Strategic Planning for Small Business
In today’s highly competitive environment, budget oriented planning or forecast based planning method, large companies should ensure that they will survive and prosper. The firm must engage in Strategic Planning. Before defining what Strategic Planning is? We should distinguish first the strategy and planning. STRATEGY may be defined as a “course of action aimed at ensuring that the organization will achieve its objectives”. PLANNING refers to “the management function of anticipating the future and determining the best courses of action to achieve company objectives. With these definitions, we can identify what Strategic Planning means. STRATEGIC PLANNING refers to “the process of determining the major objectives of an organization and defining the strategies that will govern the acquisition and utilization of resources to achieve these objectives.
Procedures for Strategic Planning
Components of the Strategic Management Process:
1. Strategic Planning which consists of:
a. Assessment of organization strengths, weaknesses, opportunities, and threats. b. Formulation of organization mission
c. Formulation of organization philosophy and policies.
d. Determination of Strategic Objectives; and
e. Determination of Organization Strategy
2. Strategy Implementation and control which consist of
a. Implementation of organization strategy
b. Control of organization strategy
STRATEGIC DECISIONS are made at the strategic planning stage. It consists of mission, philosophy, policies and objectives. It aims to achieve the organization’s objectives. MANAGERIAL DECISIONS are made in the implementation and control of strategy. It includes type of organization structure, leadership styles, management information systems and monitoring and evaluation systems used.
THE PROCESS OF STRATEGIC PLANNING
ASSESSMENT IN ORGANIZATIONAL STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS STRENGTH is a distinctive competence, resource or skill that provides the organizations with a competitive advantage in their marketplace. Characteristics of the business or project that give it an advantage over others. Are those features of the business which allow you to operate more effectively than your competitors? For example, strength could be your specialist technical knowledge. You need to consider your strengths from your own point of view and from that of your customers' and clients'. You must be realistic and honest. WEAKNESS is a negative internal condition that can lead to a lowering of organizational performance. Characteristics that place the business or project at a disadvantage relative to others Are areas capable of improvement?
OPPORTUNITIES are a current or future condition in the environment that is favorable to an organization’s current or potential output.
-Elements that the project could exploit to its advantage Examples of opportunities include:
Changes in technology and markets, e.g. the Internet
Changes in government policy or regulations / legislation
Local and global events
Potential new uses of products and / or services
Use of marketing or promotional techniques to boost the business Social factors, e.g. population fluctuation, lifestyle changes, etc.
THREATS are negative external forces that inhibit the firm’s ability to achieve its objective. Elements in the environment that could cause trouble for the business or project Can be external or internal, and are anything which can adversely affect your business. External threats could be inflation, new legislation, or a new competitor in your market. Internal threats could include a skill or staff shortage within your organization.
FORMULATION OF THE ORGANIZATIONAL MISSION
The ORGANIZATIONAL MISSION refers to “the management’s vision of what the organization seeks to do and to become.” A statement of the purpose of a company, organization or person,...
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