Good morning!!!!

? ?
e
e w
ar
r e
he
W 1
 Pre-Requisites to Strategic Planning
The first step in strategic planning is "planning to
plan" or get organized
Commitment to the process on the part of senior
management
The organization must have the financial and human
resources to carryout SPM
The Organization must have the knowledge and
skills required for SPM
If the Organization is in crisis, the time may not be
right for SPM 2
 Analyze Country or Regional Context
In step two you start with analyzing the
Country /Regional context or highlight the
National or
Regional profile in which you operate
The situation of your sector.
Organizational Background/Profile

Vision, Mission And Value

3
 Setting the
Strategic Direction

4
What is a Vision?

A vision or strategic intent is a view

of a future reality that the
organization seeks.
Vision is also defined as a realistic,
credible, attractive future for an
organization.

5
 What is a Vision? Cont’d…
In defining a vision, the management must pose a
question “What business are we in?”
In this respect, the firm’s size, scope, the products
/services it provides & the markets it serves should
be considered
Thisis simply for the purpose of identifying the gap
between what is and what will be the firm.
Usually, in defining a vision, what the company
wants to be & the timeframe to achieve it are stated.

7
Key Traits of a Strategic
Vision
 Delineates management’s aspirations for the business
 Is distinctive and specific to
a particular organization
 Ischallenging and a bit beyond a
company’s immediate reach
 Paints a clear picture of a company’s
long-term direction, rather than
hiding it in foggy language.
A vision statement is little more than a bunch of meaningless words
unless it says something substantive about the company’s long-term
direction and the market position(s) that company leaders are striving
to stake out.

8
 Vision Vs Mission Example

Mahatma Gandhi had a simple vision

of getting rid of British rule in India
and establishing a vibrant democracy
in India.

He had a specific image of post

British India in his mind and he
talked of that image at every
opportunity and to every one.

9
Example of Vision Statement

Commercial Bank of Ethiopia’s Vision

“To become a world class

commercial bank by the year
2025.”

10
Example cont’d …

Ethiopian’s Vision 2025

Ethiopian will be the most competitive and

leading aviation group in Africa by providing
safe, market driven and customer focused
passenger and Cargo Transport, Aviation
Training, Flight Catering, Maintenance Repair
and Overhaul (MRO), Ground Services,
Domestic and regional services by 2025.
11
Example cont’d …

eBay
Provide a global trading
platform where practically anyone
can trade practically anything.

12
Xcs of effectively worded vision statements

13
Common Shortcomings in Company Vision Statements

14
 HOW WELL DO THEY
MEASURE UP?
Coca-Cola
Our vision serves as the framework for our roadmap and guides every aspect
of our business by describing what we need to accomplish in order to
continue achieving sustainable, quality growth.
• People: Be a great place to work where people are inspired to be the best they
can be.
• Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people’s desires and needs.
• Partners: Nurture a winning network of customers and suppliers, together we
create mutual, enduring value.
• Planet: Be a responsible citizen that makes a difference by helping build and
support sustainable communities.
• Profit: Maximize long-term return to shareowners while being mindful of our
overall responsibilities.
• Productivity: Be a highly effective, lean and fast-moving organization. 15
Comment
• Focused
• Flexible
• Feasible
• Desirable
• Long
• Not forward-looking
16
 HOW WELL DO THEY
MEASURE UP?
UBS
We are determined to be the best global financial services
company. We focus on wealth and asset management, and on
investment banking and securities businesses. We continually
earn recognition and trust from clients, shareholders, and staff
through our ability to anticipate, learn and shape our future. We
share a common ambition to succeed by delivering quality in what
we do. Our purpose is to help our clients make financial decisions
with confidence. We use our resources to develop effective
solutions and services for our clients. We foster a distinctive,
meritocratic culture of ambition, performance and learning as this
attracts, retains and develops the best talent for our company. By
growing both our client and our talent franchises, we add
sustainable value for our shareholders. 17
 Comment
• Focused
• Feasible
• Desirable
• Not forward-looking
• Bland or uninspiring

18
HOW WELL DO THEY
MEASURE UP?
Walmart
Saving People Money So They Can Live Better
Comment
• Focused
• Easy to communicate
• Feasible
• Flexible
•` Desirable
• Not forward-looking 19
A Vision Can Fail
Though vision is important it can fail:
If it reflects merely the leaders internal needs
If internal & external factors are not analyzed well
Due to lack of acceptance by the market & by those
who implement it
If it ignores stakeholders needs
If it Miscalculates the resources needed and available
to achieve it

20
A Good Strategic Vision Is
Managerially Useful

 A well-conceived, well-communicated vision

1. Points an organization in a particular direction
2. Sets forth a strategic path for it to follow in
preparing for the future
3. Molds organizational identity
4. Communicates management’s aspirations to
stakeholders
5. Helps steer the energies of company personnel in a
common direction.
21
The Mission
Mission is defined as “the fundamental
purpose of the organization & its scope
of operation.”
Organizational mission is written in
terms of the general set of products &
services the organization provides & the
markets & clients it serves.
22
Mission cont’d …
Clear mission statement serves to define
the mandates (the context within which
the organization operates).

Operative mandates are subject to

continuous alteration & expansion.

23
 Formulating the Mission
Your organization’s mission statement is a concise introduction to its
work.
It describes an organization in terms of its:
Purpose: what the organization seeks to accomplish
(WHY DO WE EXIST?)
Target Audience: the target group or beneficiaries of the
organization’s work (WHO DO WE SERVE?)
Business: the main method or activity through which the
organization tries to fulfill this purpose (WHAT
SERVICES DO WE PROVIDE and HOW DO WE GO
ABOUT PROVIDING THEM?)
24
Formulating the Mission (Cont’d…)
Points of emphasis when articulating mandates &
missions:
Awareness of legal constraints & responsibilities of
all persons of an organization
Definition of stakeholders any group of individuals
who are affected by or can affect the future of the
organization.
It should be recognized that the vision statemen
t already defined is embedded in the mission an
d mandate and also define the structure and the
general role of the organization.
25
Mission serves several functions:
Ensures unanimity of purpose
Provides a basis for motivation
Allocates organization’s resources
Establishes the necessary organizational climate
Serves as a basis for those who can identify with
the organization
Facilitates the translation of objectives & goals

26
Example Mission Statement
AAU’s mission
 The mission of AAU is to foster a democratic university,
which gives pride of place to its students in instruction
and provision of services while encouraging the robust
exercise of academic freedom. This will be achieved by
developing vibrant graduate programs and by nurturing
professional competence, a humanistic education, a
scientific culture, academic excellence and a committed,
ethical citizenship.


27
Example cont’d …

CBE’s Mission
We are committed to best realize stakeholders'
needs through enhanced financial intermediation
globally and supporting national development
priorities, by deploying highly motivated, skilled
and disciplined employees as well as state-of-the-
art technology. We strongly believe that winning
the public confidence is the basis of our success. 

28
 Revising a mission
If you already have a mission statement in your
organization you can review it by asking the following
questions.
Is it relevant as when the statement was written?
Are there items that ought to be added?
Does the statement address the points suggested for
inclusion in a mission statement?
Does the statement effectively describe the unit to
those who work within it as well as to those external
to it?
29
The mission of the Ethiopian Management Institute is to
provide need based management consultancy and training
services for government, non-government and private sector
institutions through continues learning.
 "To support the peoples of Amhara Region in their effort to
become self-reliant through a sustainable rural development
programmes based on genuine participation of the people"
 "To improve the socio-economic well-being of poor
communities in Tigray through project intervention focusing
on water, education and irrigation."
 The mission of a woreda education office could be "to
enable the woreda's students to acquire the knowledge,
skills, values, attitudes and habits necessary for living in and
contributing to a peaceful, democratic and pluralistic
society". 30
Values
Every organization should be guided by
a set of values.
Values are beliefs which an
organization's members hold in common
and endeavor to put into practice.
Thevalues guide an organization's
members in performing their work.

31
Values (Contd…)
 Values are often rooted in ethical themes, such
as honesty, trust, integrity, respect, fairness,
etc.
 Values should be applicable across the entire
organization
 Values may be appropriate for certain best
management practices – best in terms of
quality, exceptional customer service, etc.

32
 Values (Cont’d…)
Examples of values include: a commitment to
excellent services, innovation, diversity, creativity,
honesty, integrity, and so on.

By developing a written statement of the values of

the organization, group members have a chance to
contribute to the articulation of these values, as
well as to evaluate how well their personal values
and motivation match those of the organization.

33
Examples of Values
We obey the law and do not compromise
moral or ethical principles – ever!
We are committed to forging public and
private partnerships that combine diverse
strengths, skills and resources.
We treat everyone with respect and
appreciate individual differences.
34
Examples Cont’d…..
CBE’s Values
Corporate Citizenship
Customer Satisfaction
Quality Service
Innovation
Teamwork
Integrity
Employees
Public Confidence

35
Examples Cont’d…..

Ethiopian’s Value Statements

As an airline, safety is our first priority.
ET is a high performance and learning
organization.
We are an equal opportunity employer
We treat internal and external customers the
way we would want to be treated

36
 VISION
To become an icon of excellence and leading commercial Bank in Ethiopia.
MISSION
To provide customer focused, efficient and effective full-fledged commercial
banking services by deploying qualified, honest, and motivated staff, state-of-the
art technology and thereby optimize shareholders’ interest.
VALUES
• Loyalty
• Transparency
• Accountability
• Social responsiveness
• Honesty and integrity
• Organizational excellence
• Equal employment opportunity
• Prudent and professional banking service
• Competitive services and sustainable growth

37
 VISION
To be the most competent, dependable, reliable and preferred insurance
service provider in Ethiopia.
MISSION
To excel in performance to the satisfaction of all stakeholders in providing
comprehensive insurance covers and venturing to engage in diversified
investments by employing competent expertise and applying up-to-date
technologies.
VALUES
• Passion for customers
• Professionalism
• Empowerment
• Integrity
• Cooperation and Partnership
• Social Responsibility

38
 VISION
By 2020 we aspire to be world class Management development
center that enables client organizations to provide efficient and
effective services.
MISSION
To enable public service and other institutions to provide
sustained, efficient and effective services by rendering state-of-
the-art training, research and consultancy services.
VALUES
• Committed for Quality
• Customer focused
• People First
• Continuous learning
• Team work for effectiveness
• Economy 39
 VISION
To make Ethiopia one of the top 5 tourist destinations of Africa in 2020
through the development of its cultural wealth and natural attraction.
MISSION
To study, preserve, develop and promote the cultural wealth and the national
tourism attractions of the nations, nationalities and peoples of Ethiopia and to
build the positive image of Ethiopia with a view to adding a sustainable socio-
economic and political values with popular and stakeholders’ participation.
VALUES
• Respect diversity
• Hospitality
• Transparency
• Accountability
• Commitment to change
• Excellent service
• Participation

40
ANY QUESTION?
Environmental scannin
g

42
Scanning the
environment
EXTERNAL
ENVIRONMENTAL
ANALYSIS
43
ENVIRONMENTAL –
ANALYSIS
“It is not the strongest species
that survive, nor the most
intelligent, but the one most
responsive to change.”
Charles Darwin

44
 Outcomes From External & Internal
Environmental Analyses
By Studying the External By Studying the
Environment, firms identify: Internal Environment,
firms identify:
•What they might
• What they can do?
choose to do?

Examine unique
Examine resources, capabilities &
opportunities & competencies –
threats
sustainable
competitive advantage

45
Analytical Tools of External Environmental
Analysis

1. SCANNING
2. MONITORING
3. FORECASTING
4. ASSESSING

46
External Environmental Analysis

The external environmental

analysis consists of:
1.The general/macro environment

2.The industry environment

3.The competitor analysis

51
External Environmental …
Cont’d

52
 The General
Environment
(PESTE – Analysis)

53
 The General Environment
Analysis of the general environment is focused
on its future impacts on firm’s performance.
In this respect, the awareness & understanding
of an increasingly turbulent, complex & global
general environment is critical.
The general environment influences the firm’s
strategic options & the decisions made in light
of this.

54
 The General Envir (Cont…)
A scan of the external general environment in
which the firm operates can be expressed in
terms of the following factors:
 Political
 Economic
 Social
 Technological
 The acronym PEST (or sometimes rearranged as
"STEP") is used to describe a framework for the
analysis of these external general environmental
factors.
 Firms also add one more E to the PEST analysis
and conduct PESTE analysis to address the
growing interest on Ecological factors.
55
Political Factors:
Political
factors define the legal and regulatory
parameters of organizations’ operation.
 There are laws that could restrict the
potential profits of businesses: fair trade
decisions, anti-trust laws, tax programs,
minimum wage legislation, pollution &
pricing policies

56
Political Factors: cont’d …
Some key Political (Gov’al & legal) variables
 Tax laws
 Environmental protection laws
 Level of government subsidies
 Antitrust legislation
 Terrorist activities
 Import/Export regulations
 Fiscal & monetary policies
 Size of Government budget
 Local, state & national elections
60
 Economic Factors:

Economic assessment must address:

 The overall economic forecast and the
likely funding stream that will be
available.
 The international and national forces
that can affect the economic well being
of the organization should be
analyzed.

61
 Economic Factors: cont’d …
Some key economic variables:
 Availability of credit
 Level of disposable income
 Interest rates
 Inflation rates
 Unemployment trends
 Consumption patterns
 Stock market trends
 Import/Export factors
 Demand shifts
 Price fluctuations
 Fiscal policies
 Tax rates

62
Social Factors:
These factors include the beliefs,
values, attitudes, opinions, and life
style of persons depending up on
cultural, demographic, religious, and
ethnic conditioning.

63
 Social Factors: cont’d …
Some key socio-cultural variables
 Changing work values
 Ethical standards
 Growth rate of population
 Life expectancies
 Rate of family formation
 Consumer activism
 Geographic shifts in population
 Attitudes towards business
 Average level of education
 Attitudes towards leisure time

64
 Technological Factors:
Organizations
must strive to understand technological advances:
must be conscious of technological changes that
could affect its operation
 b/cnew technologies might require new operation
systems and bring about sudden and dramatic effect
on an organization’s environment.
Technological adaptations can suggest possibilities
for
◦ new products,
◦ improvements in existing products, or
◦ in manufacturing and marketing techniques 65
Technological Factors: cont’d …
Some key technological variables
 R&D activity
 automation
 technology incentives
 rate of technological change

66
The Industry
Environment

67
 Analysis of the industry
Definition
An industry is a group of firms
producing products that are close
substitutes
Firms that influence one another
Includes a rich mix of competitive strategies that
companies use in pursuing strategic
competitiveness & earning above-average returns.

68
Porter’s Five-force Model

69
 Interpreting Industry Analyses

Low entry barriers

Suppliers & buyers Unattractive

have strong positions
industry
Strong threats from
substitute products

Intense rivalry
Low profit
among competitors potential

70
Interpreting Industry Analyses cont’d …

High entry barriers

Suppliers & buyers Attractive

have weak positions
industry
Few threats from
substitute products

Moderate rivalry High profit

among competitors
potential

71
Competitor
Analysis
Competitor analysis components

73
 Activities
How can your organization understands
/knows its competitors’:
1. Future objectives,
1. Current strategy,
2. Business philosophies/assumptions,
3. Capabilities: strengths and weaknesses.

So that it prepares better and competes successfully!

Discuss in group and reflect

74
SWOT Analysis (External Environment)

SWOT analysis of the external environment

focuses on opportunities and threats.
OPPORTUNITIES:
An opportunity is a major favorable situation in a
firm’s external environment.

THREATS:
A threat is a major unfavorable situation in a firm’s
external environment. Threats are key ingredients
to the firm’s current or desired opposition.

75
Group Exercise
 SWOT Analysis (External Environment)
 

 List the major opportunities and threats that you believe

your hypothetical organization will face in the next 2-5
years that may significantly influence whether it
succeeds or fails. Identify 4 – 8 of these opportunities or
threats that are most critical to the hypothetical
organization’s future success.
Opportunity Threat

76
 The Internal
Environment
What are the components of IE Analysis?
 Outcomes From External & Internal
Environmental Analyses
By Studying the External By Studying the
Environment, firms identify: Internal Environment,
firms identify:
•What they might
• What they can do?
choose to do?

Examine unique
Examine resources, capabilities &
opportunities & competencies –
threats
sustainable
competitive advantage

78
Internal Analysis of the Organization
As Shown in the diagram an analysis of the
internal environment enables an organization
determine what it can do- that is, the actions
permitted by its unique resources,
capabilities and core competencies.
The proper matching of what a firm can do
with what it might do allows the development
of strategic intent, the pursuit of strategic
mission and formulation of strategies.

79
SWOT Analysis (Internal
Environment)
SWOT analysis of the internal environment
focuses on strengths and weaknesses.
Strengths:
Strength is a resource, skill, or other advantage
relative to competitors and the needs of the
markets a firm serves or expects to serve.
Itis a distinctive competence that gives the firm a
comparative advantage in the market place.
Strengths may exist with regard to financial
resources, image, market leadership,
buyer/supplier relations etc.
80
Internal Analysis cont’d …
Weaknesses:
Weakness is a limitation or deficiency in
resource, and capabilities that seriously
impedes a firm’s effective performance.
Lack of facilities, financial resources,
management capabilities, marketing skills,
and brand image can be source of
weaknesses.
81
 The Process of Performing an
Internal Audit
The process of performing an internal audit closely
parallels the process of performing an external audit.
Representative managers and employees from
throughout the firm need to be involved in
determining a firm’s strengths and weaknesses.
The internal audit requires gathering and assimilating
information about the firm’s management, marketing,
finance/accounting, production/operations, research
and development (R&D), and management
information systems operations.

82
 Group Exercise
 SWOT Analysis (Internal Environment)
 

Instructions:
 List the major strengths and weaknesses of your
hypothetical organization as you see them. Identify 4 - 8 of
these strengths and weaknesses that will be most critical to
your organization’s future success.
Strengths Weaknesses

83
 Value Chain Analysis

Firm Infrastructure

Support
Human Resource ManagementMA
R
Activities G
Technological Development IN
Procurement

Service
Operations

Outbound

Marketing
Logistics

Logistics
Inbound

& Sales

IN
RG
A
M
Primary Activities 85
 Value Chain Analysis cont’d …
Each of an organization’s product lines
has its own distinctive value chain.
Because most organizations make several
different products or services, an internal
analysis of the firm involves analyzing a
series of different value chains.
The systematic examination of individual
value activities can lead to a better
understanding of an organization’s
strengths and weaknesses.
86
Brain storming
Assess your organizations environment!!
Do the following on the exercise sheet

87