Chapter 7: Strategic Planning Part 1

Question 1

Strategic Planning

definition

Answer 1

• Outlines a company’s direction and priorities
• For management to make decisions about the allocation of resources and assets
• Build commitment to the agreed upon goals and objectives

Question 2

Elements:

1. Situation Analysis

Answer 2

• Internal and external environments are assessed

- Can be conducted using SWOT and PEST

Question 3

Elements:

2. Mission Statement

Answer 3

• Communicate to all stakeholders the core purpose and values of the company
• Could be in a form of vision statement or the statement of cooperate philosophy

Question 4

Elements:

3. Goals & Objectives

Answer 4

• Goals are set for long term, while objectives are set for short and medium term
• Objectives include the KPI business will use to measure progress towards the goals
• The SMART process can be used to set goals

Question 5

Elements:

4. Strategies

Answer 5

• Plan of actions to achieve objectives
• Developed for operation, marketing, competition and expansion.
• To guide the development of action plan: Detail what employees need to do in short term to implement the strategies and achieve the objectives.

Question 6

Elements:

5. Review

Answer 6

• Issues are identified and plans are made for any corrective action
• Occurs at the end of the timeline

Question 7

Key Features:

1) Mission and Objectives

Answer 7

• Outline its purpose, what it wants to achieve and how it is different to its competitors
• Use SMART process

Question 8

Key Features:

2) Environment Scan

Answer 8

• A scan that researches and analyses the business environment
• To identify and anticipate factors that affects a business’ growth and success
• Internal and external environment is scanned for detecting early signs of opportunities and threats that may influence current and future plans

Question 9

Key Features:

3) Strategic Formulation

Answer 9

• Aimed at improving business performance and profits through gaining competitive advantage to succeed in the market

Question 10

Key Features:

4) Strategic Implementation

Answer 10

• Put strategic plans into action
• Strategy is more likely to work if it builds on and aligns with existing systems and culture.
• Everyone in the company must understand their role and responsibilities to achieve the overall goals.

Question 11

Key Features:

5) Evaluate and Control

Answer 11

• To measure performance and review operations regularly, and make corrective actions to identified problems
• Evaluate progress by comparing results to the planned targets and timeframes.