Strategic Planning Essay

Strategic syllabusning EssayIntroductionPlanning is the near important thing for all validation. A successful computer program means a successful mission to goal of a business or composition. It doesnt matter the organization big or small. Plan result bring you to face the challenges and opportunities. This bequeath enable to deliver more(prenominal) effectively to meet the needs of tar nurture people and strengthen the organization. Planning is the beginning(a) step towards sustainable funding. Planning should be creative process, simple and straightforward that brings demonstrable benefits.The process of making governanceatic decisions ab break finished proposed future outcomes, the process includes evaluating an organization and the environment in which it operates, establishing long-term goals, and mapping a plan to achieve the goals that have been identified. Strategic planning assumes and incorporates the likelihood of a changing environment that will require adjust ments in the identified goals and the process of achieving them.Strategic planning processEnvironmental S placeningDeveloping the environmental s rout outning structure.The environmental scanning process. inquisitory for discipline resourcesSelecting information resources to scan.Identifying criteria by which to scan.Determining special actions to take on the scanning resultsScanning for the institution.Evaluating the process.Key stages of strategic planning processThere ar several mainstay stages of strategic planning processDevelop Vision and MissionBusiness and operation synopsisDevelop and select strategic alternativeEstablish strategic objectiveStrategy execution plan.Establish resource allocationExecution summaryStrategy can be seen as an on going positioning process for an organization and strategic planning can be seen as a separate activity reviewed at periodic head- specify intervals. Strategy involves achieving a competitive advantage for an organization in meeting the needs of customers and fulfilling the expectations of stakeholders.An organization with an active strategy will have a plan on which to base its decisions. This plan may be in the form of a written document, or it may be a way of feeler matters as they arise. eccentricIn the case of Marks Spencer in the late 1990s, its surveys showed that customer ecstasy did fall over a period of months, still in that location were a combination of factors causing problems, including a general recession in High Street shops in 1998. Other possible problems for MS that were out limited TV advertising, its supply lines were relatively expensive, and it had difficulties with its product range and with the presentation of its clothes. Although the company recorded profits of over 1 billion in 1997 and 1998, there was a 23 per cent drop in profits in November 1998. The CEO left the company in 1999 and there were further changes in senior(a) management in the following two years. Major credit cards became original, product ranges were altered, product presentation was reviewed and a TV advertising campaign was on a lower floortaken under the slogan Exclusively for everyone. (Tim Hannagan, Mastering Strategic Management, 2002, Palgrave, New York, pg 60)Task 2 Involvement of stakeholders in the strategic planning process.Stakeholders argon involved in the personal effects of strategic management because the actions and the development of the organization will result in change in their circumstances in one way or another. Stakeholders can be described as individuals and groups who are affected by the activities. It can be argued that the most important stakeholders are those who have the most to lose from the organizations actions. It is similarly important for an organization to be able to assess the power of these groups to influence events and the attitudes of the most powerful groups individuals.Stakeholders include a range of people involved with a companyThe shareh olders- who own the company and receive dividends.Financial bodies such a banks- who fund organizations in one way or another, and receive added pass judgment through interest or by other means.The employee- who receive some of the added value through their pay.The management- who receive added value through their pay and other benefits.The government- which receives part of the added value in the form of taxes.The customers- who consume the results of the value added to a commodity or service through the value chain.The mission and the objectives of an organization have to be highly-developed taking into account the interests of the organizations stakeholders.Stakeholders ExpectationsShareholders Financial returnCreditors Interest, Creditworthiness, Prompt paymentSuppliers Payment, long-term ordersEmployees Pay, stability, job satisfactionManagers Pay, benefits, power and controlclients Supply of goods and services, qualityGovernment Taxes, employment, sparing growthStrategic Man agementIn terms of strategic management the major issue is to identify the relative power of the various stakeholders so that it is derive which of them is the most important to satisfy. On the one hand, it can be said that form any organization the customer comes first, second and third because comes without the customer the utilisation of the organization will not exit, on the other hand, there may be other stakeholders who if not satisfied have the power to bring the organization to an end. For an example, Creditors have the power to close an organization if they are not paid, and employees can bring a company to its knees by withdrawing their labour. Every organization has to decide which are its most influential stakeholders and balance out their interests.Task 3 SWOT analysis of an organizationSWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is an important woodpecker for auditing the overall strategic position of a business and it s environment. Once key strategic issues have been indentified, they feed into business objectives, grumpyly marketing objectives.The key attribute Internal and External Issues.Internal Issues Strengths and Weaknesses are internal factors. For example, an strength could be specialist marketing expertise. A weakness could be the lack of a newfangled product.External Factors Opportunities and Threats are external factors. For example, an opportunity could be a developing distribution channel such as the internet, or changing consumer lifestyles that potentially ontogeny demand for a companys product. A threat could be a new competitor in an important existing market or a expert change that makes existing products potentially obsolete.(S)trengthsDiversifying away from areas of major threat to more promising opportunities.Focusing on modifying weaknesses in spots of significant opportunities.Taking defending measures in areas of threat where you are weak.(W)eaknessesMake mind up w hich weaknesses need to be addressed as a priority. Other weaknesses have got to be accepted and respected until time and resources let find a solution.Some weaknesses can be developed into strengths or opportunities. For instance, it might be feasible to turn a shortage of production capacity into increased value for your product.(T)hreatsBuild successful relationships with suppliers and customer.Cultivate good employee relations.Ensure clear and reasonable contracts with suppliers, customers and employees.Procure insurance against distinct debacles.Make genuineistic contingency plans to deal with potential.Establish the full types of service contracts for key personnel.Invest in legal protection for intellectual property.Task 4 The differences between balance scorecard, scenario planning, cost benefit analysis and sensitivity analysis.Balance scorecardThe balanced scorecard is a strategic planning and management system that is used extensively in business and industry, governme nt, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.Kaplan and Norton describe the innovation of the balanced scorecard as followsThe balanced scorecard retains traditional financial measures. But financial measures tell the humbug of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.ExamplesDepartment AreasFinance Return on Investment hard cash FlowReturn on Capital EmployedFinancial Results (Quarterly/Yearly)Internal Business Processes Number of activiti es per functionDuplicate activities across functionsProcess alignment (is the right process in the right department)Process bottlenecksProcess automationLearning and Growth Is there the correct expertise for the jobEmployee turnoverJob satisfactionTraining opportunitiesCustomer Delivery performance to customerQuality performance for customerCustomer satisfaction rateCustomer percentage of marketCustomer retention ratScenario PlanningScenario planning where choices can be screened by matching them to possible scenarios. This is a what if? approach based on possible changes in the organizations environment. This leads to the formation of contingency plans in order to meet the requirements of each of these possible scenarios. For this approach to be useful, the strategic manager has to recognize the onset of the elements of a particular scenario so that the appropriate contingency plan can be introduced. Tim Hannagan, Mastering Strategic Management, 2002, Palgrave, New York, pg 60Scena rio planning or scenario thinking is a strategic planning tool used to make flexible long-term plans. It is a method for learning about the future by understanding the nature and bear upon of the most uncertain and important driving forces affecting our world.Change has considerable psychological impact of the human mind. To the fearful, change is threatening because it means that things may belong worse to the hopeful, change is encouraging because things may get better. To confident, change is inspiring because the challenge exists to make thing better King Whitney, youngerCost benefits analysisA cost benefit analysis finds, quantifies, and adds all the positive factors. These are the benefits. Then it identifies, quantifies, and subtracts all the negatives, the cost. The difference between the two indicates whether the planned action is advisable. The real trick to doing a cost benefit analysis well is making sure you include all the costs and all the benefits and property quan tify them.Example of a Cost BenefitAs the Production Manager, proposing the purchase of a $ 1 million stamping cable car to increase output. Before present the proposal to the guilt President, know the need some facts to support suggestion, decide to run the numbers and do a cost benefit analysis.Itemize the benefits. With the new machine, it can be produced 100 more units per hour. The three workers currently doing the stamping by hand can be replaced. The units will be higher quality because they will be more uniform and be convinced these outweigh the costs. There is a cost to purchase the machine and it will consume some electricity. Any other costs would be insignificant.Calculate the selling price of the 100 additional units per hour multiplied by the number of production hours per month. Add to that two percent for the units that arent rejected because of the quality of the machine output. Also add the monthly salaries of the three workers. Thats a pretty good total benefit .Then calculate the monthly cost of the machine, by dividing the purchase price by 12 months per year and divide that by the 10 years the machine should last. The manufacturers specs tell what the power consumption of the machine is and get power cost numbers from accounting then figure the cost of electricity to run the machine and add the purchase cost to get a total cost figure.Now subtract total cost figure from total benefit value and analysis shows a healthy profit. sensitiveness analysisSensitivity analysis is a method for testing the degree of sensitivity of a system or models unsettleds by applying incremental changes. The system can be physical or notional and represent the whole project or major element the analysis determines which variables are the most significant having the most impact on results and so helps the selection of the optimal settings or best solution.A technique used to determine how different values of an independent variable will impact a particular de pendent variable under a given set of assumptions. This technique is used within specific boundaries that will depend on one or more input variables, such as the effect that changes in interest rates will have on a bonds price. Sensitivity analysis is a way to predict the outcome of a decision if a situation turns out to be different compared to the key prediction(s).Example An analyst might create a financial model that will value a companys equity (the dependent variable) given the amount of fee per share (an independent variable) the company reports at the end of the year and the companys price-to-earnings multiple (another independent variable) at that time. The analyst can create a table of predicted price-to-earnings multiples and a corresponding value of the companys equity based on different values for each of the independent variables.ConclusionStrategy can be seen as an on going positioning process for an organization and strategic planning can be seen as a separate activ ity reviewed at periodic well defined intervals.Referenceshttp//www.yourdictionary.com/business/strategic-planninghorizon.unc.edu/projects/seminars/futuresresearch/stages.htmlhttp//ezinearticles.com/?7-Steps-Effective-Strategic-Planning-Processid=588763Tim Hannagan, Mastering Strategic Management, 2002, Palgrave, New York, pg 60Tim Hannagan, Mastering Strategic Management, 2002, Palgrave, New York, pg 50, 51Kaplan and Nortonhttp//www.businessballs.com/balanced_scorecard.htmTim Hannagan, Mastering Strategic Management, 2002, Palgrave, New York, pg 60)http//www.jiscinfonet.ac.uk/tools/scenario-planningKing Whitney, Jr.http//management.about.com/cs/money/a/CostBenefit.htmhttp//www.maxwideman.com/issacons1/iac1112b/tsld002.htmhttp//www.investopedia.com/terms/s/sensitivityanalysis.asp