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
A continuous monitoring and evaluation of the
progress through the path to the goals
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
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
Demographic Socio-cultural Economic Political
Natural Technological Legal Govt Policies
Industry& Competition Market/Customer Technology
Supplier Factors Govt. Policies
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
Developing the opportunities-threats profiles
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
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)
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
• 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
6. Formulating the corporate strategy : Exploring generic
• 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
• Clarifying the competitive advantage and synergy which
each alternative would require / use.
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
• 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 ?
• 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
-Assigning the priorities to the SBUs , existing as well as
-Clarifying what is expected to each SBU
- Allocating resources to the SBUs
8. Monitoring the strategy.