Strategic Planning and Strategy Formulation Overview

Learning Outcomes

  • Importance of planning
  • Writing statement of strategic intent
  • Conducting SWOT analysis
  • Setting SMART strategic objectives
  • Undertaking gap analysis
  • Differentiating between corporate-level, business-level, and functional-level strategies
  • Choosing appropriate strategies for profit gaps
  • Understanding Red Oceans vs. Blue Oceans
  • Basics of value innovation
  • Drawing value curves for innovative strategies
  • Implementing identified strategies
  • Writing a strategic plan through a nine-step process

The Managerial Task of Planning

  • Involves:
    • Choosing the organisation's vision, mission, and goals.
    • Setting goals at various organisational levels.
    • Selecting strategies to achieve goals.
    • Allocating resources accordingly.

Importance of Planning

  • Provides focus for managerial tasks.
  • Offers direction and purpose.
  • Identifies future opportunities and threats.
  • Helps coordinate management efforts.

Strategic Planning Overview

  • Master plan integrating long-term and short-term goals.
  • Involves strategy formulation and strategy implementation.

Strategic Planning Process

  1. Clarify strategic intent (vision & mission)
    • Vision should be inspiring and clear.
  2. Assess threats and opportunities
    • Identify external factors impacting profitability.
  3. Assess strengths and weaknesses
    • Internal resource evaluation compared to competitors.
  4. Set strategic objectives (SMART)
  5. Undertake gap analysis
    • Evaluate if current practices will meet future goals.
  6. Formulate strategies to fill profit gaps
  7. Implement strategies
    • Align goals across all organisational levels.
  8. Control and diagnose results
  9. Repeat the planning process
    • Adapting to changes in the business environment.

Types of Strategies

  • Corporate-level strategies: Define overall scope and direction.
  • Business-level strategies: Focus on competing successfully in specific markets.
  • Operational strategies: Concerned with detailing processes supporting higher-level strategies.

Evaluation of Strategies

  • Assess their appropriateness, feasibility, desirability, and overall consistency with goals.

Summary

  • Planning is foundational for effective management, influencing all other tasks (organising, leading, controlling). The strategic plan acts as a comprehensive blueprint for operational success, requiring periodic review and adaptation.