Strategic Planning:-

Strategic planning means planning for making and implementing strategies to

achieve organizational goals. It starts by asking oneself simple questions like :
What are we doing, should we continue to do it or change our product line or the
way of working, what is the impact of social, political, technological and other
environmental factors on our operations, are we prepared to accept these changes
etc.

Strategic planning is a formalized, documented organizational management

process used to analyze its current situation, set priorities, and to focus resources
and energy to achieve and maintain an organization’s competitive advantage.

Strategic planning helps in knowing where we are and where we want to go so that
environmental threats and opportunities can be exploited, given the strengths and
weaknesses of the organization. Strategic planning is “a thorough self-examination
regarding the goals and means of their accomplishment so that the enterprise is
given both direction and cohesion.”

Strategic planning is planning for long periods of time for effective and efficient
attainment of organizational goals. Strategic planning is based on extensive
environmental scanning. It is a projection into environmental threats and
opportunities and an effort to match them with organizational strengths and
weaknesses.

Benefits of strategic planning:-

1. It allows organizations to be proactive rather than reactive
A strategic plan allows organizations to foresee their future and to prepare
accordingly. Through strategic planning, companies can anticipate certain
unfavorable scenarios before they happen and take necessary precautions to avoid
them. With a strong strategic plan, organizations can be proactive rather than
merely reacting to situations as they arise. Being proactive allows organizations to
keep up with the ever-changing trends in the market and always stay one step
ahead of the competition.
2. It sets up a sense of direction
A strategic plan helps to define the direction in which an organization must travel,
and aids in establishing realistic objectives and goals that are in line with the
vision and mission charted out for it. A strategic plan offers a much-needed
foundation from which an organization can grow, evaluate its success, compensate
its employees and establish boundaries for efficient decision-making.

3. It increases operational efficiency

A strategic plan provides management the roadmap to align the organization’s
functional activities to achieve set goals. It guides management discussions and
decision making in determining resource and budget requirements to accomplish
set objectives -- thus increasing operational efficiency.

4. It helps to increase market share and profitability

Through a dedicated strategic plan, organizations can get valuable insights on
market trends, consumer segments, as well as product and service offerings which
may affect their success. An approach that is targeted to turn all sales and
marketing efforts into the best possible outcomes can help to increase profitability
and market share.

5. It can make a business more durable

A business may be booming one year and in debt the next. With constantly
changing industries and world markets, organizations that lack a strong foundation,
focus and foresight will have trouble riding the next wave. According to reports,
one of every three companies that are leaders in their industry might not be there in
the next five years... but the odds are in favor of those that have a strong strategic
plan!

Three Key Fundamentals to Strategic Planning:-

One of the wonderful things about going through the strategic planning process is
gaining a detailed picture of your organization, leading to a true understanding of
how the company works and its position in your industry. It takes time, energy and
effort to pull together and polish a terrific strategic plan, and in order to do so, you
must understand the three key elements:

1. Evaluate where you stand now: This is the information gathering stage of
planning; it's time to gather all your facts and figures. A full understanding of your
organization is key here, including internal operations, overall role in profitability,
and comparison to competitors. Ideally, these reports begin from the bottom and
work their way up the chain, so as to get a fully realistic picture of how all of your
units and teams work within the company.

2. Pinpoint your goals: This becomes the answer to a frequent interview question:
Where do you see yourself in five years? How about 10 years? Develop a broad
overall plan for your organization, identifying long-range goals. Sharpen the focus
of your company to align with those objectives. Will your stated focus and goals
gain your company a competitive edge over the competition? All divisions and
teams will have an ultimate goal that feeds into and supports the overall goals of
the organizations.

3. Design the path: Here is where everyone rolls up their sleeves and gets their
hands dirty. Identify changes for each division and team, along with broad overall
structural changes needed to the organization. Long-term goals have been set, now
it's time to break those goals down further, into short- and medium-range
objectives. Finally, to put some teeth in the document, set deadlines for each step
on the way to each goal.

STRATEGY:-
The term ‘strategy’ means formulating an extensive decision plan which gives
direction to the organization & helps the organization to utilize its resources
appropriately.

STRATEGIC MANAGEMENT PROCESS:-

The process of strategic management focuses on developing the strategy of the
organization. It is distinct process, which the management uses to select strategies
that will help the organization in improving its performance. It is never ending
process that evaluates the companies and industries that are associated with the
organization and its opponents.

1.ENVIRONMENTAL SCANNING:- Environmental Scanning means

careful monitoring of internal and external business environment to identify risks
and opportunities associated with it. It is a constant process in which the
environment is frequently analyzed and diagnosed. In other words, scanning refers
to short term forecasting. It involves activities like future studies , future research
,insight activities, projecting etc.

Environmental Scanning Techniques:-

◦ SWOT Analysis : SWOT analysis is framework that identifies the Strengths,
Weaknesses , Opportunities and Threats of a project or a business enterprise.
◦ETOP(Environmental Threat And Opportunity Profile) : It is a process of
structuring environmental issues.

◦PEST Analysis : (Political , Economic, Social and Technological) :It outlines

the macro-environmental factors used for environmental scanning in SHRM.

◦ Survey Method : This is a method of collecting qualitative and quantitative

information respondents. ◦Econometric Technique : It is a quantitative technique
which uses mathematical models to stimulate and forecast the environmental
factors.

2. Strategy Formulation :-
Strategy formulation means formulation of long-term organizational plans that
would assist in the carrying out organizational activities in the best possible way.
Strategy formulation is essential optimum functioning of the organization. Strategy
formulation involves administering the external opportunities and threats
effectively while keeping in mind the strengths and weaknesses of the organization
by formulating long term plans. This involves develops the corporate vision,
identifying corporate mission, setting realistic objectives, formulating strategies
and establishing policy guidelines.

3. Strategy Implementation :-
Once strategies are formulated and sound strategic plan has been developed , the
next step in the process of strategic management is to ensure effective
implementation of formulated strategies. Thus strategic implementation is the
process that facilitates is successful execution of the selected strategy. Strategies
are implemented with the help of programs , budgets and procedures .This process
may also result in modifying organization’s culture, structure and management
system.

4. Evaluation and Control:-

After a strategy is implemented successfully, it is important that it is evaluated on
a regular basis. Evaluation must be incorporated in the process of strategic
management as an essential element of strategy implementation, as it helps in
monitoring the whole procedure. Performance is the final outcome of all the
activities involved in the process of strategic management. Strategic management
process has become widely accepted as it enhances the performance of the
organizations.

Importance of Strategic Management:-

 It guides the company to move in a specific direction. It defines organization’s
goals and fixes realistic objectives, which are in alignment with the company’s
vision.
 It assists the firm in becoming proactive, rather than reactive, to make it analyze
the actions of the competitors and take necessary steps to compete in the market,
instead of becoming spectators.
 It acts as a foundation for all key decisions of the firm.
 It attempts to prepare the organization for future challenges and play the role of
pioneer in exploring opportunities and also helps in identifying ways to reach
those opportunities.
 It ensures the long-term survival of the firm while coping with competition and
surviving the dynamic environment.
 It assists in the development of core competencies and competitive advantage,
that helps in the business survival and growth.