If you own or manage a business, you need to develop a way of analysing the areas that will most affect your ability to gain an advantage in the marketplace.
Identifying the strengths and weaknesses of your business, along with environmental factors and the opportunities that exist is essential in creating a strategic plan.
Having this information at your fingertips will help you make better, more informed, educated decisions which will ultimately help your business become more successful.
A strategic plan provides a vision and sets a clear direction for your team and in most cases, a set of goals that will help measure the overall success of the business.
The first step in developing a strategic plan is identifying the mission or purpose of the organisation, along with the goals and objectives. Defining the purpose of a business forces the management team to look at the products and services on offer and how they will be used. This is where you ask your management team one basic question - what business should we be in?
In developing a strategic plan, it is essential to analyse the environment. The environment will define what options are available for management to take advantage of. For example, in today’s climate conscious society, producing a cost effective hybrid car would provide competitive advantage to a car company e.g. the Toyota Prius.
Conducting a SWOT analysis is the next phase. Looking internally enables management to identify the strengths and weaknesses within the business. What is it that the business does really well – and not so well? It is in this phase that management should ensure they take into account the culture and impact this has on their chosen strategy.
Externally, it is important to consider the opportunities that can be exploited and the threats that will be faced by the business.
Once this is done, a review of the organisation’s current resources is imperative. Does the business have the right skills and experience to achieve the goals and objectives of the company? Are new products or services required? What is the financial state of the business? Is there cash flow and money that can be spent on developing new ideas or marketing? Is there core business that needs to be consolidated?
Only after this process has been undertaken, can management effectively formulate real strategies using the information that has been gathered. Strategies need to be established at all levels of the business both at the highest corporate level – down to functional levels where business units need to align their performance with the overall business.
The final two steps are implementing and evaluating the strategies based on the performance. It is at this stage, that adjustments can be made if necessary to ensure continued success.
Retain HR run workshops with management teams on developing Strategic Plan and assisting with SWOT analysis. Contact us to find out more.
Retain HR
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