example, McDonald's provides the same kind of burger in different countries with little modifications as per local taste. According to a recent report of 2018, the company serves more than 69 million people per day all over the globe(Lawrence et al, 2017).

• Improved Research and Development - The cost related to R&D and other development of product and service is high for any company. However, with globalisation, more number of countries are linked with the company and the contribution to R&D also increases. Thus, global strategy also opens the exposure to foreign investment opportunities.

• Increase in revenue - With globalization, the company get access to a wide range of customers, where its products and services can be marketed. If customers prefer the brand, then it can take the revenue to a new height (Georgiadis et al, 2016).

The global organizational structure reflects the area of decision making, the procedure of work completion, and the cost of production. The three different structures of global business are: functional, divisional and hybrid. A functional organizational structure is the one in which different jobs are performed in different departments, to maintain a standardised process. These organizations are highly centralised and emphasize on job-related skills. For example, jobs like accounts payable and accounts receivable are carried out in the Accounts department. On the contrary, in the divisional structure, every single division of employees are assigned small groups of tasks. It helps each group of employees to get familiar with the assigned job and decentralised in nature. However, hybrid structure is designed due to difficulty centralised system of functional structure and communication gap in divisional structure. It aims to maintain an economic scale through local efficiency (Lawrence et al, 2017).


Question 5: Explain the concept of Porter's five forces model used for industry analysis? Apply the model to airline industry and explain what are the major factors that become barriers to entry in the new industry?

Answer: Porter's model analyses on the basis of five forces for determining the intensity of attractiveness and competitiveness of a company in a particular market (Greiner, & Julian, 2017). Porter's five force analysis for and airlines industry has been outlined below:

• Bargaining power of suppliers - In this industry, the power of suppliers is high because it provides three major inputs, that is, aircraft, fuel and labor.

• Bargaining power buyers - With the provision of online ticket system, customers do not depend upon intermediaries and agents for ticketing. Low cost carriers as a result of competition has benefited the frequent fliers (Hannigan, Hamilton III, & Mudambi, 2015).

• Threats of new entrants - There is no threat of new entrants as it requires huge capital investment to enter in this industry. It needs specific knowledge, expertise a letter to airlines and has to take permission regulatory officers.

• Threat of substitute products - There does not exist any threat from substitute such as trains or buses. Consumers mostly prefer flying rather than taking the substitute options.

• Competitive rivalry - The airline industry is highly competitive in terms of low cost carriers, high operating cost, and tight regulation. The airline industry mostly operates through supply-side as compared to the demand side (Hannigan et al 2015). Thus, the competition among different airline companies is dependent on flier's choice, which can be attracted to low fare and quality service.

Major factors which become barriers to new entrants in the industry are:

• Capital-It is one of the most important factors for the knee organisation to enter and sustain in a new industry. The capital is related to inventories, facilities, resources, manpower and salaries and varies according to the type of business (Greiner et al, 2017).

• Cost of switching - Most of the consumers preferred those products with whom they are accustomed to. However, when a new company is introduced in the market with similar features, customers of existing companies can be attracted by providing them the new product at very low price.

• Product differentiation - One of the most important factors contributing to this barrier is brand loyalty. This becomes difficult for new entrance to penetrate into the target market and create learn customers through advertising as it requires additional resources and capital (Greiner et al, 2017).

Question 6: In all four examples above, the organizations' short-term financial hits were real and painful. Nevertheless, we don't consider these efforts to be acts of charity but acts of strategy. What specific strategic elements do they share?

Answer: In each of the examples, it is identified that the provided organization incorporates process improvement techniques to enhance the quality of patient care. Their focus is to get better outcome, minimize anxiety level, improve care service, minimum wasted time and reduce health-related risks. When these results became clear and achievable, the efforts of each employee depicts teamwork and pride, and thereby minimize employee turnover rate. In addition to this, it is also believed by these organizations that improving value is much more important than gaining short-term fee as service profit (Colla, Morden, Sequist, Schpero, & Rosenthal, 2015). They understood that a business plan designed on the basis of value is beneficial for their patients as well as the organizations. Thus, these organizations invested more towards improving their reputation and in this context, they emphasised to change the habits of their staff. Finally, it is decided by this medical organization not to target the patients to gain financial benefit. Rather it is understood that proper care for patients should be the basic value of the hospitals. Patients should not be given financial pressure, even if the hospitals will incur a financial loss in some cases. Thus, it is a matter of professional pride for the health service providers and they will implement it as a forward-looking strategy. In brief, it can be said that the specific strategic element being shared by all the examples given in the case study is to achieve value-based care service without considering financial profit and market share (Colla et al, 2015).
The reasons provided by these organizations for incorporating these strategies are:

• Building relationship - In a Healthcare System, it requires a closer alignment between the physician and other healthcare providers for gaining higher market value. It takes time to collaborate with stakeholders group. Thus, a value-oriented strategy will help to develop strong relationships with stakeholders such as government, social service agencies and other organizations. Building a better relationship with the stakeholders will help in achieving financial assistance to fulfil the social requirements of poor patients (Rajaram, Chung, Kinnier, Barnard, and Mohanty, 2015).

• Gaining experience of managing risk - Physicians who work on value-based strategy are able to manage risk within the predefined budget. This approach includes identifying and handling full continuum of care through evidence-based care practices.

• Sustainability - With the emergence of new healthcare centres, there is an increase in competition by providing higher quality service at a lower price. The previous medical model of fee-for-service are presently not accepted by patience and government. Thus, value-based service has become a way to Minden sustainability in health service (Rajaram et al, 2015).

The organizations who have transformed their strategies into value-based care are able to gain financial stability, advanced information system, positive bonding with physicians and patients, and health plan affiliation. It is who commanded to the healthcare centres to take steps for improving the health care facilities, such as e-visit consultation. Moreover, efficient and cost-effective treatment procedures and medicines should be invented for quick recovery of patients.


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