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Unit 3

STRATEGIC
BUSINESS
PLANNING

Contents
Introduction................................................................................................................................2
Significance of an organizations Vision and Strategic Direction...............................................2
Vision and Mission Statements..............................................................................................3
Purpose and Aim................................................................................................................4
What makes an organizations statement unique................................................................4
Implications of Strategic Direction........................................................................................4
Linkage between Mission, Vision with Strategic Direction...............................................5
Incorporating Strategic Direction into Business Plan................................................................5
Stakeholders and the development of Strategic Business Plan..............................................6
Content of Strategic Business Plan....................................................................................6
Link between objective and direction of the organization.....................................................7
Identifying Business Risks.....................................................................................................7
Contingency purpose and content.......................................................................................7
Importance of stakeholder support for Strategic Business Plan.................................................7
Key stakeholders....................................................................................................................8
Communication Strategies.....................................................................................................8
Gaining Support.....................................................................................................................8
Implementing a Business Strategy.............................................................................................8
Resource Requirements..........................................................................................................9
Approaches.............................................................................................................................9
Conclusions..............................................................................................................................10
CEO Speech.............................................................................................................................11
Success factors for last one year...........................................................................................11
Future Action plan................................................................................................................11
References................................................................................................................................12
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Introduction
This project presents the use of strategic planning in a business and its constituents, further it
discusses how strategic plans are implemented in a business. Firms use Strategic Analysis
Model (SAM) to conduct strategic analysis of the organization, the results of the analysis
could be further used for making strategic decisions (Abraham, 2012). SAM could also be
used to set the direction and strategy of the organization by setting long term and short term
goals.
Strategic Decision Making is an essential part of strategic management, it is necessary to
ensure that the functional decision making by the employees in each department of the
organization must be in line with the overall mission statement of the firm. Consequently it is
necessary to study strategic decision making in order to be able to understand the
complexities in strategic decisions and also how managers can keep track of functional
decision making in the organization. Once functional strategic decision making is in line with
the strategy of the organization.
References from organizations like SPAR and TESCO were used to explain the importance of
an organizations mission statement in strategic decision making. The project discusses the
role of strategic business planning and decision making in todays organizations by
highlighting the importance of mission statement in strategic decision making along with
other factors as discussed below.

Significance of an organizations Vision and Strategic


Direction
Vision and Mission Statement of an organization is very important in outlining the strategic
direction of the firm. The vision and mission of an organization outlines what exactly the
organization is involved in and what do they plan to become in future. The vision and mission
of the organization highlights what exactly the firm plans to do for its stakeholders.
Summarizing we could say mission and vision are the communication modes through which
the organization communicates with its stakeholders regarding the strategic direction of the
firm.

Vision and Mission Statements


Organizations use mission statement as a mean of communication for the strategic direction
of the firm (Harrison & St. John, 2010). Therefore mission statement is an important
contributor in designing the strategic direction of the firm and communicating it to all the
stake holders. The mission statement of an organization highlights the identity of the
organization, its products, market and the specific methodology adopted by the organization
to achieve its mission (Alkhafaji, 2003). Further the mission statement defines the following:
1- The size of the organization
2- The scope of the organization
3- The number of the organizations businesses, markets and customers
The mission statement of SPAR is as follows:
To be the best supplier of food, drink and associated products to existing and new customers
in our retail business area (SPAR, n.d.).
The mission statement of SPAR detailed the strategic direction of the business, which is to be
the best supplier of food, drink and associated products in the retail industry of UK. It also
highlights the size and the number of organizations businesses, customers and existing
markets i.e. the size is limited to UK, the customers are new and existing customers looking
for food, drink and associated products.
The vision of an organization represents the overall vision, defines the business of the
organization and also outlines the values of the organization. The vision of TESCO is stated
below:
Vision for Tesco is to be most highly valued by the customers they serve, the communities in
which they operate, their loyal and committed staff and their shareholders; to be a growth
company; a modern and innovative company and winning locally, applying our skills
globally (TESCO, n.d.).
The vision of TESCO clearly states the values of the company, what they do and what they
plan to do for their stakeholders in future. Therefore the strategic direction of the TESCO is
to become a growth company which is valued most highly by its customers.

Purpose and Aim


The purpose and aim is to communicate the strategic direction of the firm as shown in above
examples the purpose and aim of TESCO and SPAR is as follows:
SPAR: The purpose of mission statement is to communicate with the stakeholders that SPAR
plans to become the best supplier of food, drink and associated products in the retail industry
of UK.
Therefore the purpose and aim of the mission statement is to communicate the strategic
direction of the organization with its stakeholders also highlighting the scope and size of the
organization, along with the number of organizations businesses, markets and customers.
What makes an organizations statement unique
The strategic direction of the organization could only be determined with the help of the
information on the image and character the firm wishes to develop in the future (Hitt et al.,
2011). Therefore the fact that the mission and vision predict the strategic direction of the firm
makes mission and vision unique.

Implications of Strategic Direction


The overall strategic direction of the firm has implications for the rest of the organization and
all the activities the organization is involved, including products and services offered by the
firm (Gould, 2012). Most of the organizations regard products and services offered by them
as of the top priority, consequently designing the strategic direction of the firm becomes very
important to achieve the organizations mission and satisfy the stake holders. The implications
in development of organizational strategies could be explained with the help of the following
figure, showing the development of Planned, Emergent, Deliberate, Unrealized and Realized
Strategies for an organization (Hill & Jones, 2008).

Linkage between Mission, Vision with Strategic Direction


Mission and Vision of an organization have direct link with the strategic direction, because
mission and vision outlines the values, scope, size, stakeholders, products and markets. Based
on this information the strategic direction of the firm is designed which has its effects on all
the aspects of an organization.
It could be easily stated that mission and vision provide organizational goals which set the
direction of the organization, therefore the vision and mission of the organization actually
direct the organization. In contrast SPAR has a different strategic direction which is to be the
best supplier of food, drinks and related products and the organization is focusing to be the
best supplier and not the high quality supplier as in the case of TESCO.

Incorporating Strategic Direction into Business Plan


The mission and vision of an organization provide the strategic direction of the business
which could be incorporated in the business plan to achieve the mission of the organization.
Strategic business planning enables an organization to achieve organization mission and
vision with the help of strategic direction, pointing out the need for strategic planning to
achieve long-term goals of the organization.

Stakeholders and the development of Strategic Business


Plan
Stakeholders are the main focus of strategic business plan, ultimately the organization is
working to increase the wealth of its shareholders, provide expected products/service to its
customers and satisfy the demands of all the involved stakeholders.
Content of Strategic Business Plan
The first step in Strategic business planning is to develop the mission and vision of the
organization highlighting the organizational size, scope, values, products, markets and stake
holders. The mission and vision of the organization must highlight the long-term goal of the
organization and what it intends to achieve for its stakeholders.
The second step (SWOT) is to determine the critical success factors of the organization
necessary to achieve the mission and vision of the organization. An organization could
conduct SWOT Analysis to determine the critical success factors also it predicts the
competitive position of the organization. Critical success factors point out towards critical
thinking, which is used by managers to think about the longer vision of the organization,
assess its operations and create the success factors for the organization. Strategic thinking is a
six step procedure which involves thinking over six critical success factors which are as
follows (Kaufman et al., 2003):
1- Thinking out of the box, out of the comfort zone
2- Identifying what and how
3- Use all levels of planning including mega/outcomes, macro/outputs and micro
products
4- Prepare organizational objectives (SMART objectives)
5- Using continuous development in planning
6- Thinking about improving results to increase performance
The third step (Strategic Plan) in the development of strategic business plan is to compile the
business strategies which the organization will use to indulge in business practices. The
strategies outline the actions required for the success of the organization and the concerned
employee, including business strategies for marketing and advertisement.
The fourth step is to develop the timeline for the strategic business plan, the timeline in which
the stakeholders of the firm expect required results.
The strategic business planning process could be narrowed down to:
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1. Strategic Analysis using SWOT Analysis


2. Business Planning and developing Strategic Plans
3. Strategic Control with the help of Balance Scorecard

Link between objective and direction of the organization


The objectives derived from mission and vision of the organization set the strategic direction
of the organization. Therefore the strategic direction of the organization could only be
determined once the objectives of the organization are written down.

Identifying Business Risks


Identifying risks is also a major part of strategic business planning the products/services of an
organization go through different product life cycle and experience low or high sales. Risk
management is an important part of strategic planning process which could be understood
with the help of following diagram, which explains the strategic planning process (Anderson
& Schroder, 2010).
Risk Management Process
Identifying

Data

Measure

risks

Collection

(VaR)

Strategic Analysis (SWOT)

Evaluate

Manage

Monitor

Hedge

Business Planning

Strategic Control

(Strategic Plan)

(Balanced Scorecard)

Strategic Planning Process

Contingency purpose and content


Contingency planning is an integral part of strategic business planning, which involves
planning for unexpected events. Unexpected events are generally those events which are
different than the assumptions in the strategic business plan. The purpose of contingency
planning paradigm is to focus on most probable issues and most harmful issues in the
organization and incorporate them in the planning process.

Importance of stakeholder support for Strategic


Business Plan
Stakeholders of any organization may have very different objectives than the management of
the organization. Finding out the objectives of the stakeholders and incorporating them in
strategic business planning is very vital for the success of the organization and to achieve its
mission. If an organization wished to achieve certain objectives it must incorporate the stake
of all the stakeholders involved in fulfilment of those objectives specially the ones with level
of power enabling them to exert pressure.

Key stakeholders
The key stakeholders of an organization include clients, investors and shareholders,
contractors and suppliers, employee unions and society in general. An organization must
incorporate objectives and safe guard stake of all of its stake holders in strategic business
planning.

Communication Strategies
Both internal and external communication strategies must be used to remove conflict with
any stakeholder in the organization. The conflict if any must be analysed and communication
strategy must be developed to communicate with key stakeholders. The external
communication strategy for external stake holders must include process definition and
product identification.

Gaining Support
By implementing the right communication strategy an organization could gain support from
all the key stakeholders while developing the strategic business plan. The benefits of
implementing the business strategy must be identified and informed to the key stakeholders
to gain support.

Implementing a Business Strategy


Following steps are important in implementing a business strategy:
To implement a business strategy the organization must come up with a change
program with clear and defined mission and vision. The vision of the organization
must be communicated to all the stakeholders, people must understand where they are
going and what are they working to achieve in the future.
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Communication plays an important role in the implementation of a business strategy,


the objectives must be clearly communicated in order to achieve desired results.
Planning is an integral part of implementing a business strategy, which involves
identifying all the steps in implementing the required change.
The objectives and goals of the organization must be realistic and not set too high,
which become too hard to achieve in the given time.
Practicality is the centre ingredient for the implementation of a business strategy and
to implement the required change.
All the stakeholders must be encouraged to participate in implementing the business
strategy and change process.
Overcoming obstacles in the way of implementing strategies and motivating others to
be confident and providing training and support for the employees to acquire new
skills required to implement business strategy.

Resource Requirements
To implement a business strategy the resource requirement for the implementation must be
identified with the help of Capacity Requirements Planning (CRP), Resource Requirements
Planning (RRP) and Rough-Cut Capacity Planning (RCCP). CRP provides the resource
requirements for the materials required for implementing the new strategy. RCCP assess the
resource requirement for scheduling the production of goods/services of the organization.

Approaches
The following approaches could be used for implementing a business strategy:
1. Vision
2. Communication
3. Planning
4. Steady Progress
5. Realism and Practicality
6. Participation
7. Motivation
8. Overcoming Resistance
9. Systems and Processes
10. Training and support
Communication by using all means with all the key stake holders could be another approach
for implementing a business strategy. Planning is an integral part of implementing change and
the required business strategy hence managers could adopt planning approach to implement a
business strategy.

Sub strategies are also a concern while implementing business strategy, sub strategies are
within the functional areas of the firm designed to assist in fulfilling the overall strategy of
the firm. Decision making also plays an important role in implementing a strategy and these
decisions and actions help implementing the sub strategies eventually implementing the wide
strategies.

Conclusions
The project started by highlighting the importance of Vision and strategic direction. It is been
deduced that an organizations vision and mission statement along with its goals and
objectives determine the strategic direction of the firm.
All the stakeholders of the organization must be taken into consideration before making the
strategic business plan. Once the strategic direction of the business is formed with the help of
organizational objectives and mission, the risks facing the organization could be outlined.
Gaining stakeholder support is vital for the success of strategic business plan and the
stakeholder support must be ensured with the help of communication strategies as explained
above. It could be concluded that without strategic business planning and decision making it
is very easy for an organization to derail from its strategic direction. The organization could
use SWOT analysis for strategic analysis and strategic planning for business planning and in
the end for implementation and strategic control Balance Scorecard could be used.

CEO Speech
Success factors for last one year
The success factors for the organization are as follows:
1. Outlining the mission and vision of the organization followed by the goals of the
organization.
2. Predicting the strategic direction of the firm
3. Making sure functional decision making is in line with the organizations mission and
vision.
4. Identifying business risks
The organization successfully created the mission and vision, and based on the vision the
strategic direction of the organization was established. The functional decision making has
been corrected by incorporating the strategic direction and vision of the organization.
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All the employees of the organization are made aware of the strategic direction, mission and
vision of the organization.

Future Action plan


The future action plan for the organization would be to implement strategic control over the
organization with the help of Balance Score Card. The management must track the strategic
direction of the firm and make sure that it is in line with the mission of the organization. The
future Action plans are as below:
1. For future success it is necessary for the organization to implement risk management
process by identifying risks and data collection with the help of SWOT analysis.
2. Measuring and evaluating the business plan with the help of Strategic business
planning.
3. Exerting strategic control and using Balance Score Card to track performance.
With the help of implementing the above tools the management targets to achieve the mission
of the organization in the future.

References
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Alkhafaji, A.F., 2003. Strategic Management: Formulation, implementation and control in a
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http://books.google.com/books?
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SPAR, n.d. Mission Statement. [Online] Available at:
http://www.sparscotland.co.uk/html/corporate/mission.htm [Accessed 15 April
2013].
TESCO, n.d. Our Vision. [Online] Available at: http://www.tescoplc.com/index.asp?
pageid=13 [Accessed 15 April 2013].

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