The following presentation was prepared by Dominique Garval, Professor at the
Reims Management School in Reims, France. It follows the logic and content of
his chapter on strategic planning in the textbook, The Management of Strategy
in the Marketplace, edited by Cadotte and Bruce. (See chapter 3.)
The lecture fits nicely at the start of the Marketplace exercise when the teams
are beginning to formulate their strategic direction or during the quarter when
the marketing plan is being prepared.
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategy Formulation
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
What is Strategy ?
A Voyage on the Ocean
Controls
Objective
Strategy
Formulation
Tactics
Strategic
Analysis
x
Strategic
Option
x
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
• Objective :
To get from Copenhagen to Helsingborg as fast as possible and as
cheaply as possible
• Strategic Analysis
Departure point / Prices / Weather conditions / Sea conditions /
Traffic conditions / Departure times / Duration of journey ….
• Allocated Resources
Business Expenses
• Strategic Options :
Bus? Rental car? Taxi? Helicopter shuttle? Boat? ….
• Strategy :
Take the helicopter shuttle
• Tactics :
Choose departure time / Prepare luggage / Buy ticket / Take ear
plugs / Board the helicopter / Fasten seat belt …..
Example
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Strategic Planning
Business Example
OBJECTIVES STRATEGY TACTICS
PURPOSE
Set ultimate
objectives
Meet ultimate
objectives
Meet contributing sub-
objectives
ACTIVITY Think / Doubt Think / Doubt Act / Believe
TIME HORIZON Longer term Long term Short term
MAGNITUDE OF
EFFECTS
Larger amplitude Large amplitude Small amplitude
EXAMPLE
(ONE STRATEGIC
THRUST)
•Improve profitability
• …
•Gaining a
competitive
advantage based
on lower
production
cost
• ….
•Partnering for
economies of scale
•Acquiring new
manufacturing
technology
•Improving changeover
costs
• …
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Firm
Market
Business
Administration
Firm
Market
Competition
Business
Strategy
Environment
DO WELL
(70 ’s and earlier)
DO BETTER
(70 ’s and after)
Why Business Strategy ?
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategic Process
Results to be
attained before
a certain date
Actual actions and
operations that are
necessary to
execute strategy
Objectives Strategy Tactics
Set of carefully
selected / integrated
business priorities
to achieve objectives
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategy (as formulated)
Problem
Strategy
Formulation
Tactics
Controls
Strategic
Analysis
Objectives Strategy Tactics
•Resources made
available
•Strategic options
•Choice of one option
•Strategic Thrusts
•Internal appraisal
•External appraisal
•Tactical Plans
•Execution
•Definition of
problem
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategy (as crafted)
PROBLEM / ISSUE
Resources
Analysis
Objectives
Strategy
Tactics
Scorecard
People
Timing
Finance
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Key Questions
1. What is the problem to be solved? (Objectives)
2. What is the relevant information? (Strategic Analysis)
(internal / external assessment)
3. Which of all our available resources
do we allocate to this particular problem? (Strategic Plan)
4. What are the options? (Strategic Plan)
5. Which option to select and for which reasons? (Strategic Plan)
6. What are the strategic thrusts? (Strategic Plan)
7. How to implement the chosen solution? (Tactical plans)
followed by:
8. Implementation of chosen solution and controls (Tactical execution)
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Level 1 Level 2 Level 3
Worldwide
Operations
European
Operations
Poland
Operations
Objectives
Saint Paul
Increase Sales
London
Geographical
Expansion
London
Polish
Market Entry
Strategy
Geographical
Expansion
Polish
Market Entry…
Polish
Marketing
Strategy
JOHNSON SCREENS : FROM SAINT PAUL TO WARSAW
The Vertical Perspective
(Example)
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategy Formulation :
The Vertical Perspective
Objectives
Strategy Objectives
Strategy Objectives
Level 1
Level 2
Level 3
Tactics
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Vertical Perspective
(Marketplace)
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Finance
Strategy
Finance
Objectives
Production
Objectives
Production
Strategy
Objectives
Strategy
Marketing
Objectives
Marketing
Strategy
FunctionsFirm
Product
Objectives
Price
Objectives
Distribution
Objectives
Distribution
Strategy
Price
Strategy
Product
Strategy
Communication
Objectives
Strategic Toolbox
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Vision
The impossible dream …..
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Vision
(McDonald ’s)
McDonald ’s vision is to dominate the global
food service industry. Global dominance means
setting the performance for customer
satisfaction while increasing market share and
profitability through our convenience, value and
execution strategies.
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Mission
The definition of the boundaries of
acceptable activities
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Mission Statement
(McDonald ’s)
Serving a limited number of hot, tasty, food
quickly in a clean, friendly restaurant for a good
value to a broad base of fast food customers
worldwide.
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Values
• What a company believes in and stands for …
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Values
(Wal-Mart)
• Frugality
• Hard work
• Constant improvement
• Dedication to customers
• Genuine care for employees
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
SWOT :
Strategic Analysis
• Internal analysis
• The firm itself
• External analysis
• The market
• The competition
• The environment
Opportunities
& Threats
Strengths
& Weaknesses
Strategy
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
• A process of distillation
• Interpretation: different people = different conclusions
• Critical question : So what ?
• Fact based - no wishful thinking
• Necessary assumptions --> contingency plans
• SWOT = basis for strategic options
What makes a good strategic analysis?
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Preparing your Plan
Given your vision, mission and values :
1. List the objective(s) to be met,
2. Perform a SWOT,
3. Identify the resources available,
4. Build strategic options – select one,
5. List the resulting strategic thrusts,
6. List the resulting action items,
7. Prepare a formal plan
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategy Implementation
& Control
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
ObjectivesStrategyTactics
Action Item 1
Action Item 2
Action Item 3
Action Item m
Strategic Thrust 1
Strategic Thrust 2
Strategic Thrust n
Objective 1
Objective p
Strategy
Formulation
Strategy
Implementation
Action Items
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Organizational Aspects
(McKinsey 7S Model)
Shared
Values
Staff
Structure
Skills Style
Strategy Systems
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Strategic Planning
Hard Elements
Soft Elements
Scheduling Aspects
Tasks
1
2
3
4
5
6
7
.
.
.
Time
(Time linkages)
Deadline
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Strategic Planning
Gantt diagram
Financial
Projections
Acceptable?
Rework
Plan
Initial
Plan
Financial
Projections
Acceptable?
Rework
Plan
Financial
Projections
Acceptable?
Plan
Validated
No
No
Yes
Execution
Financial Validation of the Plan
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategic Management Systems
Scorecards
“What you do not measure,
You do not manage…”
Manageable
Amount
Useful
Understandable
Compared to
Reference Values
Financial &
non Financial
Performance &
Performance Drivers
Real Time
Internal &
External
Information Provided
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategic Management Systems
Scorecards
Given a Strategy
……
…..
Delta (t)= Measured Indicator (t) - Target (t)
…..
Scorecard
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Strategic Management Systems
Scorecards
Given a Strategy
……
……
……
Scorecard
Indicator (t)
Time
Target (t)Delta (t)
Strategic Management Systems
Scorecards
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Financial
Strategy
Clients
Internal
Process
Growth &
Development
Balanced Scorecard
(Norton & Kaplan)
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Objectives
Indicators
Targets
Objectives
Indicators
Targets
Objectives
Indicators
Targets
Objectives
Indicators
Targets
Balanced Scorecard
Key Questions
Financial Perspective Indicators / Targets :
To succeed financially, how should we appear to our shareholders?
Customer Perspective Indicators / Targets :
To achieve our vision, how should we appear to our customers?
Internal Business Process Perspective Indicators / Targets :
To satisfy our shareholders and customers, what business processes
should we excel at?
Learning and Growth Perspective Indicators / Targets :
To achieve our vision, how will we sustain our ability to change
and improve?
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Balanced Scorecard
Typical Indicators /Targets
Financial Perspective :
Share price, EVA, MVA, EPS, ROI, ROA, Contribution …
Customer Perspective :
Share, Image, Awareness, Level, Loyalty Level, Satisfaction …
Internal Business Process Perspective :
Time to Market, Quality Indicators, Productivity Indicators …
Learning and Growth Perspective :
Employee Turnover, Social Climate, Employee Satisfaction, Skills …
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Performance Scorecard
Objectives
Strategy
Tactics
Level i-1
Indicators
Targets
Indicators
Targets
Indicators
Targets
Objectives
Strategy
Tactics
Indicators
Targets
Indicators
Targets
Indicators
Targets
Level i
1. -
2. ...
1. -
2. -
3. …
1. -
2. -
3. -
4. -
5. -
6. -
7. …
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
The Management
of Strategy
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Management of Strategy
• Stated objectives vs. achieved results?
• Planning vs. plans?
• Success vs. luck?
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Planned & Emergent Strategy
(Mintzberg)
Planned
Strategy
Deliberate
Strategy Realized
Strategy
Unrealized
Strategy
Emergent
Strategy
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
When to Modify a Strategy?
Problem
Strategy
Formulation
Tactics
Controls
Strategic
Analysis
Actual Performance
Different from
Planned Performance
Unexpected Changes
in the Environment
Experience
Gained
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
How to Modify a Strategy?
Problem
Strategy
Formulation
Tactics
Controls
Strategic
Analysis
Last First
Priority Order for Strategy Modifications
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Initial Plan
Assumptions
Contingency Plans :
Dealing with Assumptions
Initial Plan
Contingency
Plans
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Review & Key Strategic Lessons
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
“ Plans are useless –
Planning is everything! ”
Dwight Eisenhower
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
“ Are you lucky? ”
General Napoleon Bonaparte
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
“ Chance favors the prepared mind. ”
Louis Pasteur
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
Key Strategic Lessons
• Strategy formulation is painful
• Not a single solution to business problems
• No pure analytical solutions to business problems
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
• Cannot believe models - but cannot afford to neglect
them
• Extinction by instinct - paralysis by analysis
Key Strategic Lessons
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
• An optimum long-term strategy is not a sequence of
optimum short-term strategies
• Business continues during refurbishing
Key Strategic Lessons
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning
• In a turnaround situation, long-term is short-term and
performance is cash
• A key resource is management time
• A good long-term strategy also requires a strong shortterm
financial position
Key Strategic Lessons
16 September 2021Copyrighted in its entirety, Dominique Garval,
Strategic Planning