Module 1:Introduction to

strategic planning workshop

Yi-Chih Yang

Professor, Department of Shipping and

Transportation Management,

National Kaohsiung University of Science and

Technology

Allison James Lecture, Maritime and Logistics Management

University of Tasmania

(Lecture materials were amended based on

2003 cooperation teaching project between

NKMU and AMC)

Outline

1.1 The nature of managing strategically

1.2 Definitions of strategic planning and management

1.3. Distinctive features of strategic management

1.4. The process of strategic management

1.5 Key industry success factors and performance

1.1 The nature of managing

strategically

• Every organization operates on a Theory of the

Business, that is a set of assumptions as to what

its business is, what its objectives are, how it

defines results, who its customers are, what the

customers value and pay for. Strategy converts

this Theory of the Business into performance. Its

purpose is to enable an organization to achieve

its desired results in an unpredictable

environment.(Drucker, 1999)

• As a manager you have to be clear in your own

mind about what has to be done so that you can

set priorities, pass on directions and delegate

tasks.

• Planning may even assist a manager to

crystallise in his or her own mind what is

required. Planning not only provides directions

but also guidelines for decision-making.

• Making choices and setting priorities is much

easier when you know where you are going.

1.2 Definitions of strategic planning

and management

• Strategy is a set of related actions that

managers take to increase their company’s

performance.(hill and Jones, 2004)

• Strategic management is that set of managerial

decisions and actions that determines the long-

run performance of a corporation. It Includes

environmental scanning(both external and

internal), strategy formulation(strategy or long-

range planning), strategy implementation , and

evaluation and control.(Wheelen and Hunger,

2002)

environmental scanning

• Strategic management can be defined as

the art and science of formulating,

implementation, and evaluation cross-

functional decisions that enable and

organization to achieve its objectives.

(David, 2003)

Benefit of strategic managmnet

• Clearer senses of strategic vision for the

firm

• Sharper focus on what is strategically

important

• Improved understanding of a rapidly

changing environment

1.3 Distinctive features of strategic

management

1. It deals with the long term.

2. It focuses on organisational effectiveness

and efficiency.

Effectiveness means to perform the right activity

or operation at the right time. For a port to be

effective it must possess a number of resources.

This includes infrastructure (for example, berths,

yards) and superstructure (for example, cargo

handling equipment, warehousing, transit sheds)

tugs and navigation aids etc.

• Efficiency relates to how well an activity or

operation is performed vis-à-vis

competitors

• How efficient the port is depends on how it

utilises these resources in order to achieve

objectives. For example, how do you

allocate cargo handling equipment to

achieve a quick turnaround time; how do

you arrange yard space to receive

containers;

3. It requires a broad and comprehensive

knowledge of the organisation and its

environment.

4. Senior managers in consultation with

many others make key strategic

decisions.

5. It occurs at different organisational levels.

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1 | 12

Strategic Managers • Corporate Level Managers

– Oversee the development of strategies for the

whole organization

– The CEO is the principle general manager who

consults with other senior executives

• General Managers

– Responsible for overall company, business unit, or

divisional performance

• Functional Managers

– Responsible for supervising a particular task or

operation e.g. marketing, operations, accounting, human

resources

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Levels of Strategic Management

Yang Ming Line

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Mifflin Company. All

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The Five Steps of the

Strategy Making Process Select the corporate vision, mission, and values and

the major corporate goals and objectives.

Analyze the external competitive environment to

identify opportunities and threats.

Analyze the organization’s internal environment to

identify its strengths and weaknesses.

Select strategies that:

– Build on the organization’s strengths and correct its weaknesses – in order to take advantage of external opportunities and counter external threats

– Are consistent with organization’s vision, mission, and values and major goals and objectives

– Are congruent and constitute a viable business model

Implement the strategies.

6. Strategic management efforts are often

formalised into written strategic plans, but

this need not always be the case. At the core of strategic management is the

development and implementation of a plan of

action that is aimed at ensuring an

organisation’s long term success. This plan of

action is referred to as the strategic plan.

• For instance, a manager, following recent

• trends in, say, ship design, shipping

company size and environmental

awareness, may decide to follow a ‘gut-

feeling’ strategy and may proceed to

divest of investments in some sectors and

pursue joint ventures in others.

1.4 The process of strategic

management 1. the formulation of the organisation’s mission

statement, including a broad statement about

its philosophy for the future;

2. discussion of the organisation’s external

environment, including both the competitive

and general contextual factors, often referred to

as an external analysis or as assessing

external factors;

3. the development of a company profile that

reflects internal conditions and capabilities,

often called an internal analysis or assessing

organisational factors;

4. the establishment of goals and

objectives;

5. the selection of a set of strategies;

6. the implementation of the plan; and

7. the evaluation and control of the plan.

Formal strategic planning

process

1. Select the corporate mission and major

corporate goals

2. Analyze the organization's external

competitive environment to identify

opportunities and threats

3. Analyze the organization's internal

operating environment to identify the

organization's strengths and weakness

4. Select strategies that build on the

origination's strengths and correct its

weakness in order to take advantage of

external opportunities and counter

external threats.

5. Implement the strategy.

Wheelen and Hunger

Copyright © Houghton

Mifflin Company. All

rights reserved.

1 | 24

The Five Steps of the

Strategy Making Process

1. Select the corporate vision, mission, and values and

the major corporate goals and objectives.

2. Analyze the external competitive environment to

identify opportunities and threats.

3. Analyze the organization’s internal environment to

identify its strengths and weaknesses.

3. Select strategies that:

– Build on the organization’s strengths and correct its weaknesses – in order to take advantage of external opportunities and counter external threats

– Are consistent with organization’s vision, mission, and values and major goals and objectives

– Are congruent and constitute a viable business model

4. Implement the strategies.

Main Components of the

Strategy- Making Process

Source: C. W. L. Hill and G. R. Jones, Strategic management

theory , Prentice Hall, 2002.

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Processes for Improving

Decision Making

Reveals problems with

definitions, assumptions,

& recommended courses

of action

To bring out all the

reasons that might

make the proposal

unacceptable

Source: Source: C. W. L. Hill and G. R. Jones, Strategic

management theory , Prentice Hall, 2002.

• Key strategic management concept

• An organisation’s mission, objectives and

strategy and approach to implementation

are never final; evaluating performance,

monitoring changes in the surrounding

environment and making adjustments are

normal and necessary parts of the

strategic management process

1.5 Key industry success factors

and performance

• Key success factors is a management term for

an element that is necessary for an organization

or project to achieve its mission.

• Critical success factors are those few things that

must go well to ensure success for a manager or

an organization and, therefore, they represent

those managerial or enterprise areas that must

be given special and continual attention to bring

about high performance.

• CSFs include issues vital to an organization's

current operating activities and to its future

success.Defining key success factors is,

however, no easy task. In container trades, for

instance, a port’s ability for fast ship turn around

times is critical to its success.

• A SWOT analysis will not only determine

acceptable turn around times but also identify

the reasons behind a particular port/terminal’s

speed (technology, well trained personnel, good

industrial relations and so on).

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