Strategic Planning – refers to the process of
determining the major objectives of an organization and defining the strategies
that will govern the acquisition and utilization of resources to achieve these
objectives.
Components of the Strategic
Management Process:
1.
Strategic
planning which consists of:
a.
assessment
of the organization strengths, weaknesses, opportunities, threats. SWOT
b.
formulation
of organization mission
c.
formulation
of organization philosophy and policy
d.
determination
of strategic objectives
e.
determination
of organization strategy
2.
Strategy implementation and control which
consist of:
a.
implementation
of organizational strategy
b.
control of
organization strategy
Applicable Strategies
1.
Entering a New Business
a.
Acquisition
of an existing business
b.
Ordering a
new business entity
c.
Franchise
2.
Going Concern
a.
Segment
Markets – Identify the market segment with which it has an expertise. Then
compete.
b.
Efficient
use of Research and Development – it must concentrate its R & D efforts to
lowering process costs or to bring new products to the market.
c.
Think Small
– The emphasis must be on profits rather than sales growth, and specialization
rather than diversification.
3.
Meeting Competition of Big
Companies
a.
Concentrate
on narrow market segments that big business do not want to exploit.
b.
Localize the
business. Ex. Pampanga dishes, Mindoro delicacies.
c.
Stress
“Personal Touch”- the small business operator can be more close to his clients,
build favorable image and get more business.
Why Small Business Operators
Ignore Strategic Planning:
1.
Lack of expertise
– few small
business operators are trained in strategic planning.
2.
Inability to get started – failing to get started in planning
for lack of sufficient exposure to planning activities.
3.
Uncontrollable, often intangible,
variables – these
variables complicate planning which later on discourages the small business
operator from repeating the exercise.
4.
Resource poverty –
planning
requires time, but the small business operator oftentimes does not have it;
this is because he must attend to problems related lack of adequate capital,
managerial experience, and other key assets.
5.
Focus on daily operations – the daily requirements of
small business usually keeps the operator so busy that he has no time for
planning.
6.
Failure to realize the importance
of strategic planning – the small
business operator is exposed to an environment of successful businessmen who
never do strategic planning. This provides them with sufficient reason to
disregard strategic planning.
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