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Learning Objectives

• Identify the primary steps in a strategic planning process


• Benefits of formal procedures for planning

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Strategic Planning Process
 A set of procedures for -
• setting long range quantified overall corporate objectives and of
• determining the strategies, and
• assigning accountabilities, within policies that govern the acquisition and
allocation of resources
• to achieve the fundamental purpose of the organization.
FORMAL Strategic Planning Process
to convey that an organization’s strategic planning process involves
explicit systematic procedures
Purpose and Benefits
1. Ensure top managers are on the same page
2. Makes top managers paying attention to the same important matters at the same
time
3. Without the structure that comes with formal strategic planning contributions may
become unbalanced
4. Moderate the use of power in a planning group
5. Help groups to deal effectively with conflicts
6. Help to give a sense of direction to meetings
7. Formal planning procedures enable evaluation of progress
Five stages of Strategic Planning Process
 Initial Assessment
Situation Analysis
Strategy Formulation
Strategy Implementation
Strategy Monitoring
1. Initial Assessment
 To determine and assess the company ̓s:
• Vision
• Mission
 To give a clear image of what success looks like for the business
Components of a Mission statement
Mission

• Purpose of the company, or a statement of what the company strives to do

Vision

• Articulation of a company’s desired achievements or future state

Values

• Statement of how employees should conduct themselves and their business


to help achieve the company mission

Goals

• Precise and measurable desired future state that a company attempts to


realize

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2. Situation Analysis
 To determine and assess the company ̓s current situation in the
market.
 This includes evaluating an organization’s
• external environments – key external forces : macro and micro
environments and competition.
• Competitors - assess their competitors using competitors profile
matrix and benchmarking to evaluate their strengths, weaknesses
and level of performance.
• internal environments - includes the assessment of the company’s
resources, core competencies and activities.
2. Situation Analysis
 It identifies strengths, weaknesses, opportunities and threats for
the organization and reveals a clear picture of company’s situation
in the market
3. Strategy Formulation
 To develop strategic plan
To prioritize major objectives, important questions such as the following
should be asked:
• Which of these initiatives will have the greatest impact when it comes to achieving
our company mission/vision and improving our position in the market?
• What types of impact are most important (e.g. customer acquisition vs. revenue)?
• How will the competition react?
• Which initiatives are most urgent?
• What will we need to do to accomplish our goals?
• How will we measure our progress and determine whether we achieved our goals?
3. Strategy Formulation
 The 3 different levels of strategies:
1. Business level strategy - used when strategic business units (SBU), divisions
or small and medium enterprises select strategies for only one product that
is sold in only one market.
2. Corporate level strategy - choosing which products to sell, which market to
enter, whether to acquire a competitor or merge with it, selecting between
integration, intensive, diversification and defensive strategies.
3. Global/International strategy. The main questions to answer: Which new
markets to develop and how to enter them? How far to diversify?
3. Strategy Formulation
4. Strategy Implementation
To execute and manage the plan
Communication is essential as new strategies must get support all
over organization for effective implementation.
6 steps of strategy implementation
1. Setting annual objectives;
2. Revising policies to meet the objectives;
3. Allocating resources to strategically important areas;
4. Changing organizational structure to meet new strategy;
5. Managing resistance to change;
6. Introducing new reward system for performance results if needed.
4. Strategy Implementation
5. Strategy Monitoring
• Implementation must be monitored to be successful.
• To measure performance which need to be measurable and
comparable
Main components of the strategic planning
process Feedback

External Analysis:
Opportunities Designing
and Threats Organization
Existing Business Model

Structure
Strategies:
Functional,
Mission, Designing
SWOT Strategic Business, Governance
Vision, Values, Organization
Choice Global, and and Ethics
and Goals Culture
Corporate-
Level
Designing
Internal Analysis: Organization
Strengths and Controls
Weaknesses

Strategic Formulation Strategic Implementation


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Thank you..