Task 6: strategic planning (bme)

Key features of strategic plans

Mission and objectives

Environmental scan

Strategic formulation

Strategic implementation

Evaluation and control

Strategic planning

Framework that guides managers in making decisions regarding the allocation of resources

Involves various stakeholders within the business to build commitment toward shared goals and objectives

Mission statement

Short, clear statement that explains the purpose of the business and what it aims to achieve for its customers or community

Objectives

Specific, measurable targets that guide a business in achieving its broader mission

Must be connected to KPIs within key areas of a business’s operation

Environmental scan

Process of analysing internal and external factors that affect a business

e.g., PEST, Porter’s Five Forces, SWOT

Environmental scan purpose

Identify potential risks and opps in the marketplace

Align strategic decisions with current conds and trends

Stay competitive by anticipating external pressures

Build on strengths and address weaknesses for long term success

PEST analysis

External (macro) environment

Evaluates and examines political, economic, social and technological factors in the external environment that could impact a business

Used to assess major external factors that may influence operations and overall business success in a particular market

PEST analysis purpose

Helps businesses gauge how external factors may impact profitability and long term success

Supports decision making during the strategic planning process

Identifies opps to utilise and threats to mitigate in the external environment

PEST and SWOT analysis used when…

Entering new market

Launching a new product/service

Evaluating current market conds

Preparing long term strats

Monitoring changes in the external environment

Porter’s Five Forces definition

Operating environment

Assesses the competitiveness of the industry by examining threats and power dynamics

Porter’s Five Forces purpose

Assesses the competitiveness and attractiveness of an industry

Helps identify external pressures that may impact pricing, profitability and market strat

Informs businesses on how to position themselves for long term success

Porter’s Five Forces used when…

Considering entry into a new market or industry

Evaluating existing comp and market conds

Developing or adjusting business strat

Launching new products or forming partnerships

Porter’s Five Forces

New entrants - analyse how easy it is for new competitors to enter the industry

Bargaining power of suppliers - assess how much influence suppliers have over prices, supply terms and quality

Bargaining power of buyers - consider how much power customers have in demanding lower prices or higher quality

Availability of substitutes - examine the presence of alternative products or services that customers could use instead

Level of comp - evaluate the intensity of rivalry among existing competitors

High profit industry factors

Suppliers with little bargaining power

Customers with low bargaining power

Barriers preventing competitor entry

Few substitutes

Low comp

SWOT analysis

Internal and operating environment primarily (some external)

Evaluates a business’s strengths and weaknesses (internal) and opps and threats (external) based on an assessment of both internal and external environments

SWOT analysis purpose

Helps businesses understand their current position and make informed decisions

Guides the development of realistic strats by building on strengths, addressing weaknesses, taking advantage of opps and preparing for threats

Supports goal setting, planning and risk management in dynamic markets

Strategic formulation

Process of developing strats aimed at improving business performance and profits

Focus on gaining a competitive advantage and fulfilling the mission statement and objectives identified by the business

Strategic goal/objective areas

Financial performance

Market share and growth

Customer satisfaction and loyalty

Operational efficiency

Employee performance and engagement

Sustainability and social responsibility

Additional: innovation, horizonal integration, strategic alliances

Strategic formulation steps

1. analyse the business environment - utilise relevant environmental scans to researcha dn evaluate key business environments

2. set a clear strategic direction - identify key values, mission statement and goals/objectives for org

3. develop projects or initiatives - formulate and outline projects or initiative to specific business areas that are linked to and will help in achieving the strategic objectives

4. establish action plans - refine plans to team/individual levels which will help to achieve the projects

Strategic implementation

Putting the chosen strats into action by allocating resources, assigning responsibilities and coordinating activities across the business (may require overcoming resistance)

Successful implementation steps

1. set clear goals/objectives during strategic formulation

2. understand the impacts of proposed strats on different business stakeholders, particularly managers and employees

3. communicate the value of a strat to managers and employees

4. communicate specific projects and action plans to relevant teams and employees to clarify direction

5. support the implementation through training

Evaluation and control

Monitoring the outcomes of implemented strats, comparing results to goals and making necessary adjustments to improve performance

Evaluation - evaluating performance and feeding back info into decision making for next strategic planning cycle

Control - measuring activities, timelines and resource consumption; analysing deviations and correcting processes/outcomes

Evaluation and control strats

Measure performance - key benchmarks (KPIs)

Analyse variances - actual and expected results

Take corrective actions to improve processes or outcomes based on data

Review and refine strat before the next planning cycle

Evaluation and control purpose

Assess the performance of implemented strats

Provide feedback to inform future strategic decisions

Identify deviations from planned outcomes, timelines or resource use

Ensure the business stays aligned with goals/objectives

Technology

Tools, systems, platforms and innovations that help businesses improve their operations, comms, productivity and competitiveness

In global business - plays crucial role in expanding market reach, reducing operational costs, improving customer service and streamlining international transactions

Impacts of tech on business operation

Tech that assists businesses in the expansion into global markets

E-commerce, security and privacy issues

Tech’s impact on assisting expansion

Makes operations more efficient and customer focused

Tech enhances a business’s ability to reach, engage and serve international customers

Reduces barriers to entry and build customer confidence across borders

Digital marketing and social media

Reach new overseas customers by researching and launching targeted social media campaigns on platforms popular in specific regions

Advanced shipping solutions and GPS delivery tracking

Faster and more efficient shipping tech help improve customer satisfaction by ensuring timely delivery of goods across borders

Benefits both business and customer by providing delivery updates, enhancing trust and transparency

Secure payment systems

Implementing globally trusted digi payment methods builds customer confidence and facilitates smooth, secure transactions

E-commerce integration

Adopting e-commerce systems enables quick and seamless international transactions

e.g., instant currency conversion, cross-border payment

Customisable websites and software

Businesses can invest in hardware and software that allow websites to display different languages and currencies, making it easier for international customers to browse, understand and purchase products

E-commerce

Buying and selling g+s over the internet to conduct commercial transactions

Security and privacy

Growing reliance on online transactions, e-commerce businesses face increasing pressure to protect customer info and payment details

Rise in cyberattacks, data breaches and online scams makes it essential to maintain strong digi security practices and respect customer privacy

Risks with poor security and privacy

Data breaches

Financial loss

Rep damage

Legal penalties - Privacy Act 1988

Operational disruption - cyberattacks may force businesses offline or damage key systems, disrupting sales

Strats for managing security and privacy

Invest in secure online payment systems - use trusted platforms like PayPal

Keep security software up to date

Conduct regular policy reviews and audit

Limit data sharing and access

Educate employees and customers

Use SSL certificates - ensure all website data is encrypted during transmission

Use of tech in global markets

Distribution of products

E-commerce

Social media campaigns

Distribution of products

Tech improves comms, increases efficiency in logistics and enhances inventory management

Allows businesses to plan, track and deliver goods across international markets more accurately and at lower costs

Tech driven distribution strats

GPS tracking systems

Video conferencing tools

Inventory management systems - automate stock tracking and reordering, helping businesses minimise delays and meet demand

Transport tech - automated warehousing and smart delivery routing, streamline logistics and reduce errors in the distribution process

Data-sharing and collaboration platforms

Benefits of Third party logistics (3PL) - extension

Faster and more reliable delivery

Reduced operational costs

Expertise in cross border logistics

Tech driven e-commerce strats

Customisable e-commerce websites

Secure online payment systems

Mobile-payment optimised platforms

Automated fulfilment systems

E-commerce integration with inventory systems

Lower entry costs

Social media campaigns

Targeted content on platforms to promote products and engage international audiences

Cost-effective method of generating interest, capturing customer data and building brand awareness globally

Social media campaign strats/benefits

Platform selection and targeted presence

Engage promotional content

Platform-specific features and sponsorships

Lead generation and customer interaction - social ads and interactive posts encourage users to click through, sign up or message for more info

Product management systems

Converts raw materials into finished g+s

Manages inputs, processes, outputs and controls to meet product specs, schedules and budgets

Inputs

Resources that go into the production process to create a finished g/s

Types: physical, human, capital, info/research

Processes

Actions and activities that transform inputs into outputs

Includes design, development, manufacturing, logistical tasks required to create and prepare the product for sale

Outputs

Final g/s produced and delivered to consumers

Must meet quality expectations, customer needs and brand standards

Controls

Monitoring and evaluation of mechanisms used to ensure that the production process stays on track, time, budget and within quality standards

Help identify errors or inefficiencies and ensure consistency across outputs

Product management systems purpose

Achieve strategic goals - through efficient ops and quality outputs

Build a positive public image - via reliable, well-made products

Support other business functions - with timely and consistent product delivery

Remain competitive - by ensuring products are made to standard, on time and with minimal waste

Product development

Process of taking an idea and turning it into a sellable g/s

Involves multiple stages of planning, creating, testing and market intro

Resource intensive process and carries inherent risk - requires time, money, skilled staff

Product development purpose

To design, create and bring new or improved products to market that:

meet customer needs

respond to changes in the business environment

remain competitive

support growth

build brand

increase efficiency

Successful product development

Market research - understand customer needs and preferences

Business environment research - monitor PEST trends

Staff skills and expertise - have capable, creative and technical workforce

Clear plan - outline steps, responsibilities and timelines

IP protection - secure IP rights

Product development stages

Product ideas

Evaluate the ideas

Product concept evaluation

Prototype testing

Market testing

Product launch

Product ideas

Generation of ideas for new products or improvements to existing ones

Ideas can come from customers, staff, competitors or market trends

Evaluate the ideas

Assess ideas to determine whether it’s worth pursuing

Check if it aligns with business’s goals, where there’s demand and if it’s feasible

Product concept evaluation

Develop shortlisted ideas into detailed concepts

Includes initial designs, cost estimates, legal checks and early market analysis to decide whether to move forward with development

Prototype testing

Sample or working model of product is created to test its design, functionality and usability

Feedback collect to identify faults, make improvements and ensure it meets expectations

Market testing

Product released to a small group of target customers or in a limited market to evaluate how it performs in real cond

Data gathered on customer reactions, pricing and sales potential

Product launch

Product introduced to full market with support from marketing, sales and distribution

Becomes commercially available and success is monitored through sales data and customer feedback

Quality management

Process of ensuring that a business’s products, services and processes consistently meet or exceed customer expectations

Covers the entire production process (planning and prevention to checking final output)

Quality management features

Assurance

Control

Improvement

Quality management importance (EMBR IB)

Ensures compliance with industry standards and regs

Maintains and strengthens brand rep

Builds customer trust through consistent quality

Reduces costs by minimising waste, rework and inefficiencies

Improves staff morale by involving employees in quality initiatives

Builds competitive advantage, increase profitability

Quality assurance

Set of procedures to ensure processes are adequate to meet objectives - ‘right the first time’

Proactive

Occurs at the beginning of a project or manufacturing process

Quality assurance purpose

Prevent defects before they occur by focusing on processes and procedures

Quality assurance implementation (PSST)

Process audits

Standard operating procedures

Staff culture

Train staff

Quality control

Process of checking and reviewing outputs at the end of production compared to product plans

Check throughout production:

1. specs

2. raw materials

3. production

4. final testing

Quality control purpose

Maintain product quality at the desired level

Ensures final product meets defined quality criteria and customer requirements - if not, corrective actions can be put in place

Quality control implementation

Specification - establish clear designs, criteria and requirements for products

Raw materials - source high quality raw materials, inspect

Production - operation checks, monitor plant and equipment, feedforward controls

Final testing - checking the final product to make sure it meets customer and quality specs, feedback

Quality improvement

Ongoing effort to increase efficiency (streamline processes) and reduce waste/rework

Measured against past level of quality (record/quantify)

Quality improvement purpose

Achieve continuous performance improvements in processes and systems

Quality improvement implementation

Benchmarking

1. plan

2. do

3. check

4. act

Inventory control techniques

Manage materials (raw and other supplies), work in progress (partially completed products) and finished goods to ensure the right stock is available in the right place at the right time

Effective inventory control reduces waste, saves costs, improves cash flow and ensures customers receive products when needed

Inventory control importance

Prevents overstocking

Avoids out of stock events

Supports efficient production flow

Helps businesses respond to changes in demand and supply conditions

Just in time

Stock arrives exactly when needed for production or sale

Just in time suitable for

Businesses that utilise perishable materials or stock

Stable demand

Reliable, quick supply chains

Businesses with limited storage space

Just in time pros/cons

Pros

• low storage and insurance costs

• less waste and stock obsolescence

• frees up cash flow

Cons

• risk of delays

• requires accurate sales forecasting (increase complexity)

• relies heavily on reliable suppliers

Just in case

Businesses maintain extra stock of materials to minimise risks of running out of inventory

Just in case suitable for

Unreliable or long supply chains

Unpredictable demand

Critical goods

Just in case pros/cons

Pros:

• reduces risk of shortage

• can meet sudden demand surges

• less affected by supply issues

Cons:

• higher storage and insurance costs

• risk of waste if stock expires

• ties up more cashflow in purchasing inventory ahead of time