Process Of Business Planning

Process Of Business Planning-87
The macro-environmental analysis includes political, economic, social, and technological factors and sometimes is referred to as a PEST analysis.

The macro-environmental analysis includes political, economic, social, and technological factors and sometimes is referred to as a PEST analysis.

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An environmental scan is performed to identify the available opportunities.

The firm also must know its own capabilities and limitations in order to select the opportunities that it can pursue with a higher probability of success.

Porter advised against implementing a combination of these strategies for a given product; rather, he argued that only one of the generic strategy alternatives should be pursued.

The strategy likely will be expressed in high-level conceptual terms and priorities.

Porter's 5 forces include barriers to entry, customers, suppliers, substitute products, and rivalry among competing firms.

The internal analysis considers the situation within the firm itself, such as: A situation analysis can generate a large amount of information, much of which is not particularly relevant to strategy formulation.In the strategy formulation process, the mission statement sets the mood of where the company should go.Objectives are concrete goals that the organization seeks to reach, for example, an earnings growth target.The strategy should be translated into specific policies for functional areas such as: In addition to developing functional policies, the implementation phase involves identifying the required resources and putting into place the necessary organizational changes.Once implemented, the results of the strategy need to be measured and evaluated, with changes made as required to keep the plan on track.For effective implementation, it needs to be translated into more detailed policies that can be understood at the functional level of the organization.The expression of the strategy in terms of functional policies also serves to highlight any practical issues that might not have been visible at a higher level.The objectives should be challenging but achievable.They also should be measurable so that the company can monitor its progress and make corrections as needed.To make the information more manageable, it sometimes is useful to categorize the internal factors of the firm as strengths and weaknesses, and the external environmental factors as opportunities and threats.Such an analysis often is referred to as a SWOT analysis.

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