KEY STEPS/ELEMENTS IN STRATEGIC PLANNING

Strategic planning involves three key steps or elements which are closely interrelated: they are strategic analysis, strategic choice, and strategy implementation. Each of these is discussed below

Strategic Analysis

• Strategic analysis is the first step in strategic planning. It consists of the planner assessing the current position/performance of the organisation – including its present objectives and strategies – and relating this assessment to an analysis of trends and changes in the organisation's environment.
• The overall aim of strategic analysis is to form an assessment of the present and likely future performance of the organisation. Strategic analysis involves an assessment of current organisational results, an evaluation of current resources, and an assessment of environmental trends and changes.
• A key technique here is SWOT analysis, i.e. the assessment of strengths, weaknesses, opportunities and threats. Equally important, however, is the assessment of the actual values and expectations of different shareholder groups. The outcome of strategic analysis should be an assessment of the extent to which current objectives and strategies require to be changed to meet the needs of the future. This gives rise to the need to exercise strategic choice

Strategic Choice

• This second step in strategic planning contains three sub-steps. The first of these is the generation of strategic options. Usually there are numerous alternative ways to achieve a given objective. For example, the objective of growth can be achieved through acquisition or through internal development.
• Similarly, a company can compete on the basis of, say, cost leadership, or focus, or differentiation. The first step in strategic choice is to delineate the range of strategic options. The second step in strategic choice is to evaluate these options.
• The most preferred options are those which build on corporate strengths and minimise company weaknesses whilst, at the same time, taking cognisance of environmental opportunities and threats. Strategies should also be evaluated with respect to feasibility and acceptability.
• The third step in strategic choice then is the selection of alternative strategies. Although selection should be as objective as possible, it is often affected by the values of managers and other groups with interests in the organisation.

Strategy Implementation

• The third element in the strategic planning process is implementation. Broad strategic choices need to be translated into specific action programmes. Resources need to be allocated, responsibilities defined, organisational structures designed and, finally, systems of information and control put in place.
• It is often at the implementation stage that most of the problems of co-ordinating and controlling strategic plans are encountered. Human resource considerations are particularly important in the effective implementation of strategic plans. Care should be taken to exercise effective leadership and motivation.
• These then are the three elements of the process or framework of strategic planning and management. Again, it should be emphasised that the elements can be seen as a number of interlinked issues or decisions rather than a series of separate sequential steps.