Strategy and Planning Essay

Strategy and planning essay 1. Executive Summary: In this research paper we will briefly discuss about the essential factors that involved in strategic planning and decision making and the change management and the importance of change management. The essay is all about the important strategic tools which can be implemented in order to get an excellent strategic plan. In conclusion the back bone of any organisation which tends to become a success lies upon each and every decision they make and they must take into consideration the forces which act on the macro environment and in the micro environment of the organisation. . Introduction Planning and Strategy are the essential factors which act as the back bone of an organisation. A company with an excellent strategic planning and change management capabilities is sure to get a concrete market stake in this dynamic business environment. Some organizations tend to leave the strategic part of business planning and end up in bankruptcy. S trategy is the way to achieving short and long term goals. Planning is the means of achieving the goals through strategy while exploiting the available resources. 3. Main Body: (a) Strategy and Planning: The term strategy is derived from the Greek word strategos which means the highest ranking army general. So we can derive from these words the importance of strategy and the out come of strategy. Strategy is a tool which helps to create an advantage over the competition in the dynamic business environment. To create a strategic plan for an organisation there are certain constraints which are to be followed in order to achieve the optimum benefits from the decisions we make through strategy and planning.The maximum exploitation of our resources is the key to advantage over the competitors. Marketing is one of the main areas in which a well versed strategic plan can make the organisation to attract customers here the way in which we describe the organizations motives, goals and the de dication to the customers reflect in our adverts. So, cleverly placing the right factors in the right place is a challenge in the strategic planning decision making.In this ever changing business environment the only way of survival of an organisation depends upon the decisions it makes. Thus strategic planning is the key factor to success. In this research we will briefly discuss about the tools of strategy and the outcomes of implementing these tools in an organisation. We will discuss about SWOT analysis, PESTEL analysis and Potter's Five Force. 3 (b). SWOT Analysis SWOT analysis is one of the tools in strategic planning and decision making.This tool helps us to judge the organizations position in the business environment. SWOT stands for Strength, Weakness, Opportunities and Threats. Strength – The organizations factors which are most influential with respect to customers, market share, and brand value and so on. The strength of an organisation maybe its good will, an exc ellent customer relationship management and many other sensitive factors which lies on the organizations side. Weakness – The things which are an advantage of the competitor and a disadvantage to our organisation.The weakness factor may depend upon our organizations own business policies and or work ethics which binds us to a corner, the competitors takes advantage of this issue and exploit the opportunity but fine tuning our strategy and decision making will bring in a drastic change. Opportunities – The chance in which all the things fall in line for our organisation to exploit and to make a profit of it is the definition for opportunities. Opportunities can occur due to a change in trend of customers, brand switching an so on.It is wise for an organisation to make use of such opportunities. Threats – The main and most important factor is the threats from rivals and competitors. If an organisation fails to with stand the threats from the competitors then it wi ll surely end up in bankruptcy, the competition may come up with innovative ways of marketing and attracting customers so it is our bounded duty to over come the competitors by creating innovative ways of marketing through strategic planning.Example for SWOT analysis – Soft drink giant: Coca-Cola Strengths One of the most successful organisations of all time. The brand value of Coca-Cola is worth more than $68 million in 2009. the company manages its products over 200 countries with over 700 products which is a gigantic goal to achieve but maintaining it as the leader of its kind is still another battle. People tend to be faithful to the Coca-Cola brand because of its one main product the cola drink.So a wide variety of different products from the company with the same brand name tends to market the products for itself. (www. interbrand. com) Weaknesses The Coca-ColaCompany products are beverages so the main weakness for them is that they have this lobby of beverage segment a nd this is might be their weakness because in the long run they might hit the ground if any other company produces a better beverage. And nowadays people tend to make choices more often than in the past so it is a vulnerable area to be looked upon! OpportunitiesPeople are concerned about their health now more than ever so the introduction of Coke Zero a new product from the Coca-ColaCompany is catching up a considerable amount of market share because of its new distinct taste without added sugar in some countries but basically it's a new drink with zero calories, the company claims!. The company is exploiting the current trend of health criteria. Threats The main competitor of Coca-ColaCompany is the PepsiCo Inc, the Pepsi Cola Company introduces new products in response to the Coca-ColaCompany. The Coca-ColaCompany is trying very hard to cope up with the situation. During 998 the PepsiCo Inc managed to out smart the company. So without the proper strategic planning PepsiCo will soo n go beyond the Coke's victory 3(c). The PESTLE Analysis The most important tool of strategic planning is the PESTEL analysis. The PESTEL analysis is a tool which helps us to judge our position in the market with respect to the macro environment. PESTLE stands for P – Political Forces, E – Economical Forces, S -Social Forces, T -Technological Forces, L – Legislative Forces and E – Environmental Forces. These forces influence the overall performance, market value, finance and customer relationship of the company.We will briefly discuss about the PESTEL forces one by one by implementing into an organisation. Example : Integrated Electronics (INTEL) Semiconductors. The Intel Semiconductors are the producers of the famous Intel microchips which literally runs the computer industry but with some rivals such as AMD Inc (Advanced Micro devices). Here we will apply the PESTEL analysis to know the factors that are influencing the Intel semiconductors. Political : The implementation of new taxes and the internationalism of the products tends to make the company to adhere to strict rules in each country which the company is ventured on.So Intel is focusing upon its new products onto buyers and not on further research and development because of the political pressure around the organisation. Economic: The semiconductor industry is in rise. So, the financial status of the company is rising due to a smaller amount of competitors there is lower amount of threats so the economic factor of the company is in concrete position as of now. Social: The company is present in an ever changing dynamic business environment so it has to be sensitive to changes that occur in the environment and then adapt to the changes that takes place.Technological: The semiconductor industry is ever growing in rapidly increasing speed. So, the technological advancements of the industry must be up to date due to high growth ratio of processors which are used in computers acr oss the globe. The research and development team comes up with new innovative ideas to integrate the previous processing unit into the new one with advanced technology so the computation power increases more than double the time the predecessor microchip used to compute. Legislative:The legal factors are important factors of the company because every country that the company venture into must strictly adhere to that particular country's rules and regulations. Environment: Being a semiconductor company the company must look after environmental issues which affect the world so the semiconductor devices must be environmentally friendly and recycling of the devices plays a vital role in the environmental factor. The company has a good background of making environmentally friendly chips and recycling units so the environmental issue is under control. (http://ivythesis. typepad. com) 3(d). Porter's Five Forces:The porter's five forces is a business strategy tool which is used to analyse t he position of a company and assessing its strength with respect to the competitors in this case new entrants and their impact in this ever changing environment. The porter's five forces are: Existing rivalry among firms Threat of new entrants determinants of supplier power Determinants of buyer power Threat of substitute products Example: AIRBUS The porter's five applied to the Airbus aviation company who have been the most influential carriers of all time apart from Boeing. These two major aircraft companies were literally in a fight for gaining the considerable mount of market share. Since the introduction of Airbus A380 the Boeing Company has lost lot of customers. The new entrant in our case the A380 is so much advanced than the legendary Boeing 747 which literally ruled the skies. The Boeing 747 was a fuel efficient and economically well versed passenger and good carrier aircraft but the major flaw in the Boeing decision making is that it was not concentrating on the future of the aircraft but it produced a wide variant of Boeing 700 series but the cleverly devised strategic plan of Airbus was a nightmare to the Boeing corporation.The A380 has an excellent performance with regardless of its massive size the jumbo jet can people double the time the Boeing 747 used to carry. Since the aviation industry has only fewer concentrations of rivals the market share is huge compared to other industries. So with the new A380, Airbus has a considerable amount of stake in the airline industry. But Boeing's answer to A380 is the new 787 dreamliner. Which is more fuel efficient but in the case of size the A380 outsmarts the Boeing. Importance of Change: The change management in an organisation is the most important factor which influences the future of an organisation.It describes an strategic approach in modifying or altering an organizations internal factors such as teams, individuals etc. there are different ways to achieve the change in an organisation by collabora tive – which is done by providing workshops and seminars explaining about the change to the people working in the organization. Consultative – the people are informed about the change and the feedback of the change is taken into consideration. Directive – the members of the staff are informed about the details of the change and the sensitivity of the change.Coercive – the members are forced to follow the change. Example of Change: The acquisition of Iberia by British Airways The British Airways acquired the Iberia for $7 billion and it made the third largest airline in the world. The member of the staff was quickly adapted to the change in different management team. The Iberia staff members were given a change management session on order to cope up with the new acquisition. The acquisition made the stock holder's value to increase and they were given a 55 percent of the new airline's share. 4. Conclusion:We have so far discussed about some of the Strategi c planning tools and the ways in which they can be exploited. And in conclusion we can say that the way in which we approach the organisation with the necessary tools and strategic planning will make a gigantic impact on the organisation in the present and in the future. In this ever changing business environment the challenge for each organisation is to identify the needs of the customers and to create an appropriate strategic plan to approach the problem which will provide the optimum results which can benefit the customers as well as the organisation. . References SWOT Analysis, [online], Available http://www. marketingteacher. com/Lessons/lesson_swot. htm PESTLE Analysis, [online], Available http://rapidbi. com/pestle/Introduction-to-the-PESTLE-analysis-tool. html Coca-Cola Case Study, [Online], Available http://www. interbrand. com/best_global_brands. aspx http://finance. mapsofworld. com/brand/value/coca-cola. html Intel case Study, [Online], Available http://ivythesis. typepa d. com/term_paper_topics/2009/09/intel-case-study. html Read more: http://www. americanessays. com/study-aids/free-essays/management/strategy-and-planning. php#ixzz2OPwRLxoO