STRATEGIC PLANNING

MPOB ASSIGNMENT
Subject Code: BBA 101

Submitted to: Submitted by:

 INDEX
1. Acknowledgement
2. Strategic planning
3. Concept of planning
(a) Nature of planning
(b) Objectives of planning
(c) Types of planning
4. Concept of strategy
(a) Characteristics of strategy
(b) Strategies at different levels
5. Concept of strategic planning
(a) Characteristics of strategic planning
(b) Significance of strategic planning
(c) Steps in strategic planning
6. Conclusion
 ACKNOWLEDGEMENT

I would like to express my special thanks to our mentor

Mr. Heramb Nayak for his time and efforts he has
provided us and opportunity to do this wonderful project
on the topic ‘STRATEGIC PLANNING’ which helped me
in doing a lot of research and I came along so many new
things. Your useful advice and suggestions were really
helpful to me during the project’s completion. In this
aspect, I am eternally grateful to you.
Secondly, I would like to thank my parents and friends
who helped me finish this project.
I would like to acknowledge that this project was
completed entirely by me and not by someone else.
 STRATEGIC PLANNING
An organisation’s strategy is the match between its resources and capabilities and the
environmental opportunities and risks it faces. In view of the challenges poses by the
economic, social, political, legal and international environment, the managers have to
formulate appropriate strategies so as to grow and survive in the market.

PLANNING
“Planning is the process of deciding in advanced what is to be done, who is to do it, how is to
be done and when it is to be done.” It is a determination of a course of action to achieve the
desired results. It bridges the gaps from ‘where we are’ to ‘where we want to go’. It makes it
possible for things to occur which would not otherwise happen. Planning is a mental process
requiring the use of intellectual faculties imagination, foresight and sound judgement.
In the words of Koontz, O’Donnell and Weihrich, “Planning is an intellectually demanding
process; it requires a conscious determination of courses of action and the basic of decisions
on purpose, knowledge and considered estimates.”

NATURE OF PLANNING:
i. Planning is an intellectual activity
ii. Planning involves selection among alternatives
iii. Planning is forward-looking
iv. Planning is related to objectives
v. Planning is the most basic of all managerial functions
vi. Planning is pervasive function
OBJECTIVES OF PLANNING:
i. To provide unity of direction
ii. To reduce uncertainty
iii. To check overlapping and wasteful activities
iv. To promote new ideas
v. To establish standards for controlling

TYPES OF PLANNING:
We can classify planning on the basis of following dimensions:
1. Organisational Level – Corporate, Divisional and Functional
2. Focus – Strategic, Operational and Tactical planning
3. Time period – Long-range, Medium-range and Short-range planning

1. LEVELS OF PLANNING

(i) Corporate (ii) Divisional (iii)

Functional
Planning Planning
Planning
it is a systematic and It relates to a particular
comprehensive process of division of department. Its focus is to lay down
planning, taking accounts It sets the objectives, detailed plan for a
policies and particular unit for the
of resources and
programmes of a day to day activities, it
capability of the is highly specific as as it
organisation within which particular division or
department in tune with is done to achieve
it has to operate. the corporative plans devisional objective
 2. FOCUS OF
PLANNING

LONG-TERM
PLANNING:
generally more than 5
years

MEDIUM-TERM
3. TIME SPAN PLANNING:
time horizon is more than
OF PLANNING 1 year, but less than 5
years
SHORT-TERM
PLANNING:
time span is limited
upto 1 year.
CONCEPT OF STRATEGY
A strategy is a unified comprehensive and integrated plan design to ensure that the basic
objectives of the enterprise are achieved. A strategy is not just a plan it is a plan that is
unified it ties all the parts of the enterprise together the strategy is integrated in the sense that
all parts of the planner compatible with each other and fit together with.
Strategy refers to the basic goals and objectives of the organization, the major programmes of
action chosen to reach this goals and objectives and major pattern of resource allocation used
to relate the organization to its environment.
According to chandler, “Strategy is the determination of the basic long-term goals and
objectives on an enterprise and the adoption of course of action and allocation of resources
necessary to carry out these goals and objectives.”

CHARACTERISTICS OF A STRATEGY:
The salient features of a strategy are as under:
I. Strategy is a comprehensive and integrated plan that allocates scarce resources of an
organization.
II. Strategy is designed to shape the organization’s response to its environment. It is
known as environmental adaption. Strategic decisions are taken to deal with the
external forces.
III. Strategy determines the nature and direction of the organisation’s activities.
IV. Strategy sets the direction and other plans decide how this direction is to be put into
action. Therefore, strategy must be formulated before plans are made.
V. Strategies standing and long-term plan.
VI. Strategy formulation is primarily the responsibility of top management. However,
people at all levels are involved in strategy implementation.

STRATEGIES AT DIFFERENT LEVELS

From the organizational point of view, view may distinguish between the nature and scope of
strategic decisions at the corporate, business and functional level
Concept of strategic planning
“Strategic planning is the process of deciding on the objectives of the organization, on
changes in these objectives, on the resources used to attain these objectives and on the
policies that will govern the acquisition, use and disposition of these resources.”
Strategic planning enables the management to conceptualise the purpose of the organization
taking into account its strengths and weakness in the light of external environment. Strategic
planning as a management tool encompasses on aspects of the organisations future and it
enables management to plan for desired future and to ensure survival and growth.

CHARACTERISTICS OF STRATEGIC PLANNING:

I. It emphasises upon the basic mission and goals of the organization the nature of
business and the nature of customers or clients are clearly stated.
II. It is a top management activity. It determines the basic policies and programmes of
the organization. It provides a framework for operational planning and decision
making.
III. It is normally long term in nature. The time frame is longer than other types of
planning.
IV. It provides for coherence in organisation’s policies, decisions and activities overtime.
V. It deals with uncertain environment by forecasting opportunities and threats in the
environment. It is designed to improve the organisation’s relations with its
environment.
VI. It sends the direction of organisational activities for attaining corporate objectives.

SIGNIFICANCE OF STRATEGIC PLANNING:

Strategic planning has assumed great importance for modern businesses because of the
following benefits:
a) Focus on objectives: strategic planning clarifies the objectives of the organization
towards which its resources will be directed. All decisions and activities are guided by
organisational objectives. It also defines the kind of businesses in which the
organization is engaged.
b) Reduction of environmental uncertainty: strategic planning facilitates environment
scanning. It helps in reducing environmental uncertainty by identifying key factors for
the success of the business.
c) Competitive strength: strategic planning is very useful to fight competition in the
market on to have control over the market.
d) Better coordination: strategy provides a unifying force by focusing attention on
common objectives. It brings out coordination among different units of the
corporation.

STEPS IN STRATEGIC PLANNING

1. Determination of mission or purpose: The strategic planning process begins with
spelling out the business mission and tentative purpose that might be pursued in
future. In organization’s mission is the reason for his existence from stop it represents
a long-term vision of what the organization seeks to do when the reasons, why it
exists. It searches as a source of inspiration from which flows, the life of the
organization. Clear statement of organization’s mission would help to identify the
functions it performs for the society and also basic character and philosophy.
The terms ‘objectives’ and ‘goals’ have been often used interchangeably in the
management literature. However, Russell Ackoff has made a distinction between the
2 terms as follows: ‘Objectives’ are desired states or outcomes. ‘Goals’ and objective
that are scheduled for attainment during the planning. Thus, objectives are open ended
in nature and have no time frame for example, the survival objective offer farmers
never completely attend since failure is always a future possibility.
2. Environmental scanning:
Environmental analysis is the
diagnostic phase of strategic
planning. External environment of
a firm consists of economic, social,
technological, market and other
forces which affects functioning.
The firm’s external environment is
dynamic and uncertain.
The management must
systematically monitor it to
determine threats and opportunities
for the firm in the future.
The external environment provides
the setting for the functioning of
the enterprise. The management
should try to find answers to the
following questions:
i. What is the economic,
social and political trends,
for example: monetary
policy, social changes, anti-
pollution or energy
conservation laws?
ii. What are the trends in the
market for company’s
products and services? For
instance, demand is likely
to remain static, decrease or increase.
iii. What technological changes are anticipated? New products with additional uses
may become popular.
iv. What competition will be face? The competitors should be identified and their
strengths and weaknesses analysed.

3. Organizational analysis: In order to analyse organizational strengths and

weaknesses, it is essential to know the current domain of the firm. It includes:
i. The range of products or services provided by the firm;
ii. Geographic coverage of the firm - local common national or international;
And
iii. Firms differential advantage, that is, the special competitions competitive
strength the firm stresses such as fuel efficiency of its car over the cause of the
competitors.
Organizational analysis involves the review of financial position, productive capacity or
productivity, marketing effectiveness, the extent of research and development, the human
resource skills and so one. The strategic planner should analyse the organisation’s
operational, financial and managerial strengths.
4. Developing strategic alternatives: Strategic alternatives may be developed and
analysed in the light of organisation’s strengths and weaknesses and the opportunities
and threats it faces. This involves SWOT (strengths, weaknesses, opportunities and
threats) analysis. After that identification of the environmental opportunities and
threats and the organisational strengths and weaknesses (and the reformulation of
objectives if need be); process the next step in the strategic planning process is the
consideration of strategic alternatives for the purpose of choosing the most
appropriate strategy.
5. Evaluation of strategic alternatives: 8 strategic alternative has its own merits and
demerits which needs to be analysed carefully. The management should examine
various alternatives in the light of forecasted opportunities and constraints and also
the strengths and weaknesses of the company full stock for the choice of best
alternative, the management can use quantitative tools of analysis such as PERT,
CPM, ration analysis, linear programming, etc.
In evaluating alternatives, it is also important to focus on a particular product or
service and on those competitors who are direct tribals in offering it strategy that does
not exploit a particular advantage of the organization over its rivals should be
rejected.

6. Choice of strategic alternative of formulation of strategy: the last agent strategic

planning is the choice of an appropriate strategy for the attainment of specified
objectives. The management should select that strategic alternative which is best
suited to the organisation’s capabilities. In other words, it must the existing strength
of the organization to the maximum extent. New capabilities can be acquired. But a
strategic plan fully relying on the resources or skills yet to be acquired may fail in
actual practice. Some other factors which influence the choice of first strategic
alternative include: degree of risk acceptable to the management, timing of the
decision, expectations of owners of business and attitude of top managers.
 CONCLUSION
Strategic planning can actually be described as a management tool used in managing the
business operations of a given business entity. Strategic planning improves the overall
performance of small businesses. In relation to this, it is important to note that research
findings point out that the more complex the strategic plan the higher the performance of a
business organization.

However, it is important to be aware of the fact that the process of strategic planning is not a
guarantee that a business entity will enhance its performance. The successful implementation
of strategic plan requires sufficient resources and also that all the stakeholders understand the
contents of the strategic plan.

Strategic planning process does not only have its good part; it has a number of problems
associated with it. Strategic planning process is elaborate and sometimes may get complex
and hence may be left unfinished due to lack of motivation to complete the planning process.
Besides, strategic planning is relatively costly in terms of finances and time.