P1.B.1 Strategic Planning

Question 1

What is Strategic Planning Process?

P1.B.1 Strategic Planning

Answer 1

1. Define mission
2. Analyze external factors: opportunities, limitations, threats
3. Analyze internal factors: strengths, weaknesses, competitive advantages
4. Select strategies using planning tools & techniques

Question 2

Strategic Plan into Bite Sized Portions

P1.B.1 Strategic Planning

Answer 2

1. Mission
2. Long term objectives
3. Strategic plan
4. Intermediate / Tactical plans
5. Short term plans
6. Operational plan - master budget

Question 3

Strategic Plan Timeframe

P1.B.1 Strategic Planning

Answer 3

1. Short: 1-2 years
2. Medium: 3-5 years
3. Long: +5 years

Question 4

Characteristics of Strategic Plan

P1.B.1 Strategic Planning

Answer 4

1. In sync with mission statement
2. Flexible to change
3. Prepared by top management but inclusive to all levels of management
4. Understood & accepted by all levels of management
5. SMART: specific, measurable, achievable, realistic & time bound

Question 5

Strategy Types

P1.B.1 Strategic Planning

Answer 5

1. Corporate: which business firms should undertake

2. Competitive: how to achieve goals and establish competitive advantage

Question 6

External Factors

P1.B.1 Strategic Planning

Answer 6

1. Industry in which company operates
2. Country in which company operates
3. Macro-economic environment in which company operates.

Question 7

Internal Factors

P1.B.1 Strategic Planning

Answer 7

1. Value chain: design, produce, market, deliver & support product
2. Primary activities: logistics, marketing, sales
3. Secondary/support activities: procurement, technology development
4. Resource

Question 8

Porter (Generic) Strategies

P1.B.1 Strategic Planning

Answer 8

1. Broad cost leadership
2. Broad differentiation
3. Focused cost leadership
4. Focused differentiation

Broad/narrow: market
Cost/Differentiation: strategy

Question 9

Porter’s 5 Forces

P1.B.1 Strategic Planning

Answer 9

1. Risk of entry by potential competitor
2. Bargaining power of suppliers
3. Bargaining power of buyers
4. Closeness of substitutes
5. Intensity of rivalry among existing competitors

Question 10

PEST

P1.B.1 Strategic Planning

Answer 10

1. Political: government laws and regulations
2. Economic: interest rates, inflation
3. Social: values and culture
4. Technological

Question 11

BCG Matrix

P1.B.1 Strategic Planning

Answer 11

1. Star: high growth rate & high market share
2. ?: high growth rate & low market share
3. Cash cow: low growth rate & high market share
4. Dog: low growth rate & low market share