Strategic Planning

PREPARED AND
 What Is Strategic
Planning?
• A process for determining
– Where you are`
– Where you intend to be
– How you’re going to get there

• Clearly define objectives, assess both internal

and external situation to formulate strategy,
implement and evaluate the progress and
make adjustment to stay on track

PREPARED AND
 What Is Strategic
•
Planning?
S.P is an organization's process of defining
its strategy, or direction, and making
decisions on allocating its resources to pursue
this strategy, including its capital and people.
• Various business analysis techniques can be
used in SP
• SWOT analysis (Strengths, Weaknesses, Opportunities,
and Threats ),
• PEST analysis (Political, Economic, Social, and
Technological),
• STEER analysis (Socio-cultural, Technological, Economic,
Ecological, and
Regulatory factors),
PREPARED AND
• EPISTEL (Environment, Political, Informatic, Social,
 What Is Strategic
Planning?
• Where are we now? (Assessment)
• Where are we now? (Assessment)
• Where do we need to be? (Gap / Future End
• Where do we need to be? (Gap / Future End
State)
State)
• How will we close the gap (Strategic Plan)
• How will we close the gap (Strategic Plan)
• How will we monitor our progress (Balanced
• How will we monitor our progress (Balanced
Scorecard)
Scorecard)

PREPARED AND
 What Is Strategic
Planning?
• Where are we now? (Assessment)
• Process to establish priorities on what you
• Where do we need to be? (Gap / Future End
will
State)
accomplish in the future
• How will we close the gap (Strategic Plan)
• Forces you to make choices on what you will
• How will we monitor our progress (Balanced
do
Scorecard)
and what you will not do
• Pulls the entire organization together around

a
single game plan for execution
• Broad outline on where resources will get
Prepared and Presented By
allocated PRINGAL SONI
Strategic Planning:
4 Steps
1.Setting Vision, Mission Objective

2. Environmental Scanning

3. Strategy Formulation

4. Strategy Implementation

5. Evaluation and Control

PREPARED AND
 Major Components of the
Strategic Plan / Down to Action

Strategic Plan

Action Plans
Vision Why we exist
Evaluate Progress
Mission What we want to be

Goals What we must achieve to be successful

Objectives O1 Specific outcomes expressed

O2
in measurable terms (NOT
activities)
Strategies Planned Actions to
S1 S2 S3 Achieve Objectives

Measures Indicators and

M1 M2 M3 Monitors of success

Targets T1 T1 T1 Desired level of

performance and
PREPARED AND timelines
 Environmental
Scanning
Environmental scanning is the ability to
identify strategic factors (both external and
internal to the organization) that can
significantly impact the firm's business
operations.

Environmental scanning requires the ability

to assess the internal strengths and weakness
of the organization as well as the external
opportunities and threats to the organization.
We Can use PEST, SWOT,Porters
PREPARED AND
five forces for
industry
 SWOT Model

Strengths, Weakness, Opportunities

and Threats (SWOT) Model

Internal

1. strengths of the organization

2. weaknesses of the organization

PREPARED AND
 The External Environment

The external environment can include a number of different

forces that can impact the performance and operations of an
organization, including:

1. Competitive Factors
2. Political/Legal Factors
3. Economic Factors
4. Technological Factors
5. Sociocultural Factors

PREPARED AND
 Competitive Factors

Competitive factors are the Click to edit Master text

business strategies and Second level
● Third level
actions of one’s competitors. ● Fourth level

The competition may have ● Fifth level

designed a better product

or service. Examples:

Sony vs. Microsoft Videogame

Rin Vs Tide
Nokia vs. Motorola Cellular
Verizon vs. AT&T Telephony Click to edit Master text styles
Second level
 `Political/Legal
Factors
Political/legal factors represent changes in the
political and regulatory environment that can
significantly influence the business operations of a
company or organization. Examples:
SEZ
FDI Limits
VAT, Custom and other taxes
RBI and SEBI Regulation ob banks and FI
 Economic Factors

Economic factors are

marketplace changes that can
help or adversely affect your
business operations. Click to edit Master text style
1. Spiraling inflation Second level
● Third level

2. Economic recession ● Fourth level

● Fifth level
3. Natural calamity
4. The availability of a
product substitute
Technological
Factors
• Technological
Technological factors
factors
represent
represent advancements
advancements in in
newnew technologies
technologies thatthat
cancan
helphelp or adversely
or adversely affect
affect
one’s
one’s business.
business.
– 1. Camera cell Phone
1. Camera
– 2. SetcellUp
Phone
Box
2. Set– Up
3. Box
Apple iPhone
– 3. MP3 File Sharing
3. Apple
– 4.iPhone
Cable Modems
– File
3. MP3 Sharing
5. High Definition Television
– 6.Laptops
4. Cable Modems
5. High Definition Television
 Sociocultural
Factors
Sociocultural factors are social/
• Sociocultural
cultural factors are
changes in the
environment
social/ that may affect
cultural a
changes
consumer's buying habits, product
in etc.
usage the environment that
may affect a consumer's
buying habits, product
Examples:
1.usage etc.
Consumer reaction to animal furs, etc

• 2.Examples:
Student attitudes about software piracy
1. Consumer reaction to animal furs,
etc
3. Privacy and security while purchasing
merchandise
2. on the Internet.
Student attitudes about software
piracy

3. Privacy and security while

purchasing
 Strategy Formulation

After environmental scanning, firm should

match it strength
to the opportunities and addressing its
weaknesses and
Threat.
Ex:- Moser Bear, Videocon mobile, Fiat, Maruti
To attain a superior profitability a firm should
Suzuki
develop a
competitive advantage to its rival. A
Competitive advantage
Can be based on cost and differentiation.
 Strategy Formulation
Selecting Strategy

Corporate strategy (Stability, Growth,

Retrenchment)

Business strategy (Competitive,

Cooperative)

Functional strategy (Technological

Leadership,

Technological Followership)
 Strategy
Strategy Formulation
Formulation

How the strategic goals will be accomplished.

specifying objectives, with each strategic
goal. in that sense,
an objective is still a goal, but on a smaller
scale.

Objective is associated with strategy, which is

one of the methods needed to reach an
objective.

Example-Objective(20%increase in sales) Strategy- (Discount,

 Strategy Implementation.

The selected strategy is implemented by

means of programs, budgets, and procedures.
Implementation involves organization of the
firm's resources and motivation of the staff to
achieve objectives.
The way in which the strategy is implemented
can have a significant impact on whether it will
be successful.
The people who formulate n implement
strategy are different, so it must be
communicated well. Misunderstanding at lower
 Strategy
Strategy Evaluation.
Evaluation.

The implementation of the strategy must be

monitored and adjustments made as needed.
Evaluation and control consists of the following
steps:

1.Define parameters to be measured

2.Define target values for those parameters
3.Perform measurements
4.Compare measured results to the pre-
defined standard
5.Make necessary changes
 Strategy Evaluation.
Methodology
The most common method for strategic planning is
this(That we have studied)

Vision - Define the vision and set a mission statement with

hierarchy of goals and objectives

SWOT - Analysis conducted according to the desired goals

Formulate - Formulate actions and processes to be taken to

attain these goals

Implement - Implementation of the agreed upon processes

Control - Monitor and get feedback from implemented processes

to fully control the operation
 Strategy Evaluation.
Methodology

METHOD 2
Situation - evaluate the current situation and how it came about.
Target - define goals and/or objectives (sometimes called ideal
state)
Path - map a possible route to the goals/objectives

METHOD3 Draw-See-Think
Draw - what is the ideal image or the desired end state?
See - what is today's situation? What is the gap from ideal and
why?
Think - what specific actions must be taken to close the gap
between today's situation and the ideal state?
Plan - what resources are required to execute the activities?
 Strategy Evaluation.
Methodology

An alternative to the Draw-See-Think approach is called See-

Think-Draw

See - what is today's situation?

Think - define goals/objectives

Draw - map a route to achieving the goals/objectives

 Strategic Planning Model
ABCDE
Where we are Where we want to be How we will do it How are we
doing

Assessment Baseline Components Down to Evaluate

Specifics

• Environmental • Situation – Past, • Mission & • Performance • Performance

Scan Present and Vision Measurement Management
Future
• Background • Significant • Values / • Targets / • Review Progress
Information Issues Guiding Standards of – Balanced
Principles Performance Scorecard
• Situational • Align / Fit with • Major Goals • Initiatives and • Take Corrective
Analysis Capabilities Projects Actions
• SWOT – • Gaps • Specific • Action Plans • Feedback
Strength’s, Objectives upstream –
Weaknesses, revise plans
Opportunities,
Threats
Thank Y
ou