c
 

    

Conceptually Strategic Planning is deceptively simple; analyze the current and expected future
situation, determine the direction of the firm, and develop means for achieving the mission. In
reality this is an extremely complex process that demands a systematic approach for identifying and
analyzing factors external to the organization and matching them with the firm¶s capabilities.

 
  



c
  

c
 : Derived from Greek Word p
 p, meaning ³ 
ë
c
 refers to the determination of the purpose (or mission) and the basic long-term objectives
of an enterprise, and the adoption of course of action and allocation of resources necessary to
achieve these aims. Therefore, objectives are a part of the strategy formulation.

are general statements or understandings that guide managers¶ thinking in ecision making.
They usually do not require action but are intended to guide managers in their commitment to the
decision they ultimately make.
Strategies and policies must be put into practice by means of plans, increasing in detail until they
get down to the nuts and bolts of operation.  then, are the action plans through which
strategies are executed. c
  

   

c
    


1.V !  
 
  
: Various Inputs (People, Capital, Management and Technical
skills, others) including goals input of claimants (Employees, Consumers, Suppliers,
Stockholders, Government, Community and others)need to be elaborated.
2.V ! 
 : Formulation of strategy requires the evaluation of the attractiveness of
an industry by analyzing the external environment. The focus should be on the kind of
compaction within an industry, the possibility of new firms entering the market, the
availability of substitute products or services, the bargaining positions of the suppliers, and
buyers or customers.
3.V è 



: Enterprise profile is usually the starting point for determining where the
company is and where it should go. Top managers determine the basic purpose of the
enterprise and clarify the firm¶s geographic orientation.
4.V 
  
   

è  : The enterprise profile is shaped by people,
especially executives, and their orientation and values are important for formulation the
strategy. They set the organizational climate, and they determine the direction of the firm
though their vision. Consequently, their values, their preferences, and their attitudes toward
risk have to be carefully examined because they have an impact on the strategy.
5.V Ñ
! 

"Ñ#

#  c
 !  : Mission or Purpose is the
answer to the question: What is our business? The major Objectives are the end points
towards which the activates of the enterprise are directed. Strategic intent is the commitment
(obsession) to win in the competitive environment, not only at the top-level but also
throughout the organization.
6.V
  $ 
è 
è 

 : The present and future external environment
must be assessed in terms of threats and opportunities.
  .V ! 
è 

 : Internal Environment should be audited and evaluated with respect
to its resources and its weaknesses, and strengths in research and development, production,
operation, procurement, marketing and products and services. Other internal factors include,
human resources and financial resources as well as the company image, the organization
structure and climate, the planning and control system, and relations with customers.
8.V °
 
 
 c
 : Strategic alternatives are developed on the basis of
an analysis of the external and internal environment. Strategies may be specialize or
concentrate. Alternatively, a firm may diversify, extending the operation into new and
profitable markets. Other examples of possible strategies are joint ventures, and strategic
alliances which may be an appropriate strategy for some firms.
9.V è 
 %

c
 : Strategic choices must be considered in the light of
the risk involved in a particular decision. Some profitable opportunities may not be pursued
because a failure in a risky venture could result in bankruptcy of the firm. Another critical
element in choosing a strategy is timing. Even the best product may fail if it is introduced to
the market at an inappropriate time.
10.VÑ&c

'    !  
 

'  
  

  
c
 
(
 %


: Implementation of the Strategy often
requires reengineering the organization, staffing the organization structure and providing
leadership. Controls must also be installed monitoring performance against plans.
11.V%
     %
     : The last key aspect of the strategic
planning process is the testing for consistency and preparing for contingency plans.
)*cÑ

For many years, the SWOT analysis has been used to identify a company¶s strengths, weakness,
opportunities and threats. However, this kind analysis is static and seldom leads to the development
of distinct alternative strategies based on such an analysis. Therefore, the TOWS Matrix has been
introduced for analyzing the competitive situation of the company or even of nation leading to the
development of four distinct sets of strategic alternatives. The TOWS Matrix is a conceptual
framework for a systematic analysis that facilitate matching the external threats and opportunities
with the internal weaknesses and strength of the organization.
è 
$


1.V è 


  !": Current and future economic conditions, political and social
changes, new products, services and technologies. (considering risks)
2.V è 

 !": Lack of energy, competition. Also threat in current and future
economic conditions, political and social changes, new products, services and technologies.
! 
$


1.V ! 
c
  !c": Strength in management, operations, finance, marketing, R&D,
engineering.
2.V ! 
*+ !*": Weakness in management, operations, finance, marketing, R&D
and engineering.
c
 






 
1.V *c
 : It aims to minimize both weaknesses and threats and may be called the
³mini-minië strategy. It may require that the company, for example, form a Joint Venture,
retrench, or even liquidate.
2.V *c
 : It attempts to minimize the weakness and maximize the opportunities.
So it requires to develop those areas within the enterprise or acquire the needed
competencies from the outside.
 3.V cc
 : It is based on the organization¶s strength to deal with threats in the
environment.
4.V cc
 : This is the most desirable situation, in which company can use its
strengths to take advantage of opportunities. Indeed it is the aim of enterprise to move from
other position in the matrix to this one, if they have weakness they will strive to overcome
them, making them strengths. If they face threats, they will cope with them so that they can
focus on opportunities.
The strategy designer must prepare several TOWS Matrices at different point in time.

,



Ñ






  



This is simplified version of the matrix, shows the linkages between the growth rate of the business
and the relative competitive position of the firm. Business Growth Rate can be High or Low
similarly Relative Competitive Position can be Strong or Weak. This is developed for large
corporations and are too simple.
Strategies based on above four combinations are as follows:
1.V † 
Ñ
+: Weak market share and a high growth rate, usually require cash
investment so that they can become Stars
2.V c 
: The businesses in the high growth rate and Strong competitive position. They have
opportunities for growth and profit.
3.V %%
-: With strong competitive position and low growth rate, are usually well
established in market, and such enterprise are in the position of making their products at low
cost.
4.V °
: These are businesses with low growth rate and weak market share. These businesses
are usually not profitable and generally should be disposed of.

.Ñ#

/ 
c
  

For a business enterprise, the major strategies and policies that give an overall direction to
operations are likely to be in the areas of growth, finance, organization, personnel, public relations,
products or services, and marketing.


 

c
c
 :
Key questions in this area can be summarized as follows:
1. What is our business?
2. Who are our customers?
3. What do our customers want?
4. How much will our customers buy and at what price?
5. Do we which to be a product leader?
6. What is our competitive advantage?
 . Do we wish to develop our own new products?
8. What advantages do we have in serving customer needs?
9. How should we respond to existing and potential completion?
10. How far can we go in serving customer needs?
11. What profits can we expect?
12. What basic form should our strategy take?
Ñ
+  c
 :
These are design to guide managers in getting products or services to customers and in encouraging
customers to buy. They are closely related to product strategies; they must be interrelated and
mutually supportive. Marketing and Innovations are key factors for business survival. Key
questions in this area can be summarized as follows:
1. Where are our customers, and why do they buy?
2. How do our customers buy?
3. How is it best for us to sell?
4. Do we have something to offer that competitors do not have?
5. Do we wish to take legal steps to discourage competition?
6. Do we need, and can we supply, supporting services?
 . What are the best pricing strategies and policies for our operation?
8. How can we best serve our customers?
0


%
 c
 
At the top of the pyramid is the %



 1c
  i.e. overall strategy for a diversified
company. What industry company wants to compete? The second level in the hierarchy, 2 
c
  are developed, usually by the general manager of business unit. The purpose of the
business strategy is to gain a competitive advantage in particular area of product line. On the third
hierarchical level, $  
c
 !


" are developed. Thus, Strategies are devised
for department or other organizational units such as finance, production, marketing, service,
personnel and so on.

3


4! 
  5 
%
  c
 
Michael Porter at Harvard has suggested that strategy formulation requires an analysis
(attractiveness) of the industry and the company¶s position within that industry.
1.V ! 
 : Five forces of Industry Analysis are a. The competition among
companies. b. The threat of new companies entering in the market. c. Possibility of using
substitute product or service. d. bargaining power of the supplier. e. bargaining power of
buyers or customers. On basis of industry analysis a company may adopt generic strategy or
strategies.
2.V 
%
 (
c
 : This strategic approach aims at reductions in cost,
based to a great extent on experience. The objective is for a company to have low cost
structure when compared with that of its competitors.
3.V °
  
c
 : This strategy attempts to offer something unique in the industry
in respect to products or services.
4.V $
c
 !(
-%
 

°
  
": This strategy concentrates on special
groups of customers, a particular product line, a specific geographic region or other aspects
that become the focal point of the firm¶s efforts. This may be accomplished by low-cost
strategy, differentiation or both. In general company needs to choose a generic strategy and
should not ³get stuck in middleë
5.V 2   2 %
 


: This is a hybrid strategy that focuses on the
customers that want a differentiated product but a cost lower than that of its rivals.
6
  $

  
The most overlooked but the most essential step. This is establishment of, and the agreement by
managers and planners to utilize, consistent assumptions critical to plans under consideration.
Planning Premises are defined as the anticipated environment in which plans are expected to
operate. They include assumptions or forecasts of the future and known conditions that will affect
the operation of plans.
A forecast that are planning premises and forecasts that are translated into future expectancies can
be distinguished as in the first case, the forecast is a prerequisite of planning; in the second case, the
forecast is the result of planning. At the same time, plans themselves and forecast of their future
effects often become premises for other plans.
In practice, Environmental forecasting is much more complicated.
 



  



  
1.V This compels thinking ahead, looking to the future, and providing for it.
2.V Discover areas where necessary control is lacking.
3.V Participation throughout the organization helps to unify and coordinate plans.





   include economic, social, political/legal and technical.

One approach of forecasting is Delphi technique, in which experts are ask to forecast till
convergence of opinion begins to evolve.