The Strategic Planning Process

Jean Macedo

Strategic planning frequently makes difference between a company’s success and failure. Strategic planning has formed the foundation of many core management decisions.

Boone and Kurts on the book Contemporary Business highlighted six steps that a successful strategic planner should follow: defining a mission, assessing the organization’s competitive position, setting organizational objectives, creating strategies for competitive position, setting organizational objectives, creating strategies for competitive differentiation, implementing the strategy, and evaluating the results and refining the plan.


Defining the mission

The first step in strategic planning, define the mission means to translate the company’s vision into a mission statement. A mission statement is a written explanation of a business intentions and objectives. It is a supporting statement of purpose, emphasizing how it operates, the market it seeks to serve and the way it will attempt to do it. A mission statement guides the actions of the employees and announces the company’s reasons for existence.

 

Assessing competitive position

Once a mission statement has been created, the next step in planning process is to determine the company’s position in the marketplace (current or potential position). Management evaluates the factors that may help it grow or fail. SWOT analysis is the tool that should be used. SWOT means strengths, weakness, opportunities and threats. By evaluating all four of these factors, a company can develop efficient strategies for gaining competitive advantage.

To evaluate a company’s weakness and straights, its managers may examine each area such as finance, marketing, information, and human resources.

Swot analysis

SWOT analysis helps to define the major opportunities and threats the company is likely to face. Threats may include economic recession, or changes in regulation.

SWOT analysis is not final. Strengths and weakness may shift, just like opportunities and threats. Strength may become a weakness and a threat may turn into an opportunity.


Setting organizational objectives

The next step is to develop objectives for the firm. Objectives set the company’s desired performance in areas such as sales, customer service, growth, employee satisfaction and so on. Mission statements identifies overall goals, objectives are more specific.


Creating strategies for competitive position

Developing a mission statement and setting objectives point a business in a specific direction. But a company needs to identify the strategies it will use to reach its objectives. Competitive differentiation is the goal of strategy development.  The unique combination of a company’s abilities and resources that gives it advantages over the competition. Differentiation might be innovation, discounts, customer service and so on.


Implementing the strategy

After complete all four prior phases of strategic planning, managers are ready to put those plans into action. Middle managers and supervisors are, actually, working directly to implement a strategy.


Evaluating the results and refining the plan

The final step in the strategic planning process is to monitor and adapt plans when the actual performance fails to meet the goals. Monitoring involves securing feedback about the performance. Managers may compare actual sales against the forecast; compile information from surveys; interview employees who are involved; and review reports.

Continuous use of SWOT analysis and forecasting help managers adapt their objectives and functional plans as they occur.

Thank you

Jean Macedo



 

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