Strategic Management

Technopreneurship 02
Strategic planning
• Is a crucial ingredient in business success.
• The planning process forces potential
entrepreneurs to subject their ideas to an objective
evaluation in the competitive market.
“The goal of developing a
strategic plan is to create for
the small company a
competitive advantage—the
aggregation of factors that
differentiates a small business
from its competitors and gives
it a unique and superior
position in the market.”
Competitive Advantage
• Key to business success is to develop a
unique competitive advantage
• creates value for customers,
• is sustainable, and
• is difficult for competitors to duplicate

• When sustainability achieved,

competitive advantage becomes Core
Competencies
Core Competencies
• Are a unique set of skills, knowledge, or abilities
that a company develops in key areas
• Such as: superior quality, customer service, innovation,
engineering, team-building, flexibility, speed,
responsiveness

• Example:
• Martin Guitar company, manufacturing quality acoustic
guitars, 180 years of experience
• Hilton Hotel, for superior customer service
9 Steps Strategic Planning Process
1. Develop vision and translate into mission statement
2. Assess the company’s Strengths and Weaknesses
3. Scan the environment for significant Opportunities
and Threats
4. Identify the key success factors
5. Analyze the competition
6. Create company goals and objectives
7. Formulate strategic options and select the
appropriate strategies
8. Translate strategic plans into action plans
9. Establish accurate controls
1/9 Vision, Mission
• Vision: an expression of what entrepreneur’s
dream (believe in) and the values on which
they build their businesses

• Mission: mission statement reflects the

company’s core values, it helps create an
emotional bond between a company and its
stakeholders, especially its employees and its
customers.
1/9 Vision, Mission
• Vision: Foster’s Grille is the place for finest
burger.

• Mission: Foster’s Grille is committed to

create the ultimate burger of the finest
quality meats and serve it to people with
other great menu offerings in an atmosphere
that they could look forward to coming to
with their friends, family, and colleagues
2/9 Strength & Weakness
• Strength: Positive Internal Factors
• contributes to company’s mission,
goals, objectives

• Weakness: Negative Internal Factors

• inhibits the accomplishment of its
mission, goals, and objectives
3/9 Opportunities & Threats
• Opportunities : Positive External
Factors
• exploited to achieves company’s mission,
goals, objectives

• Weakness: Negative External Factors

• hampers the company’s ability to
achieves its mission, goals, and
objectives
4/9 Key Success Factors
• Are the factors that determine a company’s ability to
compete successfully in an industry
• Numbers to achieve, Less-tangible target
• Example:
• Trained, dependable, and honest in-store managers
• Close monitoring of waste
• Convenient location
• High food quality
• Consistent food
• Clean restaurants
• Friendly and attentive service from a well-trained waitstaff
4/9 Key Success Factors
5/9 Analyze the Competition
• “Business is like any battlefield. If you want to win the
war, you have to know who you’re up against.”

• Who are your major competitors and where are they located?
• What distinctive competencies have they developed?
• How do their cost structures compare to yours?
• How do they market their products and services?
• What are their key strategies?
• What are their strengths?
• What are their primary weaknesses?
• What messages are they communicating to their customers?
• Are new competitors entering the market?
5/9 Analyze the Competition
Competitive Profile Matrix
6/9 Goals & Objectives
• Before choosing strategy, establish business goals &
objectives

• Goal: the broad, long-range attributes that a business

seeks to accomplish
• Not specific, abstract

• Objective: things that entrepreneurs must accomplish if

they are to achieve their goals and overall mission
• Specific, measurable, assignable, realistic-challenging, timely,
written down
6/9 Goals & Objectives
•Goal:
•Leader in burger chain.

•Objective:
•At least 15 new restaurant every
year.
7/9 Strategy
• a road map an entrepreneur draws up
of the actions necessary to fulfill a
company’s mission, goals, and
objectives

• A strategy is the master plan that covers

all of the major parts of the
organization and ties them together
into a unified whole.
7/9 Strategy
Porter’s Generic Strategies

Cost Leadership
Differentiation
Focus
Porter’s Generic Strategies
1/3 Cost Leadership
• Strives to be the lowest-cost producer
to its competitors
• Cost ≠ Price
• “You can’t compete on price if you
can’t compete on cost,” – Scott Shane
• Find cost structure in acquiring,
producing, goods/services
Porter’s Generic Strategies
2/3 Differentiation
• Seeks to build customer loyalty
• Position its goods/services in unique
way : quality, convenience, flexibility,
performance, or style
• Goods/services as distinctive
competence
• Create the perception of value to the
customer
Porter’s Generic Strategies
3/3 Focus
• Market are NOT homogenous
• In any given market, there are many
different customer segments, each having
different needs, wants, and characteristics.
• Target niche market. A niche must be big
enough for a company to generate a profit.
• Ex: Small geographic area, big size clothing,
artisan soap, ...
8/9 Action
• Strategy into actions. Make a project to run the strategy.

• Purpose. What is the project designed to accomplish?

• Scope. Which areas of the company will be involved in the
project?
• Contribution. How does the project relate to other projects
and to the overall strategic plan?
• Resource requirements. What human and financial
resources are needed to complete the project successfully?
• Timing. Which schedules and deadlines will ensure project
completion?
9/9 Controls
• Controlling projects and keeping them on schedule
means that the owner must identify and track key
performance indicators.

• Balanced Scorecard
• set of measurements unique to a company that includes
both financial and operational measures and gives
managers a quick yet comprehensive picture of the
company’s total performance
Task #2
Prepare a presentation
 Task #2 Porter’s Generic
Strategies

• Based on the choice of the company in the

previous assignment, determine which
strategy the company chooses. (Slide #17)

• Give examples of policies or actions that

the company is doing to achieve its
objectives.