6. Strategic Problems and Priorities
6.1. Problem Statements
Based on the situation analysis, briefly list all of the strategic issues/problems/ opportunities/challenges revealed by the situation analysis, the SWOT analysis, and the strategic assessment. Think strategically: what are the most critical and fundamental issues the company needs to grapple with to obtain and/or sustain a competitive advantage? Make sure the problem/issue statements are focused, concise, clear, and well written. Each problem statement should be communicated in one sentence and written in
italics
to make it easy to see. When writing each problem statement, please keep the following in mind:
BAD problem statements are not firm-specific, meaning they are generic and could be said about any company. Moreover, problems like poor profitability and limited market share are often symptoms of more fundamental issues such as poor R&D, bad customer service, failing to leverage company resources/capabilities, improper management, etc.
· Bad Example #1: ABC Inc. needs to internationalize to increase its market share. (This statement is superficial and not firm-specific.)
· Bad Example #2: ADAMS Division of ACME Corp needs to increase profits or sales. (This statement identifies is a symptom of a problem, not the problem itself.)
GOOD examples of business-level problem statements are detailed and firm-specific:
· Good Example #1: BETA Corp has failed to exploit its strong marketing capabilities to target college students with their digital notepad products, which convert pen-and-paper notes into digital format, resulting in severe declines in new and repeat sales from the college segment over the past five years.
· Good Example #2: The central problem with GAMMA Inc. is that its production facilities are geared for small, niche jobs in support of its product differentiation strategy despite the fact that the industry environment—especially intense rivalry—is is generally better suited to a low-cost leadership strategy.
Once listed, briefly discuss each problem statement. Use very specific information, facts, data, etc. to convey the relevance, significance, and importance of the problems/issues. Again, be as specific as possible—no vague or generic commentary here. For each statement, discuss the following: What is the magnitude of the problem? Is the problem/issue major or minor? Is the problem part of a bigger problem? Is the problem/issue “stand alone” or is it intertwined with more fundamental factors/problems/issues inside or outside the company? What happens if the problem/issue is ignored? If the problem/issue is inadequately resolved, are we talking about the end of the company as we know it or would it be a minor setback. (NOTE: the bigger the problem/issue, the more interesting and engaging the project will be.)
6.2. Strategic Priority
Now look over your list of problem statements. Clearly state which of the core problem statements from the above list is the single most important problem/issue/challenge/opportunity for the company to address or resolve? Clearly explain why this is the strategic priority for the company.
By the way, if you are convinced that your company is very well run and faces no major problems (this has to be justified), focus on any future problems/issues indicated by your situation analysis. Your problem statements should discuss any future problems/issues/opportunities/challenges the company will have to deal with to maintain its competitive advantage. Remember, no company—no matter how successful—can keep doing the same thing and remain competitive. Stated differently, "If it isn't broken, don't fix it" is not a valid conclusion for the strategic plan.
NOTE: Given the Strategic Priority, now discuss with your teammates how to respond to the problem.
7. Strategic Options and Recommended Response
7.1. Strategic Options
Identify as many alternative strategies as possible for fixing/addressing the strategic priority. These options should be creative and strategic, realistic and plausible, and build on firm-specificinformation uncovered by the situation analysis. DO NOT suggest generic or “business as usual” solutions to the problem. Also, each option MUST be mutually exclusive (this means that it is not possible to implement more than one strategy to fix the Strategic Priority). When writing each strategic response statement, please keep the following in mind:
BAD Strategic Options for the BETA Corp problem statement above:
· Bad Option #1: BETA should reduce their marketing budget by 50 percent. (This is a bad example because it does not fix the “repeat customer” problem.)
· Bad Option #2: BETA should expand their operations overseas. (This is a bad example because it is too generic, does not fix the repeat customer problem, and is not mutually exclusive with other responses.)
GOOD Strategic Options for the BETA Corp problem statement above:
· Good Option #1: BETA should develop a strategic alliance with textbook publisher GOTCHA LLC to develop paper templates for students to speed note taking in class or while reading. (This is a good example in that it may fix the specified problem, builds on firm specific resources, and it suggests a firm-specific action.)
Once stated, briefly discuss each strategic option. Use quantitative information, facts, data, etc. to convey the effectiveness of your solution. Again, be as specific as possible—no vague or overly general commentary here. For each strategic response, discuss the following: How likely is the strategic response to fix/address the strategic priority? Will the strategic response fix/address other problems in addition to the strategic priority? How risky it the strategic alternative? What happens if solution fails?
7.2. Strategic Recommendation
Now look over the strategic options. Clearly state which of the strategic options you recommend as the solution/response to the strategic priority. Give some discussion as why the rejected strategic options are not as good as your strategic recommendation. Provide good, concise, and logical support for your position.
Use the VRIN framework to evaluate whether and how your strategic recommendation will translate into sustained competitive advantage. NOTE: It is critical that you demonstrate mastery of the VRIN framework here. Discuss the V, R, and I of your recommendation and briefly comment on the N.
7.3. Implementation Plan
Describe in some detail how the firm should go about implementing the strategic recommendation. Provide a timeline for implementation, a list of the resources or capabilities the company needs to acquire or develop, some assessment of costs involved (to the extent available financial information allows), the organizational/structural changes required and problems that might be encountered during the implementation. Talk in specifics. (HINT: If you recommend a merger or international strategy, for example, be sure to discuss how the structure/controls will have to change as a result!)
Provide a summary back-up plan. Discuss the conditions under which your strategic recommendation might not work. For example, does your strategic recommendation depend on the economic recovery or interest rates remaining low? If your strategic recommendation cannot be implemented as planned, then what would/could the company do?
8. Conclusion
Offer some substantive concluding remarks to your strategic plan. What did you learn about your company that is interesting, surprising, and/or telling about its past and future competitive advantages? In the last paragraph, make a prediction something that might happen in the next 12 months (e.g., growth, bankruptcy, M&A, etc.).