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The preparation of a strategic plan is a multi-step process covering
vision, mission, objectives, values, strategies, goals and programs. These
are discussed below.
It goes without saying that the mission, objectives, values, strategies
and goals must be inter-linked and consistent with each other. This is
much easier said than done because many businesses which are set up with
the clear objective of making their owners wealthy often lack strategies,
realistic goals or concise missions.
The Vision
The first step is to develop a realistic Vision
for the business. This should be presented as a pen picture of the business
in three or more years time in terms of its likely physical appearance,
size, activities etc. Answer the question: "if someone from Mars visited
the business, what would they see (or sense)?" Consider its future products,
markets, customers, processes, location, staffing etc.
I will come to America, which is the country for me. Once there,
I will become the greatest bodybuilder in history.......... I will
go into movies as an actor, producer and eventually director. By the
time I am 30 I will have starred in first movie and I will be a millionaire......
I will collect houses, art and automobiles. I will marry a glamorous
and intelligent wife. By 32, I will have been invited to the White
House. Attributed to Arnold Schwarzenegger
The Mission
The nature of a business is often expressed in terms of its Mission
which indicates the purposes of the business, for example, "to design,
develop, manufacture and market specific product lines for sale on the
basis of certain features to meet the identified needs of specified
customer groups via certain distribution channels in particular geographic
areas". A statement along these lines indicates what the business is
about and is infinitely clearer than saying, for instance, "we're in
electronics" or worse still, "we are in business to make money" (assuming
that the business is not a mint !). Also, some people confuse mission
statements with value statements (see below) - the former should be
very hard-nosed while the latter can deal with 'softer' issues surrounding
the business. The following table contrasts 'hard' and 'soft' mission
statements.
| Hard |
Soft |
What business is/does
Primary products/services
Key processes & technologies
Main customer groups
Primary markets/segments
Principal channels/outlets |
Reason for existence
Competitive advantages
Unique/distinctive features
Important philosophical/social issues
Image, quality, style, standards
Stakeholder concerns |
Compare the following statements:
| Hard Statement |
Soft Statement |
| X Corp. designs, develops, assembles and markets systems for data
base management. These systems integrate its proprietary operating
system software with hardware supplied by major manufacturers, and
are sold to small, medium and large-sized companies for a range
of business applications. Its systems are distinguished by a sophisticated
operating system, which permits use without trained data-processing
personnel. |
Our mission is to enhance our customers' business by providing
the very highest quality products and services possible. Our customer
support strategy is based upon total, no-compromise customer satisfaction
and we continually strive to offer a complete package of up-to-date
value added solutions to meet our customers' needs. We value above
all our long term customer relations. |
The Objectives
The third key element is to explicitly state the business's Objectives
in terms of the results it needs/wants to achieve in the medium/long
term. Aside from presumably indicating a necessity to achieve regular
profits (expressed as return on shareholders' funds), objectives should
relate to the expectations and requirements of all the major stakeholders,
including employees, and should reflect the underlying reasons for running
the business. These objectives could cover growth, profitability, technology,
offerings and markets.
The Values
The next element is to address the Values
governing the operation of the business and its conduct or relationships
with society at large, customers, suppliers, employees, local community
and other stakeholders.
The Strategies
Next are the all important Strategies
- the rules and guidelines by which the mission, objectives etc. may
be achieved. They can cover the business as a whole including such matters
as diversification, organic growth, or acquisition plans, or they can
relate to primary matters in key functional areas, for example:
- The company's internal cash flow will fund all future growth.
- New products will progressively replace existing ones over the
next 3 years.
- All assembly work will be contracted out to lower the company's
break-even point.
For further discussion on strategies, refer to Devising
Venture Strategies.
The Goals
Goals logically follow from the
strategies. These are specific interim or ultimate time-based measurements
to be achieved by implementing strategies in pursuit of the company's
objectives, for example, to achieve sales of $3m in three years time.
Goals should be quantifiable, consistent, realistic and achievable.
They can relate to factors like market (sizes and shares), products,
finances, profitability, utilization and efficiency.
The Programs
The final elements are the Programs
which set out specific implementation plans for the key strategies.
These should cover resources, objectives, time-scales, deadlines, budgets
and performance targets.
Additional Help
If desired, you can use the free On-line
Strategic Planner to create a 3-page strategic plan based on the approach
described above.
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