Saturday, November 15, 2008

Strategy: The key to success and the path to failure



Company management will allow strategic planning to understand and formulate ways of future development and policies necessary for successful implementation. Take advantage of the long-term strategy and the risks associated with it, the company adequately maintain medium and operational planning of its activities.


Strategic planning is designed to help address the following tasks:

  * 1. The development of philosophy and basic principles of business strategy.
  * 2. Planning purposes, which includes the identification of the main activities of enterprises and the desired objectives.
  * 3. Analysis of long-term changes in target markets, in policy making, structural changes in the industry, and other external factors.
  * 4. Building a foundation for an effective work plan.
  * 5. Planning for operational and strategic business activities over the next 5-10 years.



Typically, a strategic planning process includes:

  * 1. Analysis of current activities, the assessment of external factors and the allocation of domestic capacity.

  Typically, companies tend to exaggerate their abilities too. This is evident, particularly when evaluating the basic building business. For example, nearly all financial institutions are confident that the value of their brands - "above average".
  * 2. Assessing the competitive environment, identifying trends change.

  For certain industries such as petrochemicals to the special importance of gaining an analysis of the global competitive environment. Thus, in the opinion of international experts, a number of Belarusian enterprises of this industry has preuvelichili capabilities overseas markets when developing their own development projects. In particular, shortages of certain raw materials, tested chemical companies could pre-empt, making their production host before Russia had built factories capable of completely consume all produced in the domestic market, threatening to idle our businesses.
  * 3. Production of strategic long-term and short-term goals and objectives.

  This phase is most important, it determines the main direction, the core of the company over a long period. It is through long-term development strategy should be based company's current activities. A clear example - the company MTS. At the entrance to the local market, it has developed a long-term regional development strategy as part of an overall development strategy. As part of a long-term strategy took into account possible fluctuations in the external environment and provide responses to these fluctuations. And at the moment the company continues its strategy, as the industry leader in the pace of development.
  * 4. Description of current and future areas of development of the desired code of conduct, providing the desired goals - for example, the achievement of specific performance (profitability, revenue, earnings, turnover), defining business success.

  Another example. Canadian enterprises are concerned as to 10% growth in output. Achieving such an outcome is impossible without carefully planned and consistent development strategy. Growth, of course, can be reached dearly, but if the attainment of the growth becomes part of a long-term development strategy, we can expect that to achieve it, it will not stop the development.
  * 5. The development activities of different scenarios for the realization of strategic objectives and tasks, with different options for changing external environment. Assessing the likelihood of each scenario.

  The founder of scenario planning of Roual Dutsh / Shell believes that companies should rely on two or even four scenarios. When companies produce only one scenario for the development of the situation, then because of the frequent losses, may not realize the project. For example, due to deficiencies in marketing strategy and trends of the European market collapsed global introduction of cellular 3rd generation (3G). The same problem is at the moment, one of the Belarusian cellular operators. Over the past year, the company repeatedly changed strategy of positioning its product strategy to gain market share. Today the results of this company is not very successful.

  One of the most common mistakes in the formulation of a strategy - is its complete certainty. Taking any static state of the external and internal environment of certainty, the developer abstragiruetsya of environmental change reality. And the strategy is so accurate and applicable only to specific conditions. This precision and certainty says its not viable. These errors were typical for many Western companies at the entrance to the local market. For example, a company Ford did not take into account peculiarities of the economic development of Belarus, drawing only a general pattern characteristic of other regions, in particular static situation.
  * 6. Developing consistency of the company, assessment of available resources and the need for additional, necessary to achieve the goal.
  * 7. Business development plans for most plausible scenarios, the figures they are helping more accurately see what will grow the company.

  Many companies prefer to own strategic planning of its business. Of course, a group of key staff after collecting the necessary external and internal data can evaluate alternative solutions, to some elements of the strategy of the enterprise. But in the future, the effectiveness of such a group is reduced, as some inefficient alternatives can be offered by the most influential members of the group.

It is at this stage the best option - it is an invitation independent investment consultant company, which will help provide a more detailed analysis and objectively select the best from the alternatives.

Such a consultant not only helps lay the foundation for strategic business planning, developing a business philosophy, values and principles, but also to build an effective work plan, defining the mission and organization category of critical goals for each unit.

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