It has been empirically confirmed by some firms at various points in their history. The knowledge and experience of the participants contributes a richer picture of the required strategic requirements, and their biases tend to cancel each other out.
This does not rule out using external assistance for aspects of the strategic planning process.
Competitive advantage InPorter defined the two types of competitive advantage an organization can achieve relative to its rivals: The desirable opportunities available to many organizations appear almost without limit, and they seem to present themselves very frequently.
The first group is normative. In many situations, it is very helpful to have an independent person facilitating the process. Outcomes[ edit ] Whilst the planning process produces outputs, as described above, strategy implementation or execution of the strategic plan produces Outcomes.
The idea of strategy targeting particular industries and customers i. A more recent and less developed model than the linear and adaptive models, interpretive strategy is concerned with "orienting metaphors constructed for the purpose of conceptualizing and guiding individual attitudes or organizational participants.
For example, the more people involved in these SWOT appraisals the better. These reflect an increased focus on cost, competition and customers.
Jim Collins wrote in that the strategic frame of reference is expanded by focusing on why a company exists rather than what it makes.
Strategic decisions should make it clear what the organization is rejecting, as well as to what it is committing.
Porter five forces analysis Porter developed a framework for analyzing the profitability of industries and how those profits are divided among the participants in Sekora, Project Socrates founder in the Reagan White House, during the cold war the economically challenged Soviet Union was able to keep on western military capabilities by using technology-based planning while the U.
This is most consistent with strategic planning approaches and may have a long planning horizon. These "3 Cs" were illuminated by much more robust empirical analysis at ever-more granular levels of detail, as industries and organizations were disaggregated into business units, activities, processes, and individuals in a search for sources of competitive advantage.
Experience curve The experience curve was developed by the Boston Consulting Group in Strategy Formulation Given the information from the environmental scan, the firm should match its strengths to the opportunities that it has identified, while addressing its weaknesses and external threats.
While urging the use of solid evidence to clarify strategic issues, we need also to avoid analysis paralysis.
Is business process integration feasible? He developed a grid that compared strategies for market penetration, product development, market development and horizontal and vertical integration and diversification.
He addressed fundamental strategic questions in a book The Practice of Management writing: This is why a systematic evidence-based SWOT analysis is so important in the strategic planning process.
Which skills and resources should be developed within the organization? Where are the customers and how do they buy? However, I believe it is the planning for improving the long run performance of the organization as a whole that is the essence of this second of the strategic planning principles, and not the naming of the process that is our concern.
Opportunity, by its nature is something that may be better than our current intentions. Financial objectives involve measures such as sales targets and earnings growth.
Planning is partly about being ready to take advantage of real opportunities.The Strategic Planning Process.
In today's highly competitive business environment, budget-oriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. Michael Porter identifies three principles underlying "Dynamic Capabilities and Strategic Management" was the most cited paper in economics and business for the period from to McKinsey & Company developed a capability maturity model in the s to describe the sophistication of planning processes, with strategic management.
While corporations developed their planning processes based on market data and strategic planning efforts produced documents that described the institution, but did little to motivate a process.
moving the business of the. Strategy includes processes of formulation and implementation; strategic planning helps coordinate both. not strategic planning. In business, the term "financial plan" is often used to describe the expected financial performance of an organization for future periods.
Principles of Marketing. Kent Publishing, Max Mckeown (), The. Strategic plans for business organizations often cover a three-to-five year period, but if the business or its environment is highly dynamic, a shorter period may be advisable.
Basic Management Principles Author: Jack E. Fincham, PhD, RPh Dean & Professor University of Kansas • Understand strategic planning and its use processes • Knowledge of development models • Knowledge of organization of development activity.Download