MBA Strategic Planning
Basic Principles of Strategic Planning
The CEO then asked you to explain the normal concept of strategic business planning and how it would help improve performance at Lawrence?
To the questions posed by the CEO I would answer: Proper planning process can be summed up by responding to three questions: Where are we now? Where do you want to go? and Just how do we make it happen? The basic principles of proper planning are best detailed by de Kluyver and Pearce in the booklet Strategy: A view from the most notable. The creators write Strategy is about positioning a business for competitive advantages. It consists of making choices about which sectors to take part in, what products or services to offer, and the way to allocate commercial resources. Its primary goal is to build value for shareholders and other stakeholders by giving customer value. (de Kluyver and Pearce, 2006, p. 1)
The basic proper planning process consists of establishing a quest, targets, current situational examination, formal strategy formulation, strategy execution, and adding measurable control systems in spot to monitor the business enterprise. This basic tactical planning process is more applicable at the business enterprise unit level including the Home Appliances; Electrical Equipment; Industrial Tools; Agricultural Equipment; Automotive Parts; and Financial Services sections already proven at Lawrence Production Corporation.
More detailed approaches to strategy include the newer concepts helped bring forth by writers Kim and Maugborne called Blue Sea Strategy. The more traditional procedure is competition based strategy such as Porters Five Forces of Competition model. The Blue Sea Strategy is a basically unproven but very interesting concept that uses Value Advancement to propel the business into new market segments that are untapped alternatively than going toe to toe with your competition fighting it out for market space.
This battling is known as the Red Sea strategy where the waters are bloodied due to the fight for a competitive benefit. The Blue Sea Strategy looks to find ground breaking ways to offer the customer more value in the products or services at a lower life expectancy cost building a win-win situation for both customer and supplier.
The more traditional way is always to use Michael Porters five causes to analyze the position of the business in relation to your competition and then strategically position the company on a course of least competitive level of resistance. Basically Porter looks at: Risk of substitute products, Risk of access of new competition, Level of competitive rivalry, Bargaining vitality of customers, and the Bargaining vitality of suppliers.
Strategic planning at the organization level
She[CEO] specifically asks you what her role would be in the planning process, what the organization headquarters tasks would be and how the company would add value to the business enterprise units?
Strategic planning at the Corporate level is more involved in managing the profile of the business. Fundamentally Corporate and business level strategic planning consists of decisions such as which sections to grow, which market places the business units should be competitive in, allocating resources between the sections, building and using synergies amongst sections, and merging or acquiring other businesses.
Also Corporate strategic planning calls for defining the overall mission, eye-sight and aims of the Corporation. Corporate level proper planning will also use such tools as Porters Five Forces, employ a Blue Sea Strategy, a Space Analysis, or balanced Scorecard approach. Porters Five Causes and the Blue Ocean Strategy are explained above. A Difference Analysis is a tool used to find the current express of the company and the targeted condition of the company.
The difference between them is the Gap. A Strategic Difference Analysis may be used to determine the space and formulate an idea to bridge the space. The Balanced Scorecard talks about the business from four different perspectives Financial, Customer Learning and Progress, and Internal Business Process. The Balanced Scorecard methodology provides company an idea what should be measured in order to balance the financial point of view.
The Balanced Scorecard system is a management tool that allows the business to clearly see their eyesight and translate that eye-sight into proper action. The organization will add value to the business items by coordinating and sharing corporate staff and different resources throughout the business enterprise units, utilizing sections to complement one another in the organization structure and various business activities, and fiscally making an investment resources across different business units.
Roles of SBU managers and functional executives
The three Presidents of the business units and the efficient executives also wished to really know what their specific roles and obligations would maintain this new planning process, and exactly how their performance would be assessed and compensated?
To the questions of three Presidents and functional executives I'd answer: The role of the tiny business unit professionals and functional executives is EXTREMELY important to the proper business plan of the organization. (This assertion will capture the attention of the three business unit presidents and practical professionals allowing them feel secure in their positions and ultimately help me to get the work!)
As the business unit is made and begins rivalling in a market place that it's rather a viable performer, the business enterprise unit manager gets the freedom to framework and control their business product to seize the competitive gain available to the machine within that market.
Performance will be measured using key performance signals described in the strategic planning process by using planning tools including the Balance Scorecard. The Well-balanced Scorecard helps proper organizers to derive key measurable for that particular sections such as: customer, product performance, competitive comparisons, operations, supplier, cost and financial data, employee-related, and market performance. These indicators help to align the activities of the business enterprise unit with the goals of the corporation. The role of the business enterprise unit managers and functional professionals are to provide source in regards to what these metrics should be, screen these metrics and offer feedback, and put into action changes to enhance the performance.
Analysis of exterior and interior environments
The Vice Chief executive of IT also wanted to know very well what types of exterior and internal information would be asked to develop the business plans, and how they would obtain these details. He wished to know very well what types of analytical tools, methodologies and skills they might need to generate and analyze this information?
To the questions of Vice President of IT (IT) I'd answer: One of the most important tools used to ascertain internal an exterior environmental factors impacting the business enterprise is to execute a Talents, Weakness, Opportunities, and Hazards evaluation or better know as SWOT examination.
Internal environmental factors impacting on the business are primarily the Advantages and Weaknesses of the business. Strengths that a company can build on are usually items such as; brand name, intellectual property, reputation, and well toned distribution networks merely to name a few. Weaknesses a company may face are items such as; high over head costs, poor source chain, or a vulnerable brand.
External factors affecting the company are the Opportunities and Risks. Opportunities shown to the company could be thing such as; dependence on a new product, lifted laws, emerging marketplaces, and removal of trade obstacles. Finally, Hazards are items such as; alternative products, increased laws, and new trade tariffs. When placed into a matrix form, a SWOT evaluation can provide the inspiration on which the proper plan of the business will be built.
As I pointed out previously performance of the business enterprise units and the organization will be assessed using indicators described in the tactical planning process by using planning tools like the Balance Scorecard and a Space Analysis. IT will be asked to aid in acquiring and stocking data that is internally and externally related to areas of the business such as: customer, product performance, competitive evaluations, operations, company, cost and financial data, employee-related, and market performance. This data is crucial to short-term aggregate planning for the business products and permanent strategic planning for both the business units and the organization.
IT will play a very important role in human being learning resource management and planning, taking cross efficient knowledge equity of the business enterprise units, realizing and protecting intellectual property, and writing these details throughout the organization. The strategic organizers will require assistance from IT to provide tools for business scenarios, marketing and sales planning, and financial projections. These inputs are necessary for sound planning decisions. Writers Anthony and Govindarajan have posted a e book entitled Management Control Systems and section 8 further discusses the role of Information Technology in tactical planning.
In general input from IT will be necessary for management control systems and providing a construction where the control systems provides information and opinions to the market leaders for tactical planning. Finally It'll be needed to help with Enterprise Source Planning (ERP). ERP is important to web page link many of the individual directories or produce a central databases for the many system modules.
ERP will aid in the posting of information throughout the organization and invite performance monitoring of key indications. A global business such as Lawrence Making Corporation is like the octopus where the tentacles must be mounted on the central body in order to work together. It'll play a crucial part in hooking up the business devices for purposes of strategic planning.
An effective business plan
One of the Presidents of the business enterprise units asks you to explain just what a business plan consist of and how they will know if they are suffering from a good plan?
I would answer this question by first verifying that whenever the Chief executive asked in regards to a business plan that he/she was interested in elements of a Strategic Business Plan. Presuming this is the case I'd answer the business unit President by expressing: There is typically five important elements to a proper business plan.
These elements are;
1) Vision Statement,
2) Mission Affirmation,
3) Critical Factors for Success,
4) Strategies and Activities to meet Goals, and
5) Prioritized Implementation Routine for the Strategies.
The Vision Affirmation should briefly identify the route of the business and plans for expansion. The Mission Affirmation should describe the capabilities of the organization to meet the needs of the client as determined by general market trends. Such as: World leader in quality Industrial Tool.
The Critical Factors for Success will be the key aspects that must definitely be addressed if the business is to attain their vision and mission assertions. The Strategies and Activities are primarily identified action plans needed to ensure that the critical factors of success are achieved. A Prioritized Execution Schedule is actually strategies and activities spelled out to be able worth focusing on, and communicated to the associates. These basic elements are the base of a tactical business plan.
She[CEO] asks you how you would ensure that the ideas were executed effectively?
To the CEO I'd answer this question by saying: Strategic business planning will require a certain amount of change within the business and with change there will also be a certain amount of resistance. I required a course at Lawrence Technological University (curiously this is the same name as the business!) while working toward my MBA called Leading Organizational Change. In this program we researched John Kotters eight step process to successful change taken from his book Leading Change.
Step 1: Create a Sense of Urgency
Step 2: Pull Together the Guiding Team
Step 3: Develop the Change Eyesight and Strategy
Step 4: Communicate for Understanding and Buy-in
Step 5: Empower Others to Act
Step 6: Product Short-Term Wins
Step 7: Don't Let Up
Step 8: Create a New Culture
The concepts provided in the publication and in the class room were put on a job that was begun at that time that I had taken the course. The job was to use a new engineering records system that I could say is progressing well with the instruction provided by these eight steps. The procedure is logical in case followed religiously, I could testify, work great. This would be one method to ensure plans were applied effectively.
Also studied in this course was Appreciative Inquiry (AI). That is another method that would help to ensure that the strategic plans are carried out effectively. AI is a great organizational development tool that breaks away from the traditional problem-focused procedure.
Instead AI looks to recognize and examine what's working well within the business and exactly how this activity can be improved. Basically the strategy is to focus an organization around things that are working somewhat that wasting effort trying to fix things that dont work. More on AI and the 4-D model found in AI can be found in David Cooperiders e book Appreciative Inquiry.
After a successful execution of the strategy measurable signals I described preceding will see whether the business enterprise is on track with the strategic plan. The tactical plan will be revisited at prescribed intervals employing constant improvement to move forward the vision and quest of the company.
De Kluyver, Pearce, (2006) Pearson Education, Inc. , Strategy A View From The Top
NetMBA, The Strategic Planning Process-Website, Retrieved June 3rd, 2008 from: http://www. netmba. com/strategy/process/
Balanced Scorecard Institute, Exactly what is a Balanced Scorecard -Website, Retrieved June 3rd, 2008 from: http://www. balancedscorecard. org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default. aspx
JaxWorks Spreadsheet Company, The Balanced Scorecard Idea, Retrieved June 2nd, 2008 from: http://www. jaxworks. com/thebalancedscorecardconcept. htm
Quick MBA, Strategic Planning-Website, Retrieved June 6th, 2008 from: http://www. quickmba. com/strategy/strategic-planning/
Kotter (1996). Leading Change, Harvard Business Institution press.
Changing and Succeeding Under any Conditions - Website Retrieved November 25, 2007, http://www. ouricebergismelting. com/html/8step. html
Quick MBA, Strategic Management-Website, Retrieved June 6th, 2008 from: http://www. quickmba. com/strategy/swot/
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