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  • 1. Strategic Planning
  • 2. Why strategic planning ?  It gives a clear vision of internal and external environment of a business firm  Focus on what is most important and how it is to be managed for success of business.  Understanding of problem, its nature ,its threats, its controls and implications.  Appropriate decisions to implement the strategies evolved to achieve the desirable objectives.  A continuous monitoring and evaluation of the progress through the path to the goals
  • 3. TASKS IN STRATEGIC PLANNING Clarifying the mission of the corporation Defining the Business Surveying the environment Internal appraisal of the firm Setting the corporate objectives Formulating the corporate strategy Monitoring the strategy
  • 4. STRATEGIC PLANNING PROCESS 1. Clarifying the mission of corporation 2. Defining the business 3. Surveying the environment  Macro environmental factors  Environmental factors specific to business concerned Demographic Socio-cultural Economic Political Natural Technological Legal Govt Policies Industry& Competition Market/Customer Technology Supplier Factors Govt. Policies
  • 5. The strategic planning process  Spotting the opportunities & threats  Checking the attractiveness and probability position of these opportunities  Highlighting those opportunities the pursuit of which will help the firm bridge its strategic planning gap  Developing the opportunities-threats profiles (OTP) 4. Internal appraisal of the firm.  Assessing the firm’s capabilities/strengths & weakness in the various areas: Finance Marketing Human Resources Operations R&D General Management
  • 6. The strategic planning process  Developing the strength-weakness profile  Appraising the individual businesses/strategic businesses units (SBU) of the firm  Identifying the competitive advantage and core competencies and developing the competitive advantage profile (CAP).  Examining the capability gap (gap between the existing capabilities and the ones needed for pursuing spotted opportunities)
  • 7. 5. Setting the corporate objectives. • Framing the broad aims of the corporation ,using the corporate mission as the guide. • Examining the strategic planning gap and checking the growth scope • Fixing the growth objective • Setting the objectives in all major areas: -Growth in assets, sales, profits, market shares • Prescribing the hierarchy /Rank / Priorities of the objectives Profitability Competitive Position Technology Productivity R&D and Innovation Human Resources Corporate Image Social Responsibilites
  • 8. 6. Formulating the corporate strategy : Exploring generic alternatives. • Examining which generic strategy the firm should opt for: • Stability ? • Expansion ? • Divestment ? • Combination ? • Understanding the effect of the alternatives in terms of changes /additions / deletions to the firms existing product market posture. • Clarifying the competitive advantage and synergy which each alternative would require / use.
  • 9. 7.Formulating the corporate strategy : Strategy Choice • Evaluating the strategy alternatives • Keeping the OTP, the growth objective and CAP as the reference frame, examining what strategy would be the best • Reviewing the existing businesses Assessing the prospects of each SBU Examining what to do with each SBU -Build ? Maintain ? Harvest ? Divest ? -To what extent ? -At what pace ?
  • 10. • Examining which new businesses are to be taken up • Examining the resource requirement of the different strategy options and checking the resource availability • Make the final choice of the strategy / Strategy Spectrum • Translating the strategy in terms of what is to be done with each SBU -Assigning the priorities to the SBUs , existing as well as new ones -Clarifying what is expected to each SBU - Allocating resources to the SBUs 8. Monitoring the strategy.