BUSINESS STRATEGY

Business Strategy - Understanding Process of Strategic Planning



Business Strategy - Understanding Process of Strategic Planning

Introduction

Strategic planning is a tool which has been used for many years in transforming and stimulating the organizations. Strategic planning helps in bringing a clear of mission and vision by providing a reason for the existence (mission) and a sense of direction for long-term goals (vision). Strategic planning helps information in preparing themselves for future endeavors. It helps in identifying the factors which could have an impact on the business performance and then helps in devising a plan also known as strategic plan to protect the organization from future problems Strategic planning is worth the effort placed in planning and implementing it. The most important thing for an organization is turning the ultimate into actuality. Several techniques are referred to when devising a strategic plan (Waechter, 2009).

Explanation of Terminologies

Mission

Mission is the overall purpose or the reason of the existence of the firm. Missions are summed up in mission statements which are designed for internal uses of the company mainly the employees and stockholders. Mission is designed by keeping in consideration the company's image, values core competencies and its current operations (VanBaren, 2012).

Example: Mission - Overall Purpose - To produce best quality cars and increase the market share

Vision

The vision of the company explains the key values of the organization and explains how a company intends to perform in the market where it is operating (VanBaren, 2012).

Example: Vision - Long term - To be the best car manufacturer in the whole world

The main purpose of vision is to provide a direction to employees about the future prospects of the company and to provide an insight to the customer that where the company wants to be in future. Corporate vision is summed up in vision statements which are integral part of the company (VanBaren, 2012).

Corporate Goals and objectives

Corporate objectives are the quantifiable form of the goals of the company. Goals are the statement which provides a sense of direction to work towards however corporate objectives help in quantifying those goals into measureable and achievable objectives (Riley, 2012).

Example: Goal - A general Statement - to be market leader in sedan car sales

The objectives are in terms of number, which can be measured in future against the performance of the individuals in order to evaluate them. These numbers provide a focused direction as employees would be able to know about the objectives of the firm and can monitor them on regular basis against their performance (Fawcett, 2012).

Example: Objective - Quantification of Goals - to increase the local market share each year by 20% and to penetrate in offshore markets.

Source: http://www.tutor2u.net/business/strategy/corporate_objectives_strategy.html

Core competencies

Core competencies are those benefit(s) or capabilities which enables a business in order to attain a competitive edge over its competitors (Riley, 2012).

Example: Core Competency - Unique capability - powerful yet fuel efficient engines in the whole world

Core competencies help in achievement of objectives because, when businesses have edge over their ...