The purpose of strategic planning is. Abstract: Stages of strategic planning

Key questions:

The essence of strategic planning and its typology

The strategic planning process and its stages

Strategic plan and its structure

1. The essence of strategic planning and its typology

Strategic planning (SP) is the most important function of strategic management. There are several definitions strategic planning:

A tool with the help of which a system of goals for the functioning of an enterprise is formed and the efforts of the entire team are combined to achieve it (A.I. Ilyin). This definition reflects the purpose of the joint venture, and not its essence;

This is a set of actions and decisions taken by the company’s management in order to develop functional strategies and assist the company in solving the problems of its development (L.P. Vladimirova). There is also no distinction made here between joint ventures and strategic management in general;

This is a set of decisions and actions to develop a strategy necessary to achieve the goals of the organization (L.E. Basovsky). In this definition, the plan was equated with strategy, which is not the same thing;

A set of specific goals that must be achieved by a certain period. They cover the most general problems of production development and resource distribution for many years to come and are developed independently in various areas, but at the same time they are subject to a certain hierarchy (V.R. Vesnin). Here the planning process is identified with its result.

The most correct definition is E.A. Utkina: “ SP is a special type of practical activity of people - planned work, consisting of the development of strategic decisions (in the form of forecasts, programs and plans), providing for the promotion of such goals and strategies for the behavior of relevant management objects, the implementation of which ensures their effective functioning in the long term, rapid adaptation to changing environmental conditions».

The difference between joint venture and strategic management is as follows (Table 1).

Table 1

Differences between strategic planning and strategic management

The main task of the joint venture is to ensure flexibility and innovation in the organization’s activities necessary to achieve its goals in a changing external and internal environment.

Strategic planning is characterized by:

Degree of uncertainty;

Time orientation of the planning process;

A certain planning horizon.

Depending on degree of uncertainty planning systems in an organization can be divided into two types:

Those that operate in a completely predictable environment and do not lack information. In such systems, you can give a 100% guarantee that if an event occurs A, then it will be followed by the event IN. This type of planning system is called deterministic. In practice, such systems do not exist at the level of the entire enterprise, but at the level of current planning of the activities of individual divisions it is quite predictable.

Planning systems that assume a lack of certainty in the external environment and a lack of information. Such systems are called probabilistic.

Options for probabilistic planning systems are:

Planning based on a system of strict obligations (for example, a contract with a proven partner, when only force majeure circumstances can change the plan). This type of planning is suitable for situations in which there is a high degree of certainty about the outcome of events.

Planning under personal responsibility. Such planning is acceptable in a situation of complete uncertainty. It is typical for small business organizations that do not have the necessary knowledge of the environment and do not have established connections with their counterparties.

Planning adapted to random circumstances. This is an intermediate type of planning: on the one hand, there is constant uncertainty in the company’s activities, and on the other, possible options for action in an uncertain environment are taken into account. In practice, there are no more than three or four main options for the possible development of events.

Depending from time orientation planning Ackoff distinguishes four types of planning:

Reactive planning (return to the past) - is based on an analysis of previous experience and relies on old organizational forms and established traditions. This planning is carried out from the bottom up. First, the needs of the departments are identified and plans are developed for them. These plans are passed up the hierarchy chain for clarification, adjustment and preparation of a consolidated project.

Inactive planning (inertia). The main goal is survival and stability of production. It is focused on the present and does not contribute to economic growth and development of the organization. When making decisions, bureaucracy and red tape dominate. Most of the time in planning is spent collecting facts and their primary processing.

Proactive planning (anticipation) is focused on future changes. It relies on all the achievements of science and technology, widely uses experiment and forecasting, but does not take into account accumulated experience. Planning is carried out from top to bottom; Top managers formulate goals and strategies, and then determine lower-level goals and action programs.

Interactive planning is about designing the desired future and finding ways to build it. The purpose of such planning is to maximize your ability to learn, adapt and develop.

In table 2 presents the main advantages and disadvantages of these types of planning.

Strategic planning- a set of actions and decisions taken by management that lead to the development of specific strategies designed to help the organization achieve its goals.

According to Peter Lorange, the strategic planning process is a tool that helps in making management decisions.
His task is ensure innovation and change in the organization to a sufficient extent.
There are 4 main types of management activities:

resource allocation- is the allocation of limited organizational resources, such as funds, scarce management talent and technological expertise;
adaptation to the external environment- covers all strategic actions that improve the company's relationship with its environment. The company needs to adapt to both external opportunities and threats, identify appropriate options, and ensure that strategy is effectively adapted to environmental conditions.
internal coordination - involves coordinating strategic activities to reflect the firm's strengths and weaknesses in order to achieve effective integration of internal operations.
awareness of organizational strategies - It is the systematic development of managers' thinking by creating an organization that can learn from past strategic decisions.

Strategy is a detailed, comprehensive, comprehensive plan designed to ensure the accomplishment of an organization's mission and achievement of its goals.

Main theses of the strategy:
a) the strategy is mostly formulated and developed by senior management, but its implementation requires the participation of all levels of management;
b) the strategic plan should be developed from the perspective of the entire corporation rather than a specific individual;
c) the plan must be supported by extensive research and evidence;
d) Strategic plans must be designed to not only remain coherent over long periods of time, but also to be flexible enough to allow modification and reorientation as necessary.
Planning and success of organizations.

The current rate of change and increase in knowledge is so great that strategic planning seems to be the only way to formally forecast future problems and opportunities. It provides senior management with a means of creating a plan for the long term. Strategic planning also provides the basis for decision making. Formal planning reduces risk in decision making. Planning, as it serves to formulate set goals, helps create unity of common purpose within an organization.
Formulating a strategic plan represents careful preparation for the future. If all managers should engage in some degree of formal strategic planning, then creating strategic plans for the entire organization is primarily the responsibility of senior management. Middle and lower level managers participate in this work by providing relevant information and feedback.

Stages of the strategic planning process

1. Mission of the organization.
2. Goals and values of the organization.
3. Assessment and analysis of the external environment.
4. Management survey of strengths and weaknesses.
5. Analysis of strategic alternatives.
6. Choice of strategy.
7. Strategy implementation.
8. Strategy assessment.

rice. 2 Strategic planning process

1. Mission of the organization

The first and most significant decision in planning will be the choice goals organizations - its mission and specific goals.
The main overall purpose of the organization, i.e. a clearly expressed reason for its existence - designated as its mission. Goals are developed to achieve this mission.

The goals developed on its basis serve as criteria for the entire subsequent management decision-making process. If leaders don't know what the core purpose of their organization is, then they won't have a logical point of reference for choosing the best alternative.
The mission details the status of the firm and provides direction and guidance for defining goals and strategies at various organizational levels. The organization's mission statement should contain the following:

The firm's mission in terms of its core services or products, its core markets and core technologies, i.e. What business activity does the company engage in?
The external environment relative to the firm, which determines the operating principles of the firm.
Organizational culture. What type of work climate exists within the company? What type of people are attracted to this climate?

By viewing the mission in terms of identifying the basic needs of customers and effectively satisfying them, management is actually creating customers to support the organization in the future.

The mission serves as a guideline on which leaders base their decisions. Choosing a goal that is too narrow can reduce management's ability to identify alternatives when making decisions. Choosing a mission statement that is too broad can harm the success of the organization.

2. Values and goals of senior management

Values are shaped by our experiences, education and socio-economic background. Values, or the relative importance we attach to things, guide and orient leaders when faced with making critical decisions.
Gut and Tagiri established 6 value orientations that influence management decision-making:

Value orientations		Types of Goals Preferred by Organizations
Theoretical	True Knowledge Rational thinking	Long-term research and development
Economic	Practicality Utility Accumulating Wealth	Height Profitability Results
Political	Power Confession	Total capital, sales, number of employees
Social	Good human relations Attachment No conflict	Social responsibility regarding profit Indirect competition Favorable atmosphere in the organization
Aesthetic	Artistic harmony Compound Shape and symmetry	Product design Quality Attractiveness, even at the cost of profits
Religious	Consent in the Universe	Ethics Moral issues

The connection between the values held by senior management and the overall company goals is important. Leadership values are manifested in the goals of the organization.

Goals must have a number of characteristics:
1. Must be To specific and measurable
By expressing its goals in specific, measurable terms, management creates a clear frame of reference for subsequent decisions and evaluation of progress.
2. Orientation of goals in time.
It should not only determine what the organization wants to accomplish, but also when the result should be achieved. Goals are usually set for long or short periods of time.
A long-term goal, according to Steiner, has a planning horizon of approximately 5 years. A short-term goal in most cases represents one of the organization's plans that should be completed within a year. Medium-term goals range from one to five years.
3. Achievable goals.
The goal must be achievable, which helps to increase the efficiency of the organization.
4. Mutually supporting goals.
Actions and decisions necessary to achieve one goal should not interfere with the achievement of other goals.

The strategic management process will be successful to the extent that senior management is involved in setting goals and to the extent those goals reflect management's values and the firm's realities.
3. Assessment and analysis of the external environment
Managers evaluate the external environment according to three parameters:

Assess changes that impact different aspects of the current strategy.
Determine which factors pose a threat to the current strategy.
Determine which factors present greater opportunities to achieve the company-wide goal by adjusting the plan.

External environment analysis - the process by which strategic planners monitor factors external to the organization to determine opportunities and threats to the firm.
In terms of assessing these threats and opportunities, the role of environmental analysis in the strategic planning process is to answer three specific questions:

Where is the organization now?
Where does senior management think the organization should be in the future?
What must management do to move the organization from where it is now to where management wants it to be?

The threats and opportunities faced by the company can be divided into 7 areas:

economic forces (rate of inflation or deflation, employment levels, international balance of payments, stability of the US dollar abroad and tax rate);
political factors (Management must monitor local government regulations, politicians' attitudes toward antitrust activities, restrictions on hiring labor and the ability to obtain loans, etc.);
market factors (demographic conditions, life cycles of various products or services, ease of market penetration, income distribution and level of competition in the industry);
technological factors (take into account changes in production technology, the use of computers in the design and provision of goods and services, or advances in communications technology);
international factors (ease of access to raw materials, activities of foreign cartels, changes in exchange rates and political decisions in countries acting as investment sites or markets);
competitive factors (analysis of the future goals of competitors, assessment of the current strategy of competitors, review of prerequisites regarding competitors and the industry in which these companies operate, in-depth study of the strengths and weaknesses of competitors);
factors of social behavior (changing expectations, attitudes and mores of society);

4. Management survey of the internal strengths and weaknesses of the organization

The next challenge an organization faces is determining whether the firm has internal forces to take advantage of external opportunities, as well as identifying internal weaknesses that may complicate problems associated with external threats.
The process by which internal problems are diagnosed is called management survey.

Management survey is a methodical assessment of an organization's functional areas designed to identify its strategic strengths and weaknesses.

Marketing

When examining the marketing function, 7 areas deserve attention for analysis and research:

market share and competitiveness;
variety and quality of product range;
market demographics;
market research and development;
pre-sales and after-sales customer service;
effective sales, advertising and promotion of goods;
profit.

Finance and accounting

A detailed analysis of the financial position can reveal existing and potential internal weaknesses in the organization, as well as the relative position of the organization with its competitors.

Operations(in the narrow sense – production).

Some key questions to answer during the survey:

1) Can we produce our goods or services at a lower cost than our competitors? If not, why not?

2) Is our equipment up to date and well maintained?

3) Are our products subject to seasonal fluctuations in demand, which forces us to resort to temporary layoffs of workers?

4) Can we serve markets that our competitors cannot serve?

5) Do we have an effective and efficient quality control system?

Human resources.

If an organization has skilled employees and managers with well-motivated goals, it is able to pursue various alternative strategies.

Culture and image of the corporation.

Culture reflects the prevailing customs, mores and expectations in the organization.
The image of a corporation, both inside and outside the organization, refers to the impression it creates through employees and public opinion at large.

5. Analysis of strategic alternatives

The organization faces 4 main strategic alternatives:

Limited growth - setting goals based on what has been achieved, adjusted for inflation.
Height - annual significant increase in the level of short-term and long-term goals above the level of the previous year.
Growth may be internal and external.
Internal growth can occur by expanding the range of products.
External growth may be in related industries in the form of vertical or horizontal growth.
Reduction - the level of goals pursued is set below what was achieved in the past. Several shortening options:
liquidation- complete sale of the organization’s inventories and assets;
cutting off excess- often firms find it advantageous to separate certain divisions or activities from themselves;
downsizing and refocusing- reducing part of its activities in an attempt to increase profits;
Combination - combining any of the 3 strategies mentioned.

6. Choice of strategy

The Boston Advisory Group Matrix can help shape options and make management decisions.

Cash generation (market share)

Cash use
(growth rate) high high low

For example, if your product or service has a large market share and a high growth rate (star), you are likely to pursue a growth strategy. On the other hand, if your product or service has a small market share and low growth rate (dog), you can choose a strategy of trimming the excess.

The strategic choices made by managers are influenced by a variety of factors:

risk;
knowledge of past strategies;
reaction to owners;
time factor.

Management chooses a strategy after analyzing external opportunities and threats, internal strengths and weaknesses, and evaluating all its alternatives and options.

7. Planning for strategy implementation

Once an underlying overall strategy has been selected, it must be implemented by integrating it with other organizational functions.
An important mechanism for linking strategy is the development of plans and guidelines: tactics, policies, procedures and rules.

Tactics

Just as management develops short-term goals that are consistent with and facilitates achievement of long-term goals, it must often develop short-term plans that are consistent with its overall long-term plans. Such short-term strategies are called tactics.

Some characteristics of tactical plans:

tactics are developed in development of strategy;
while strategy is almost always developed at the top levels of management, tactics are often developed at the middle management level;
tactics are designed for a shorter period than strategy;
While the results of strategy may not be seen for several years, tactical results appear very quickly and are easily related to specific actions.

Policy

Policy provides a general guide for action and decision making that facilitates the achievement of goals.

Policies are usually formulated by senior managers over a long period of time. Politics guides decision-making, but also leaves freedom of action.

Procedures

Procedures – describe the actions that should be taken in a particular situation.

Procedures usually describe the sequence of actions that should be taken in a given situation. In general, an individual acting according to a procedure has little freedom and few alternatives.

Rules

When a high degree of obedience is required to achieve goals, managers use rules . When management wants to restrict employee actions to ensure that specific actions are performed in specific ways, it makes rules.

Rule specifies exactly what should be done in a specific single situation.

Evaluating the strategic plan.
Developing and then implementing a strategic plan seems like a simple process. But ongoing evaluation of the plan is critical to its long-term success.

8. Strategy assessment

Strategy assessment carried out by comparing performance results with goals. The evaluation process is used as a feedback mechanism to adjust the strategy. To be effective, assessment must be carried out systematically and continuously.
When evaluating the strategic planning process, you should answer 5 questions:

Is the strategy internally consistent with the organization's capabilities?
Does the strategy involve an acceptable degree of risk?
Does the organization have sufficient resources to implement the strategy?
Does the strategy take into account external threats or opportunities?
Is this strategy the best use of the firm's resources?

There are a number of criteria, both quantitative and qualitative, that are used in the assessment process.
Quantitative evaluation criteria:

market share
sales growth
level of costs and production efficiency
level of costs and sales efficiency
staff turnover
absenteeism
employee satisfaction
net profit
payments on securities
stock price
dividend rate
earnings per share

Qualitative evaluation criteria:

ability to attract highly qualified managers
expansion of services to clients
in-depth market knowledge
reduction of hazards
taking advantage of opportunities

After selecting a strategy for developing a subsequent plan, management must conduct a thorough review of the organization's structure to determine whether it is conducive to achieving overall organizational goals. Strategy determines structure. Conceptually, structures should always reflect strategy.

The best organizational structure will be one that matches the size, dynamism, complexity and personnel of the organization. As organizations develop and their goals evolve, their strategies and plans change. This should also happen to their structures.

is a set of actions, decisions taken by management that lead to the development of specific strategies designed to achieve goals.

Strategic planning can be presented as a set of management functions, namely:

resource allocation (in the form of company reorganization);
adaptation to the external environment (using the example of Ford Motors);
internal coordination;
awareness of organizational strategy (thus, management needs to constantly learn from past experience and predict the future).

Strategy is a comprehensive, integrated plan designed to ensure that its objectives are implemented and achieved.

Key points of strategic planning:

the strategy is developed by senior management;
the strategic plan must be supported by research and evidence;
strategic plans must be flexible to allow for change;
planning should be beneficial and contribute to the success of the company. At the same time, the costs of implementing activities should be lower than the benefits from their implementation.

Strategic Planning Process

The following stages of strategic planning are distinguished:

- the overall primary purpose of the organization, the clearly expressed reason for its existence. The Burger King fast food restaurant chain provides people with inexpensive, fast food. This is implemented in the company. For example, hamburgers should be sold not for 10, but for 1.5 dollars.

The mission statement can be based on the following questions:

What business activity does the company engage in?
What is the firm's external environment that determines its operating principles?
What type of working climate within the company, what is the culture of the organization?

The mission helps create customers and satisfy their needs. The mission must be found in the environment. Reducing the mission of an enterprise to “making a profit” narrows the scope of its activities and limits the ability of management to explore alternatives for decision making. Profit is a necessary condition of existence, an internal need of the company.

Often, a mission statement answers two basic questions: Who are our customers and what needs of our customers can we satisfy?

The character of the leader leaves an imprint on the mission of the organization.

Goals- are developed on the basis of the mission and serve as criteria for the subsequent management decision-making process.

Target characteristics:

must be specific and measurable;
oriented in time (deadlines);
must be achievable.

Assessment and analysis of the external environment. It is necessary to assess the impact of changes on the organization, threats and competition, and opportunities. There are factors at play here: economic, market, political, etc.

Management survey of the internal strengths and weaknesses of the organization. It is useful to focus on five functions for the survey: marketing, finance, operations (production), human resources, culture, and corporate image.

Exploring Strategic Alternatives. It should be emphasized that the company’s strategic planning scheme is closed. The mission and procedures of other stages should be constantly modified in accordance with the changing external and internal environment.

Basic strategies of the organization

Limited growth. Used in mature industries, when satisfied with the current state of the company, low risk.

Height. Consists of an annual significant increase in the indicators of the previous period. It is achieved through the introduction of new technologies, diversification (expanding the range) of goods, capturing new related industries and markets, and merging corporations.

Reduction. According to this strategy, a level is set below what was achieved in the past. Implementation options: liquidation (sale of assets and inventories), cutting off excess (sale of divisions), reduction and reorientation (reduce part of the activity).

Combination of the above strategies.

Choosing a Strategy

There are various methods for choosing strategies.

The BCG Matrix is widely used (developed by Boston Consulting Group, 1973). With its help, you can determine the position of the company and its products, taking into account the capabilities of the industry (Fig. 6.1).

Rice. 6.1. BCG Matrix

How to use the model?

The BCG matrix, developed by the consulting company of the same name, was already widely used in practice by 1970.

The main attention in this method is paid to cash flow, directed (consumed) in a separate business area of the company. Moreover, it is assumed that at the stage of development and growth, any company absorbs cash (investments), and at the stage of maturity and the final stage, it brings (generates) positive cash flow. To be successful, the cash generated from a mature business must be invested into a growing business to continue making a profit.

The matrix is based on the empirical assumption that the company that is larger is more profitable. The effect of lower unit costs as firm size increases is confirmed by many American companies. Analysis is carried out using the matrix portfolio(set) of manufactured products in order to develop a strategy for the future fate of the products.

BCG matrix structure. The x-axis shows the ratio of the sales volume (sometimes the value of assets) of the company in the corresponding business area to the total sales volume in this area of its largest competitor (the leader in this business). If the company itself is a leader, then go to the first competitor that follows it. In the original, the scale is logarithmic from 0.1 to 10. Accordingly, weak (less than 1) and strong competitive positions of the company’s product are identified.

On the y-axis, the assessment is made for the last 2-3 years; you can take the weighted average value of production volumes per year. You also need to take inflation into account. Next, based on the strategy options, the direction for investing funds is selected.

"Stars". They bring high profits, but require large investments. Strategy: maintain or increase market share.

"Cash Cows". They generate a stable income, but the cash flow may suddenly end due to the “death” of the product. Does not require large investments. Strategy: maintain or increase market share.

"Question Marks". It is necessary to move them towards the “stars” if the amount of investment required for this is acceptable for the company. Strategy: maintaining or increasing or reducing market share.

"Dogs". They can be significant in the case of occupying a highly specialized niche in the market, otherwise they require investment to increase market share. It may be necessary to stop producing this product altogether. Strategy: be content with the situation or reduce or eliminate market share.

Conclusion: the BCG matrix allows you to position each type of product and adopt a specific strategy for them.

SWOT analysis

This method allows you to establish a connection between the strengths and weaknesses of the company and external threats and opportunities, that is, the connection between the internal and external environment of the company.

Strengths: competence, adequate financial resources, reputation, technology. Weaknesses: outdated equipment, low profitability, insufficient understanding of the market. Opportunities: entering new markets, expanding production, vertical integration, growing market. Threats: new competitors, substitute products, slowing market growth, changing customer tastes.

Opportunities can turn into threats (if a competitor uses your capabilities). A threat becomes an opportunity if competitors were unable to overcome the threat.

How to apply the method?

1. Let's make a list of the organization's strengths and weaknesses.

2. Let's establish connections between them. SWOT Matrix.

At the intersection of four blocks, four fields are formed. All possible pairing combinations should be considered and those that should be taken into account when developing a strategy should be selected. Thus, for couples in the SIV field, a strategy should be developed to use the company's strengths to capitalize on the opportunities that have arisen in the external environment. For SLV - due to the opportunities to overcome weaknesses. For the SIS, it is to use forces to eliminate the threat. For a couple in the field, SLU is to get rid of a weakness while preventing a threat.

3. We build a matrix of opportunities to assess the degree of their importance and impact on the organization’s strategy.

We position each specific opportunity on the matrix. Horizontally we plot the degree of influence of the opportunity on the organization’s activities, and vertically we plot the likelihood that the company will take advantage of this opportunity. The opportunities that fall into the fields of BC, VT, SS are of great importance, they need to be used. Diagonally - only if additional resources are available.

4. We build a threat matrix (similar to step 3).

Threats that fall into the VR, VC, SR fields are a great danger, immediate elimination. Threats in the VT, SK, and HP fields are also eliminated immediately. NK, ST, VL - a careful approach to eliminating them. The remaining fields do not require immediate elimination.

Sometimes, instead of steps 3 and 4, an environmental profile is compiled (i.e., factors are ranked). Factors are threats and opportunities.

Importance for the industry: 3 - high, 2 - moderate, 1 - weak. Impact: 3 - strong, 2 - moderate, 1 - weak, 0 - absent. Direction of influence: +1 - positive, -1 - negative. Degree of importance - multiply the previous three indicators. Thus, we can conclude which factors are more important for the organization.

Implementation of the strategic plan

Strategic planning is only meaningful when it is implemented. Any strategy has certain goals. But they need to be implemented somehow. There are certain methods for this. To the question: “how to achieve the company’s goals?” This is exactly what strategy answers. At its core, it is a method of achieving a goal.

Concepts of tactics, policies, procedures, rules

Tactics- this is a specific move. For example, an advertisement for Fotomat film, which is consistent with the company's strategy to promote 35mm film to the market.

There are problems with the implementation of rules and procedures. Conflict may arise over the methods of providing employees with information about new company policies. It is necessary not to force, but to convince the employee that the new rule will allow him to perform this work most effectively.

Methods for implementing the strategy: budgets and management by objectives.

Budgeting. Budget— plan for resource allocation for future periods. This method answers the questions of what tools are available and how to use them. The first step is to quantify the goals and the amount of resources. A. Meskon identifies 4 stages of budgeting: determining sales volumes, operational estimates for departments and divisions, checking and adjusting operational estimates based on proposals from top management, drawing up a final budget for the items of receipt and use of resources.

Management by Objectives— MBO (Management by Objectives). This method was first used by Peter Drucker. McGregor spoke about the need to develop a system of benchmarks in order to then compare the performance of managers at all levels with these benchmarks.

Four stages of MBO:

Developing clear, concisely formulated goals.
Developing realistic plans to achieve them.
Systematic control, measurement and evaluation of work and results.
Corrective actions to achieve planned results.

The 4th stage is closed on the 1st.

Stage 1. Development of goals. The goals of a lower level in the company's structure are developed on the basis of a higher level, based on strategy. Everyone participates in setting goals. A two-way exchange of information is required.

Stage 2. Action planning. How to achieve your goals?

Stage 3. Testing and evaluation. After the period of time established in the plan, the following are determined: the degree of achievement of goals (deviations from control indicators), problems, obstacles in their implementation, reward for effective work (motivation).

Stage 4. Adjustment. We will determine which goals were not achieved and determine the reason for this. It is then decided what measures should be taken to correct the deviations. There are two ways: adjusting methods for achieving goals, adjusting goals.

The validity and effectiveness of MBO is demonstrated by the higher performance of people who have specific goals and information about the results of their work. The disadvantages of implementing MBO include a great emphasis on formulating goals.

Evaluating the Strategic Plan

Beautiful matrices and curves are not a guarantee of victory. Avoid focusing on immediate implementation of the strategy. Don't trust standard models too much!

Formal assessment is performed based on deviations from specified evaluation criteria. Quantitative (profitability, sales growth, earnings per share) and qualitative assessments (personnel qualifications). It is possible to answer a number of questions when evaluating a strategy. For example, is this strategy the best way to achieve a goal and use the company's resources?

The success of Japanese management lies in its commitment to long-term plans. USA - pressure on shareholders, demands for immediate results, which often leads to collapse.

Measurement accuracy. Accounting methods for inflating income and profits. Enron Company. Standards need to be developed. It’s easier to face the truth.

Checking the consistency of the strategy structure. Strategy determines structure. You cannot impose a new strategy on the existing structure of the organization.

Strategic Market Planning

In solving the strategic problems of an organization, strategic planning plays a significant role, which means the process of developing and maintaining a strategic balance between an organization's goals and capabilities in changing market conditions. The purpose of strategic planning is to determine the most promising areas of the organization’s activities that ensure its growth and prosperity.

Interest in strategic management was due to the following reasons:

Awareness that any organization is an open system and that the main sources of success of the organization are in the external environment.
In conditions of intensified competition, the strategic orientation of an organization’s activities is one of the decisive factors for survival and prosperity.
Strategic planning allows you to adequately respond to the uncertainty and risk factors inherent in the external environment.
Since the future is almost impossible to predict and extrapolation used in long-term planning does not work, it is necessary to use scenario, situational approaches that fit well into the ideology of strategic management.
In order for an organization to best respond to the influence of the external environment, its management system must be built on principles different from those previously used.

Strategic planning aims to adapt the organization's activities to constantly changing environmental conditions and to capitalize on new opportunities.

In general, strategic planning is a symbiosis of intuition and the art of the organization’s top management in setting and achieving strategic goals, based on mastery of specific methods of pre-plan analysis and development of strategic plans.

Since strategic planning is primarily associated with production organizations, it is necessary to distinguish different levels of management of such organizations: the organization as a whole (corporate level), the level of areas of production and economic activity (divisional, departmental level), the level of specific areas of production and economic activity (level of individual types of business), level of individual products. The management of the corporation is responsible for developing a strategic plan for the corporation as a whole, for investing in those areas of activity that have a future. It also decides to open new businesses. Each division (department) develops a divisional plan in which resources are distributed between the individual types of business of this department. A strategic plan is also developed for each business unit. Finally, at the product level, a plan is formed within each business unit to achieve the goals of producing and marketing individual products in specific markets.

For competent implementation of strategic planning, organizations must clearly identify their areas of production and economic activity, in other terminology - strategic economic units (SHE), strategic business units (SBU).

It is believed that the allocation of CXE must satisfy the following three criteria:

1. SHE must serve a market external to the organization, and not satisfy the needs of other divisions of the organization.

2. It must have its own, distinct from others, consumers and competitors.

3. SHE management must control all the key factors that determine success in the market. Thus, CHEs can represent a single company, a division of a company, a product line, or even a single product.

In strategic planning and marketing, several analytical approaches have been developed that make it possible to solve the problems of assessing the current state of a business and the prospects for its development. The most important of them are the following:

Analysis of business and product portfolios.
Situational analysis.
Analysis of the impact of the chosen strategy on the level of profitability and the ability to generate cash (PIMS - the Profit of Market Strategy).

Assessing the degree of attractiveness of an organization's various identified CXEs is usually carried out along two dimensions: the attractiveness of the market or industry to which the CXE belongs, and the strength of the position of the given CXE in that market or industry. The first, most widely used method of CXE analysis is based on the use of the “market growth rate - market share” matrix (Boston Consulting Group matrix - BCG); the second is on the CXE planning grid (General Electric Corporation matrix, or Mag-Kinzy). The "market growth rate - market share" matrix is designed to classify a CXE organization using two parameters: relative market share, which characterizes the strength of CXE's position in the market, and market growth rate, which characterizes its attractiveness.

A larger market share makes it possible to earn greater profits and have a stronger position in the competition. However, here it should immediately be noted that such a strict correlation between market share and profit does not always exist; sometimes this correlation is much softer.

The role of marketing in strategic planning

There are many points of intersection between strategies for the organization as a whole and marketing strategies. Marketing studies the needs of consumers and the organization's ability to satisfy them. These same factors determine the mission and strategic goals of the organization. When developing a strategic plan, they operate with marketing concepts: “market share”, “market development” and
etc. Therefore, it is very difficult to separate strategic planning from marketing. In a number of foreign companies, strategic planning is called strategic marketing planning.

The role of marketing is manifested at all three levels of management: corporate, CXE and at the market level of a particular product. At the corporate level, managers coordinate the activities of the organization as a whole to achieve its goals in the interests of pressure groups. At this level, two main sets of problems are solved. The first is what activities should be undertaken to satisfy the needs of important customer groups. The second is how to rationally distribute the organization's resources among these activities to achieve the organization's goals. The role of marketing at the corporate level is to identify those important environmental factors (unmet needs, changes in the competitive environment, etc.) that should be taken into account when making strategic decisions.

At the individual CHE level, management is more focused on making decisions for the specific industry in which the business competes. At this level, marketing provides a detailed understanding of market demands and the selection of the means by which these requests can best be satisfied in a specific competitive environment. A search is being carried out for both external and internal sources of achieving competitive advantages.

Managing the market for a specific product focuses on making rational decisions about the marketing mix.

Choosing a Strategy

After analyzing the strategic state of the organization and the necessary adjustments to its mission, you can move on to analyzing strategic alternatives and choosing a strategy.

Typically, an organization chooses a strategy from several possible options.

There are four basic strategies:

limited growth;
height;
reduction;
combination.

Limited growth(several percent per year). This strategy is the least risky and can be effective in industries with stable technology. It involves defining goals based on the achieved level.

Height(measured in tens of percent per year) is a strategy typical for dynamically developing industries, with rapidly changing technologies, as well as for new organizations that, regardless of their field of activity, strive to quickly take a leading position. It is characterized by the establishment of an annual significant excess of the level of development over the level of the previous year.

This is the most risky strategy, i.e. As a result of its implementation, you may suffer material and other losses. However, this strategy can also be identified with perceived luck, a favorable outcome.

Reduction. It assumes the establishment of a level below that achieved in the previous (base) period. This strategy can be used in conditions when the company's performance indicators acquire a steady tendency to deteriorate.

Combination(combined strategy). Involves a combination of the alternatives discussed above. This strategy is typical for large firms operating in several industries.

Classification and types of strategies:

Global:

minimizing costs;
differentiation;
focusing;
innovation;
prompt response;

Corporate

related diversification strategy;
unrelated diversification strategy;
capital pumping and liquidation strategy;
change course and restructuring strategy;
international diversification strategy;

Functional

offensive and defensive;
vertical integration;
strategies of organizations occupying various industry positions;
competitive strategies at various stages of the life cycle.

Cost minimization strategy consists in establishing the optimal value of production volume (use), promotion and sales (use of marketing economies of scale).

Differentiation strategy is based on the production of a wide range of goods of one functional purpose and allows the organization to serve a large number of consumers with different needs.

By producing goods of various modifications, the company increases the circle of potential consumers, i.e. increases sales volume. In this case, horizontal and vertical differentiation are distinguished.

Horizontal differentiation assumes that the price of various types of products and the average income of consumers remain the same.

Vertical implies different prices and income levels of consumers, which provides the company with access to different market segments.

The use of this strategy leads to an increase in production costs, so it is most effective when demand is price inelastic.

Focus strategy involves serving a relatively narrow segment of consumers who have special needs.

It is effective primarily for firms that have relatively few resources, which does not allow them to serve large groups of consumers with relatively standard needs.

Innovation strategy provides for the acquisition of competitive advantages through the creation of fundamentally new products or technologies. In this case, it becomes possible to significantly increase sales profitability or create a new consumer segment.

Rapid response strategy involves achieving success through rapid response to changes in the external environment. This makes it possible to gain additional profit due to the temporary absence of competitors for the new product.

Among corporate strategies, strategies of related and unrelated diversification stand out.

Related diversification strategy assumes that there are significant strategic fits between business areas.

Strategic fits presuppose the emergence of so-called synergistic effects.

Strategic correspondences are identified: production (single production facilities); marketing (similar brands, common sales channels, etc.); managerial (unified personnel training system, etc.).

Unrelated Diversification Strategy assumes that the business areas in their portfolio have weak strategic fits.

However, firms that adhere to this strategy can acquire special stability due to the fact that downturns in some industries can be compensated by upturns in others.

Among functional strategies distinguished primarily offensive and defensive.

Offensive strategies include a set of measures to retain and acquire competitive advantages of a proactive nature: attacking the strengths or weaknesses of a competitor; multi-pronged offensive, etc.

Defensive strategies include measures that are reactionary in nature.

The strategic planning process in a company consists of several stages:

Defining the mission and goals of the organization.
Environmental analysis, which includes collecting information, analyzing the strengths and weaknesses of the company, as well as its potential capabilities based on available external and internal information.
Choice of strategy.
Execution of strategy.
Evaluation and control of implementation.

Defining the mission and goals of the organization

“The target function begins with establishing the mission of the enterprise, expressing the philosophy and meaning of its existence.”

“A mission is a conceptual intention to move in a certain direction.” Typically, it details the status of the enterprise, describes the basic principles of its operation, the actual intentions of management, and also defines the most important economic characteristics of the enterprise.

The mission expresses aspirations for the future, shows where the organization’s efforts will be directed, and what values will be a priority. Therefore, the mission should not depend on the current state of the enterprise, it should not be affected by financial problems, etc. It is not customary in the mission to indicate making a profit as the main goal of creating an organization, although making a profit is the most important factor in the functioning of the enterprise.

“Goals are a specification of the mission of the organization in a form accessible to manage the process of their implementation.”

The main characteristics of the goal are as follows:

clear orientation to a certain time interval;
specificity and measurability;
consistency and consistency with other missions and resources;
targeting and controllability.

Based on the mission and goals of the organization's existence, development strategies are built and the organization's policies are determined.

Concept of strategic analysis

Strategic analysis, or as it is also called “portfolio analysis,” is a fundamental element of strategic planning. “The literature notes that portfolio analysis acts as a strategic management tool, with the help of which enterprise management identifies and evaluates its activities in order to invest funds in its most profitable and promising areas.”

Strategic analysis originated in the late 60s. At this time, large firms and most medium-sized ones turned into complexes that combined the production of diverse products and entered many product markets. However, growth did not continue in all markets, and some of them were not even promising. This discrepancy has arisen due to differences in demand saturation, changing economic, political and social conditions, growing competition and the rapid pace of technological innovation.

It became obvious that moving into new industries would not help the company solve its strategic problems or realize its full potential. The situation required managers to radically change their perspective. In such conditions, extrapolation was replaced by strategic planning and portfolio analysis.

The unit of portfolio analysis is the “strategic management zone” (SZH). SZH represents any market into which the company has or is trying to find an exit. Each agricultural sector is characterized by a certain type of demand, as well as a certain technology. As soon as one technology is replaced by another, the problem of technology correlation becomes a strategic choice for the company. During portfolio analysis, a company evaluates the prospects of a particular line of business.

The main method of portfolio analysis is the construction of two-dimensional matrices. With the help of such matrices, production, divisions, processes, and products are compared according to relevant criteria.

There are three approaches to forming matrices:

A tabular approach in which the values of varying parameters increase as the names of these parameters move away from the column. In this case, the portfolio analysis is carried out from the upper left corner to the lower right.
A coordinate approach in which the values of varied parameters increase with distance from the coordinate intersection point. The portfolio analysis here is carried out from the lower left corner to the upper right.
A logical approach in which the portfolio analysis is carried out from the lower right corner to the upper left. This approach has become most widespread in foreign practice.

Environmental analysis is necessary when carrying out strategic analysis, because its result is the receipt of information on the basis of which assessments are made regarding the current position of the enterprise in the market.

Environmental analysis involves the study of its three components:

external environment;
immediate environment;
internal environment of the organization.

Analysis of the external environment includes the study of the influence of the economy, legal regulation and management, political processes, natural environment and resources, social and cultural components of society, scientific, technical and technological development of society, infrastructure, etc.

Environmental analysis is the process by which strategic planners monitor factors external to the organization to determine opportunities and threats to the firm.

Analysis of the external environment helps to obtain important results. It gives the organization time to forecast opportunities, time to create a contingency plan, time to develop an early warning system for possible threats, and time to develop strategies that can turn previous threats into any profitable opportunities.

“In terms of assessing these threats and opportunities, the role of environmental analysis in the strategic planning process is essentially to answer three specific questions:

Where is the organization now?
Where does senior management think the organization should be in the future?
What must management do to move the organization from where it is now to where management wants it to be?”

The threats and opportunities facing an organization can generally be divided into seven areas. These areas are economics, politics, markets, technology, competition, international affairs and social behavior.

Economic forces. The current and projected state of the economy can have a dramatic impact on an organization's goals. Certain factors in the economic environment must be continually diagnosed and assessed. “Studying the economic component of the macroenvironment allows us to understand how resources are formed and distributed. This is clearly vital to the organization as access to resources greatly determines the entry status of the organization.

The study of economics involves the analysis of a number of indicators: GNP, inflation rates, unemployment rates, interest rates, labor productivity, tax rates, balance of payments, savings rates, etc. When studying the economic component, it is important to pay attention to such factors as the general level of economic development, extracted natural resources, climate, type and level of development of competitive relations, population structure, level of education of the workforce and wages.

For strategic management, when studying the listed indicators and factors, what is of interest is not the values of the indicators as such, but, first of all, what opportunities this provides for doing business.

Also within the scope of interest of strategic management is the identification of potential threats to the company, which are contained in individual components of the economic component. It often happens that opportunities and threats come in close conjunction.”

“The analysis of the economic component should in no case be reduced to the analysis of its individual components. It should be aimed at a comprehensive assessment of her condition. First of all, this is fixing the level of risk, the degree of competition intensity and the level of business attractiveness.”

Market factors. The changing external market environment is an area of constant concern for organizations. Market environment analysis includes numerous factors that can have a direct impact on the success and failure of an organization.

International factors. Threats and opportunities may arise from ease of access to raw materials, the activities of foreign cartels (eg OPEC), changes in exchange rates and political decisions in countries acting as investment sites or markets.

By analyzing the external environment, an organization can create an inventory of the threats and opportunities it faces in that environment.

The immediate environment is analyzed according to the following main components: buyers, suppliers, competitors, labor market. Analysis of the internal environment reveals the opportunities, the potential that a company can count on in competition in the process of achieving its goals.

“The internal environment is analyzed in the following areas:

personnel of the company, their potential, qualifications, interests, etc.;
management organization;
production, including organizational, operational and technical and technological characteristics and research and development;
company finances;
marketing;
organizational culture."

Selecting a strategy in accordance with the results of strategic analysis

Strategy is a long-term, qualitatively defined direction of development of an organization, relating to the scope, means and form of its activities, the system of relationships within the organization, as well as the position of the organization in the environment, leading the organization to its goals.

The strategy is selected taking into account:

the competitive position of the company in a given strategic economic zone;
prospects for the development of the most strategic management zone;
in some cases, taking into account the technology that the company has.

The technological factor must be present when choosing a strategy for an enterprise that operates in an industry where this factor is critical and technology is changing rapidly.

There are four main types of strategies:

Concentrated growth strategies – strategy for strengthening market positions, market development strategy, product development strategy.
Integrated growth strategies – backward vertical integration strategy, forward vertical integration strategy.
Diversification growth strategies – centered diversification strategy, horizontal diversification strategy.
Reduction strategies – elimination strategy, harvesting strategy, reduction strategy, cost cutting strategy.

Evaluation of the chosen strategy

The assessment of the chosen strategy consists in answering the question: will the chosen strategy lead the company to achieve its goals?

If the strategy meets the company’s goals, then its further assessment is carried out in the following areas:

compliance of the chosen strategy with the state and requirements of the environment;
compliance of the chosen strategy with the potential and capabilities of the company;
acceptability of the risk inherent in the strategy.

Execution and control of strategy

I. Ansoff in his book “Strategic Management” formulates the following principles of strategic control:

Due to uncertainty and inaccurate calculations, a strategic project can easily turn into a fool's errand. This cannot be allowed; expenses must lead to the planned results. But unlike normal production control practices, the focus should be on cost recovery rather than budget control.
At each control point, it is necessary to assess the cost recovery during the life cycle of the new product. As long as the payback exceeds the control level, the project should continue. When it falls below this level, other options should be considered, including terminating the project.

Top management functions:

In-depth study of the state of the environment, goals and strategy development: a final understanding of the essence of certain goals and a broader communication of the ideas of strategies and the meaning of goals to employees of the company.
Making decisions on the efficiency of using the company's resources.
Decisions about organizational structure.
Carrying out the necessary changes in the company.
Reviewing the strategy execution plan in case of unforeseen circumstances.

Changes that are carried out in the process of implementing strategies are called strategic changes. Organizational restructuring can come in forms such as radical change, moderate change, routine change, and minor change.

Types of organizational structures: elementary, functional, divisional, SEB structure, matrix. The choice of organizational structure depends on the size and degree of diversity of activities, the geographical location of the organization, technology, the attitude towards the organization on the part of the organization's managers and employees, the dynamism of the external environment and the strategy implemented by the organization.

To carry out changes, you need to uncover, analyze and predict what resistance can be encountered when planning changes, reduce this resistance to the possible minimum and establish the status quo of a new state. Styles of change: competitive, self-elimination, compromise, adaptation, cooperation. The task of control is to determine whether the implementation of the strategy will lead to the realization of goals.

The strategic planning process is carried out in several stages:

1 - definition of the organization's mission;

2 - determining the goals of the organization;

3 - management research and assessment of the strengths and weaknesses of the organization;

4 - assessment and analysis of the external environment;

5 - formation and analysis of strategic alternatives;

6 - choice of strategy;

7 - strategy implementation;

8 - assessment of the strategy for compliance with established criteria.

Let's consider the content of these stages.

Stages I - II: defining the mission and goals of the organization.

These are the first and most important decisions that a manager makes. The mission and overall organizational goals of the organization serve as a guide for all other stages of planning. The contents of these stages were discussed in the previous lecture. Let us note once again that goals must satisfy the following basic requirements: achievability, specificity, time orientation.

Stage III: assessment of the strengths and weaknesses (positions) of the organization. At this stage of the planning process, the pros and cons of the organization's activities are determined.

Stage IV: assessment and analysis of the external environment consists of identifying trends, threats and chances, as well as possible “exceptional” situations that can qualitatively change past trends.

Stage V - formation and analysis of strategic alternatives (formation of strategy options).

A strategy is a comprehensive, integrated plan designed to implement the mission and achieve the goals. In other words, a strategy is a detailed, comprehensive, comprehensive plan that is developed for the future and should contribute to the achievement of the organization’s mission and goals; it is specified by stage VI - the choice of strategy is the most important stage of strategic planning. It is intended to compare the company's prospects in the types of activities in which it is engaged. This is necessary to determine development priorities and allocate resources between various activities. At this stage, the analysis can be completed, and the organization's management can move on to drawing up long-term programs, plans and budgets. But often existing activities do not provide grounds for confidence in achieving long-term goals, since they do not provide sufficient growth rates or are strategically vulnerable (high probability of changes in the structure of needs), etc. Taking this into account, it is necessary to analyze diversification paths (from Lat.-Remote - expansion of activities into new areas).

Stage VII - implementation of the strategy.

Planning for the implementation of the strategy is carried out using administrative levers (tactics, procedures, rules, policies) and economic levers (by forming a budget, using a system of indicators).

All considered strategies are implemented using the following administrative levers:

1. Tactics are short-term plans that specify the strategy.

2. Policy is a general guide for actions and decisions that facilitate the achievement of goals, provisions according to which the parameters for making minor decisions that are often repeated are established. The policy gives general instructions for the implementation of activities, and in fact is the most typical and simple type of so-called “stable plans” (directives aimed at increasing overall overall efficiency based on compliance with the simplest principles of the organization), designed to manage the daily processes in the organization. In addition to policies, these include procedures and rules.

3. Procedures - actions that should be performed in a specific situation.

4. Rules - indicate what should be done in a specific one-time situation. They are designed for specific, limited issues and are often advisory in nature.

The use of tactics, policies, procedures and rules makes it possible to create a certain organizational and administrative mechanism aimed at ensuring the implementation of the strategy.

Stage VIII - assessment of the strategy for compliance with established criteria. The process of evaluating an organization's strategy is a feedback mechanism for adjusting the strategy.

Often, when implementing a strategic plan, obstacles arise due to either an imperfect assessment by managers of the external environment, or an overestimation of the company's capabilities. Therefore, the strategy implementation process must be constantly analyzed, provide feedback to adjust the strategy, and serve as a means of preventing errors when developing a new one.

When assessing the effectiveness of a strategy, the following aspects must be taken into account:

There is a strategy in conjunction with the financial capabilities of the company;

The management of the company is sufficiently qualified for its implementation;

It fits within a level of risk acceptable to the company’s management;

It takes into account all the opportunities and threats of the external environment;

Can this strategy be implemented within the existing organizational structure and if not, how difficult will it be to change it;

The existing organizational culture is suitable for implementing the strategy;

There is a strategy for the best way to use a firm's resources.