STRATEGIC PLANNING MODEL

15th April 2015

STRATEGICStrategic
ANALYSIS
FRAMEWORK
direction
Step 1:
Define the destination

Step 2:
Environmental
analysis

Mission
Vision
Leadership

Strategic analysis

Analysis of the internal environment (Value Chain analysis)

Analysis of the external environment (PESTEL, Porters 5-forces)
SWOT analysis

Strategic alternatives
Step 3:
Generate alternative

Step 4:
Select the best:
implement and
monitor

Diversification (new products, new markets)

M&A (Verticle / Horizontal integration)
Joint Ventures

Strategic selection

Strategic choice
Resource allocation
Evaluation and control
Feedback

STEP 1: DEFINE
THE
DESTINATION
A mission statement is a brief description of a companys
Mission

Vision

Values

Leadership

fundamental purpose. A mission statement answers the

question Why do we exist?

A vision statement provides inspiration, answers the

question Where do we want to go?
A mission statement focuses on a companys present
state, while a vision statement focuses on a companys
future
Core values are the principles that guide an organisations
internal conduct as well as its relationship with the external
world

Leadership is vital to communicate the organisations

strategic direction clearly to all staf

STEP 2: ENVIRONMENTAL ANALYSIS

Internal analysis

External analysis

Value chains

PESTEL
Porters five forces
Competitor analysis

SWOT Analysis

STEP 3: STRATEGIC ALTERNATIVES (1)

Corporate-level
strategy

Business-level
strategy

Functional-level
strategy

Corporate-strategy is relevant for a parent company managing

several business units across a range of industries.

Corporate-level strategy deals with the industries (or markets)

an organisation seeks to compete in.

Business-strategy is relevant for a single business unit or product

competing in a single industry.

Business-level strategies are focused on how an organisation

competes in a single market or industry.

Functional-level strategy deals with specific management

functions such as production, marketing or accounting.

It is concerned with the objectives for that specific function and

the allocation of resources among diferent operations within
that functional area.

STEP 3: STRATEGIC ALTERNATIVES (2) CORPORATE Related products and markets

LEVEL STRATEGY
New markets
Diversification
Mergers &
acquisitions

Unrelated product or markets

Merger: two organisations agree to go forward as a single new

company

Acquisition: one organisation clearly takes over another

organisation
Involves
two (2) or more
organisations
joining under a
Verticle integration
vs horizontal
integration
contractual agreement for a partiular business undertaking

Joint venture

Continuing the current activities of the organisation without any

significant change in direction

Withdraw from certain markets

Streamline

Selling a business unit, usually for underperforming business

Divestment

Stability (Hold)

Discontinuation of selling certain products or services

May occur when an organisation is made an ofer that is too

good to resist

STEP 3: STRATEGIC ALTERNATIVES (3) BUSINESS Appealing to a wide spectrum by achieving a lower cost structure
Broad
low-cost
LEVEL
STRATEGYthan its rival
provider

By ofering a point of diference around products or services that

is diferent from its rivals and appeals to a broad spectrum

Providing excellent value to customers by ofering high-quality

goods or services to customers at a lower cost profile than its
rivals

Focused strategy
based on low
costs

By achieving a lower cost profile than rivals, and that is focused

on delivery to a narrow band of customers

Focused strategy
based on
differentiation

By ofering a point of diference to customers that appeals to a

narrow band of customers

Broad
differentiation
provider

Best-cost provider

IMD STRATEGIC PLANNING MODEL

Internal analysis

External analysis

Value chains
Resource Based View

SWOT

PESTEL
Porters five forces
Competitor analysis
Risk analysis