HOW IS STRATEGIC PLANNING CARRIED OUT AT THE DIFFERENT LEVELS

OF AN ORGANISATION?

CORPORATE AND DIVISION STRATEGIC PLANNING

ALL CORPORATE HEADQUARTERS UNDERTAKE FOUR PLANNING ACTIVITIES
DEFINING THE CORPORATE MISSION.
ESTABLISHING STRATEGIC BUSINESS UNIT.
ASSIGFNING RESOURCES TO EACH BUSINESS UNITS.
ASSESSING GROWTH OPPORTUNITIES.

1.DEFINING THE CORPORATE MISSION.

GOOD MISSION STATEMENTS HAVE FIVE MAJOR CHARACTERISTICS:
THEY FOCUS ON LIMITED NO. OF GOALS.
THEY STRESS COMPANY’S MAJOR POLICIES AND VALUES.
THEY DEFINE THE MAJOR COMPETITIVE SPHERES WITHIN WHICH THECOMPANY WILL OPERATE.
THEY TAKE A LONG-TERM VIEW.
THEY ARE AS SHORT, MEMORABLE, AND MEANINGFUL AS POSSIBLE

2.ESTABLISHING STRATEGIC BUSINESS UNITS

A STRATEGIC BUSINESS UNIT HAS THREE BASIC CHARACTERISTICS:
IT IS A SINGLE BUSINESS, OR A COLLECTION OF RELATED BUSINESS, THAT CAN BE PLANNED SEPARATELY FROM
THE REST OF THE COMPANY.
IT HAS ITS OWN SET OF COMPETITORS.
IT HAS A MANAGER RESPONSIBLE FOR STRATEGY PLANNING AND
PROFIT PERFORMANCE, WHO CONTROLS MOST OF THE FACTORS
AFFECTING PROFIT.

3.ASSIGNING RESOURCES TO EACH SBU

THE COMPANY MANAGEMENT DECIDES HOW TO ALLOCATE RESOURCES OR BUDGET TO EACH BUSINESS
UNIT.

4.ASSESSING GROWTH OPPORTUNITIES

INTENSIVE GROWTH- REVIEW OF OPPRTUNITIES FOR IMPROVING EXISTING GROWTH.
INTEGRATIVE GROWTH- THE COMPANY CAN ACQUIRE ONE OR MORE OF ITS SUPPLIERS, WHOLESALERS,
COMPETITORS TO EXPAND ITS BUSINESS.
DIVERSIFICATION GROWTH- WHEN GOOD OPPORTUNITIES EXISTS OUTSIDE THE PRESENT BUSINESS,
THEN TRHE COMPANY MAY LOOK FORWARD TO STARTING A NEW BUSINESS.
DOWNSIZING AND DIVESXTING OLDER BUSINESS- IT MAY REVIEW ITS OLDER BUSINESSES ACCORDING
TO ITS PROFITS OR TECHNOLOGY.

BUSINESS UNIT STRATEGIC PLANNING

THE BUSINESS MISSION
SWOT ANALYSIS
 GOAL FORMULATION
STRATEGY FORMULATION
PROGRAM FORMULATION AND IMPLIMENTATION
FEEDBACK AND CONTROL

1. THE BUSINESS MISSION

EACH BUSINESS UNIT NEEDS TO DEFINE ITS OWN SET OF MISSIONS WITHIN
THE BROADER COMPANY MISSION.

2. SWOT ANALYSIS
INTERNAL ENVIRONMENT (STRENGTH AND WEAKNESS) ANALYSIS- TRHE
QUESTION HERE IS WHETHER IT SHOULD LIMIT ITSELF TO THOSE OPPORTUNITIES FOR WHICH H IT
POSSESSES THE REQUIRED STRENGTH OR CONSIDER THOSE THAT MIGHT REQUIRE TO FIND NEW
STRENGTH.

EXTERNAL ENVIRONMENT (THREAT AND OPPORTUNITY) ANALYSIS-

A MARKETING OPPORTUNITY IS AN AREA OF BUYER NEED AND INTEREST THAT A COMPANY HAS A HIGH
PROBABILITY OF PROFITABLY SATISFYING.MARKETERS NEDD TO BE GOOD AT SPOTTINGT
OPPORTUNITIES LIKE BELOW:
A COMPANY MAY BENEFIT FROM CONVERGING INDUSTRY TRENDS AND INTRODUCE HYBRID PRODUCTS
OR SERVICES THAT ARENEW TO THE MARKET.
A COMPANY MAY MAKE A BUYING PROCESS MORE CONVENIENT FOR THE CUSTOMERS.
A COMPANY CAN MEET THE NEED FOR MORE INFORMATION AND ADVICE.
A COMPANY CAN CUSTOMISE A PRODUCT AND SERVICE.
A COMPANY CAN INTRODUCE A NEW CAPABILITY.
A COMPANY MAY BE ABLE TO DELIVER A PRODUCT OR SERVICE FASTER.
A COMPANY MAY BE ABLE TO OFFER A PRODUCT AT A MUCH LOWER PRICE.

3.GOAL FORMATION
THE GOAL FOR THE COMPANY
THEY MUST BE ARRANGED HIERARCHIALLYFROM MOST TO LEAST IMPORTANT.
OBJECTIVE SHOULD BE QUANTITATIVE WHENEVER POSSIBLE.
GOALS SHOULD BE REALISTIC.
OBJECTIVES MUST BE CONSISTENT.

4.STRATEGY FORMULATION
STRATEGY IS A GAME PLAN TO ACHIEVE A GOAL.
PORTER’S GENERIC STRATEGY:
OVERALL COST LEADERSHIP- FIRMS WORK TO ACHIEVE THE LOWEST BPRODUCTION AND DISTRIBUTION
COST TO UNDERPRICE COMPETITORS.
DIFFERENTIATION- THE FIRM CONCENTRATES ON ACHIEVING A SUPERIOR PERFORMANCE IN A
CUSTOMER BENEFIT AREA.
FOCUS- THE BUSINESS FOCUSES ON ONE OR MORE NARROW MARKET SEGMENTS.
5.PROGRAM FORMULATION AND IMPLIMENTATION
A COMPANY MIGHT AIM TO DELIGHT THE CUSTOMERS PERFORM WELL FOR ITS EMPLOYEES AND DELIVER
A THRESHOLD LEVEL OF SATISFACTION TO ITS SUPPLIERS.IN SETTING THESE LEVELS IT MUST NOT VIOLATE
ANY STAKEHOLDER GROUP’S SENSE OF FAIRNESS ABOUT THE TREATMENT IT’S RECEIVING RELATIVE TO
THE OTHERS.

6.FEEDBACK AND CONTROL

A COMPANY’S STRATEGIC FIT WITH THE ENVIRONMENT WILL INEVITABLY ERODE BECAUSE THE MARKET
ENVIRONMENT CHANGES FASTER THAN COMPANY’S STRATEGY. THUS, A COMPANY MIGHT LOSE
EFECTIVENESS. ONCE AN ORGANISATION FAILS TO RESPOND TO A CHANGED ENVIRONMENT IT BECOMES
INCREASINGLY HARD TO RECAPTURE ITS LOST POSITION.THUS IT IS IMPORTANT TOTAKE FEEDBACK AND
KEEP YOURSELF UPDATED ABOUT THE LATEST MARKET TREND.