What Are the Different Methods of Strategic Business Planning?

The strategic planning process refers to the development and maintenance of a practicable strategic adaptation management between the company's goals and resources (or capabilities) and the rapidly changing environment through the formulation of the company's mission, goals, business portfolio plan and new business plan process. The strategic planning process includes: defining corporate missions; determining corporate goals; arranging business portfolios; and developing new planning tasks.

Strategic planning process

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The strategic planning process refers to the development and maintenance of a practicable strategic adaptation management between the company's goals and resources (or capabilities) and the rapidly changing environment through the formulation of the company's mission, goals, business portfolio plan and new business plan process. The strategic planning process includes: defining corporate missions; determining corporate goals; arranging business portfolios; and developing new planning tasks.

The strategic planning process refers to the development and maintenance of a practical relationship between the company's goals and resources (or capabilities) and the rapidly changing operating environment by formulating the company's mission, goals, business portfolio plan and new business plan. Feasible strategic adaptation management process. In other words, the strategic planning process is a series of major steps taken by an enterprise and its various business units to formulate a long-term overall strategy for survival and development.

The so-called enterprise task refers to what kind of activities the enterprise will engage in and what markets to serve in a long period of time. It involves the business scope of an enterprise and its status in the division of labor in the whole society, and distinguishes this enterprise from other types of enterprises.

Under the objective management system, corporate tasks must be translated into specific goals at each management level. The most common targets are profit, sales growth, market share, risk sharing, innovation, etc. Enterprise goals should have conditions such as hierarchy, quantification, reality and coordination.

After the enterprise has clarified its tasks and goals, the next step is to check the business items currently being operated and determine the specific content of each business, that is, to determine which businesses to establish, maintain, shrink and eliminate.

Summarizing the business investment portfolio plans formulated by the existing business units of an enterprise can yield the company's top sales and profits. However, the expected sales and profits are usually lower than the company's top management wants to achieve. To make up for this difference, a plan to acquire new business is needed. Enterprises can make up for this difference in three ways: first, to find future development opportunities in the company's existing business areas, that is, intensive growth; second, to establish or buy business related to the current enterprise business, that is, integrated growth; third, to increase Diverse growth, but an attractive business that is not related to the company's current business.

The mission of the enterprise should answer the question: What is the business of the enterprise? Top management clearly specifies appropriate tasks and makes it clear to all staff that morale can be improved and the motivation of all staff can be motivated. Moreover, the mission of the enterprise is an "invisible hand" that guides all staff members in one direction and enables them to work together.

After the top management of the enterprise has stipulated the tasks of the enterprise, the tasks of the enterprise must be specified as a series of goals at all levels of the organization. Managers should be aware of their goals and be fully responsible for their achievement. This system is called goal management. The common goals of enterprises are:

Return on investment (ROI = profit / total investment)

sales growth rate

market share

Product innovation, etc.

In order for a company's goals to be practical, the goals set by the company's top management must meet the following requirements:

After the company's top management has specified the company's tasks and goals, it needs to arrange the business portfolio and use the company's limited funds to operate the business with the highest efficiency. This is a major task of an enterprise's strategic planning work.

After the company's top management has formulated a business portfolio plan, it should also make a strategic plan for the future business development direction, that is, formulate a new business plan or growth strategy for the company. There are three ways companies can develop new businesses:

Intensive growth of strategic planning process

1) Conditions. If companies have not fully exploited the opportunities that lurk in their existing products and markets, they can adopt intensive growth strategies.

2) Form

A. Market penetration. That is to say, through improving advertising, publicity and sales promotion, enterprises have set up more commercial outlets in certain regions, used the multiple channels to deliver the same product to the same market, and short-term price cuts to expand existing product sales in existing markets. include:

Do everything possible to make existing customers buy more of the company's existing products;

Attract competitors' customers and purchase existing products of the company;

Find ways to sell products in existing markets to customers who have never bought their own products.

B. Market development. That is to say, enterprises can increase the sales of existing products in new markets by adding new commercial outlets in new regions or abroad or using new distribution channels to strengthen advertising promotion.

C. Product development. That is, the company provides new products or improved products to the existing market by adding colors, varieties, specifications, models, etc.

Integrated growth of strategic planning process

1) Conditions. If the company's basic industry is very promising, and if the company's integration of supply, production and sales can improve efficiency, strengthen control, and expand sales, an integration strategy can be implemented.

2) Form

A. Backward integration. That is, the company owns and controls its supply system through the acquisition or merger of several raw material suppliers, and implements production and sales integration.

C. Forward integration. That is, the company implements the integration of production and sales by acquiring or merging several commercial enterprises, or owning and controlling its distribution system.

D. Horizontal integration. It refers to the enterprises of the same type acquired or merged by competitors, or joint production and operation with other similar enterprises at home and abroad.

Diversified growth of strategic planning process

1) Concept. Diversified growth means that the company maximizes the variety of products, cross-industry production and operation of multiple products and businesses, expands the production scope and market scope of the enterprise, makes full use of the company's strengths, and enables the company's human, material and financial resources Utilize it to improve business efficiency.

2) Form. The cores of different forms of diversification are different. The main forms are:

A. Concentric diversity. The original technology is the core of diversified operation. That is, the company uses the existing technology, expertise and experience to develop new products, increase product types, and expand business scope from the same center. For example: automobile manufacturers increase the production of tractor products.

B. Horizontal diversification. Taking the original market as the core of diversified operation. That is, the enterprise uses the original market and uses different technologies to develop new products and increase various types of products. For example, the original fertilizer manufacturer invested in pesticide projects.

Features: The characteristic of horizontal diversification is that the basic products of the original product and the new product are different, but there is a strong market relationship, and the original product can be used to sell new products.

C. Group diversification. Taking the original enterprise group as the core of diversified operation. That is, large enterprises increase acquisitions, merge with enterprises in other industries, or invest in other industries to expand their business to other industries. New products and new businesses have nothing to do with the company's existing products, technologies, and markets. In other words, the company does not rely on the original technology or the original market, and develops into products or labor services with completely different technologies and markets.