Strategic planning

Essay by wade80University, Bachelor'sA-, May 2005

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Strategic Planning

In organisational development, strategic management and marketing, organisations employ strategic planning as a way to move toward their desired future states. It is the process of developing and implementing plans to reach goals and objectives. Strategic planning, more than anything else, is what gives direction to an organisation.


Most strategic planning methodologies are based on the STP process:

Situation - Where are we right now? How did we get here?

Target - Where do we want to be?

Path - How can we get there?

General Approaches

In general terms, there are two approaches to strategic planning:

1. The Industrial Organisation Approach is based on the economic theory and deals with issues like competitive rivalry, resource allocation, economies of scale assumptions - rationality, self interested behaviour, profit maximisation

Examples - M. Porter's 5 Forces Model & J. Barney's Resource Model

2. The Sociological Approach deals primarily with human interactions and the assumptions are - bounded rationality, satisficing behaviour, profit sub-optimality

Examples - the Peter Priciple


There are two ways of doing strategic planning:

1. Strategy as logical incremental steps which is a formal approach with 4 steps:

1. situation analysis including environmental scanning, internal resource assessment,

2. industry or market research, competitor analysis, and customer marketing research

3. strategy development including determining vision, mission, objectives, and strategum generation,

4. strategic plan including strategy specification and resource allocation

implementation, monitoring, adjustment, and control

2. Strategy as revolution

1. more a mind-set than a formal technique

2. not rule or ritual oriented, not reductionist, not reactive, not autocratic

3. identify the unquestioned beliefs in your industry and challenge them - Look for opportunities to re-write the rules of the industry

4. look for major discontinuities in technology, lifestyle, habits, and geopolitics, and embrace the change wholeheartedly - Do...