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Lesson 5

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Lesson 5

Uploaded by

D A M N E R A
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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STRATEGIC PLANNING

LESSON 5
Objectives:
• At the end of the lessons, the students should be able to:
1. Explain why and how small business must create a
competitive advantage in the market.
2. Develop a strategic plan for a business using the steps in
strategic planning.
Strategic Planning
• refers to the systematic process of envisioning a desed
future and translating this vision into broadly defined goals
and objectives, which involves formulation of strategies
and allocation of resources to achieve those objectives.
Competitve Advantage
• refers to the aggregation of factors that differentiate a
small business from its competitors and gives ita unique
and superior position in the market.
Process of Strategic Planning
I. Development of a Clear Vision and Translating It into a
Meaningful Mission Statement
• Vision - refers to how the entrepreneur sees the company
he/she is about to put up in the future.
• Mission Statement - refers to the basic description of the
fundamental nature, rationale, and direction of the firm.
Elements of a Mission Statement
• The purpose of the business
• The business the entrepreneurship is in
• The values of the entrepreneurship
Process of Strategic Planning
II. Analysis ofhe Internal and External Environment of the
Business.
SWOT Analysis - is an entrepreneurial tool used in
assessing the firm’s internal strengths and weaknesses and
the opportunities and threats in the external environment.
SWOT ANALYSIS
• Strength - refers to a skill, competence, valuable
organizational resource or competitive capability, or an
achievement that gives the firm a market advantage.
• Weakness - refers to something that the company lacks
or does poorly or a condition that puts it at a
disadvantage.
• Opportunity - refers to the chance offered by the external
environment to improve the firm’s situation significantly.
• Threats - refers to a challenge posed by an unfavorable
trend or development in the external environment that
Process of Strategic Planning
III. Formulation of Business Goals
Goals - are broad and long-term attributes that the business
seeks to accomplish
Process of Strategic Planning

IV: Strategy Formulation -


Strategy (Courses of Action)
is a designed plan which indicates how the entrepreneur
will attempt to accomplish the goals with the resources
available.
It defines the means on how the vision, mission, goals nd
objectives will be attained.
Process of Strategic Planning

V: Business Targets or Objectives


Strategic Objectives - refes to the specific performance
targets that the entrepreneurship hopes to accomplish. it
states how the mission will be realized in a specific manner.
In formulating an objective, it should follow the SMART + W
Principle.
SMART + W Principle
• Specific - precise and spells out exactly what the entrepreneur
wants to accomplish.
• Measurable - quantifiable based on a scale of measuring the
business’ performance.
• Attainable - within the reach of the entrepeneur or the business
• Realistic - focused on the outcome rather than the means of
achieving them
• Time-Boun ded/Timely - state when outcome is expected to be
acheived and evaluated.
• Written Down - recorded to ensure the objectives set would not
forgotten and to serve as guide in pursuing the business.
Process of Strategic Planning

VI: Strategy Execution Through Highly Defined Tactics


This is the stage when the high level plan is translated
into more operational planning and action items. In this
stage of the strategic planning process, specific methods or
tactics are identified.
Process of Strategic Planning

VII: Evaluation
An evaluation plan should always be measured by
evaluating the outcomes of the activities stated in it.
Through evaluation, the management or entrepreneur is
able to identify the sustainability of the strategic plan as well
as the efficiency and effectivity of the plan in carrying out
the firm’s activity in attaining its goals, mission and vision.
GSOT Plans
Goal • a broad primary outcome

Strategy • the approach you take to


achieve a goal
Ojectives • a measurable step you take to
achieve a strategy

Tactics • a tool; you use in pursuing an


objective associated with
strategy
Sample of GSOT Planning of the Business
Goal Strategy Objecives Tactics
Develop an Reduce the company’s Decrease the Attrition Offer kucrative
employee-oriented training expenses by rates of newly-hired compensation package
company culture that lowering the rate f employees by 50% in 3 to newly-hired
emphasizes quality attrition turn-over of years employees; conduct a
performance with employees formal orientation to
efficient utilization of newly-hired employess;
company resources conduct an intensive and
extensive training that
will expose4 the
newly-hired employees
to the different tasks they
will be performing.
Fundamentals Strategies for Small
Business
1. Flexibility strategy
2. Strategy of effectiveness as a higher priority
3. Strategy of starting simple
Strategy Concerns of Small Business
• New Business - refers to businesses operated for the first time by
the small business operator.
a. acquiring an existing business
b. organzing a new business
c. buying a franchise
• Old Business
a. Segment Markets
b. fficient use of Research and Development
c. Think Small - profits and specialization vs sales growth and
diversification
Importance of Preparing a Strategic Plan
1. it Allows organizations to be proactive rather than
reactive
2. It sets up a sense of direction
3. It increases operational efficiency
4. It helps to increase market share and profitablity
5. It can make a business more durable

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