F3023 CYBERPRENEURSHIP Chapter 3 Manage a Business

3.2 STRATEGIC PLANNING

What is Strategic Planning?

• Process to establish priorities on what you will accomplish in the future
• Forces you to make choices on what you will do and what you will not do
• Pulls the entire organization together around a single game plan for execution
• Broad outline on where resources will get allocated

Why do Strategic Planning?

• If you fail to plan, then you plan to fail – be proactive about the future
• Strategic planning improves performance
• Counter excessive inward and short-term thinking
• Solve major issues at a macro level
• Communicate to everyone what is most important

Strategic planning use two business analysis techniques

PEST Analysis SWOT Analysis

• Political • Strengths

• Economic • Weaknesses

• Social • Opportunities

• Technological • Threats

3.2.2 PEST Analysis

The PEST Analysis or model is another tool, specialized and focused on the external
environment and important factors "out there" that can affect present and future
business.

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Pn.Noriah binti Razali
JTMK@PSMZA
F3023 CYBERPRENEURSHIP Chapter 3 Manage a Business

The political arena has a huge influence upon the regulation of businesses, and
the spending power of consumers and other businesses. You must consider issues
such as:
Political 1. How stable is the political environment?
2. Will government policy influence laws that regulate or tax your business?
3. What is the government's position on marketing ethics?
4. What is the government's policy on the economy?
5. Does the government have a view on culture and religion?

Marketers need to consider the state of a trading economy in the short and long-
terms. This is especially true when planning for international marketing. You need
to look at:
Economic 1. Interest rates.
2. The level of inflation Employment level per capita.
3. Long-term prospects for the economy Gross Domestic Product (GDP) per
capita, and so on.

The social and cultural influences on business vary from country to country. It is
very important that such factors are considered. Factors include:
1. What is the dominant religion?
2. What are attitudes to foreign products and services?
Social 3. Does language impact upon the diffusion of products onto markets?
4. How much time do consumers have for leisure?
5. What are the roles of men and women within society?
6. How long are the population living? Are the older generations wealthy?
7. Do the population have a strong/weak opinion on green issues?

Technology is vital for competitive advantage, and is a major driver of

globalization. Consider the following points:
1. Does technology allow for products and services to be made more cheaply and
to a better standard of quality?
Technological 2. Do the technologies offer consumers and businesses more innovative products
and services such as Internet banking, new generation mobile telephones, etc?
3. How is distribution changed by new technologies e.g. books via the Internet,
flight tickets, auctions, etc?
4. Does technology offer companies a new way to communicate with consumers
e.g. banners, Customer Relationship Management (CRM), etc?

Prepared by: 2
Pn.Noriah binti Razali
JTMK@PSMZA
F3023 CYBERPRENEURSHIP Chapter 3 Manage a Business

3.2.3 SWOT Analysis

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of
planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses,
opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and
threats are external factors.

Internal Factors

Strengths Weaknesses

Opportunities Threats

External Factors

In SWOT, strengths and weaknesses are internal factors.

For example:

Strength could be:

• Your specialist marketing expertise.

• A new, innovative product or service.
• Location of your business.
• Quality processes and procedures.
• Any other aspect of your business that adds value to your product or service.

Weakness could be:

• Lack of marketing expertise.

• Undifferentiated products or services (i.e. in relation to your competitors).
• Location of your business.
• Poor quality goods or services.
• Damaged reputation.

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Pn.Noriah binti Razali
JTMK@PSMZA
F3023 CYBERPRENEURSHIP Chapter 3 Manage a Business

In SWOT, opportunities and threats are external factors.

For example:

Opportunity could be:

• A developing market such as the Internet.

• Mergers, joint ventures or strategic alliances.
• Moving into new market segments that offer improved profits.
• A new international market.
• A market vacated by an ineffective competitor.

Threat could be:

• A new competitor in your home market.

• Price wars with competitors.
• A competitor has a new, innovative product or service.
• Competitors have superior access to channels of distribution.
• Taxation is introduced on your product or service.

Prepared by: 4
Pn.Noriah binti Razali
JTMK@PSMZA