Undergoing the process of strategic planning can go a long way in helping to ensure the survival and growth of an organization it seeks to eliminate the weaknesses of an organization and to confirm its strengths. It also analyses the environment and other factors that might affect the smooth running of an org and tries to rectify them accordingly and also to give the organization competitive advantage.
Kevin Scholes and Gerry Johnson define strategic planning as "A sequence of analytical and evaluative procedures to formulate an intended strategy and the means of implementing it " In undergoing the process of strategic planning two sub-processes come into play which are namely BSTEP analyses and SWOT analyses , and these two make up strategic planning.
In BSTEP (Business: Socio-Cultural: Technological: Economic: Political) analyses the management will be analyzing the type of business there are in paying particular attention to their goals and whether there are achieving them and if their trade is viable. They also monitor their competitors behaviour and compare their standard of outputs as to their competitors, they then make sure that their standards are better than those of their opponents and this in turn ensures that they survive and grow as an organization because they will constantly keep their rivals under check .It also promotes alertness and competition thus driving them to produce better products/services.
BSTEP also pays attention to the socio-cultural side of their market which is also a key step in the growth and survival of an organization. Here the management will be analyzing and taking into consideration the values of their targeted market, for example if it is a clothing company such as Levi Strauss they should analyze the type of clothing that is allowed by the culture of their targeted market. If women are not permitted to wear trousers then they should concentrate on supplying skirts or dresses. This will ensure their survival and growth because they will always supply different markets with suitable products. This also gives the organization competitive advantage over other organizations that do not undergo strategic planning because they might run the risk of supplying a product that is cultural considered to be indecent or unappealing by the market and eventually run a loss.
Another consideration taken by BSTEP analyses is the fact that technology is dynamic therefore if an organization wants to survive and grow it should take into consideration the technological changes that will be taking place in their areas of interest and keep abreast with them. This will greatly help because it will ensure that the organization will always know about the cheapest and most efficient way of producing their products or services and implement them in their day to day operations. It will also give them competitive advantage over its counterparts because for example if there are two companies in the fuel procurement industry and one of them adapts the pipeline system of importing fuel whilst the others still use the tankers it will gain competitive advantage because it will take less time and there is less loss during transit and this will significantly contribute to their survival and growth as an organization.
Fourthly it focuses on the current economical climate, whether or not it will affect their operations. Here they look at factors like the inflation rate particularly of countries like Zimbabwe were the inflation rate is unstable , they also look at the current interest rate so as to know whether taking or issuing loans would be healthy for the organization. Here they also pay attention to the exchange rates and also the economic policy adapted by the country they are operating in. This would in turn provide the organization with sound knowledge on the financial course to embark on so as to attain a...