The organization should get involved in strategic planning that evidently specifies goals and objectives in addition to analyses both the internal as well as external scenario to formulate, implement and then evaluate the strategy.
Nowadays in this strongly competitive business environment, the planning methods which play vital role in the process of budgetary allocation or forecast related areas are inadequate for many of the organisations to thrive and succeed.
In order to overcome these challenges, the organization should get involved in strategic planning that evidently specifies goals and objectives in addition to analyses both the internal as well as external scenario to formulate, implement and then evaluate the strategy.
A fundamental view of the strategic planning process is shown through the following diagram:
Mission, Objectives & Targets
The mission statement explains the organisation’s business imaginative and prescient vision, comprising the predetermined values and also purpose of the organization.
Steered by the vision, the organization’s management can clearly define measurable financial as well as strategic objectives.
Financial objectives entail actions which include sales pursuits and revenue growth. Strategic objectives are associated to the organization’s business position, and may include measures including market share and level of popularity.
The environmental scan involves the following elements:
- An organisation’s internal analysis: The internal analysis has the potential to find out the organization’s strengths and weaknesses
- External macro-environment: The external analysis explains opportunities and threats.
- Analysis of the industry: An industry analysis can be carried out by using a model Porters’ Five Forces developed by Michael Porter. This framework assesses entry barriers, suppliers, customers, substitute products, and industry rivalry.
To achieve superior market share, sales and profits, the organization needs to build up a competitive advantage over its competitors. A competitive advantage can be primarily based on cost advantage or differentiation.
Action Plans or Implementation
The chosen strategy is executed through an effective utilisation of resources and also methods. An implementation of strategy also entails team’s motivation so that you can attain specified objectives in assigned time-bound.
Performance Tracking and Control
The execution of the strategy should be monitored in addition to changes brought in as required.
Evaluation and control comprises of the following actions:
- Specify guidelines to be assessed
- Outline target values for those guidelines
- Carry out measurements
- Make needed adjustments