Strategic Planning

Why strategic planning ?
y It gives a clear vision of internal and external y y y


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


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

1. 2. 3.

Clarifying the mission of corporation Defining the business Surveying the environment
y Macro environmental factors
Socio-cultural Technological Economic Legal Political Govt Policies

Demographic Natural

y Environmental factors specific to business

Industry& Competition Supplier Factors Market/Customer Govt. Policies Technology

The strategic planning process
y Spotting the opportunities & threats y Checking the attractiveness and probability

position of these opportunities y Highlighting those opportunities the pursuit of which will help the firm bridge its strategic planning gap y Developing the opportunities-threats profiles (OTP)

Internal appraisal of the firm.
y Assessing the firm¶s capabilities/strengths &

weakness in the various areas:
Finance Operations Marketing R&D Human Resources 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)

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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
Profitability Productivity Corporate Image Competitive Position R&D and Innovation Social Responsibilites Technology Human Resources

‡ Prescribing the hierarchy /Rank / Priorities of the objectives

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.

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