Business Strategy and Policy

Week 3
Strategic Planning and Its Benefits and
Pitfalls
 What are the Six Major Components of
Strategic Planning?
•  Vision
• Mission
• Objectives
• Strategy
• Approach and
• Tactics
 Benefits of Strategic Planning
• Sets a direction: A strategic plan helps leaders
plan a direction for their business, highlighting
the areas where they want to grow or
improve. This planning process helps them
identify future opportunities or challenges
they want to address and more easily defines
the goals or activities to help them reach their
desired outcome.
 Benefits of Strategic Planning
• Improves understanding: When setting a
strategic plan, leaders analyse their business
to identify what it does right and wrong.
When leaders and employees recognise their
strengths and weaknesses, it helps them
develop ways to improve and make the
organisation stronger for the future.
 Benefits of Strategic Planning
• Enhances collaboration: An effective strategic
planning process includes the involvement of
individuals across the organisation, such as
gaining feedback from employees.
Collaborating with individuals from various
backgrounds and levels can offer more unique
perspectives and innovative solutions for the
business.
 Benefits of Strategic Planning
• Boosts productivity: When employees are
part of the strategic planning process, it can
help them feel valued and appreciated at
work. As a result, they may be more eager to
work toward the goals outlined in the plan to
show that they've contributed to the
organisation's success.
• All executives know that strategy is important. But
almost all also find it scary, because it forces them to
confront a future they can only guess at.
• An executive may well fear that getting those
decisions wrong will wreck his or her career.
• It may be an excellent way to cope with fear of the
unknown, but fear and discomfort are an essential
part of strategy making. In fact, if you are entirely
comfortable with your strategy, there’s a strong
chance it isn’t very good.
 Common Pitfalls
• Poorly defined goals
• Lack of ownership
• Poor communication
• Lack of alignment, and
• Slow adoption.
STRATEGY FORMULATION:
Vision and Mission
 What is Vision and Mission in Strategic
Management?
• A Mission Statement defines the company's
business, its objectives and its approach to
reach those objectives. A Vision Statement
describes the desired future position of the
company.

Elements of Mission and Vision Statements are

often combined to provide a statement of the
company's purposes, goals and values
 Why is Vision and Mission so Important in
Strategic Management?
• Mission and vision statements play three
critical roles:
•  Communicate the purpose of the organization
to stakeholders
• Inform strategy development, and develop
the measurable goals and objectives by which
to gauge the success of the organization's
strategy.
What is the Role of Vision and Mission in an
Organisation?
• The mission statement provides the
organization with a clear and effective guide
for making decisions, while the vision
statement ensures that all the decisions made
are properly aligned with what the
organization hopes to achieve.
The Difference Between Vision and Mission

• Timeframe: The biggest difference between

mission and vision statements is in the
timeframe. A mission statement outlines all
the things your company is doing in the
present to reach your goal, while a vision
statement describes what your company is
building toward in the future
 What is the Purpose of vision?
• A vision statement describes what an
organisation aspires be.

It also provides direction to everyone in the

organisation as they focus their efforts on
achieving the vision
 What is the Purpose of Mission?

It describes the organization's purpose and its

overall intention. The mission statement
supports the vision and serves to communicate
purpose and direction to employees, customers,
vendors and other stakeholders.
Thank You