CONCERNS OF STRATEGIC PLANNING
We are discussing here the major issues that strategic planning addresses and its main concerns.
First, strategic planning is concerned with the future or the long-term dynamics of the firm. Second, it is concerned with growth:
* Direction of growth
* Extent of growth.
* Pace of growth.
* Timing of growth.
Third, it is concerned with environment, the fit between the enterprise and its environment.
Fourth, it is concerned with the basket of businesses the firm should have. More specifically, it is concerned with the changes / additions / deletions to the firmâ€™s product-market posture.
Fifth, strategy is its concern, not the nuts and bolts of routine tasks. Growth priorities, choice of corporate strategy and choice of business level / competitive strategy are its concerns.
Sixth, strategic planning is meant to equip the organization with capabilities needed to face uncertainties. In other words, creation of core competencies and competitive advantages is its concern.
And finally, integration is its concern; a particular function is not its concern. It involves the top management task of taking the business forward. It views the organization / business in its totality. It is an integrative task.
Strategic Planning Tackles Four Main Issues
We can suitably group the concerns listed below and say that strategic planning tackles the following four issues:
* Purposes and mission.
* Choice of businesses
* Course of action for achieving the objectives.
Bullet points given below explain in a nutshell the major concerns of strategic planning.
Major Concerns of Strategic Planning:
* Future- Long-term dynamics is its concern; not day-to-day tasks.
* Growth- Direction, extent, pace and timing of growth
* Environment â€“ The fit between the business and its environment.
* Business Portfolio- Productâ€“market scope and postures.
* Strategyâ€”Strategy is its concern; not the operational activities.
* Integration- Integration of all management functions is its concern; not a particular function.
* Creating core competencies/ competitive advantages. Creating long-term, sustainable organizational capability is its concern.
* Corporate strategy- In one word, corporate strategy is its concern.
We have seen that the central concern of strategic planning is to spell out the growth direction for a firm and to help it achieve the intended growth. In fact strategic planning provides the firm with an objective-strategy design for growth. The well-known expert and author on strategy, Igor Ansoff, explained this subject in his book Corporate Strategy. According to him, strategic planning provides a firm with an easily discernible, clear cut, objective-strategy design, which, in turn, gives the require direction. The objectives strategy design actually amounts to a blueprint for management action. It contains the following elements.
* Growth objectives of the firm, which essentially clarify the performance level and the profitability which the firm seeks to achieve during a given period.
* Product market scope of the firm, which specify the business / market the firm will enter / stay with.
* Growth vector which will indicate the direction in which the firm will move in its product market posture; whether it will pursue market penetration, market development, product development or diversification.
* Synergy the strength that emerges from the linkages / joint effects, between the firm and its new product / market selection.
The objective-strategy design provided by strategic planning spells out these five elements operationally i.e. in a manner readily useable for management decision and action. In fact, these five elements, growth objectives, product market scope, growth vector, competitive advantage and synergy, describe the corporate growth strategy of a firm.
It is this corporate growth strategy that delineates what the different business units of the corporation are supposed to do. And here lies the link between corporate-level strategic planning and business-level marketing planning.