Strategic Planning Stages

Strategic planning stages

Introduction

We refer to strategic planning usually to a systematic process, that is, methodical, of implementation of plans to obtain desired objectives and results. It is a type of tactical planning that contemplates which are the best ways to achieve the goals that we have set, both within an organization (company, institution, etc.) As in personal life.

The task of all this is to find a good strategy, that is, with a good path or a good set of procedures to achieve the goal. This translates into:

 Define and then achieve the proposed objective.

 Take advantage of competitive advantages to stand out on the rest.

 Design an appropriate methodology for available resources, the environment in which it is and the dynamics faced.

 Achieve a dynamic, flexible and adaptable method to unforeseen events, which allows to solve the problems that arise.

 Propose a plan that is measurable and corrected in terms of effectiveness.

Developing.

Planning is considered the first stage of every productive cycle and this part of the definition of strategic objectives always. This is the case of nuclear, central objectives, on which the organization is based, that is, the primary goals without which all the effort is meaningless and that, in turn, allow to reach other further goals.

Once the goals have been established, an analysis of the available resources (material, human, technological, etc.

) and of the environment variables (the challenges, the difficulties, the competition, etc.). The consideration of these elements is essential for any strategic planning process since strategies cannot be undertaken for which resources are not available, nor should it waste or ignore the potentialities present in the organization, even at its starting point.

Once the strategic analysis is completed, a basic plan or a minimum strategy must be designed, which can be complex as the needs of the organization so require. To do this, the main plan must be segmented in low -level operations, that is, short -term goals, easy to glimpse and conceive in time, whose articulation generates the long -term plan. This process of translation into concrete actions is known as strategic execution.

Finally, the process must be controlled and undergoing diagnostic dynamics and strategic evaluation, to know how much their results are approximated to the initially projected and where are the failures, difficulties or challenges and how they can be solved to obtain greater efficiency and Optimal results.

In summary, the strategic planning process consists of:

 Define or review the values, mission and vision of the organization.

 Carry out an environment analysis.

 (Re) Define long -term strategic objectives.

 Develop a strategic action plan to meet them.

 Develop short -term procedures and actions that lead in the direction of the goal.

 Evaluate the result and re -apply the method.

The strategic management model

Strategic management is a tool to administer and order the changes, where the objectives of the organization are defined and strategies are established to achieve and recognize the participation based on the leadership of the company’s executives to make the decisions that correspond to the immediate and future environment demands.

Strategic management requires the identification of external threats and opportunities of a company, as well as internal weaknesses and strengths, the establishment of a company’s missions, the setting of objectives, the development of alternative strategies, the analysis of these alternatives and the decision of which to choose. The execution of the strategies requires that the company establish goals, design policies, motivate its employees and ensure resources in such a way that the strategies formulated can be carried out successfully. Strategy evaluation checks the results of execution and formulation.

Russel Ackoff model.

In the Russel Ackoff model, the need to understand the nature of changes in a global and not partial way is highlighted, for which a better vision of the world in accordance with the new methods of the time should be developed. ACKoff addresses the need for planning by expressing that when it is not planned, it is not possible to avoid the planning of others, so the motto plan or be planned. Ackoff points to interactive planning that depending on three principles can be carried out, these are:

 Participatory principle: only through participation in the interactive planning process is that members of an organization can develop.

 Principle of continuity: Because events cannot be predicted exactly, no plan can function as expected by well prepared that has been, so they must be permanently observed.

I.

Below are the phases of the interactive planning model proposed by ACKOFF:

 Formulation of the problem: set of threats and opportunities that the organization would face if it continues to behave as until now and if its environment does not change its direction significantly. This phase includes:

– An analysis of systems: detailed description of the state that the company is located and how it influences and is influenced by its environment.

– An analysis of obstructions: identification and definition of obstacles that prevent the development of the organization, taking into account weaknesses, the way in which conflicts with external participants and others of the environment are organized and managed.

 Preparation of reference projections: Extrapolations from the past to the future, using critical assumptions on which the company’s expectations are based and projections related to the provision and consumption of critical resources, with this information the scenario is prepared idealizing the idealizing the future, to reveal the consequences that the current behavior and assumptions of the company will have.

 Planning of the ends: the most desirable future is designed through the goals, objectives and ideals, starting with the latter by means of an idealized design of the system that is operated or proposed to operate. The steps involved in this design are:

– Mission selection.

– Specification of the desired design properties.

– System design.

 Media planning: At this stage the means to approach the desired future are planned by comparing it with the reference scenario to detect the gaps.

 Resource planning: which resources will be required and how they will be obtained

 Design of the implementation and control: necessary to obtain feedback through the surveillance of the organization and its environment, deciding who is going to be that, when, where and how the implementation and its consequences will be controlled.

 The system and its environment: the future of any organization depends more on what it does now, on what it did in the past.

Fred R model. David

Fred David describes his model as an objective and systematic approach to decision making in an organization, quantitative and qualitative information is organized to make effective decisions in the circumstances of uncertainty, through three stages: formulation, execution and evaluation of strategies.

Formulation of strategies: three fundamental activities are required:

 Internal and external research

 Analysis: Techniques such as (PEEA) Position Matrix Strategy and Action Evaluation, (GE) The Matrix of the Great Strategy, the (BCG) of the Boston Consulting Group and the (DOFA) Matrix of weaknesses, opportunities, strengths and threats, all for the creation and evaluation of alternative strategies.

 Decision making: They are carried out according to the objectives to be set and the strategies to be followed.

Execution of strategies: It consists of three essential activities:

 Goal setting

 Policies setting

 Resource allocation

STRATEGIES EVALUATION: Three basic activities are carried out:

 Analyze the internal and external factors that represent the basis of current strategies.

 Measure the organization’s performance (as planned).

 Take corrective measures to verify the course of the action.

As for the general model, David aims to cover the entire company, focuses on the general and global growth of the organization. Provides an interrelation between the most important components of the strategic administration process dynamically and continuously.

David’s strategic management model mentions the following steps:

 Identify current strategies, objectives and missions

 External audit: analyzing social, political, economic, technological, competitive trends.

 Management audit: includes planning (strategy formulation), organization, motivation and selection of personnel (strategy execution) and control (strategy evaluation). In this audit, the marketing, production and research finance and development area are taken into account. The final step consists in the evaluation of the internal factor through an matrix that summarizes the most important weaknesses and strengths of those found in the study.

 Establishment of the company’s mission

 Set the objectives

 Set the strategies

H. Igor Ansoff

This model represents a conceptual structure for the administration of discontinuities, a systematic approach for strategic decision making, as well as a methodology to guide the implementation.

H. Igor begins his model with:

Environment: where the historical evolution of organizations is summarized in terms of four product-market dimensions, geographic perspective, internal environment and external socio-political environment.

Evaluation of response systems: takes four badges in evolution:

 Performance control administration, suitable for slow changes.

 Administration for extrapolation, when the change the rapid but the future can be fixed by extrapolation with the past.

 Administration in advance. There are discontinuities in change, but slow enough to allow an early response and on time.

 Administration through flexibility: Quick response when the most significant challenges develop so fast that they do not allow adequate anticipation.

Strategy posture: In a process of change in which the organization goes from a state E1 to an E2 state it is essential that the organization’s strategy, its functional skills and those of the general administration also do so.

The strategic event administration system: is the constant surveillance of both the facts inside and outside the organization, which impact the skills and achievements of the company.

Michael and Model. Porter

Porter raises the model with the importance of competitive analysis, not only in the formulation of the company’s strategy, but also in corporate finances, in commercialization, in the analysis of the stock market and many other areas of the professionals of the professionals of the address, diverse functions and in different organizations. According to Porter, every organization has a competitive strategy and that this is the combination of the purposes for which the company and the means that are using to reach them are being struggled. The policies depend on the selection of the strategy and develop the competitive strategy depend on the company’s objectives and develop the competitive strategy.

The competitive strategy then depends on internal factors such as the strengths and weaknesses generated by personal values ​​of the key executives and of factors external to the company Opportunities and threats (economic and technical) that are at the same time influenced by social expectations of amplitude of amplitude. For Porter, the formulation of a competitive strategy is to relate a company to its environment, mainly to the sector or industrial sectors, in which it competes, since it determines the competitive game rules as well as the strategic possibilities available for the company. This position depends on:

 The threat of income: depends on the entry barriers present in the strategic groups to which the new income is united and that are: scale economies, product differentiation, capital requirements, changing costs, access to the channels of distribution, government policies, cost disadvantage.

 The intensity of the rivalry between competitors: through price competition, advertising, introduction of new products and increased customer service.

 Pressure of substitute products: the more attractive the performance of alternative prices offered by substitutes, the firmer the repression of profits in the industrial sector,

 Powering power of competitors: competitors compete in the industrial sector forcing prices, negotiating higher quality or more service.

 Power of negotiation of suppliers: they are a reflection of what they make powerful to buyers

Strategy in action

The 3 Michael Porter strategies are: global leadership in costs, differentiation and focus or concentration. They are basic through which a company can get a competitive advantage to survive in the long -term market. The fundamental basis for obtaining this superior profitability is to achieve a sustained competitive advantage, and for this a business strategy must be followed.

• Global cost leadership: The company must have the ability to reduce costs at all links in its value chain, so that the decrease in expenses reduces in a better price for the consumer and consequently in a greater market share.
• Differentiation: The company must produce exclusive services/products that are perceived by consumers, who are able to pay more to have them.
• Focus or concentration: Company concentrates on satisfying well -defined segments, population, products or geographical.

The purpose of these generic strategies is to be able to serve companies as a model to follow when defining their way of working to achieve a sustainable competitive advantage.

Corporative strategy

It is the question about what is the scope of the company, what or what are the activities or businesses to which the company is dedicated. It serves to connect the company with its environment. According to Fred Nichol, a corporate strategy is a complex network of ideas, thoughts, experiences, objectives, memories and expectations that provide a general guide to take actions in the search for particular purposes.

Within the corporate strategy of the company, we can distinguish three subtypes:

• Stability strategy: they are used when the company considers that the performance it is developing is satisfactory, so it seeks to maintain this situation, or because the company considers that it has few or no option to grow. They are characterized by absence of significant changes.
• Growth strategy: The objective is to increase sales, benefits and market share of the company either through diversification, internationalization, vertical integration, strategic alliances, acquisitions, the creation of licenses or franchises ..
• Contraction strategy: In that case, the organization seeks to reduce the magnitude or diversity of operations after the review and evaluation of segments that are not profitable or necessary. 

conclusion.

Strategic management requires the identification of external threats and opportunities of a company, as well as internal weaknesses and strengths, the establishment of a company’s missions, the setting of objectives, the development of alternative strategies, the analysis of these alternatives and the decision of which to choose. The execution of the strategies requires that the company establish goals, design policies, motivate its employees and ensure resources in such a way that the strategies formulated can be carried out successfully. Strategy evaluation checks the results of execution and formulation.