Strategic planning intro

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Strategic planning is also known as long term planning. It considers the whole organisation in the long term. It gives:

gives direction to the whole organisation

it considers all stakeholders

looks at how to gain sustainable competitive advantage

and relates the organisation, its resources and competencies to the environment.

A strategy, then, is a series of similar activities that seek to achieve the objectives of an organisation and adapts the scope of the organisation, its resources and operations to environmental changes in the long-term.

Advantages

forces organisations to look ahea

better use of resources

helps monitor progress

improved fit with environment

ensures goal congruence

Disadvantages

time consuming an expensive

maybe difficult in rapidly changing markets

can become bureaucratic

unplanned opprtunities may be missed.

Approaches

top-down traditional - strategic analysis,---->strategic choices------> implementation. JSW recognises these three elements as interdependent rather than linear.

When considering the analysis element one should consider PESTEL environmental factors and how they affect the organisation. Important also, are the availability of resources and their associated strength and weaknesses, the expectations and influences of stakeholders and the culture and values of organisation.

Strategic choices are generated, such as growth, acquisition diversification or concentration; then evaluated to determine their relative merits and feasibility, it should also be borne in mind that more than one strategy may be pursued and selection is largely a subjective process despite the available techniques.

Implementing a strategy involves organising, ensuring the resources supports the strategy and managing change.

REMEMBER THERE CAN BE INTERNAL DEVELOPMENT(growth)AND EXTERNAL DEVELOPMENT (mergers and acquisitions)

emergent strategy Mintzberg(1987) believes strategies emerge over time rather than in depth analysis of every aspect of the Corporate.

incrementalism Lindblom believed that strategies emerge from small-scale extensions on past policy.

freewheeling opportunities as grabbed as they arise

Three levels of strategy

Corporate strategy - looks at firms orientation towards growth, diversification of company's products and markets and how the business coordinates its activities and transfers capabilities between business units.

Business strategy - actions to provide customers with value and gain competitive advantage by exploiting core competencies.

Operational strategy - relates to single functional activity/operation (sales, purchasing etc).

JSW believed that strategy is form by the coming together of three strategic lenses

strategy by design - as described by rational planning model

strategy as experience - building on and changing the existing strategy(incrementalism)

strategy as ideas - as the organisation and its environment change new ideas emerge and should be included in the mainstream strategy.