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Strategic Planning Guide for Managers: SWOT Analysis and Planning Process

Learn about levels and types of planning, time horizons, types of plans, the importance of planning, scenario planning, determining mission and goals, formulating strategy, the SWOT analysis, the Five Forces Model, corporate-level strategies, vertical integration, business and functional level strategies, and planning and implementing strategies effectively as a manager.

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Strategic Planning Guide for Managers: SWOT Analysis and Planning Process

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  1. The Manager as a Planner Developing a SWOT analysis

  2. The Planning Process • Planning-identifying and selecting appropriate goals and courses of action for an organization • Strategy-The cluster of decisions that managers take to help a company reach its goals • Mission-a broad declaration of an organization’s purpose that identifies the companies products and customers and distinguishes the organization from the competition

  3. Three Steps in Planning • Determine the organization’s mission and goals • Formulating strategy-analyze the current situation and develop strategies to achieve the mission • Implement strategy-allocate resources between groups to ensure the strategy is achieved

  4. Levels and types of Planning • Corporate Level Plan-top management’s decisions regarding which industries, and national markets a company intends to compete • Business Level Plan-developing long term goals indicating how a division intends to compete against its rivals in the industry • Functional Level Plan-indicates how a function intends to achieve the goals of a division or business level

  5. Time Horizons of Plans • Long Term Plans-5 years or more • Intermediate Plans-1-5 years • Short term Plans-less than one year • Corporate and business level plans are long and intermediate • Functional plans are short to intermediate • Most organizations have a rolling planning cycle

  6. Types of Plans • Standing Plans-use in programmed decision situations such as policies, rules, or standard operating procedures (sop) • Single use plans-developed for a one time, non programmed issue

  7. Why Planning is Important • Planning ascertains where the organization is now and where it will be in the future • Participation-all managers are involved in setting goals • Sense of direction-sets goals and strategies for managers • Coordination-how the system fits within the company • Control- who is responsible for achieving goals

  8. Scenario Planning • Scenario Planning (Contingency Planning)-generating multiple forecasts of future conditions followed by an analysis of how to respond to each condition • Effective Plans have • Unity=1 plan • Continuity-ongoing plan • Accuracy-factual information • Flexible-adjust plans as necessary

  9. Determine Mission and Goals • Define the business-Who are customers? What needs are being satisfied? • Establish major goals-provides a sense of direction and stretches the organization to higher levels of performance. Goals must be challenging but realistic

  10. Formulating Strategy • Managers analyze the current situation to develop strategies for achieving the mission • SWOT analysis- a planning exercise in which managers identify company strengths, weaknesses, and external opportunities and threats

  11. Five Forces Model • Level of competition • Potential for Entry • Power of suppliers • Power of customers • Substitutes

  12. Formulating Corporate Level Strategies • Concentration in a single business • Related diversification • Unrelated diversification • International expansion • Global-selling the same product in all countries • Multidomestic-customizing products to specific national conditions

  13. Vertical Integration • Vertical Integration-allowing an organization to create value by producing its own inputs or distribution its own products • Backward integration-seeks to reduce its input costs by producing its own inputs • Forward integration-distributes its own outputs to lower distribution costs

  14. Business and Function Level strategies • Business-low cost or differentiation • Functional-seeks to have each department add value by lowering costs or adding new value by: • Attaining superior efficiency • Attaining superior quality • Attaining superior innovation • Attaining superior responsiveness to customers

  15. Planning and Implementing Strategy • Allocate implementation responsibility to appropriate individuals • Draft detailed action plans • Establish a timetable for implementation • Allocate resources • Hold specific groups responsible for the attainment of goals

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