Strengths and weaknesses

Strategic planning

A strategy is a long term plan of action designed to achieve a particular goal, most often "winning". Strategy is differentiated from tactics or immediate actions with resources at hand by its nature of being extensively premeditated, and often practically rehearsed. Strategies are used to make the problem or problems easier to understand and solve.

The word strategy derives from the Greek word stratēgos, which derives from two words: stratos (army) and ago (for leading). Stratēgos referred to a 'military commander' during the age of Athenian Democracy.

Strategic management provides overall direction to the enterprise. “Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy regularly to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.”

Strategic or corporate planning involves drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives It is the process of specifying the organization's mission, vision and objectives, developing policies and plans, and then allocating resources (including its capital and people) to implement the policies and plans, projects and programs.

Organisations that lack a clear strategic direction tend to fail. Emerging industries can be extremely attractive to companies, as firms can get a foothold in the industry before other people are established and barriers to entry become high. (Think of e-commerce, for example: within three years of start­up, Amazon came to dominate bookselling on the internet.)

Generally, however, companies can only succeed in an established industry by defining and implementing a corporate strategy that distinguishes them from competitors.

Organisations need to be proactive, continually reassessing their own performance and the industry and environment they operate in.

A number of standard techniques can be used to aid this process of analysis, e.g. a SWOT analysis and PEST analysis.

SWOT analysis

The SWOT analysis is an extremely useful strategic planning tool that identifies the strengths, weaknesses, opportunities andthreats of an organization normally presented as a grid, comprising four sections, one for each of the SWOT headings: Strengths, Weaknesses, Opportunities, and Threats.

The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and externalissues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results.

Strengths and weaknesses

-Resources: financial, intellectual, location

-Cost advantages from proprietary know-how and/or location

-Creativity (ability to develop new products)

-Valuable intangible assets: intellectual capital

-Competitive capabilities

-Effective recruitment of talented individuals

-Competitive Advantage

Date: 2016-01-14; view: 780