HBRJuly-August 1980

Strategic Management for Competitive Advantage

By: Frederick W. Gluck, Stephen P. Kaufman, and A. Steven Walleck

Presented By:

SANAULLAH

ZOHAIB AHMED

SOFIA FATIMA

SUNDAS SETHI

INTRODUCTION

The planners all have turned

into strategists

Performances of some large,

complex multicultural

corporations turned to the

strategic management

The question is raises Why the

companies like Apple,

Mitsubishi are so successful

INTRODUCTIONCont…

In the case:

Companies are segmented into four sequential phases:

Explicit formulation of issues and alternatives

Quality of stake holders

Top management to prepare and guide

strategic decision process

Effectiveness of implementations

The four phase model is used to evaluate corporate planning system

and processes and for indicating ways of improving their effectiveness

THE 4-PHASE MODEL

Phase 1 : Basic financial planning

Phase 2 : Forecast based planning

Phase 3 : Externally oriented planning

Phase 4 : Strategic management

THE 4-PHASE MODEL

Phase 1 : Basic financial

planning

Phase 2 : Forecast based

planning

Phase 3 : Externally

oriented planning

Phase 4 : Strategic

management

It is the annual budgeting process

The things are changed to the financial

problem

There is a financial forecasting done at the

annual bases which content the revenues and

costs

THE 4-PHASE MODEL

Phase 1 : Basic financial

planning

Phase 2 : Forecast based

planning

Phase 3 : Externally

oriented planning

Phase 4 : Strategic

management

Internal trend analysis:

Past financial status of the company

External trend analysis: (PESTL elements)

Political

Economical

Social

Technological and

Legal

THE 4-PHASE MODEL

Phase 1 : Basic financial

planning

Phase 2 : Forecast based

planning

Phase 3 : Externally

oriented planning

Phase 4 : Strategic

management

Following factors are put in glance before developing the planning• Developing new business capabilities• Defining markets according to

companies Strengths

PESTL factor oriented The SBU concept:

• Grouping of related business• Strategic planning Packed in pieces• SBU recognizes two distinct strategic

levelso Corporate decisionso Business decisions

THE 4-PHASE MODEL

Phase 1 : Basic financial

planning

Phase 2 : Forecast based

planning

Phase 3 : Externally

oriented planning

Phase 4 : Strategic

management

Strategic management + Planning = a single

process by SM

It include:

1. Planning framework

2. Planning process

3. Corporate values

4-PHASES IN EVALUATION OF FORMAL STRETEGIC PLANNING

Phase 1:Basic financial planning

Phase 2:Forecast-based planning

Phase 3:Externally oriented planning

Phase 4:Strategic management

Effectiveness of formal business planning

Meet budget Predict the future Think strategically Create the futureValue system