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Design and Development of Strategy Processes at RACC
1. What have been the goals of the strategic planning exercise at RACC over the years? What are the advantages and disadvantages of the RACC approach?

Previously all the strategic planning exercises involved a wide management participation coupled with bottom-up approach. The aim was the development of a multi-product and multi-channel strategy.

In 2000-02 the emphasis of the strategic plan was focused on geographical expansion. Which were formed by participative process by including 21 senior managers from level 1 and 2 who carried out and external analysis, followed by an internal feasibility analysis. As a result, five corporate strategic priorities were identified, with expansion to the rest of Spain as the highest priority.

In 2003-06 the focus of the strategic exercise was to tackle the issue of how to capitalize on the successful expansion. The middle level was given more importance in terms of participation.

Significant changes in the market had occurred in 2005 and 2006 along with diversification of RACC’s core business had initiated a change in the approach to strategic planning process to bring the business back to its shape. From a broader participative approach, RACC started practicing a top-down approach. The goal went to being the development of a multi-product and multi-channel strategy while ensuring compatibility with the ongoing and revised strategy that had already begun to be implemented. The objective of the change was to increase the profitability and secure the survival of RACC in the insurance business keeping the multi-product and multi-channel strategy as the key strategy in order to increase cross-selling opportunities and to increase the sales revenue and market share.

In 2005, unexpected stagnation of the insurance businesses proved difficult for RACC to function as a result the top management had to abandon the bottom-up approach in order to quickly react to...
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