Customizing strategic planning model for Iran’s cement industry

Abstract: Strategy is concept which differentiates between success and failure of a
manager. That’s why a substantial volume of management literature has been
devoted to strategy formulation. There are different approaches in
strategy which each one works well in a certain context. Strategic
planning as an approach to strategy making is applicable in organizations
in which production process has low degree of complexity and environment is
fairly stable. Cement companies in Iran experience such a context, so
strategic planning can be a valuable tool for identifying strategies in
cement industry.

This study aims to identify a basic strategic planning model so that it
takes into consideration the characteristics of Iran’s cement industry.
Driving forces, value chain, key success factors, and generic strategies:
are the main elements which have been customized according to industry’s
features. The needed information for this purpose has mainly been gathered
through document review and experts interview.

The findings of the study show that in near future cement companies will
face big changes and they have to meet the requirements of new competition
environment. Economy liberation, elimination of government subsidies and
supports, and a growing demand due to renovation of neighbor countries: are
the main driving forces which shape the future of industry. Primary
activities of value chain have been identified to assess a company against
its competitors. It has been identified that Iranian cement companies
generally have serious problems in their marketing because government’s
interventions have prevented creation of real competition in this industry.
Energy productivity, management skills, capacity utilization, being close
to market, and investment on cement downstream products are the KSFs major
issues which companies should pay close attention. Cost leadership seems to
be the most effective generic strategy in this industry.