Strategic Planning - Digital Marketing by Burak Bakay

The Explainer: Porter’s Five Forces

The competitive forces that shape strategy — in under two minutes. For more, read “Understanding Michael Porter: The Essential Guide to Competition and Strategy.”

People make it happen

People watch it happen

People who wonder what happened

Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy. Strategic planning became prominent in corporations during the 1960s and remains an important aspect of strategic management. It is executed by strategic planners or strategists, who involve many parties and research sources in their analysis of the organization and its relationship to the environment in which it competes

Owners mindset

-prepared to trust others

Michael Porter wrote in 1980 that formulation of competitive strategy includes consideration of four key elements:

Company strengths and weaknesses;
Personal values of the key implementers (i.e., management and the board);
Industry opportunities and threats; and
Broader societal expectations.

You can not do strategic planning on your own, unless you are the only person in the business.

TOOLS

A variety of analytical tools and techniques are used in strategic planning.[1] These were developed by companies and management consulting firms to help provide a framework for strategic planning. Such tools include:

PEST analysis, which covers the remote external environment elements such as political, economic, social and technological (PESTLE adds legal/regulatory and ecological/environmental);
Scenario planning, which was originally used in the military and recently used by large corporations to analyze future scenarios. The flowchart to the right provides a process for classifying a phenomenon as a scenario in the intuitive logics tradition.[6]
Porter five forces analysis, which addresses industry attractiveness and rivalry through the bargaining power of buyers and suppliers and the threat of substitute products and new market entrants;
SWOT analysis, which addresses internal strengths and weaknesses relative to the external opportunities and threats;
Growth-share matrix, which involves portfolio decisions about which businesses to retain or divest; and
Balanced Scorecards and strategy maps, which creates a systematic framework for measuring and controlling strategy.
Responsive Evaluation, which uses a constructivist evaluation approach to identify the outcomes of objectives, which then supports future strategic planning exercises.

Currently there are 4 people in employment for 1 unemployed now

There will be 2 people in employment for 1 unemployed by 2050

What will be work life balance, pension age etc then?

Unless we build a different society now

COMMON ISSUES IN STARTUPS

Cash flow
Regular custom
Limited resources
Time constraints
Single skillset
Time management
Consistent processes

COMMON ISSUES – SCALE UPS

Financial management
Restrictive structure
Time constraints
Single skillset
Time management
Consistent processes and systems
Plan (medium-long)
Resource planning
Targets
Identify help needed

COMMON ISSUES – MATURE BUSINESS

Scalability
Branding
Competition
Structure
Control
Skills

Avg size of business in the UK 8-9 people

Backbone of the economy

ISSUES – EXITING

Hand-overs
MBOs
- A management buyout (MBO) is a transaction where a company’s management team purchases the assets and operations of the business they manage. A management buyout is appealing to professional managers because of the greater potential rewards and control from being owners of the business rather than employees.
3rd party sale
Consultancy – succession
Future income stream
Maximize sale value

ISSUES – WHEN IT GOES WRONG

Look in the mirror
People
Communication
Processes
Money
Markets
Brand
Infrastructure
Product / service

WHAT IS STRATEGIC PLANNING

Where are we now?
- Thorough assessment
- You can do a workaround at times. Then this workaround becomes a formal process. Then it is in the blind spot.
Where do we want to get to?
- 5-10 years time scale
How do we get there?
- Actions and timescales
How do we know if we’re on track
- Monitoring
- On going process

Strategic plan is your conveyor belt, taking you to strategic objectives

Business plans are shorter term plans

Importance of staff knowing your strategic plan

APPROACH TO STRATEGIC PLANNING

Planned environment
Resource led
Competitive advantage
Organic (learning/adaptive)
Pick the right things to monitor

WHY DO I NEED A STRATEGIC PLAN

Clear direction
Route-map to get there
Clear investment plans
Customers and employees know
- What the business will provide
- How the business will provide it
Build emotional attachment
Involvement

WHAT IF I DON’T HAVE ONE

Static business
Always firefighting, everything short notice and short term
Drifting away from core customers, more special offers
Managers and employees have different aims and expectations
Employees and customers feel no affection for the business
No development programme, employees keen to move on
No risk assessment
Cash flow
Customer service
Not prepared for anything

HOW DO WE CREATE OUR STRATEGIC PLAN

Strategic analysis
- Internal strengths, weaknesses, structure, scale, ambition, resources
- External opportunities, threats, competition, markets, environment
Strategy choice
- Produce half a dozen strategies and select the one best fits
- Aims, identify options, evaluate, select (suitable, feasible, acceptable)
Strategy Implementation
- Changes, resources, culture, funding, timescales
Performance & Delivery Management
- Responsibility, monitoring, reviews

If you are stuck in the middle, you won’t go anywhere

Value proposition canvas