STRATEGIC PLANNING
Strategic planning:
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Identifies the best business decisions.
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Helps business to understand why these decisions are being made.
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Knows how to implement these decisions to encourage and maintain business viability within a competitive and dynamic market.
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Leads to change within a company.
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Considers the future.
Business managers use strategic planning:
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To understand the long-term objectives of a business.
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To know its available resources.
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To implement new ideas, big changes and decisions that are best suited to the nature and circumstances of the business now and to adapt these decisions as needed.
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To decide on future business goals and to develop an approach to match these goals; but not to implement specific decisions that are based on future projections –decisions should be made in the present so business makes decisions at it keeps abreast of changes.
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To recognise opportunities.
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To recognise threats.
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To analyse when and how is the best time to seize new business opportunities.
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To match the businesses resources with new business opportunities.
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To help make decisions that will influence long term, sustainable growth.
However for strategic planning to be successful (and useful), business managers must be able to think strategically and then apply this as strategic management.
Strategic Business Managers:
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Look at the big picture.
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Are forward looking and thinking.
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Consider and adapt to changes in the economic environment and the industry in which they operate – both internal and external ie. competition, regulatory or government policy, technological advances, consumer trends, competitors.
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Understand their competition and formulate strategies that are at the fore-front of their industry.
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Are able to formulate and implement strategies to meet changes now and into the future.
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Are able to project future sales, business costs and new technology using past data.
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Are able to deploy the organisations resources to successfully compete within the market.
Strategic thinkers look at the following key requirements:
- Do I have a definite purpose in mind?
- Do I understand the environment – the conditions or forces that may compromise or change that purpose?
- What creative approach can I use to respond to these conditions, forces or changes?
- Am I making the right decisions?
- Am I looking at the big picture?
Creating a Strategic Plan
When formulating a strategic plan, business managers often use what is called the SWOT and SMART approach:
SWOT identifies the: Strengths, Weaknesses, Opportunities and Threats to the business.
SMART looks at whether the plan is: Specific, Measurable; Achievable; Realistic; and has time-lines
Once these are identified and analysed a plan is formulated.
One approach to creating a strategic plan:
- Prepare a mission statement – this is a formal, concise statement that is devised specifically for the business to define its overall aims and objectives; why the business was formed, what it is trying to achieve what it will or will not be doing.
- Examine the external environment - identify major opportunities - identify major threats.
- Examine the internal environment - analyse strengths and weaknesses.
THEN
- Develop a set of objectives – and evaluate its feasibility using the information gathered in the SWOT analysis.
- Develop and evaluate alternative strategies.
- Choose the best strategy or strategies.
- Implement the strategy.
- Evaluate the strategy.
- Review and adapt the strategy.
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