Unit 2: Strategic Planning
Strategic planning is the phase of strategic management that comes after goals are defined but before the strategy is implemented. In this phase, you must take your firm's financial situation into account. For example, if your firm wants to grow, this usually involves additional capital investment. If your firm does not have the cash or the means to raise money to spend, then the goal may be dead in its tracks.
Likewise, there are external issues that must be taken into consideration. Google cannot grow much in the advertising space market without facing reviews from the Department of Justice for anti-trust issues. These are political issues, but economic, social, and technological concerns are also at play. By considering these factors, strategic planners can design a strategy that can be implemented without being stalled or shut down by unforeseen issues.
There are many ways to analyze a system and develop a strategic plan. Hopefully, you will study the methods in this course and then further research systems that may best cater to your desired industry.
Completing this unit should take you approximately 6 hours.
Upon successful completion of this unit, you will be able to:
- describe how organizational goals are established;
- identify internal and external factors that impact strategic planning; and
- select and apply the appropriate strategic management tools based on internal and external analysis.
2.1: Organizational Goals
This is a classic work about balance. The ideas are abstract, but work to separate the practical applications, noting how the internal and external environments are perceived. For example, the phrase "When gold and jade fill the hall, their possessor cannot keep them safe" addresses how much wealth a company ought to accumulate. In other words, it may be better to distribute profits as they are made rather than build up a large store of cash that competitors can raid. This is a challenging text to read and understand but is valuable and insightful.
- Read these sections to see how to create a vision and mission statement. Then, think about using the mission and vision statement in a modern organization. Attempt the exercises at the end of each section.
How do you apply and develop vision and mission statements? Read this article for more information on the process.
While this video emphasizes strategy development in healthcare, take notes of its key points. Think about the "I CARE" mission statement what goal each letter stands for. Could this mission statement be used in any business? The last 12 minutes cover SWOT, which we will discuss next.
2.2: SWOT Analysis
What is SWOT? How is it used in strategic planning? Read this section and do the exercises at the end. SWOT is an essential tool that you can use to analyze an organization's internal and external factors.
Read this overview of SWOT analysis. Then, conduct a quick web search to identify a company and its SWOT analysis. An example of a company you might find in your search is Walmart. You might notice several sites that illustrate the table found in this article.
- Review this presentation that explains the process for conducting a SWOT analysis.
- After reading this section on the best practices for conducting a SWOT analysis, note the model's applicability to an organizational setting. Take the opportunity and try to answer the exercises at the end of the section.
- Thoroughly review the four quadrants of a SWOT analysis. Then, examine the supplemental checklist and tools. Each tool gives additional context for understanding how to use a SWOT analysis in your organization.
2.3: PEST Analysis
Watch this video of a live SWOT analysis in an organization. Note the completion of each of the four components.
A SWOT analysis often is preceded by a PEST Analysis: Political, Economic, Social, Technology. The PEST Analysis model was first introduced in 1967 and has had other names. This course will use the PESTEL Analysis (PEST plus Environmental and Legal issues) as a macro-level viewpoint analysis tool.
- This article introduces the PESTEL model. There are many ways to diagram the six categories in the PESTEL Analysis model. Do a quick online search to see the variety of template diagrams that have been created to illustrate the model. What have you noticed that seems different or the same regarding the models?
2.4: Factors of Success
- This article introduces three essential factors for managers to consider when forming an effective strategy. What conditions influence the effectiveness of strategy formation?
Study Sessions
These study sessions are an excellent way to review what you've learned so far and are presented by the professor who created the course. Watch these as you work through the unit and prepare to take the final exam.
We also recommend reviewing this Study Guide before taking the Unit 2 Assessment.
Unit 2 Assessment
- Receive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
- View
Once you submit your answer, evaluate it using the provided guide to responding.