Saturday, April 13, 2024

Strategic Planning 2


Last week we saw how you, who owns a business and employs 50 workers, realised that your business was not moving forward. It stagnated and sales were going down. You are not quite sure what to do next to boost your sales again. Should you advertise, change your product, invest in something else? While these questions keep you awake during the night, you are very busy the whole day trying to keep things going. There is always some crisis to attend to. What seems to be lacking is a longer-term perspective and you don’t find the time and think about your business to develop a business strategy. We also looked at what the benefits could be for you to formalise a strategy and what the process would roughly look like. Basically you, like every other business owner needs to answer the following three questions:
Where am I now?
Where do I want to be?
How do I get there?
Next, we will look what approach could be used to find the answers to these questions and formulate long term objectives. Remember that by not following a formal approach, the business strategy will emerge ad hoc, as the result of a series of decisions at different times. And if decisions are made in the absence of a framework, the different activities of the business will be pulled into different directions, according to personal concerns and preferences. There will be no consistency in the decisions that management takes. Strategy is about means and ends, which will allow you to be more in control of your business, your resources and challenges facing your business. This requires a concentrated effort but will pay its returns in the long term. First you will need to gather information based upon which you can make your strategic decisions later. Information is required from the following points of view:
Next follow some questions and guidelines that will help you to gather the information that you need.
The business in context:
How did the business arrive at its current present form? Describe the steps.
What are the main activities of the business?
Which are core activities, and which are side activities?
Why did the business develop the side activities?
What customers groups are served by the business?
What do customers gain by buying your products or services?
What is the image of the business? Check this with customers, suppliers, workers, competitors.
What mistakes has the business made in the past in respect of the needs and expectations of the customers? What can you learn from the mistakes?
Who are the main suppliers and what is the relationship with each one of them?
The business and its resources:
What skills do your workers have? Make an inventory and write them down.
How is the business organised? Are responsibilities defined? Do job descriptions exist? Who reports to whom and about what?
What skills are lacking?
How is information organised within the business? What information system is computerised?
Is financial information summarized and presented to management to gain insight into the financial health of the business and to make strategic decisions?
What other resources are missing for the business to run more efficient and effective?
What procedures may need to be introduced to increase efficient use of resources, for example, performance assessments?
I encourage you to look into these questions and write your answers down. Discuss the issues with your key workers and summarize your findings. Next week we will continue to look into the remaining areas and lay the foundation for devising the business strategy.

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