Chapter 4

Strategic and Operational Planning

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XFL
A great idea does not guarantee success. In fact, for every ten products introduced, eight fail. The reason for this high rate of failure? Poor planning. A prime example is the now-defunct XFL, which was the World Wrestling Federations attempt at developing a new professional football league.
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Strategic vs. Operational Planning

In strategic planning, management develops a mission and long-term objectives and determines in advance how they will be accomplished. In operational planning, management sets short-term objectives and determines in advance how they will be accomplished.
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The Strategic Process

Develop mission Analyze environment Set objectives Develop strategies Implement and control strategies

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Three Levels of Strategies

Corporate Business Functional

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Situation Analysis
Draws out those features in a companys environment that most directly frame its strategic window of options and opportunities.

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Situation Analysis: Three Parts

Analysis of the companys industry and its competition Analysis of the companys particular situation Analysis of the companys competitive advantage (or lack thereof)

Lussier/Kimball, Sport Management, First Edition Copyright 2004, by South-Western, a division of Thomson Learning

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Five Competitive Forces

Rivalry among competing firms Potential development of substitute products and services Potential entry of new competitors Bargaining power of suppliers Bargaining power of consumers
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Company Analysis: Five Steps

Step 1: Assess present strategy Step 2: Analyze SWOTs Step 3: Assess competitive strength Step 4: Make conclusions Step 5: Decide what issues to address

Lussier/Kimball, Sport Management, First Edition Copyright 2004, by South-Western, a division of Thomson Learning

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Competitive Advantage
Specifies how the organization offers unique customer value. What makes us different from our competition? Why should a person buy our product or service over the competitions?
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Goals and Objectives

Goals state general targets to be accomplished. Objectives state what is to be accomplished in specific and measurable terms by a certain target date.

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Management by Objectives
MBO is the process by which managers and their teams jointly set objectives, periodically evaluate performance, and reward according to the results.

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Grand Strategies
Growth Stability Turnaround and Retrenchment Or a combination thereof

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Corporate Growth Strategies

Concentration Backward integration Forward integration Related and unrelated diversification Mergers Acquisitions
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Business Portfolio Analysis

Corporations determine which lines of business they will be in and how they will allocate resources among the different lines. A business linealso called a strategic business unit (SBU)is a distinct business with its own customers that is managed reasonably and independently of the corporations other businesses.
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BCG Growth-Share Matrix

Cash cows Question marks Stars Dogs

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Business-Level Strategy
Adaptive Strategies: prospecting, defending, and analyzing. Competitive Strategies: Michael Porter identifies three effective business-level : differentiation, cost leadership, and focus.

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Product Life Cycle

Introduction Growth Maturity Decline

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Functional-Level Strategies
Operational strategies are used by every functionallevel departmentmarketing, operations, human resources, financeto achieve corporate- and business-level objectives.

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