Strategic Planning In a Competitive Marketplace Strategic Planning

Strategic Planning In a Competitive Marketplace

Strategic Planning Process n Necessary for large corporations to survive & prosper n n Budget/Forecast oriented planning is no longer enough Strategic Planning Defines objectives n Assesses internal & external situation n Strategies formulated & implemented based on actual situation n Evaluation leads to adjustments to stay on track n

The Planning Process Mission & Objectives Environmen tal Scanning Strategy Formulation Strategy Implementat ion Evaluation & Control

The Sigmoid Curve Typical Life Cycle The Secret to Constant Growth: (Start a New Life Cycle)

The Mission & Objectives n Mission Statement - Describes the Company’s Business Vision Unchanging values n Purpose of company n Visionary goals that guide the pursuit of future opportunities n n Objectives – guided by company’s vision Measurable financial & strategic objectives n Ex: Sales targets, market share, reputation n

Environmental Scan n Includes the following: n SWOT Analysis n Strengths/Weaknesses n Industry Analysis n PEST Analysis (Political, Economic, Social, Technological) n Competitive Analysis n Rivalry n Threat of Substitutes n Buyer Power n Supplier Power n Barriers to Entry/Threats to Entry

Strategy Formulation n Given environmental conditions, Match strengths to opportunities identified n Address weakness and external threats n n Competitive Advantage - How will you gain an advantage over your competition? n Cost Leadership Strategy – low cost producer n Differentiation Strategies n Focus Strategies - segmenting

Strategy Implementation - programs, budgets, and procedures to be used n Implementation involves: n Organization of company resources n Motivation of staff to achieve objectives n Usually different people than those who formulate the strategies n n How strategies are implemented can have a significant impact on success n Executives must communicate strategies effectively & reasons behind them

Evaluation & Control n n Implementation of strategies must be monitored and adjusted if needed Evaluation & Control Process 1. 2. 3. 4. 5. Define parameters to be measured Define target values for those parameters Perform measurements Compare measured results to the predefined standard Make necessary changes