Strategic Management Planning & Control

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Subject: MPA 206 (Strategic Management Planning & Control)

1) In the Environmental Scanning Model, the organizational environment consists of


external and internal factors. The environment must be scanned to determine
development and forecast factors influencing organizational success. Scanning must
identify the threats and opportunities existing in the environment. An organization must
take advantage of the opportunities and minimize the threats. A threat for one
organization may be an opportunity for another.
a) Discuss the five (5) Forces Model under Environmental Scanning; (10 points)
There are five forces model under environmental scanning namely power of buyers,
rivalry of competitors, power of suppliers, threat of substitutes, and threat of new
entrants. The power of buyers can significantly impact pricing strategies and profitability.
When buyers have strong negotiating power, they can demand lower prices or higher
quality, forcing organizations to adapt. Even if you have many buyers, if they are more
price-sensitive, they can influence overall market pricing, especially in competitive
industries. Also, large buyers can negotiate better terms due to their purchasing power,
often leading to discounts or preferential treatment. Rivalry of competitors mean that
they can minimize your profit and even make your investment into a loss. In this force,
you need constant assessment of your rivalry, assessing the quality and features of
competitors’ offerings can highlight areas for improvement in your own products or
services. You should also check your pricing and marketing strategies to make sure that
your product stands out more than the rivals. The other force model, power of suppliers,
is a critical factor in determining an organization's bargaining power and overall
profitability. Factors such as concentration of suppliers, products being offered, cost of
suppliers, availability of substitutes, and supplier relationship, can all play a major role in
determining how your expenses might be for profitability or loss.
Another force model is the threat of substitutes. It is also an important aspect of
competitive analysis, influencing pricing and market positioning. he more alternatives
available to consumers, the higher the threat. If substitutes meet similar needs,
customers may switch easily. Also, if substitutes offer comparable quality at a lower
price while being innovative, consumers are likely to consider them, increasing the
threat level. Understanding the threat of substitutes helps organizations innovate,
enhance customer loyalty, and develop effective competitive strategies to maintain
market share. Last, the threat of new entrants is the potential for new competitors to
enter a market and disrupt established businesses. With technology rapidly advancing
making barriers to business lower, new entrants can come at any given time. This will
pose a significant threat to one’s business, especially if innovation is not widely
considered. Online platforms make it easier for businesses to sell with minimal cost,
and growing market can attract more to establish their own brands for potential
growth.
b) Discuss thoroughly the significance of the SWOT in the strategic management
process diagram. (15 points); and

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Strengths, Weaknesses, Opportunities, and Threats, more commonly known as SWOT,
is a popular tool used by organizations all over the world to assess the status of their
organization in relation to their objectives and goals. It is a technique for assessing
these four aspects of your business. SWOT Analysis is a tool that can help you to
analyze what your company does best now, and to devise a successful strategy for the
future. Below is the illustration of SWOT analysis.
Using SWOT Analysis takes a global view of your company but also evaluates smaller-
scale elements of the business. It points out where you are strong, or not so strong, and
can help you explore the opportunities and threats existing in your market. It’s this type
of knowledge that makes your strategic planning that much more robust. Implementing
SWOT Analysis is beneficial in the strategic management process. It makes your
organization aware and provides a clear snapshot of the organization’s current position.
Using SWOT also gives you the advantage in formulating strategies based on the
STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

Strengths describe Weaknesses hinder an Opportunities are Threats are factors that
what an organization organization from favorable external could negatively
excels at and what achieving its optimal factors that can impact an organization.
separates it from the performance. These provide an They arise from
competition. are areas that require organization with a situations or
improvement for the competitive edge. For developments largely
business to stay instance, if a country shaped by external
competitive, such as a reduces tariffs, a car factors, including
weak brand, above- manufacturer could competitors and
average turnover, export its vehicles to a broader economic or
significant debt, an new market, boosting societal influences.
insufficient supply sales and market
chain, or limited capital. share.
organization ‘s current mission and vision, leveraging strengths and opportunities while
addressing weaknesses and threats and ensuring profitability. Moreover, SWOT gives
you the flexibility to choose what strategy to be used best based on the programs and
activities laid out and, on the budget, and procedures prepared, considering maximum
profitability and minimized risk. Lastly, SWOT gives you a bird’s eye-view of the
strategies you implemented, ensuring concise evaluation and control of the
performance and actual results, ensuring that strategies are correct for the
organizations values and objectives.

c) What is the importance of SWOT Analysis in achieving Organizational Competitive


Advantage? (15 points)
Organizational competitive advantage is the unique capabilities and resources that
allow an organization to outperform its competitors in the market. It encompasses
various factors that contribute to a firm’s superior performance and ability to deliver

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greater value to customers. SWOT analysis, if used properly, can be of great
significance to an organization’s competitive advantage. It can help the organization
identify its unique resources, implement efficient processes, and assist in building
strong customer relationships. Through SWOT analysis, organizations can achieve
continuous assessment, innovation and adaptation, and building barriers to entry. This
would give the organization innovation, brand equity, and maximized use of present
technology to its advantage, leading to long-term success.
2) The strategic management process systematically analyzes an organization’s internal
and external environment to achieve and retain a competitive advantage. The modern
competitive environment requires an iterative approach to strategic management where
execution informs planning and planning guides execution. In relation to the Strategic
Management Planning Process, discuss in detail the following:
a) Basic Concepts in business policy and strategy; (10 points)
Business policy and strategy are essential components of how an organization operates
and competes in the marketplace. Business policy encompasses the guidelines and
frameworks that govern decision-making within the organization. It includes the mission
and vision, core values, and strategic goals that define the company's purpose and
direction. Business policy refers to the set of guidelines, rules, and principles that
govern the actions and decisions of an organization. It outlines how the organization will
conduct its business in pursuit of its goals. Business strategy refers to the plan or
approach an organization uses to achieve its goals and gain a competitive advantage. It
encompasses the decisions and actions taken to compete effectively in the market.
There are Key Elements of Business Policy. First is the Mission Statement which
defines the organization's purpose and primary objectives. Next is the vision statement
that describes the desired future position of the organization. Another is the core values
which dictates the fundamental beliefs that guide behavior and decision-making. Next is
the strategic goals which set specific, measurable objectives aligned with the mission
and vision. These elements of business policy are essential as it guides decision-
making by providing a framework for consistent and informed decision-making across
the organization. It also ensures alignment and helps align actions with the overall
mission and strategic objectives. Moreover, it facilitates communication and establishes
clear expectations and standards for employees and stakeholders.
There are also components in business strategy. The first is market analysis which
helps in understanding the competitive landscape, including customer needs, market
trends, and competitor strategies. Another component is the value proposition which
shows the unique benefits which can be offered to customers. Another is the
competitive advantage which is the identification of ways to differentiate from
competitors, whether through cost leadership, differentiation, or focus. Another
component is resource allocation which aids in deciding how to distribute resources
effectively to implement strategies.
Business policy and strategy enhances market position. It also drives growth through
strategic planning facilitates growth by identifying new markets, products, or services.
More importantly, it promotes sustainability by helping organizations adapt to changing
market conditions and maintain relevance.
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Finally, business policy and strategy play a crucial role in guiding organizations toward
achieving their objectives. A well-defined policy framework supports the development
and implementation of effective strategies, ultimately leading to enhanced performance
and competitive advantage.

b) Phases of Strategic Management process; (10 points) and


There are four phases of strategic management process. The first phase, Planning
Financial Aspects, is where next years’ budget is planned. In this phase, budgeting is
the focus of discussion. Financial statements are examined, investment planning is laid
out, cost management is considered, and risk management are in initial mode. This
phase strives to ensure resource allocation aligns with strategic goals and fostering
long-term growth and stability. The second phase, forecasting, is about estimating
future financial outcomes based on historical data, market trends, and various analytical
methods. It plays a crucial role in business planning and decision-making. Typically,
these is where long-term goals and plans are made and presented. Forecasting helps
organizations anticipate future conditions and make proactive decisions. By employing
various techniques and continuously refining their approach, organizations can improve
the accuracy of their forecasts and better navigate the uncertainties of the market. The
next phase, external planning, is the process of analyzing and strategizing based on
factors outside an organization that can impact its operations and success. This type of
planning is crucial for understanding the broader environment in which a business
operates. This is typically done by top management, and they do it by creating long-
term plans to allow them to have a comprehensive approach to business planning. The
last phase, strategic management, is where organizations formulate, implement, and
evaluate cross-functional decisions that enable an organization to achieve its long-term
objectives. It involves aligning the organization’s resources and capabilities with its
external environment to gain a competitive advantage.

c) How should business policy and strategy choices be made in your assessment? (10
points)
It is crucial to give careful consideration to various factors before developing these
business strategies and policies since it part of an organization’s short and long-term
planning and have a significant impact on the entire organization. Business strategies
and policies should revolve around the mission and vision of the organization while
incorporating its values to ensure that all policies adhere to the company’s reason of
existence. Next, such policies and strategies should be analyzed so that strengths and
weaknesses are maximized, and opportunities are considered. Also, policies and
strategies should be able to understand the organizations’ resources, capabilities, and
operational efficiencies. The policies and strategies should also be forward-looking,
ensuring that it is aligned with the future goals of the organization. Policies and
strategies should also be clear and specific, to avoid unnecessary waste of time and
resources. They should also be helpful not just for the growth of the organization, but
also for its employees and stakeholders and customers. In this way, the organization
can ensure longevity in terms of success.

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3) In the context of strategy formulation, a strategy is a big-picture plan of action with
the aim of achieving something; a strategy is usually focused on the long term. A good
strategy will help a business or organization optimize and improve. A strategy also
includes constant evaluation so that the company can monitor its progress and adapt to
its exterior environment.
a) Discuss the factors that should be considered in the Strategic Formulation Process.
Justify your answer. (15 points); and
There are a lot to consider when formulating strategic process. There should be a
mission and vision statement, indicating the purpose of the company’s presence in the
market. From there, people can deduce who the target consumer is, the product it
offers, and its deliverables to its customers and to the organization. The mission vision
also identifies all the pertinent details of the company such as the principles and long-
term goals. There should also be an internal analysis to identify the current strengths
and weaknesses of the organization. Resource availability, such as finance, human
resources, and technology should also be factored in to measure the feasibility of
strategies being formulated. Risk should be assessed so that strategic processes
include mitigation techniques to narrow the chance of risks from happening. Innovation
and improvement should also be considered so the organization can foster innovation
and remain adaptable to changing market conditions and customer needs. Considering
these factors in the strategic formulation process helps organizations create robust,
adaptable, and effective strategies that align with their goals and respond to external
challenges. A thorough analysis and thoughtful consideration of these elements
increase the likelihood of successful strategy implementation and long-term success.
b) Discuss the significance of a Balanced Scorecard in Strategic Management Planning
and how the methodology works. (15 points)
The Balanced Scorecard is a strategic management tool used to measure an
organization's performance beyond traditional financial metrics. It provides a
comprehensive framework for translating an organization’s strategic objectives into a
set of performance measures across multiple perspectives. It enables the management
to link their perspectives and see how they will likely affect each other. The goal of the
Balanced Scorecard is to ensure that the company’s vision and strategies are aligned
with its organizational activities.
If paired with strategic management planning, balanced scoreboard can be very useful.
It can bring holistic performance measurement, which means it can move beyond
traditional financial metrics by incorporating non-financial perspectives, such as
customer satisfaction, internal processes, and organizational learning. This
comprehensive view helps leaders understand performance drivers more clearly. It can
also help in the alignment of goals by ensuring that all organizational activities are
aligned with the strategic objectives. By cascading goals from top management down to
individual employees, everyone understands how their roles contribute to the broader
vision. Balanced scoreboard can also provide a framework for communicating strategy
across the organization. It fosters transparency and helps stakeholders understand
strategic priorities, leading to increased engagement and accountability. Moreover, by
emphasizing learning and growth, the Balanced Scorecard encourages organizations to
invest in capabilities that drive future success, rather than solely focusing on historical
performance. Also, using balanced scoreboard means regularly reviews performance
metrics allows organizations to identify areas for improvement and adapt strategies as
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necessary. This iterative process supports a culture of continuous learning and
adaptability. Finally, integrating the use of balanced scoreboard in strategic
management planning bring better decision-making. With a comprehensive set of
metrics, decision-makers can analyze data from various perspectives, leading to more
informed and balanced decisions that support strategic objectives.

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