Sometimes people use the term business plan when they are referring to a project. Some projects are very substantial and equate to an autonomous independent business activity, in which case a business plan is entirely appropriate. Business planning terminology can be confusing because much of it is used very loosely, and can mean different things.
V Control This process is most applicable to strategic management at the business unit level of the organization. For large corporations, strategy at the corporate level is more concerned with managing a portfolio of businesses. For example, corporate level strategy involves decisions about which business units to grow, resource allocation among the business units, taking advantage of synergies among the business units, and mergers and acquisitions.
In the process outlined here, "company" or "firm" will be used to denote a single-business firm or a single business unit of a diversified firm. Mission A company's mission is its reason for being. The mission often is expressed in the form of a mission statement, which conveys a sense of purpose to employees and projects a company image to customers.
In the strategy formulation process, the mission statement sets the mood of where the company should go. Objectives Objectives are concrete goals that the organization seeks to reach, for example, an earnings growth target. The objectives should be challenging but achievable.
They also should be measurable so that the company can monitor its progress and make corrections as needed. Situation Analysis Once the firm has specified its objectives, it begins with its current situation to devise a strategic plan to reach those objectives.
Changes in the external environment often present new opportunities and new ways to reach the objectives. An environmental scan is performed to identify the available opportunities. The firm also must know its own capabilities and limitations in order to select the opportunities that it can pursue with a higher probability of success.
The situation analysis therefore involves an analysis of both the external and internal environment. The external environment has two aspects: The macro-environmental analysis includes political, economic, social, and technological factors and sometimes is referred to as a PEST analysis.
An important aspect of the micro-environmental analysis is the industry in which the firm operates or is considering operating.
Michael Porter devised a five forces framework that is useful for industry analysis. Porter's 5 forces include barriers to entry, customers, suppliers, substitute products, and rivalry among competing firms. The internal analysis considers the situation within the firm itself, such as:Get the most out of sample plans.
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Strategic Management > Process. The Strategic Planning Process.
In the 's, many large firms adopted a formalized top-down strategic planning model. Under this model, strategic planning became a deliberate process in which top executives periodically would formulate the firm's strategy, then communicate it down the organization for implementation.
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