strategic plan is to provide a “framework for managerial decisions”

strategic plan is to provide a “framework for managerial decisions”

General approach

The purpose of a strategic plan is to provide a “framework for managerial decisions” (p. 41) to provide the managers with “unity of direction” (p. 39). In this way, all functions of the organization will reinforce the others as they make progress toward their goals. The four major steps are to:

1. identify candidates for each key element of the strategic plan,
2. analyze each candidate,
3. make a clear and specific recommendation for each key element, and

4. justify each recommendation by citing previously stated facts (including explicit assumptions), analysis of those facts, any prior decisions, or some combination.

Using an analogy from the world of journalism, I want you to approach this as a columnist, not a reporter. A reporter explains the situation and sometimes some of the background, but that’s all. A columnist goes further by suggesting how to fix the situation and why that fix will work.

Focus. I want you to focus on one business. If the organization has multiple businesses, the subject of your strategic plan must be at the business level of text Exh. 1.3 (described on pp. 6-7).

Summary approach. The outline above is a guide to a process of interrelated steps, not independent tasks. As you go forward, check that the items tie together, and prove that point as part of the justification.

For example, we will look at strategic issues and the mission statement (item 4). Your long-term objectives (item 7) must be consistent with the SWOT analysis (item 6) and lead the organization to that mission; if not, then either they or the mission need modifying.

The same will be true to the end: Your strategic analysis and choice (item 8) must take advantage of strengths and opportunities (item 6) and avoid weaknesses and threats (item 6) to meet the long-term objectives (item 7). Similarly, each successive item must be consistent with all previous items.

Then, as you follow the process, keep looking back. At each step, double check all the earlier steps because you might have uncovered something that affects an earlier decision. I will not expect you to go back and make all the necessary changes, but that is exactly what you would do in the real world.

Accordingly, the best overall approach is to do the core steps is order:

• All page, exhibit and chapter citations in this note and in parts 02 through 07 are to the Pearce & Robinson Strategic Management 13e text, unless otherwise stated

Note on strategic plans 01

1. Company background

2. Vision
3. Mission statement

4. SWOT analysis
5. Long-term objectives
6. Strategic analysis and choice

7. Short-term objectives
8. Tactics
9. Critical success factors.

These constitute a process of interrelated steps, not independent tasks, to develop a plan. As you go forward, check that the items tie together and prove that point in your write up.

For example, your long-term objectives (item 5) must be consistent with the SWOT analysis (item 4) in the environmental analysis and lead the organization to the vision; if not, then something needs modification.

The same will be true to the end: Your strategic analysis and choice (item 6) must take advantage of strengths and opportunities (item 4) and avoid weaknesses and threats (item 4) to meet the long-term objectives (item 5). Similarly, each successive item must be consistent with all previous items.

Then, as you follow the process, keep looking back. At each step, double check all the earlier steps because you might have uncovered something that affects an earlier recommendation. I will not expect you to go back and make all the necessary changes, but that is exactly what you would do in the real world.

When this is all done, you write the executive summary, because you will not be able to do it until the paper is complete! More details about all these sections are in later sections of this document.

Justification. As you prepare your plan, you must describe the chain of logic that explains how each conclusion and decision will lead to success and is consistent with all previous steps. Do not assume the reader remembers all the detail, and do not make the reader go back through your plan. Instead, explain each conclusion and decision and then back it up with solid justification. In addition, do not add any new information in the paragraphs which justify conclusions or recommendations–use only the facts and analysis that have been already presented.

The best justification consists of previously mentioned facts (including explicit assumptions), analysis of those facts, prior conclusions, prior recommendations, or some combination, such as:

Note on strategic plans 01

A big opportunity lies in capturing more sales from our existing customers since they are very satisfied with our products and services (Exh. 4) but purchase an average of only 22% of this category from us (Exh. 5).2

Let me repeat the key points because it is vital to your earning a good grade:

Back each conclusion and recommendation with solid justification, which consists of previously mentioned facts (including explicit assumptions), analysis of those facts, prior conclusions, prior recommendations, or some combination. Do not add any new information in the justification.

Remember that you cannot merely say something like, “This recommendation is consistent with the vision, mission and SWOT”–you must explain why that is so.

The subsequent sections provide more detail about various sections of the plan.

Most of the plan will be your creation

You are not expected to critique an existing strategic plan even if you could find one. Your task is to create a successful strategy. You are expected to research the company, if possible, and changes in the business environment for the SWOT analysis, but everything else will be your original work.