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Strategic Planning

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					Strategic Planning
    Strategic Planning

Strategic planning is the process
 of deciding on the programs
 that, the organization will
 undertake and the approximate
 amount of resources that will be
 allocated to each program over
 the next several years.
Strategy Formulation             Strategic Planning

Add new product line             Understand the market needs
                                 Analyse the market
                                 Conduct feasibility study for new product line


Increase the profitability       Increase sales
                                 Reduce the costs
                                 Expand market operations
                                 Advertise more
                                 Change the methods of production

Improve the customer relations   Improve the quality
                                 Increase after sale services
                                 Improve the brand loyalty
                                 Use customer friendly marketing methods
                                 Improve the channels of distribution

Improve the company image        Increase charitable spending
                                 Improve employees morale
Merits of strategic
planning

• Framework for budget
• A Management Development Tool
• mechanism to force managers to
  think for long run
• Help in aligning managers towards
  the long-term direction of the
  company
• Framework for short-run actions
Limitations of strategic
Planning
•   A form filling bureaucratic exercise
•    it may consume the valuable time
    of the executives who participate
    in strategic planning.
•   strategic planning is worse if the
    task is assigned to a separate
    department
Organizational conditions
needed for SP
•   The business must be large enough. In
    too small organisations, Strategic plan
    need not be so elaborative and in written
    form. An oral expression of strategic plan
    is enough.
•   The management must consider it as
    important for their business.
•   The business must be relatively in
    uncertainties to some extent. It is not
    suitable for the businesses, which are in
    either certainties or completely
    uncertainties.
Contents of Strategic
Plan
• the time period
• programmes
• Approximate amount of
  resources
Who should make
strategic plan?
• Functional Mangers?
• Corporate staff?
• Controller organization?
Analyzing Proposed
Programs
• Capital Investment Analysis
  • Why NPV and IRR fail?
  • Avoiding Manipulations
  • Organization fro analysis
Analyzing ongoing
programs
• Value Chain Analysis
  • Linkage with suppliers
  • Linkage with customers
  • Process Linkage within the value
    chain of the firm.
  Applications of Activity Based
    Costing
Strategic Planning
Process
•   Reviewing and updating strategic
    plan from last year.
•   Deciding on assumptions and
    guidelines.
•   First iteration of the new strategic
    plan.
•   Analysis.
•   Second iteration of the new
    strategic plan.
•   Review and approval.

				
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posted:8/11/2012
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