FiNET
Associates
Strategic Management
Kenny Tay FCCA FCMA CGMA
March 2016
Strategy planning and development
2016
1
Part A
Strategic management
Definition of strategic management
Scope and depth of strategic management
Strategy and outcome
Part B
Strategic planning – situation analysis
Corporate goals and mission
The business model and its offering
Environmental assessment
PEST and environmental assessment
Competition and market leadership
Part C
Strategy implementation
SWOT analysis and core competency
Delivery capabilities and constraints
Resources requirements
Outcome of strategy implementation
Performance evaluation and feedback
2
Definition of strategic management
Scope and depth of strategic management
Strategy and outcome
Strategy planning and development
2016
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

Strategic management is the process of managing
limited resources to achieve stakeholders’ objectives
under changing circumstances.
Strategic management
management processes –
1.
2.
3.
contrasts
with
everyday
Getting materials and manpower
Scheduling production and output
Making sales deliveries
Strategy planning and development
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
Strategic management vs. general management
Objectives of
stakeholders
Changing
circumstances
Limited resources
Strategy planning and development
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
Basic issues involving strategic management –
1.
Maximizing output from limited resources
2.
Preventing potential loss of markets and customers
3.
Ensuring market reach of new products and services
Strategy planning and development
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EVERYDAY MANAGEMENT
STRATEGIC MANAGEMENT
The Difference





Planning
Organizing
Execution
Directing
Controlling



Issues driven
Contextual
Problem solving
Strategy planning and development
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
Strategy



To resolve environmental issues
To overcome resource limitations
Outcome
Achieving approved objectives
 Minimizing deviations from plans

Strategy planning and development
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Corporate goals and mission
The business model and its offering
Environmental scanning
Evaluating and selecting the options
Strategy planning and development
2016
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
Steps
1.
Revisit the corporate vision and mission
2.
Business model review
3.
Environmental scanning
Strategy planning and development
2016
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
Our vision serves as the framework for our Roadmap and
guides every aspect of our business by describing what we
need to accomplish in order to continue achieving
sustainable, quality growth.






People: Be a great place to work where people are inspired to be the best
they can be.
Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
Partners: Nurture a winning network of customers and suppliers, together
we create mutual, enduring value.
Planet: Be a responsible citizen that makes a difference by helping build
and support sustainable communities.
Profit: Maximize long-term return to shareowners while being mindful of
our overall responsibilities.
Productivity: Be a highly effective, lean and fast-moving organization.
Strategy planning and development
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
Our Mission

Our Roadmap starts with our mission, which is
enduring. It declares our purpose as a company and
serves as the standard against which we weigh our
actions and decisions..
 To refresh the world...
 To inspire moments of optimism and happiness...
 To create value and make a difference.
Strategy planning and development
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
Vision
------------------------------------------

Mission
------------------------------------------

Does a company necessarily need a Vision and
Mission? …………………………………………
Strategy planning and development
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
A business model thus describes the rationale of how
an organization creates, delivers, and captures value
for its stakeholders –




Customers
Shareholders
Financiers
Employees
Review of its
relevance in a
changing
environment
Strategy planning and development
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
Whether the Business Model is still






Relevant in the current environment
--------------------------------------------------------------------Appropriate for the company’s mission
---------------------------------------------------------------------
Able to create and capture value for its stakeholders
---------------------------------------------------------------------Strategy planning and development
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Before strategy decisions
Strategy planning and development
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
An assessment of –
1.
2.
3.
4.
Economic cycles
Product demand cycle
Competitive forces and responses
PEST conditions
Strategy planning and development
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
Assessment
1.
2.
3.
4.
5.
Sales
Profit
Cash flow
Investment
Competition
D
A
B
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--------------------------
Strategy planning and development
2016
C
--------------------------
D
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
Assessment





Sales
Profits
Cash flow
Investment
Competitors
-------------------------------------------------------------
-------------------------------------------------------------
Strategy planning and development
2016
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
Growth vs. share
Market
Growth
Product 1
 --------------
High
Product 2
 --------------
Low


Product 3
 -------------
Problem
kid
Blue
sky
Dogs or
slog?
Cash cow
Small
Large
Market share
Strategy planning and development
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
Pressure
Suppliers
New
comers
Existing
rivalry
Buyers
New
products
Strategy planning and development
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
How competitors respond – strategic options
1.
2.
3.
Cost leadership
Differentiation
Focus strategy
__________________
__________________
__________________
Your company’s strategy option? --------------------------------Strategy planning and development
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
RISK assessment

POLITICAL

ECONOMIC

SOCIAL

TECHNOLOGY
Potential threats to
the business
Strategy planning and development
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
Political – change of government and rules



Economic – the next recession



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Social – e.g. demographics, religion and education



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Technology – solar power, e – commerce, multilevel marketing


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
Apply tools








Risk analysis
SWOT
Breakeven analysis
Decision trees
Cost benefit assessment
Discounted cash flow analysis
Sensitivity testing
Scenario analysis
Strategy planning and development
2016
Using financial
assessment tools
25


Your company is a diversified business organization and has signed a
sole distributorship agreement with a Brazilian automobile manufacturer
for an entry level sports car into the domestic executive market. The
franchise agreement requires an investment commitment of USD 5
million and would be renewable at the end of 5 years. The target market
price on the road is the local currency equivalent of USD40000.
Outline an appropriate strategy and the key considerations for this
investment to be successful.
Strategy planning and development
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SWOT analysis and core competency
Delivery capabilities and constraints
Resources requirements
Outcome of strategy implementation
Performance evaluation and feedback
Strategy planning and development
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


Developing strategies and creating strategic plans is an
easy part.
Without careful consideration on implementation,
strategy planning is wasteful and demotivating.
It is therefore essential to recognize implementation of
strategy as a crucial part of overall strategic
management.
Strategy planning and development
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
SWOT of the organization – a recognition
 Strengths
------------------------------------
 Weaknesses
------------------------------------
 Opportunities
------------------------------------
 Threats
------------------------------------
Strategy planning and development
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
Organization and controls

Making process change

Resource availability –



Finance
People and skills
Business process re-engineering
Strategy planning and development
2016
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
Selected strategies will be executed with

Organization configuration & functions e.g.
 Departmental
 Divisional
 Transnational
 Project or
 Team
Strategy planning and development
2016
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
Work processes are required for delivery of service or
production

Market processes
 Deal with contractors & suppliers
 Cultural of collaboration
 Managing relationships

Control processes
 Input
 Output

-
planning, supervision, cultural change
performance targets
Relationships – centralization vs. decentralization
Strategy planning and development
2016
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
Process change may be required for





Greater customer satisfaction
Minimizing resources and wastage
Error minimization
Faster delivery
Delivery &
Quality
performance
Existing processes may no longer be suited in a
changing market environment
Strategy planning and development
2016
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
Basic steps
1.
2.
3.
4.
5.
Clarify business vision and process objective
Identify processes to be redesigned or improved
Analyse existing processes for their effectiveness
Identify change levers – e.g. IT capabilities, people, process
Design proto type for testing and adoption
Strategy planning and development
2016
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
Process re-design requires





Zero base – or starting from scratch
simplification – eliminate redundant elements
Value adding – non value add work to be avoided
Close gaps & disconnects at department boundaries
BPR is about achieving –




Lower costs
Faster delivery
Error free
Maximum customer satisfaction
Strategy planning and development
2016
Concept of
quality
35

Finance


Managing value and the ROI - financial decisions
1. Investment
2. Financing
3. Dividends
Managing budgets and forecasts
1. Resource allocation for the KRA and KPI achievements
2. Managing performance
Strategy planning and development
2016
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
Leadership – leading teams
 Visioning
 Build teams
 Resolving conflicts
 Managing performance

Job design and staff development
 Task goals and benchmarks
 Job enrichment and skills retention
 Succession planning
Strategy planning and development
2016
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@ strategy implementation
Strategy planning and development
2016
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
A new strategy instigates change

Changes may occur at different levels
1.
2.
3.
4.
5.
Corporate
Corporate
Project
Department
Operational
Activity
Project
Department
Prepare for change – how?
Operational
Activity
Strategy planning and development
2016
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
Changes are sometime not welcome
Managing resistance

1.
Inconvenience
--------------------------------
2.
Fear of unknown
--------------------------------
3.
Lack understanding
--------------------------------
Role of dynamic leadership – winning over people
Strategy planning and development
2016
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
Key Points

Your strategy tells you how you'll achieve success, no matter how that
success is defined. And whether you're developing a strategy at the
personal, team or organizational level, the process is as important as
the outcome.

Identify your unique capabilities, and understand how to use these to
your advantage while minimizing threats. The process and tools
identified above will help you identify a variety of potential strategies
for success, so that you can ultimately choose the one that's right for
you.

And prepare to change – new strategy means CHANGE!
Strategy planning and development
2016
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Questions and answers
March 2016
Kuala Lumpur
Strategy planning and development
2016
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Kenny Tay FCCA FCMA CGMA
Kuala Lumpur
Strategy planning and development
2016
43