HOW IS STRATEGIC PLANNING CARRIED OUT AT THE DIFFERENT LEVELS OF AN ORGANISATION?

CORPORATE AND DIVISION STRATEGIC PLANNING

ALL CORPORATE HEADQUARTERS UNDERTAKE FOUR PLANNING ACTIVITIES

DEFINING THE CORPORATE MISSION.

ESTABLISHING STRATEGIC BUSINESS UNIT.

ASSIGFNING RESOURCES TO EACH BUSINESS UNITS.

ASSESSING GROWTH OPPORTUNITIES.

1.DEFINING THE CORPORATE MISSION.

GOOD MISSION STATEMENTS HAVE FIVE MAJOR CHARACTERISTICS:

THEY FOCUS ON LIMITED NO. OF GOALS.

THEY STRESS COMPANY’S MAJOR POLICIES AND VALUES.

THEY DEFINE THE MAJOR COMPETITIVE SPHERES WITHIN WHICH THE COMPANY WILL OPERATE.

THEY TAKE A LONG TERM VIEW.

THEY ARE AS SHORT, MEMORABLE, AND MEANINGFUL AS POSSIBLE

2.ESTABLISHING STRATEGIC BUSINESS UNITS

A STRATEGIC BUSINESS UNIT HAS THREE BASIC CHARACTERISTICS:

IT IS A SINGLE BUSINESS, OR A COLLECTION OF RELATED BUSINESS, THAT CAN BE PLANNED SEPARATELY FROM THE REST OF THE COMPANY.

IT HAS ITS OWN SET OF COMPETITORS.

IT HAS A MANAGER RESPONSIBLE FOR STRATEGY PLANNING AND PROFIT PERFORMANCE, WHO CONTROLS MOST OF THE FACTORS AFFECTING PROFIT.

3.ASSIGNING RESOURCES TO EACH SBU

THE COMPANY MANAGEMENT DECIDES HOW TO ALLOCATE RESOURCES OR BUDGET TO EACH BUSINESS UNIT.

4.ASSESSING GROWTH OPPORTUNITIES

INTENSIVE GROWTH- REVIEW OF OPPRTUNITIES FOR IMPROVING EXISTING GROWTH.

INTEGRATIVE GROWTH- THE COMPANY CAN ACQUIRE ONE OR MORE OF ITS SUPPLIERS, WHOLESALERS, COMPETITORS TO EXPAND ITS BUSINESS.

DIVERSIFICATION GROWTH- WHEN GOOD OPPORTUNITIES EXISTS OUTSIDE THE PRESENT BUSINESS, THEN TRHE COMPANY MAY LOOK FORWARD TO STARTING A NEW BUSINESS.

DOWNSIZING AND DIVESXTING OLDER BUSINESS- IT MAY REVIEW ITS OLDER BUSINESSES ACCORDING TO ITS PROFITS OR TECHNOLOGY.

BUSINESS UNIT STRATEGIC PLANNING

THE BUSINESS MISSION

SWOT ANALYSIS

GOAL FORMULATION

STRATEGY FORMULATION

PROGRAM FORMULATION AND IMPLIMENTATION

FEEDBACK AND CONTROL

1. THE BUSINESS MISSION

EACH BUSINESS UNIT NEEDS TO DEFINE ITS OWN SET OF MISSIONS WITHIN THE BROADER COMPANY MISSION.

2. SWOT ANALYSIS

INTERNAL ENVIRONMENT(STRENGTH AND WEAKNESS) ANALYSIS- TRHE QUESTION HERE IS WHETHER IT SHOULD LIMIT ITSELF TO THOSE OPPORTUNITIES FOR WHICH H IT POSSESSES THE REQUIRED STRENGTH OR CONSIDER THOSE THAT MIGHT REQUIRE TO FIND NEW STRENGTH.

EXTERNAL ENVIRONMENT(THREAT AND OPPORTUNITY)ANALYSIS-A MARKETING OPPORTUNITY IS AN AREA OF BUYER NEED AND INTEREST THAT A COMPANY HAS A HIGH PROBABILITY OF PROFITABLY SATISFYING.MARKETERS NEDD TO BE GOOD AT SPOTTINGT OPPORTUNITIES LIKE BELOW:

A COMPANY MAY BENEFIT FROM CONVERGING INDUSTRY TRENDS AND INTRODUCE HYBRID PRODUCTS OR SERVICES THAT ARENEW TO THE MARKET.

A COMPANY MAY MAKE A BUYING PROCESS MORE CONVENIENT FOR THE CUSTOMERS.

A COMPANY CAN MEET THE NEED FOR MORE INFORMATION AND ADVICE.

A COMPANY CAN CUSTOMISE A PRODUCT AND SERVICE.

A COMPANY CAN INTRODUCE A NEW CAPABILITY.

A COMPANY MAY BE ABLE TO DELIVER A PRODUCT OR SERVICE FASTER.

A COMPANY MAY BE ABLE TO OFFER A PRODUCT AT A MUCH LOWER PRICE.

3.GOAL FORMATION

THE GOAL FOR THE COMPANY

THEY MUST BE ARRANGED HIERARCHIALLYFROM MOST TO LEAST IMPORTANT.

OBJECTIVE SHOULD BE QUANTITATIVE WHENEVER POSSIBLE.

GOALS SHOULD BE REALISTIC.

OBJECTIVES MUST BE CONSISTENT.

4.STRATEGY FORMULATION

STRATEGY IS A GAME PLAN TO ACHIEVE A GOAL.

PORTER’S GENERIC STRATEGY:

OVERALL COST LEADERSHIP- FIRMS WORK TO ACHIEVE THE LOWEST BPRODUCTION AND DISTRIBUTION COST TO UNDERPRICE COMPETITORS.

DIFFERENTIATION- THE FIRM CONCENTRATES ON ACHIEVING A SUPERIOR PERFORMANCE IN A CUSTOMER BENEFIT AREA.

FOCUS- THE BUSINESS FOCUSES ON ONE OR MORE NARROW MARKET SEGMENTS.

5.PROGRAM FORMULATION AND IMPLIMENTATION

A COMPANY MIGHT AIM TO DELIGHT THE CUSTOMERS PERFORM WELL FOR ITS EMPLOYEES AND DELIVER A THRESHOLD LEVEL OF SATISFACTION TO ITS SUPPLIERS.IN SETTING THESE LEVELS IT MUST NOT VIOLATE ANY STAKEHOLDER GROUP’S SENSE OF FAIRNESS ABOUT THE TREATMENT IT’S RECEIVING RELATIVE TO THE OTHERS.

6.FEEDBACK AND CONTROL

A COMPANY’S STRATEGIC FIT WITH THE ENVIRONMENT WILL INEVITABLY ERODE BECAUSE THE MARKET ENVIRONMENT CHANGES FASTER THAN COMPANY’S STRATEGY. THUS A COMPANY MIGHT LOSE EFECTIVENESS .

ONCE AN ORGANISATION FAILS TO RESPOND TO A CHANGED ENVIRONMENT IT BECOMES INCREASINGLY HARD TO RECAPTURE ITS LOST POSITION.THUS IT IS IMPORTANT TOTAKE FEEDBACK AND KEEP YOURSELF UPDATED ABOUT THE LATEST MARKET TREND.