What is Strategic Planning?

• Strategic planning is a systematic process through which

an organization agrees on and builds commitment among
key stakeholders to priorities that are essential to its
mission and are responsive to the environment.
• Strategic Planning guides the acquisition and allocation of
resources to achieve these priorities.
 Strategic Planning
• The Vision
Communicating to all staff where the organisation is going and where it
intends to be in the future
• Aims and Objectives:
Aims – long term target
Objectives – the way in which you are going to achieve the aim
 Strategic Analysis
• Constantly evaluate their position
• Strategic analysis includes different methods of assessing the current
position of the business in the market place.
• Two basic methods:
– Internal
– External
 Internal Audits
• Productivity
• Efficiency
• Costs
• Other Internal Data
– Labour turnover, absenteeism
– Customer satisfaction surveys
– Quality procedures
– Cash flow statements
– Sales trends
– Skills audit
• Strengths and weaknesses analysis
• Core competencies
 External Audits
• General business environment – Inflation, competitiveness,
unemployment/employment, growth, consumer spending
• Competitors
• PEST factors
– Political – e.g. change of government
– Economic – Trends in economic growth, inflation, etc.
– Social-changed outlook, age structure of population, etc.
– Technological
 Strengths
• Strengths – Those things that you do well, the high value or performance
points
• Strengths can be tangible: Loyal customers,efficient distribution channels,
very high quality products, excellent financial condition
• Strengths can be intangible: Good leadership, strategic insights, customer
intelligence, solid reputation, high skilled workforce
 Weaknesses
• Weaknesses – Those things that prevent you from doing what you really need
to do
• Since weaknesses are internal, they are within your control
• Weaknesses include: Bad leadership, unskilled workforce, insufficient
resources, poor product quality, slow distribution and delivery channels,
outdated technologies, lack of planning, . . .
 Opportunities
• Opportunities – Potential areas for growth and higher
performance
• External in nature – marketplace, unhappy customers
with competitor’s, better economic conditions, more
open trading policies
• Timing may be important for capitalizing on
opportunities
 Threats
• Threats – Challenges confronting the organization, external
in nature
• Threats can take a wide range – bad press coverage, shifts in
consumer behavior, substitute products, new regulations.
• The more accurate you are in identifying threats, the better
position you are for dealing with the “sudden ripples” of
change
 Porter’s Five Competitive Forces

1. Threat of new entrants

2. Competitive rivalry
3. Threat of substitute products
4. Power of buyers
5. Power of suppliers
 Crafting a Strategy
• Porter’s Generic Strategies
• 1. Differentiation strategy
» An organization seeks to distinguish itself from competitors through the quality of its
products or services. Developing an image perceived as unique
• 2. Overall cost leadership strategy
» An organization attempts to gain competitive advantage by reducing its costs below the
costs of competing firms.
• 3. Focus strategy
» An organization concentrates on a specific regional market, product line, or group of
buyers.
 Types of Strategy
• Market Dominance
• Achieved through:
– Internal growth
– Acquisitions – mergers and takeovers
• New product development: to keep ahead of rivals and set the pace
• Contraction/Expansion – focus on what you are good at (core competencies) or
seek to expand into a range of markets?
• Global – seeking to expand Global operations
 Strategy Implementation
• Technology
• Human Resource
• Reward System
• Decision Process
 Characteristic of the Good
Strategy Implementation
• An ongoing exercise
• Proper Communication
• Contingency Plan
• Emphasis on Organisation Culture
• Regular Review
• Importance of Planning