mcs strategic planning

7/30/2019 MCS Strategic Planning

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STRATEGIC PLANNING


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Strategy?Formal Statement of specific plans.

Strategic Planning?The process of preparing and revising thisstatement is called Strategic Planning.It is a process of deciding on the programsthat the Organization will undertake and onthe approximate amount of resources thatwill be allocated to each program over thenext several years


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Relation to Strategy

FormulationStrategy Formulation is the process of deciding on new strategies, whereasStrategic planning is the process of decidinghow to implement the strategies.

Eg: Organization thinking on diversifyingthrough acquisition or through organicgrowth.


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Strategy formulation should be an activity inwhich creative, innovative thinking is stronglyencouragedStrategic Planning is systematic, it hasprescribed procedures and timetables.

Formulation is unsystematic. It may beformulated to perceived threats andopportunities. Thus a possible strategy maybe surfaced at anytime from anyone in theorganization.


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Evolution

In 1950s, Strategic planning process wasconsidered as unsystematic and it was notdone in a coordinated way.It was difficult to understand certainrequirements such as:Staff, Budget, Time, Effort etc.At present many organization are gaining theadvantage of Strategic Planning for next 3-5years. Eg: Cost leadership strategy.


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Limitations

Planning can end up becoming a form filling,bureaucratic exercise, devoid of strategicthinking.Organization may create a large strategicplanning department and delegate thepreparation of the strategic plan to the staff department.It is time consuming and expensive.


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Characteristics

Top management should be convinced that itis important.

Small organizations need not need but largeorganizations it is relatively necessary.Uncertainty always exists, planning should beflexible.


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Program structure

Programs are products or product families,plus R&D, general and administrativeactivities, planned acquisitions etc.In service organizations, programs arereferred to types of services.Most of them prepare rough plans upto 5

years or above, some have only for next 3years.Because of the relatively long time horizononly rough estimates are possible.


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Organizational relationships

Primary purpose is to improve thecommunication between corporate and businessunit executives by providing sequence of

schedules.For some Controller prepares the planning whileothers have separate planning staff. Strategicplanning requires analytical skills and a broad

outlook.Even if there is a planning staff, controller usuallydoes the work of disseminating guidelines andassembling the proposed numbers.


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Chief executives are always kept in the loop.


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Analyzing proposed New

ProgramsIdeas can originate anywhere in theorganization.As ideas come from the wide variety of sources, the atmosphere needs to be suchthat ideas come to light and receiveappropriate management attention.

A highly structured, formal system maycreate the wrong atmosphere for thispurpose. A system should be flexible andreceptive enough.


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Organization for analysis

A team may evaluate extremely large andimportant proposals, and the process mayrequire a year or more. A huge hierarchicalstructure is involved. The CEO may alsoreturn for further analysis several times. Thusconsuming lot of time.

Recent work in the rapidly developing field of expert systems uses computer software in theanalysis of proposed programs.


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The computer tabulates the results anduncovers inconsistencies ormisunderstandings and raises questionsabout them.


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Analyzing ongoing Program

Value chain Analysis:

The value chain for any firm is the linked setof value creating activities of which it is part,from acquiring the basic raw materials foecomponent suppliers to making the ultimateend use product and delivering it to the finalconsumers.


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From the strategic planning perspective, thevalue chain highlights three potentially useful

areas:1) Linkages with suppliers2) Linkages with customers

3) Process linkages within the value chain of the firm.

1) Linkages with the suppliers:Taking advantage of opportunities can lowercosts, increase value or both.


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2) Linkages with Customers:

3) Process linkages with the value chain of thefirm:the overall objective of this analysis is tomove materials from vendors throughproduction and to the customer at the lowestcost in the shortest time and of acceptablequality.

Efficiency Inward portion: Factors thatprecedes production Efficiency Outward portion: From factory door

to the customer

mcs strategic planning

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