The Art, Science, and Craft of Decision-Making

Consider this high-level introduction to Strategic Management and its applications. Outline or take notes as you read, and pay attention to the key points identified in each section. Consider the three-legged stool explanation 5 minutes into the Kryscynski video you just viewed, especially the summary. How do the three legs compare with this book's three main processes of strategic business management?

Business Plans

Operational Plan

The plan outlines how we will service our clients cost effectively

  • Research and Development Plan
  • Manufacturing/Deployment Plan
    • Supply chain requirements
    • Production inputs
    • Facility requirements - size, layout, capacity, location
    • Equipment requirements
    • Warehousing needs for raw materials, finished goods
      • Space requirements

  • Information and Communications Technology Plan
    • Systems needed
      • Operations: Billing, HR, SCM, CRM, Knowledge bases, etc.
      • Websites: internal, public
    • Security and privacy requirements
    • Hardware requirements
    • Off-the-shelf software needed
    • Custom development requirements

  • Staffing Plan

Staffing Needs

    • List of roles
    • Management structure
    • For each role
      • Number of employees
      • Proposed compensation
      • Availability
  • Union Issues
  • Training Requirements
  • Hiring Time Table
  • Staffing Budget

  • Business Process Outsourcing Plan

  • Asset Development Plan
Intellectual Property Plan
    • Intellectual property inventory
    • Portfolio development plan
  • Acquisition Plan

Some business plans gain competitive advantage by buying companies up and down the value chain. Some gain competitive advantage by buying up companies and consolidating them. Sometimes a business plan will seek to earn a superior return by adding superior management talent to an existing weak company.

For more information see Mergers and Acquisitions.

When acquisitions form a major part of the business strategy, the acquisition plan needs to be included in the business plan.

  • Acquisition strategy
  • Proposed acquisition targets
  • Effect on market structure (if consolidation plan is being proposed)

Also, some acquisition plan will explain the basis of appointing the Liquidator of the acquisition procedures


Organizational Learning Plan

The organizational learning plan discusses what lessons will be learned from the marketing, operational, and finance plans and how those lessons will be consolidated to gain strategic advantage.

  • Market sensing - organization's method for collecting information about customers (George Day)
  • Strategic Staircase - the accumulation of future competencies by building on existing competencies. (Michael Hays, Costas Markides)

Cost Allocation Model

If variable costs play an important role in the business plan, it may be helpful to include a cost allocation model. This is particularly true if one has a unique business model that creates competitive advantage by transforming traditionally fixed costs into variable costs.

  • Fixed cost
  • Variable costs