Strategic Planning

Why strategic planning ?

It gives a clear vision of internal and external

environment of a business firm

Focus on what is most important and how it is to

be managed for success of business.

Understanding of problem, its nature ,its threats,

its controls and implications.

Appropriate decisions to implement the

strategies evolved to achieve the desirable

objectives.

A continuous monitoring and evaluation of the

progress through the path to the goals

TASKS IN STRATEGIC PLANNING

Clarifying the mission of the corporation

Defining the Business

Surveying the environment

Internal appraisal of the firm

Setting the corporate objectives

Formulating the corporate strategy

Monitoring the strategy

STRATEGIC PLANNING PROCESS

1. Clarifying the mission of corporation

2. Defining the business

3. Surveying the environment

Macro environmental factors

Environmental factors specific to business

concerned

Demographic Socio-cultural Economic Political

Natural Technological Legal Govt Policies

Industry& Competition Market/Customer Technology

Supplier Factors Govt. Policies

The strategic planning process

Spotting the opportunities & threats

Checking the attractiveness and probability

position of these opportunities

Highlighting those opportunities the pursuit of

which will help the firm bridge its strategic

planning gap

Developing the opportunities-threats profiles

(OTP)

4. Internal appraisal of the firm.

Assessing the firm’s capabilities/strengths &

weakness in the various areas:

Finance Marketing Human Resources

Operations R&D General Management

The strategic planning process

Developing the strength-weakness profile

Appraising the individual businesses/strategic

businesses units (SBU) of the firm

Identifying the competitive advantage and core

competencies and developing the competitive

advantage profile (CAP).

Examining the capability gap (gap between the

existing capabilities and the ones needed for

pursuing spotted opportunities)

5. Setting the corporate objectives.

• Framing the broad aims of the corporation ,using the

corporate mission as the guide.

• Examining the strategic planning gap and checking the

growth scope

• Fixing the growth objective

• Setting the objectives in all major areas:

-Growth in assets, sales, profits, market shares

• Prescribing the hierarchy /Rank / Priorities of the objectives

Profitability Competitive Position Technology

Productivity R&D and Innovation Human Resources

Corporate Image Social Responsibilites

6. Formulating the corporate strategy : Exploring generic

alternatives.

• Examining which generic strategy the firm should opt for:

• Stability ?

• Expansion ?

• Divestment ?

• Combination ?

• Understanding the effect of the alternatives in terms of

changes /additions / deletions to the firms existing product

market posture.

• Clarifying the competitive advantage and synergy which

each alternative would require / use.

7.Formulating the corporate strategy : Strategy Choice

• Evaluating the strategy alternatives

• Keeping the OTP, the growth objective and CAP as the

reference frame, examining what strategy would be the

best

• Reviewing the existing businesses

Assessing the prospects of each SBU

Examining what to do with each SBU

-Build ? Maintain ? Harvest ? Divest ?

-To what extent ?

-At what pace ?

• Examining which new businesses are to be taken up

• Examining the resource requirement of the different

strategy options and checking the resource availability

• Make the final choice of the strategy / Strategy Spectrum

• Translating the strategy in terms of what is to be done with

each SBU

-Assigning the priorities to the SBUs , existing as well as

new ones

-Clarifying what is expected to each SBU

- Allocating resources to the SBUs

8. Monitoring the strategy.