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Asynchronous Activity 02
Asynchronous Activity 02
Asynchronous Activity 02
Strategic planning is the process through which an organization's executives outline their vision for the
future and determine the aims and objectives of their organization. The process involves determining the
order in which those objectives should be achieved so that the organization may achieve its stated vision.
Strategic planning is often used to reflect mid- to long-term goals with a life duration of three to five
years, however, it can be extended. This is distinct from business planning, which often focuses on short-
term, tactical goals, such as budget allocation. A business plan's time span might range from months
to years.
1. Define your vision: Your organization's vision statement is an aspirational description of its
future goals. It serves as a guide for current and future actions, setting the long-term direction and
providing a clear objective for your organization. This describe your organization's future goals,
serving as a long-term guide and clear objective.
2. Create your mission: Your mission outlines how you plan to achieve your vision. It provides the
"why" and "how" for your organization. A well-defined mission statement aligns your team's
efforts toward a common goal. This explains how you'll achieve the vision, providing the "why"
and "how" to unite your team.
3. Set your objectives: Objectives are specific, measurable goals that an organization aims to
achieve within a defined time frame. They help assess progress toward your mission and vision.
This will define specific, measurable goals to track progress towards your mission and vision.
4. Develop your strategy: A strategy is a long-term plan that specifies how your organization will
achieve its objectives. It involves detailed plans, actions, and considerations tailored to your
organization's needs and market context. This will Create a detailed long-term plan tailored to
your organization's needs and market.
5. Outline your approach: The approach outlines the methodology for executing your strategy. It
answers key questions and guides your organization in executing the strategic plan. This will
describe how you'll execute the strategy, answering key questions and guiding the process.
6. Get down to tactics: Tactics are specific initiatives, projects, or programs that execute your
strategic plan. They are the actionable steps that make your strategy a reality. Needed to
implement specific actions and projects to bring your strategy to life.
d. AFN Equation
AFN is a method of determining how much extra financing will be required so that the business can
realistically assess whether or not it will be able to produce the additional money and hence attain the
higher sales level.
The simplified formula is: AFN = Projected increase in assets – spontaneous increase in liabilities –
any increase in retained earnings. If this value is negative, this means the action or project which is
being undertaken will generate extra income for the company, which can be invested elsewhere.
Sources:
https://www.techtarget.com/searchcio/definition/strategic-planning
https://spur-reply.com/blog/the-6-elements-of-effective-strategic-planning#:~:text=Read%20ahead
%20to%20learn%20more,strategy%2C%20approach%2C%20and%20tactics.
https://quizlet.com/80331676/planning-and-forecasting-flash-cards/
https://corporatefinanceinstitute.com/resources/accounting/retention-ratio/#:~:text=The%20retention
%20ratio%20(also%20known,out%20to%20investors%20as%20dividends.
https://learn.saylor.org/mod/page/view.php?id=59154#:~:text=The%20simplified%20formula%20is
%3A%20AFN,which%20can%20be%20invested%20elsewhere.
https://york.ie/budget-vs-forecast-whats-the-difference/#:~:text=The%20difference%20between
%20budget%20and,results%20of%20your%20strategic%20plans.