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10.9 Strategic planning
Strategic planning is concerned with the future of the business and with how the firm can best supply what the market desires. This requires an analysis of the market in which the business is operating in order to decide what the market (ie potential customers) wants and what price it is willing to pay for the satisfaction of its wants. This is then followed by an analysis of what the firm is able to produce and supply (and at what price). This then determines how the firm will organise its activities in order to provide these goods or services.
Strategic planning is not concerned with the present but rather with the future and is therefore especially concerned with changes to current patterns of demand, and with ensuring that the firm’s capabilities change to meet the changes in market demand. Thus strategic planning is concerned with ensuring the future of the business by ensuring that the firm changes to reflect changed market conditions. This can be modelled thus:
Fig 10.2: Strategic planning and market development
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Without strategic planning there is a danger that the market would change without the firm being aware of this change and reflecting it in its own changes pattern of operations. thus the firm would find itself outside the market, thus:
Fig 10.3: Market development without strategic planning and the firm would effectively go out of business.
Strategic planning therefore is concerned with the future direction of the business. This planning must of course ensure that the business has the capability of achieving whatever direction and objectives are determined in this planning stage. Thus the strategic plan must define a set of objectives for the business and the steps necessary to ensure the achieving of these objectives – in other words an implementation plan. Most managers of organisations, at the commencement of their strategy development process, start with a vision of where they see the organisation being in the future. This is known as a ‘strategic vision’
and is often promulgated throughout the organisation in the form of a Mission Statement, which sets in very broad terms the reason for the firm’s existence.
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360° thinking .
Discover the truth at www.deloitte.ca/careers
© Deloitte & Touche LLP and affiliated entities.
360° thinking .
Discover the truth at www.deloitte.ca/careers
© Deloitte & Touche LLP and affiliated entities.
360° thinking .
Discover the truth at www.deloitte.ca/careers
© Deloitte & Touche LLP and affiliated entities.
360° thinking .
Discover the truth at www.deloitte.ca/careers
Corporate Social Responsibility Corporate Social Responsibility and Leadership Thus the strategic planning process can be modelled as follows:
Fig 10.4: The strategic planning process
The implementation plan will involve the following aspects of planning:
Operations plan: to ensure that the firm has the resources (i.e. manpower, capital investment, working capital) and capabilities to achieve the objectives of the plan. These capabilities include:
• technological capability
• capacity planning
• ability to produce required costings Marketing plan: to ensure that the firm is able to:
• produce the requires amount and maintain adequate stocks
• to price the product correctly
Financial plan: to ensure that the firm has the financial resources to:
• manage operations
• undertake any necessary capital investment Thus the strategic plan will need to be as follows:
Fig 10.5: The components of the strategic plan
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