A Chinese proverb states that if you are planning for one year, grow rice. If you are planning for 20 years, grow trees. If you are planning for centuries, grow men. This unit focuses on how organisations undertake strategic planning and its importance in a fast changing, turbulent marketplace. Learners will understand why it is important to develop a strategic vision and mission, establish objectives and decide on a strategy. Strategy and strategic plans map out where the organisation is headed, its short- and long-range performance targets, and the competitive moves and internal action required to achieve targeted business results. Learners will understand that a well-constructed strategic plan is essential for organisations to cope with industry and competitive conditions.
In this unit, learner will discover how important it is for an organisation to understand what is happening in their external environment and how the environment is changing. This will then enable learners to review an organisation’s existing business plans, using appropriate tools and techniques. Having explored the competitive environment, learners will understand how to develop strategic options using modelling tools and then develop a strategic plan, giving due consideration to the core values, vision and mission of the organisation. Learners will then look at planning the implementation of a strategic plan and the creation of monitoring and evaluation systems to measure progress.
Simply put, strategic planning determines where an organization is going over the next year or more, how it's going to get there and how it'll know if it got there or not. The focus of a strategic plan is usually on the entire organization, while the focus of a business plan is usually on a particular product, service or program. There are a variety of perspectives, models and approaches used in strategic planning. The way that a strategic plan is developed depends on the nature of the organizations leadership, culture of the organization, complexity of the organizations environment, size of the organization and expertise of planners.
1.1 EXPLAIN THE IMPORTANCE OF EXTERNAL FACTORS AFFECTING AN ORGANIZATION Most successful business start-ups are owned by believers and proponents of good strategic management, a regimented 7-stage discipline involving vision and mission development, external assessment, internal assessment, long-term objective setting, strategy identification and selection, strategy implementation, and performance evaluation. Businesses do not exist in a bubble. Rather, they exist as part of a community, in which they are responsible and accountable stakeholders. Well-meaning strategic management practitioners consider five (5) key external forces in doing the external assessment exercise, and these are political, economic, social, technological (PEST), and competitive factors. The scope of external assessment embraces the analysis of opportunities and threats impacting a certain industry or business. The following discusses the key factors covered by an external assessment: Political factors
Political issues occasionally come to influence the activities of the business community. Corporations often spend many billions of dollars lobbying to influence political decision makers for this reason. Businesses may get involved in politics, for example, when their international operations come under fire from human rights groups, or when a high-profile politician recommends an increase in corporate taxes. Economic factors
The most important external economic influence on a business is the level of competitiveness in its market. This factor determines how much profit a company can make. Other factors, like consumer demand, tax rates and interest rates, affect businesses by determining how much people are willing to pay for their products and how...
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