Guide to understanding the process of strategic planning
Strategic planning
Strategic planning is an important step in any business. It gives a plan of action as to how to best enter the market, so that capital is not lost or the loss is minimal to begin with and with long term profit is in mind. It ensures consistency across functions, products and regional units. It dictates the functional activities of the company and the way in which it interacts with others. A great strategy is one step ahead of competitors, difficult to imitate or replace and value for money, therefore encouraging customers to be drawn to the company only.
Strategic planning is a process whereby an organization determines the direction , objectives and priorities and aligning their resources to accomplish the actions necessary to meeting them. In order to plan strategically the company requires to analyze internal and external environments and define its business, mission statement, goals and objectives and what are their strategies in meeting the targets? In order to achieve the objectives there should be an action plan based on external environmental forces, Internal SWOT analysis, reduction of costs and local market adaptation. Objectives quantify the aims in terms of how much, what, where, when, how of the strategy (Schmit, Laycock,2011).
In planning the strategy SMART objectives; Specific, Measurable, Achievable, Relevant and Time constrained. The objectives must be specific and it should be quantifiable so it can be measured, for example how much profit will the company gain by end of 2016. It should be achievable, if the targets are set too high, then the targets will not be reached and company goes bankrupt. For example if the company sets their first year profit margin to be ten million pounds, then it would be a very unreasonable and perhaps a target of 500,000 might be achievable (Schmit, Laycock,2011).
The objectives must be relevant to the business, so if the company is making educational software and decides to break into a new market it knows nothing about such as making computers, then it is not relevant to their business. Targets can only be met feasibly if there are time limits as to when objectives will be met, with a specific date and a very small degree of flexibility. Setting time limits organizes the process into mini goals and it is more achievable (Schmit, Laycock,2011). It also dictates how long it is before the project is on the way so for example money borrowed from a bank will incur further charges if it is later and puts pressure on finances as well as delays in opening a company or introducing a product into the market has a danger of competitors copying what they might want to do or losing new customers because they have not opened on time.
Core competencies
Core competencies relate to the skills, knowledge, expertise and appropriate attitudes in a specific field that people bring to the job. The right type of people should be brought into the business, with the correct set of skills. It is not appropriate and it is costly to bring a Turkish foreman who cannot speak English to work in the company, even if he knows how the machines work. Communication is one of the basic skills. The manager for each section must be trained to the correct level of competencies and attitudes, in order to manage the company effectively and move it forward (Schmit , Laycock,2011).
There should be regular reviews of the objectives and updates of where the company is at, at that point in time. The objectives may need to change slightly or rescheduled according to issues that may arise. There is no point saying this building will finish on time, when suddenly exports of main materials such as cement has stopped temporarily or until further notice, because America has decided to stop exports for whatever length of time, due to change of president. This also has financial implications, so reassessing the situation and contingency planning is essential.
Mission statement, vision statement, value statement
Mission statement is a general statement which is defined as the purpose and reason for the organization to exist. The statement declares the current customer’s needs. Vision statement is where the company sees its future. It is a statement to give hope but also purpose that in 5 or 10 years time from now something should have been achieved. Value statement states what the organization stands in terms of beliefs and expected behavior. It is passionate and core beliefs. These beliefs set out rules as to how run activities and have goals in the organization and states what each company stands for. Review of issues involved in strategic planning such as strategic thinking, staff involved, time to plan, planning systems (Sage, 2016).
Have to finish ...Different planning techniques; BCG growth-share matrix, directional policy matrices, SPACE, PIMS.... More references
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References
Sage,S., 2016. Strategic planning terms.
Available at:
[Accessed 5.12.16].
Schmit J.C., Laycock, M.,2011.Theory process strategy development . Available at: [Accessed 5.12.16].
