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

Includes analysing internal and external environments, developing a mission statement, identifying goals and objectives and formulating appropriate strats

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