The Strategic Planning Process

STRATEGIC PLANNING
Strategic planning is a comprehensive process which includes everything which a business should become and how best it can achieve that goal. Basically it links the business objectives to the actions and resources required to achieve them. While doing this it offers a systematic procedure to ask and answer the most critical questions faced by the management team.

DEFINITION
George Steiner defines strategic planning as “the formulation of basic organizational mission, purpose and objectives; policies and programmes to achieve them, and the methods needed to achieve organizational ends.

WHY DO COMPANIES USE STRATEGIC PLANNING PROCESS?
Strategic planning changes the performance and direction of the business by creating a

Environment analysis: Survey of the environment is central to strategic planning. Environmental survey forms a vital part of the strategic planning process. It helps in the formulation of strategies in line with the opportunities emerging in the environment. In its attempt at environment survey, basically a firm gathers all relevant information relating to the environment and analysis them in detail. It analysis the macro environmental factors as well as factors specific to the business concerned. Under the macro-environmental factors, the firm studies ,political environment, the legal environment, government policies covering various areas ,demographic environment ,socio-cultural environment and the economic scene. As regards the firm studies emerging trends in the industry, the structure of the industry, the nature of competition and scope for invasion by substitute products. The environmental factors specific to business concerned include; the market demand, consumer, industry, competition, government policies, supply-related factors

Setting the Corporate Objectives: Once the firm develops its mission, defines its business and scans its environment and internal capabilities, it is ready to set its corporate objectives. The main task here is to decide the extent of growth, the firm wants to achieve. The firm examines its present level of performance, its achievable level of performance. The objectives are set in a measurable and time-bound manner. After setting the objectives with maximum clarity, the firm must also prescribe their hierarchy /priorities.
6. Formulating the corporate strategy: The effectiveness of the entire strategic planning process is tested and proved by the effectiveness of the corporate strategy it chalks out. The main objectives of corporate strategy are to provide strategic direction to the firm. It is corporate strategy that ensures the fit between the firm and its environment. It is a tool with which the firm matches its growth needs with the promises and threats of the environment. It is the route map chosen for navigating the firm through all the fluctuation and turbulence the firm may face.
7. Monitoring the strategy: The strategy has to monitor and adjustments that become necessary have to be brought about. What is to be monitored here is essentially is the compatibility with the environment as well as the internal realities. This essentially is the purpose of