Strategic Planning

Pr of. GUR U P RAS AD

FACUL TY ME MB ER
IN C GUN TU R
pgp4149@gmail .c om
 Strategic Planning

Strategic planning is the process

of deciding on the programs
that, the organization will
undertake and the approximate
amount of resources that will be
allocated to each program over
the next several years.
Strategy Formulation Strategic Planning

Add new product line Understand the market needs

Analyse the market
Conduct feasibility study for new product line

Increase the profitability Increase sales

Reduce the costs
Expand market operations
Advertise more
Change the methods of production

Improve the customer relations Improve the quality

Increase after sale services
Improve the brand loyalty
Use customer friendly marketing methods
Improve the channels of distribution

Improve the company image Increase charitable spending

Improve employees morale
Meri ts of str ategic
pl annin g

• Framewo rk fo r budget
• A Ma nagement Deve lo pme nt
Tool
• mechanism to fo rce ma nagers
to th in k fo r lo ng run
• Help in a li gning m anagers
towa rd s th e lo ng-term d ire ctio n
of the c ompany
• Framewo rk fo r short -run a ctio ns
Limit ations of
st ra tegic Pla nning
• A form filling bureaucratic exercise
• it may consume the valuable time
of the executives who participate
in strategic planning.
• strategic planning is worse if the
task is assigned to a separate
department
Organizational conditions
needed for SP
• The business must be large enough. In
too small organisations, Strategic plan
need not be so elaborative and in written
form. An oral expression of strategic plan
is enough.
• The management must consider it as
important for their business.
• The business must be relatively in
uncertainties to some extent. It is not
suitable for the businesses, which are in
either certainties or completely
uncertainties.
Co nte nts o f St ra te gic
Pla n
• the time period
• programmes
• Approximate amount of
resources
Who should make
strategic plan?
• Functional Mangers?
• Corporate staff?
• Controller organization?
Analyzing Proposed
Programs
• Capital Investment Analysis
• Why NPV and IRR fail?
• Avoiding Manipulations
• Organization fro analysis
Analyzing ongoing
programs
• Value Chain Analysis
• Linkage with suppliers
• Linkage with customers
• Process Linkage within the value
chain of the firm.
Applic ations of A ctivity B ased
Cost in g
Strategic Planning
Process
• Reviewing and updating strategic
plan from last year.
• Deciding on assumptions and
guidelines.
• First iteration of the new strategic
plan.
• Analysis.
• Second iteration of the new
strategic plan.
• Review and approval.