Strategyis a planned course of action undertaken to achieve the goals and objectives of an organization. The overall strategy of an organization is known as corporate strategy, but strategy may also be developed for any aspect of an organization's activities such as environmental management or manufacturing strategy.
AStrategic Planis a coordinated and systematic direction for an organization. Strategic Planning determines where an organization is going and how it's going to get there. In today’s highly competitive business environment, a solid Strategic Plan is essential to the success of a business.
The Strategic Planning Process
The basic steps in the planning process outlined in the first activity are restated here in terms of Strategic Planning.
|(1) Identify Mission and Objectives|
|(2) Analyse Internal and External Environment|
|(3) Formulate Strategy|
|(4) Implement Strategy|
|(5) Evaluate Results and Control|
Management tools for analysis
The second step of the process is to analyse the internal and external environment. There are three commonly used methods for doing this analysis.
(1)SWOT Analysisincludes both an internal analysis of organizationalstrengths andweaknesses as well as an analysis of the externalopportunities andthreats. Successful organizations use their strengths to create strategies that take advantage of opportunities and minimize threats.
(2)PESTAnalysisis a tool to examine the external factors that provide opportunities and threats to an organization. Because these factors are beyond the organization’s control and may represent threats, the acronym PEST is used.
Political factors include: political stability, trade regulations, taxation, labour laws, and safety regulations. These factors vary widely from country to country.
Economic factors include: economic growth, stagnation, recession, interest rates, exchange rates, and inflation.
Social factors include: demographics and cultural aspects, e.g., health consciousness, population growth, age distribution, education, and attitudes to work and leisure.
Technological factors include: new discoveries and developments, rates of technological obsolescence, changes in information technology, and research and development activity.
(3)Porter's Five Forcesrefers to a model developed by Michael E. Porter in his bookCompetitive Strategy: Techniques for Analyzing Industries and Competitorsin 1980. Like SWOT and PEST analysis, Porter’s model develops incorporate strategies to meet opportunities and threats in the organization’s external environment. Porter identifies five competitive forces that shape every industry and every market.
- Competitorsare the existing competitive rivalry within the industry.
- New entrantsinvolve the threat from new market entrants.
- Customersmean the bargaining power of buyers.
- Suppliersare the bargaining power of suppliers.
- Substitutesare the threat of substitute products which includes technology change.
Watch the video of Professor Michael E. Porter of Harvard University discussing “The Five Competitive Forces That Shape Strategy.” The video is almost 13 minutes long and will give you an excellent understanding of the five forces.
Strategic Planning Case Study
You will work individually to complete a case study. Please select one of the cases to complete.
Read the case study. Decide on a format to present the results of your work to your teacher. You may choose a website, a slideshow presentation, or a video. The presentation must present a brief introduction to the business and its situation, as well as answers to the questions. Be sure to use the concepts and terms you studied.
|First ||Kelogg's is my topic|