Business Strategy Assignment
The Strategic Planning Process
Effect of mission statement, goals and objectives on strategic planning. Strategy means firm’s plan of action. Mission and vision statement work as foundation for laying down organizational objectives. Mission is the statement of purpose of an organization. Strategic planning is done to achieve the mission. Vision gives a direction to achieve the mission.Strategic planning is done so that in the longer term organization achieves its mission by fulfilling its vision. Goal is a specific short term target. Objective is a measure of change to achieve a goal. Increase mobile subscriber base by 5000 can be a goal of Vodafone. Increasing 25% of it by December 2014 can be an objective. (Hill & Jones, 2012). Hence vision and mission give the directional input to the firm while goals and objectives are ways to achieve the same.
1. Key factors to be assessed for strategic planning Factors which need to be assessed while making a strategic plan-
When to plan- company has to understand when planning is needed. Planning may be needed at new product development stage, new production facility procurement stage or at new market entry stage. For example Vodafone while launching there 4G technology data plans did lot of plarming on the marketing strategy.
Who should be involved- The Company has to decide who all to involve in a particular plan that’s how many managers, workers, stakeholders or directors to be involved in each plan.
Role of planning- The role of planning has to be clear. For example if planning aims at
increasing sales it should be focused on marketing strategy.
Targets- targets are smaller aims which are to be fulfilled in the short run in order to achieve thebigger objectives. Targets have to be clear so that plan moves in proper direction (Bamford &West, 2012). Planning has to be done talent into consideration all the factors as all of them contribute in one way or another.
2.Techniques used to develop strategic planning
BCG Growth-share Matrix- BCG matrix classifies a company’s business units into four
categories bases on its market growth and market share.
Dog- Low market share and low growth rate. A declining product can be termed as dog. E.g. Diet Coke
Question mark- Products having high growth rate, with high cash consumption but low market share and less cash generation. E.g. Coca-Cola’s Fanta brand Stars- These products have high market share and high growth rate. Star has a potential of becoming a market leader. E.g. Samsung’s galaxy smartphones.
Cash cow- The market leader of a mature market, this product generates more cash than it
consumes. It has high market share and low growth. E.g. Coca-Cola’s black cola
For example we can say the Through this analysis company can foresee which of its question marks and stars have potential of becoming a cash cow.
Directional Policy Matrix- Is a frame work which categorizes a firm’s business activities on the basis of its market position and market attractiveness. The analysis is performed on the basis of ability of each product area to achieve the firm’s objectives. Firm needs to identify factors which determine market attractiveness and business strategy.Products lines, segments or business units are classified on basis of these factors as having high, low or medium market attractiveness and business strength. On this basis a firm decides whether to invest, divest, harvest or grow (Ansoff, 2007).There are a few more techniques like strategic position and business evaluation matric (SPACE) and profit impact of marketing strategy (PIMS). BCG matrix is one of the best techniques as it gives a quick and simple analysis of the opportunity available.
3. Importance of stakeholder analysis for new strategy formation Stakeholders’ analysis is a review of impact of stakeholders like suppliers, customers, employee,
shareholders and investors on business.Stakeholders mapping is done in order to understand the orientation of different stakeholders and to develop better working relationship and trust with them. For Example doe a new product launch stakeholder’s like customers and employees are very important. Stakeholder’s grid is a technique of mapping the impact of stakeholders on the firm.
Impact/influence grid- This grid helps understand which stakeholder has maximum impact or influence over a project.
High impact, high influence stakeholders- Such stakeholders should be given full attention.
Low Influence, high impact stakeholders- These need to be kept informed.
High influence, low impact- These stakeholders need to be kept satisfied.
Low influence, low impact- These stakeholders need to be monitored closely.
The stakeholders in each category differ from project to project and are subject to change (Hill & Jones, 2012). Stakeholders are the key people who matter to a company hence knowing which stakeholders are more important is essential for smooth functioning.
4. Importance of personnel in strategy implementation.
Employees or personnel are crucial for successflil implementation of any strategy. Sales targets are achieved by the workforce on the field. A committed sales force will be able to influence the customer to a great extent. For successful delegation of work the work is distributed into targets which each employee has to achieve within a stipulated time. Many companies like Vodafone distribute geographical area between their employees and assign area based targets. These targets help the employee keep his job in perspective. Also the entire project is divided in to reams and each team is given a target to achieve. The team leader then divides this target between members of the team. While dividing the target the leader should keep in mind role of individual as well as
the team in order to achieve it.