Course : Thematic Independent Study

Course Thematic Independent StudyTopic strategicalalal groomingEssay 1 skepticism How does strategic proviso create a competitive favour for an brass?Name Tamryn du PreezSupervisor Kunofiwa TsaurauDue Date 18 October 2010Words 4 160TABLE OF CONTENTSIntroduction. pg 4Definition of strategic provision.. pg 4-5Preparation for strategic intend.. pg 5-6Timing..Who should be involved? .. infix..Preparatory work.Planning the agenda/ dishstrategic training act upon pg 6-7Gathering Information..Developing c be pecuniary statement.Setting goals and objectives.Identifying bodily functions and allocating resources.Implementing the plansMonitoring the progress..Evaluating the progress..Contributions of strategic Planning pg 7-91.5.1 Financial Benefits.1.5.2 Nonfiscal Benefits..Strategic planning techniques pg 10-11SWOT analytic thinkingScenario Planning..PEST outline.. promiseCompetitors analysissensitivity analysis. system planning at contrary levels.. pg 11-12Corpora te levelBusiness LevelOperational levelTypes of strategic planning time horizon.. pg 12-13Long-term planning..Intermediate planning..Short- term planning..Components of strategic planning pg 13Strategy and glossInternal and extraneous..Balanced scorecard perspectivesMarket focus.. cobblers last pg 14Referencing and Bibliography. pg 15-161.1 INTRODUCTIONToday many organisations face challenges to keep up with the rapid varys in the world. These changes atomic number 18 taking place mainly beca usage of technology, which creates and leads to a red-hot contact between flock, economic markets, governments and larger organisations. This advancement pace of technology does bring in its benefits and its disadvantages. Therefore it is vital that organisations always remain aw ar of the changes in their environment and adapt jibely in order to remain competitive and to distinguish it from the competitors by creating a competitive advantage. This study reviews the literature of strateg ic planning in order to gain insight on how an organisation stinker lead to a competitive advantage.In order to gain a exhaustive understanding of the topic the study leave identify how strategic planning will help a trouble team understand exactly what strategic planning is, how to plan strategically and how to ensure that strategic planning is implemented in your organisation. The importance of this topic is to identify how strategic planning is important not only for the survival or growth of an organisation but too on how it can help the organisation lead to having a competitive advantage over the competitors that choose not to follow a process for strategic planning.The strategic planning process is a step by step hunt set in place in order to help guide the organisation in been triumphful. This review also clearly identifies how strategic planning contributes to the success of an organisation and how it can be seen as a competitive advantage. It imparts a deeper unders tanding of strategic planning techniques that are used to help managers make the silk hat possible decisions with schooling that is available to the company.LITERATURE REVIEWThis is the main body of the essay and it reviews all the academic literature related to the subject of strategic planning. The bring forth is to review the sarcastic points of current knowledge including substantive findings as well as theoretical and methodo sensible contributions of strategic planning.1.2 Definition of strategic planningStrategic planning is an organisations process of defining their outline or their direction, and making decisions on allocating resources in order to pursue the strategy, this includes capital and people (Bradford R.W and Duncan JP, 2009). Different business analysis techniques can be used in strategic planning. Strategic planning is the formal consideration of an organisation future day course (Bradford R.W and Duncan JP, 2009). Strategic planning is a sets out the over all direction for the business, is broad in scope and it covers all the major activities within an organisation (Boddy D, 1988). harmonise to Shapiro J, 1996, strategic planning is the overall planning that facilitates a good counseling Process. agree to Geyer Y, 2006, strategic planning is a process that an organisation follows that is disciplined and thorough. Geyer Y, 2006, indicated that strategic planning takes note of the internal kinetics of an organisation and the external dynamics of the world. Strategic planning analyses whether the organisation is effective in its objectives and goal (Shapiro J, 1996). According to Shapiro J,1996 strategic planning establishes whether the organisation pick outs to change its direction in order to fulfil is purpose or create a competitive advantage.McNamara C, 2002, added that strategic planning identifies where the organisation wants to be at many point in the near future and identifies how it is going to get there. The strategic pa rt of the planning process continues to adapt to the current changes of the organisation (McNamara C, 2002). Strategic planning is considered to be a comprehensive plan that is designed to connect all of the firms decisions and their activities (McNamara C, 2002). Strategic planning is the ability to make decisions for the future, and is considered to be a systematic judicial decision of the benefits and costs, and clear rules for decision making (McNamara C, 2002).1.3 Preparation for Strategic PlanningAuthors Shapiro, J. (1996), Ducker P. (1996) and Gibson C.K (1995) proposed how preparation is critical to result in good planning. These authors all concurred that without preparation it is difficult for an organisation to maintain their strategic focus. According to the authors, timing, who should be involved, input, preparatory work, and lastly planning the process should be prepared and this is critically discussed below.1.3.1 TimingThe hesitancys to ask here according to Timing is, When do you need to do a strategic planning process? How often do you need to do a strategic planning process? At what point in an organisational or rove cycle do you need to do a strategic planning process? How coherent should a strategic planning process be? (Shapiro J, 1996).1.3.2 Who should be involved?The key questions to be asked is who will participate in the strategic planning process and who should facilitate the strategic planning process (Shapiro J, 1996). The management team of the project or organisation needs to be understood by all the ply and board members and they should all be involved in the planning process (Shapiro J, 1996). According to Ducker P, 1996, administrative staff should be involved because they need to understand the organisations issues and problems.1.3.3 InputAccording to Shapiro J, 1996, strategic planning process looks at the big picture, it is useful to get external input into the process. It is easy for those involved in the work of the project or organisation to lose sight of the overall picture and to think about the issues from the point of view of our own work only (Shapiro J, 1996). Ducker P, 1996, added that getting psyche with a wider view and wider concerns may open doors to new ideas and ways of thinking.1.3.4 Preparatory workThis is a review of an organisations work and of the internal functioning that is needed to be done (Shapiro J, 1996). According to Shapiro J, 1996 the review of the work can be done by an external evaluation before the strategic planning process in order to feed into it. The review of the internal functioning of the organisation can be done by an external review conducted to find the right people that will come with useful information (Shapiro J, 1996).1.3.5 Planning the processAccording to Shapiro J, 1996, it is important to know what an organisation wants to achieve and what has to be done to achieve these outcomes. It is also important to know what additional issues need to be de alt with in the time available (Shapiro J, 1996). Preparing for the strategicplanningprocesshelps an organisation ensure that when they implement the strategy it is a success (Gibson C.K, 1995).1.4 Strategic planning processAccording to the authors Boddy D, 2005 and Wirth R.A, 2009 the planning process can be viewed as a circular flow of topics and action move. Boddy D, 2005 mentioned seven steps in the strategic planning process which includes meeting place information, developing a mission statement, setting goals and objectives, identifying actions and allocating resources, implementing the plans, monitoring the progress and evaluating. These seven steps are critically discussed below.Figure 1 Strategic planning processEvaluating the progressGathering InformationDevelop mission statementMonitoring the processSetting goals and objectivesImplementing the plansIdentify actions and allocate resources germ David Boddy, (2005), Third Edition, Management An Introduction, Pearson Educ ation Limited, Europe.1.4.1 Gathering InformationAccording to Boddy D, 2005, this is any information that an organisation can use to guide their choices in building a strategic plan. The information can be collected internally or externally (Boddy D, 2005). Gathering information can collected as primary information that has not yet been conducted or secondary information, which is data that has already been collected (Boddy D, 2005).1.4.2 Developing a mission statementAccording to Boddy D, 2005 this is a broad definition of an organisations operation and scope, it aims to distinguish it from other organisations. A clear plan depends on the ultimate purpose of the task (Boddy D, 2005). By developing a mission statement it is a way of the organisation to express a realistic day-dream of what the future could be if the plan were to come (Boddy D, 2005).1.4.3 Setting goals and objectivesThese are set in order to identify the desired outcome for the man-to-manists, groups, and the en tire organisations (Boddy D, 2005). According to Boddy D, 2005, the goals and objectives turns the generalities of the mission statements into a specific commitment- what is to be done. Goals and objectives provide a focus for an organisation and it used to measure the actual performances (Boddy D, 2005).1.4.4 Identifying actions and allocating resourcesAccording to Boddy D, 2005 this is the part of the planning process that involves deciding what actions need to be taken in order to achieve the objectives and it identifies who will do them. The fifth step is implementing the plan. This step also includes one to decide on possible actions which are affected by what the firms objectives are (Boddy D, 2005).1.4.5 Implementing the plansBoddy D, 2005, emphasised that a good plan is not worthwhile until something happens and people implement the plan, by acting to make the plan visible. David Bobby added that planning helps by inducing confidence in a process, leading to high levels of a cceptability from those involved. Planning is a necessary part of success, but it is not sufficient if it is not put into action (Boddy D, 2005).1.4.6 Monitoring the progress and evaluating the resultBoddy D, (2005) stated that the final stage in developing a plan is to set up a system that would allow people to monitor the progress towards the goals. Boddy D, 2005, added that managers can evaluate progress by using a programme overview chart. The overview chart gives a press stud of the progress and indicates the areas where there are issues and it shows the expected completion date (Boddy D, 2005).1.5 Contributions of Strategic PlanningAccording to the authors David FR. (2001), Hayes B. (2003), Zuckerman A. (2000), Shrader, C.B. (1993) and sweet almond K. and Barlow J, (2002) there are principle benefits of strategic planning that helps an organisation formulate better strategies through the use of a more systematic, logical and rational approach to a strategic choice. These auth ors have mentioned the financial and non financial benefits which are critically discussed below.1.5.1 Financial benefits of strategic planningAccording David FR, 2001, strategic planning allows an organisation to be more productionive rather than labile in shaping its own future it also allows an organisation to initiate and influence activities. Researchers indicate that companies using a strategic planning concept are more profitable and successful than those that do not use the concept.Businesses that are using strategic planning concepts have shown an improvement in their sales, profitabilitys, and in their productivities compared to those firms that are not using a systematic planning activity (David FR, 2001). Firms that use the planning system theory generally exhibit superior long-term financial performances relative to their industry (David FR, 2001)The Strategic planning concept and tools provided that there is a cost effectiveness that yields better interest deposit rates (Hayes B, 2003). According to musical note Hayes, 2003, strategic planning has shown to result in an improved or an increased customer service due to the firm been able to produce high fictional character performances. This is because the companies using a strategic approach are able to make more informed decisions with good anticipation of short and long-term consequences (Hayes B. 2003).According to Zuckerman A. 2000, strategic planning has helped companies to identify and prioritize their opportunities for financial improvement, mainly revenue-generating plans. This in turn has showed to offer the greatest opportunity for significant long-term benefits (Zuckerman, A, 2000). The relationship between strategic planning and company performance lies at the very heart of the discipline, yet no clear summary statement has been made about the numerous confirmable findings dealing with this subject (Shrader, C.B. 1993)1.5.2 Nonfinancial benefits of strategic planningAccording to David FR, 2001, strategic planning helps avoid financial demises and it also offers other tangible benefits, such as enhanced awareness to the external threats, improved understanding of the competitors strategies, reduced resistance to change, it shown to provide a clearer understanding of performance-reward relationship, and it increases employee productivity. The strategic planning process also helps with identifying and rationalizing the need for change to all managers (David FR, 2001).According to David FR, 2001 strategic planning has allowed organisations to financially identify what it is they want to accomplish in the long-term. Strategic planning allows the management team to prise future assumptions and alternatives. The management team can look at the company as a whole rather than just been focused on their individual responsibilities. Individuals in the credit union will strive harder to achieve objectives they help set. Strategic planning has helped companies to impr oved their planning eliminates ambiguity and enhance the teamwork and culture (David FR, 2001).According to the authors Almond K. and Barlow J, 2002, strategic planning has helped increase the ability of management to make decisions that will assure long-term financial institution survival and growth of the firms. Strategic planning has also increased the firms ability to control long-range direction, as it has allowed the board to focus on key strategic issues, as opposed to management problems (Almond K. And Barlow J, 2002).According to Almond K. and Barlow J, 2002, strategic planning serves a variety of purposes in organic laws, including to Clearly define the purpose of the organization and to establish realistic goals and objectives consistent with that mission in a defined time frame within the organizations capacity for implementation. Communicate those goals and objectives to the organizations constituents. Develop a sense of ownership of the plan. It has resulted in the fi rms using the some effective organizations resources by focusing the resources on the key priorities (Almond K. And Barlow J, 2002).According to David FR, 2001, strategic provided firms with a base from which progress can be measured and establish a mechanism for informed change when needed. Strategic planning also has helped managers to listen to everyones opinions in order to build an agreement about where the organization is going (David FR, 2001). Almond K. And Barlow J, 2002, states that strategic planning has provided a clearer focus for the organization, thereby producing more efficiency and effectiveness.Almond K. And Barlow J, 2002, also mentioned that strategic planning can benefit you company as it can be seen as the glue that keeps the board members together. Strategic planning produces great satisfaction and meaning among planners, especially around a common vision (David FR, 2001). David FR, 2001, also added that firms using strategic planning has indicated results of increases in productivity from increased efficiency and effectiveness, strategic planning also has helped management solves major problems in the organization by been able to address different strategies.According to David FR, 2001, strategic provided at the end of the day allows an organization to be more proactive than reactive in shaping its own future. Historically, the principle benefit of strategic planning has been to help different organizations to formulate better strategies for their business through the use of the more systematic, logical and rational approach to strategic choice (David FR, 2001).1.6 Strategic Planning TechniquesAccording to the authors Boddy D. (2005) Bacal R. (2002) and Salem M. Al Ghamdi, (2005) there is a wide range of strategic planning techniques available to gather information for strategic planning. There are six planning techniques identified by these authors and they are the SWOT analysis, scenario planning, PEST factors, competitive analysis, forecasting, and sensitiveness analysis.1.6.1 SWOT AnalysisAccording to Boddy D. (2005) a SWOT Analysis is an analytic tool that is used to help summarise the organisations main strengths and weaknesses that are relative to the external opportunities and threats. Bacal R, 2002 added that it helps identify the external and internal factors in order for the business to know the environment better. Boddy D. 2005 added that managers need to focus only a few trends and events that are plausibly to be important for the business growth.1.6.2 Scenario planningBacal R, 2002 stated that scenario planning is a fancy term for a very logical process the what if process. Boddy D. (2005) added that it is not an try on to predict the unpredictable but it is a way to consider multiple and equal plausible futures for an organisation. These scenarios are not just based on a hunch they are logically consistent but different from each other (Boddy D. 2005).1.6.3 PEST AnalysisAccording to Bacal R, 200 2, the PEST analysis is another tool that is similar to theSWOT analysis, but is more focused on the external environment and the important factors out there that can affect the present and future of a business. The PEST acronym stands for political, economic, social and technological (Boddy D. 2005). These factors can affect your business either directly or indirectly (Boddy D. 2005).1.6.4 Competitive AnalysisAccording to Bacal R, 2002 a competitive analysis involves looking at those companies that compete in the same market place as you do. Bobby D. (2005) stated that organisations need to look at the critical aspects of a strategy that must be achieved to secure a competitive advantage. A competitive analysis is really a subset of doing an environmental scan (Bacal R, 2002).1.6.5 ForecastingAccording to Boddy D. 2005, forecasting is predicting the future of the business. Forecasting is based on the analysis of past trends such as input prices, sales patterns or demographic charac teristics (Boddy D. 2005). either forecasts are based on assumptions and managers can assume the past trends will continue (Bobby D. 2005). According to Boddy D. 2005 forecasts rely on extrapolation of past trends and therefore organisations need to question their inherent assumptions as they interpret the results.1.6.6 Sensitivity analysisAccording to Boddy D. (2005) this is a method that is used to test the assumptions of key variables in a plan in order to increase the confidence in the choices a business wants to make. According Bacal R. (2002) sensitivity analysis can be useful to provide recommendations for the decision makers. Sensitivity analysis helps enhance the communication to the decision makers and increases them understand the system (Boddy D. 2005).1.7 Different levels of strategic planningAccording to the authors Burk woodland M. 2004 there are three different levels of strategy namely corporate level at the top, business level is the middle section and lastly ope rational level which is the lower level. Each level has different responsibilities and goals and this will be critically discusses below (Burk wood M, 2004).Figure 2 Organisational levelsCorporate LevelBusiness LevelOperational LevelSource Marian Burk Wood, (2004), Marketing Planning principles into practice, Pearson Education Limited, England.1.7.1 Corporate levelThe Corporate Level looks at the companys Vision, goals, philosophy and the culture of the organisation and determines planning accordingly (Burk Wood M, 2004). Corporate strategy refers to the overall strategy for a diversified company (Burk Wood M, 2004).It is concerned with the mix of businesses the company should compete in, and the ways in which strategies of individual units should be coordinated and integrated (Burk Wood M, 2004).1.7.2 Business levelAccording to Burk Wood M, 2004, strategic planning at this level is concerned with the firms mission, business goals and the firms competencies. Burk Wood M, 2004, adde d that an integrated and coordinated set of commitments and actions are used to gain a competitive advantage. This is done by exploiting the core competencies in a specific product market which is done on business level (Burk Wood M, 2004).1.7.3 Functional levelOccasionally, plans will be made at thefunctionallevel, to allow managers to set and to increase managerial accountability (Burk Wood M, 2004). Burk Wood M, 2004 stated that at a functional level managers will be concerned with coordinating manufacturing, marketing, homophile resources, finances, research and development, and information systems (Burk Wood M, 2004).1.8 Types of strategic planningAccording to Morton L.P, 2009 and Lenehan P.F, 2002, strategic planning is the long-term process that determines the path for business owners to reach their goals. The other 2 business planning processes are more short term (Linda Morton, 2009). Below the time horizons long term, modal(a) term, and short term will be critically di scussed.1.8.1 Long term planningAccording to Lenehan P.F, 2002, the long-term planning process should strengthen both management and the board of directors. The objective is to have everyone leave the off-site meeting with an understanding of the game plan for the next 5 years, which will be updated at an annual off-site planning meeting (Lenehan P.F, 2002).1.8.2 Intermediate planningLinda Morton states that Intermediate-term planningincludes strategic objectives and has a time horizon of from one to two years. It outlines how the strategic plan will be pursued (Morton L.P, 2009). In marketing, intermediate plans are most often used for campaigns, with the goals and purpose of the campaign supportive of one of the business long-term goals (Morton L.P, 2009).1.8.3 Short term planningShort term planningincludes operational objectives for specific departments and individuals and has a time horizon of one year or less (Morton L.P, 2009). A short term plan allocates resources and outline s objectives to meet the intermediate plans and the strategic planning process (Morton L.P, 2009). Morton L.P (2009) stated that short term planning allocates those resources day-to-day for business development.1.9 Components of a strategic planAccording to Oslen E, 2007 there are several different components of strategic planning that needs to be explained to your planning team. The components are strategy and culture, internal and external, the balanced scorecard perspectives, and market focus (Oslen E, 2007).1.9.1 Strategy and CultureAccording to Oslen E, 2007, an organisations culture is made up of people, processes, experiences, ideas and attitudes. A strategy is where the organisation is headed. A company cannot have a strategy without a culture or vice versa. The culture is the core of the business, and if it is not in order, the best strategy in the world cannot work for the company (Oslen E, 2007).1.9.2 Internal and ExternalAccording to Oslen E, 2007, the strategy is extern al when you gathering information from a companys customers, competitors, industry and environment. The external information can help a company identify the opportunities or threats that they major power face. Through employee surveys, board assessments and financial statements are ways to identify the companys strengths and weaknesses that are internal (Oslen E, 2007).1.9.3 Balanced scorecard perspectivesAccording to Oslen E, 2007, the balanced scorecard is a model that is used to develop the firms goals and objective in four areas. These areas are financial, customers, internal business processes and the employees (Oslen E, 2007,). The financial, internal processes and employees are the internal factors of the balanced scorecard whereas the customers are the external perspectives (Oslen E, 2007).1.9.4 Market focusAccording to Oslen E, 2007, the growth of a market comes from focusing on the customers and delivering superior value to them consistently year after year. Built into a companys strategic plan is market-focus framework, this is vital because it ensures that the company is focused on growing (Oslen E, 2007). According to Oslen E, 2007 by focusing on the market a company will understand the needs of the customers.CONCLUSIONA strategic plan is simply a tool to be thought of as a guide or map. It has a starting point which is todays conditions and environment. It has an ending point, where the company wants to be in terms of success in the future. Strategic planning is a process that answers the question of how is the best, most likely way to be successful as defined by the stakeholders and allowed by the customers and embraced by the employees. While there is one way presented on how to conduct the strategic planning process it is by no means the only way. The process has to fit the culture, resources and style of the company. It must reinforce the confidence of management to make consistent, workable decisions.The benefit of a strategic planning dis cipline is that it facilitates effective decision making, better selection of tactical options and it leads to a higher chance of achieving the owners or stakeholders goals and objectives. superior quality information is critical to the success of the strategic plans of any organisation. All other factors can be in place, but if the information is inconsistent in any way, then success is much less likely. If success is achieved it may well be at a high cost. High quality information must be acknowledged as one of the organisations main concern. Adopting a continuous development and improvement approach to the information gathering and interpretation process is essential.