Strategic Planning for global business market.

Strategic Planning for global business market.

Strategy is worried about moving the organization from where it is now to where we would like it to be. It's the business process concerned with planning the long-range activities, character, and underlying values of the organization. 

The strategy differs from tactics therein strategic decisions are far more difficult to reverse, they typically involve the decision-makers in rejecting other options, and they tend to dictate the long-term nature of the organization as well as its activities.

Strategic planning process

Strategic planning starts with the firm’s full understanding of the business it participates in. No better approach has been developed than that offered by peter Drucker (1973). Drucker advised businesses to ask three basic and two sub-questions:

• What's our business?
• Who is the customer?
• What's value to the customer?
• What is going our business be?
• What should our business be?

Asking “what is our business?” is the way to get to the firm’s vision and business mission and two of the most important questions in determining the answer to that first question are “who is the customer?” and second, “what is valuable to the customer?” these we've shown in later steps of the strategic planning process (choice of segments). 

Answering the question “what will our business be?” means to project the present trends and business practices into the future with no change-how will the business look if it keeps operating the same way for years into the future? The third question is where strategic planning really takes place. During this case, management cares about what the business should look like and what changes need to be made so that the business will be addressing the proper markets with the proper products and services at a future time.

Mission, vision, and objectives

All organizations have to coordinate the attitudes and activities of staff. So as to do this, most firms attempt to develop a corporate culture in which the overall strategic direction of the organization is the driving force. This strategic direction is most frequently communicated via a corporate vision, a company mission, and company objectives. 

Some firms have just one of these: some have all of them. They're not mutually exclusive, in other words. Vision is the management’s view of what the organization should be. Often the vision comes from the founding father of the organization: charismatic individuals such as Anita Roddick of body shop, Richard Branson of a virgin, and steve jobs of apple imprinted their personalities on the businesses

They founded. Everyone within those companies shares the company vision, a minimum of to some degree, and understands the intended “personality” of the organization - it's not necessary to produce a vision statement, although many firms do that.

The lack of a vision statement does not mean that there is no vision. The characteristics of a corporation can be very clear to its members without having anything at all in writing. One of the difficulties faced by companies led by visionaries such as Roddick or Branson is that there is a lack of continuity. As we've seen in the case of the body shop, if the founder leaves, retires, or dies the corporate can easily lose its way.

The corporate mission is the overriding reason for the organization’s existence. It's the purpose of the organization. The mission statement is a formal document that outlines the reasons for the organization’s existence. Still, frequently it's no more than a set of corporate platitudes which do little to inform staff, customers, and other stakeholders of what the organization is about. A company mission statement has five characteristics (backoff, 1986):

• It contains a formulation of objectives that permits progress toward them to be measured.
• It differentiates the corporate from its competitors.
• It defines the companies that the company wants to be in, not necessarily those it is already in.
• It's relevant to the stakeholders in the organization, not just to shareholders and managers.
• It's exciting and inspiring.

Mission statements must reflect corporate values so as to be of use in coordinating corporate activities (Campbell, 1989). Campbell goes on to argue that there are four key issues involved in developing a useful mission:

• Clarification of the aim of the organization. Is it the organization’s purpose to maximize shareholder value – or is the purpose to (for example) develop a worldwide network?
• Description of the business and its activities, and therefore the position it wants to occupy in its field. For instance, the business might want to “offer supreme value for money” or “be the industry leader in quality engineering.”
• Statement of the company values. This is able to include the company’s intentions toward its employees, customers, and suppliers.
  
• Organizational behavior should be controlled in such how as to match the mission statement. If this is often not the case, the mission becomes mere empty rhetoric – it might be better to amend the mission statement to reflect actual behavior than to have a mission statement that does not match outcomes. Cochran et al., (2008) add that mission statements should be tested for readability, connotative meanings, and applicability. 
• For readability, they suggest reviewing the number of words and sentences and eventually the “fog index.” connotative meanings relate to the emotional response engendered by the mission statement. They provide a questionnaire to be given to managers to measure their feelings generated by any potential mission statement. The applicability analysis means trying out the mission statement to work out whether it is practical in particular situations and they suggest the use of mini-cases to measure this.

Examples of good or poor mission statements are easy to find. David and David (2003) found that a majority of the 95 firms they studied did not address several of the nine essential components required of a mission statement. IBM’s mission statement meets some of the requirements described above while that of a UK firm seems not to. 

Mission statements have become an essential part of corporate life in the past 30 years or so. Banks expect companies to have mission statements, staff are often asked to explain how their activities relate to the corporate mission, and mission statements are often found in corporate end-of-year statements as a justification for corporate activities.