The basic steps involved in the strategic planning process include
1. Vision, Mission and Objectives of the Company
Identifying and defining the company’s vision , mission and objectives is the starting point of strategic planning process. An organizational vision is the answer to the question “ what do we want to create” the corporate vision has the potential power to focus the collective energy of insiders and to give outsiders a better idea of what an organization really is? Mission relates the company’s existence with the needs of the society. Mission is defined as “an enduring statement of purpose that distinguishes one company from other similar companies. A mission statement is a declaration of an organization’s reason for being. Accomplishment of mission of an organization requires the formulation of a number of objectives. Objectives are ends towards which activity is aimed. Goals are derived from objectives. They are precise and is expressed in clear and specific terms.
2. Internal Environmental Analysis
Internal environmental factors include functional areas , organizational resources, organizational structure and stake holders. Analysis of these factors reveals the company’s strengths and weaknesses (SW analysis) example, skilled, committed and smart employees is a strength and poor financial position is the weakness of the company.
3. External Environmental Analysis
External environmental consists of STEPIN via Social, Technical, Economic, Political, International and natural factors. External environment analysis reveals the opportunities provided by and the threats posed by (OT analysis ) the environment. For example, the low per capita income in India provides demand for low priced products. This factor poses threat for high priced products in Indian market.
4. Revise Organizational Direction
A thorough scanning of environment both internal and external reveals organization’s strengths, weaknesses, opportunities and threats (SWOT) This can often help management to reaffirm or revise its organizational direction, if necessary consequent upon environmental threats.
5. Formulation of Alternative Strategies
All possible alternative strategies are formulated based on the available options and in the light of organizational analysis and environmental analysis.
6. Selecting the Best Strategy
It involves the selection of best strategy out of SWOT analysis.
7.Strategy Implementation
The next logical step is to put the strategy in action. The strategy is to be implemented in an integrated way.
8. Strategic Evaluation and Control
Implementation of the strategy may not automatically result in goal achievement. The series of actions are to be monitored and evaluated in order to ensure that the process would be implemented as per the plan. It includes establishment or determination of standard performance , measurement of actual performance , compare the actual performance with the standard performance and finally checking the actual performance equal to standard by making effective control and corrections.