Strategies in Action: Long-Term Planning and Objective Setting for Business Success, Schemes and Mind Maps of Economics and Law

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Strategies in

Action

What is strategies in action

Long-range planning in order to development a tactical plan Tactics deals with the use of competencies in actual implementation Strategy in Action.

Long term objectives

⬤ Long-term objectives represent the results expected from pursuing certain strategies. Strategies represent the actions to be taken to accomplish long-term objectives. The time frame for objectives and strategies should be consistent, usually from 2 to 5 years.

Characteristics

⬤ Objectives should be quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent among organizational units. Each objective should also be associated with a timeline.

Characteristics and Benefits of Objectives

Benefits

⬤ They provide direction, allow synergy, assist in evaluation, establish priorities, reduce uncertainty, minimize conflicts, stimulate exertion, and aid in both the allocation of

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Financial versus Strategic Objectives

Financial Objectives Financial objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, greater return on investment, higher earnings per share, a rising stock price, improved cash flow, Strategic Objectives include things such as a larger market share, quicker on-time delivery than rivals, shorter design-to-market times than rivals, lower costs than rivals, higher product quality than rivals, wider geographic coverage than rivals, achieving technological leadership, consistently getting new or improved products to market ahead of rivals, and so on.

Avoid not managing by objectives

Managing by Extrapolation Adheres to the principle “If it ain’t broke, don’t fix it.” The idea is to keep on doing the same things in the same ways because things are going well.

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Managing by Crisis

Based on the belief that the true measure of a really good strategist is the ability to solve problems. Because there are plenty of crises and problems to go around for every person and organization, strategists ought to bring their time and creative energy to bear on solving the most pressing problems of the day. Managing by crisis is actually a form of reacting, letting events dictate the what and when of management decisions.

Managing by Subjectives

Built on the idea that there is no general plan for which way to go and what to do; just do the best you can to accomplish what you think should be done. In short, “Do your own thing, the best way you know how” (sometimes referred to as the mystery approach to decision making because subordinates are left to figure out what is happening and why).

Managing by Hope

Based on the fact that the future is laden with great uncertainty and that if we try and do not succeed, then we hope our second (or third) attempt will succeed. Decisions are predicated on the hope that they will work and that good times are just around the corner, especially if luck and good fortune are on our side!

Integration Strategies

Forward Integration it’s a business strategy where a firm replaces third party distribution or supply channels with its own in an effect to consolidate operations, reduce costs, and become a step closer to the end consumer.

Backward Integration

akes place when a firm enters a merge with a supplier to take advantage of specialized resources and protect the quality of the goods and services produced.

Horizontal integration

Occurs when two businesses merge that produce goods or services at the same level in the value chain. The reason for doing so is to create economies of scale, as well as to cross-sell to each other’s customers.

Level of strategies

Strategies making is not just a task for top executives. Middle and lower level managers also must be involved in the strategic planning process to the extent possible.

Market Penetration

A market penetration strategy seeks to increase market

share for present products or services in present markets

through greater marketing efforts.

Market Development

Market development involves introducing present

products or services into new geographic

areas. India is a target for numerous firms to expand

geographically.

Product Development

Is a strategy that seeks increased sales by improving or

modifying present products or services. Product development

usually entails large research and development expenditure.

Seven reason why mergers and acquisitions

fails

1. Integration difficulties 2. Inadequate evaluation of target 3. Large or extraordinary debt 4. Inability to achieve synerg y 5. Too much diversification 6. Managers overly focused on acquisitions 7. Too large an acquisitio n

LIST GUIDELINES FOR WHEN RETRENCHMENT,

DIVESTITURE AND LIQUIDATION ARE ESPECIALLY

EFFECTIVE STRATEGIES

Retrenchment The process of aggressively cutting costs in ways that have impact to your operations and revenue. This is usually done in a context of a turnaround whereby management take drastic steps to prevent an organization from failing.

Divestiture Divestiture often is used to raise capital forfurther strategic acquisitions or investments. Divestiture can be part of an overall retrenchment strategy torid an organization of businesses that are unprofitable, that require too much capital, or that do not fit wellwith the firm's other activities.

Liquidation Selling all of a company's assets, in parts, for their tangible worth

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PORTERS FIVE GENERIC STRATEGIES