INTRODUCTION

This assignment is concerned about the strategic development of the organization in terms of its mission, aims objectives and how it develops itself strategically for the achievement of its objectives. The assignment helps to understand how an organization tackles every business issue in a way that it could achieve mutual benefit for organizations as well as for the individuals concerned with the organization which are called stake holders, in every sense ranging from internal to external. The assignment also highlights the various tools and practices used and presented by various authors in order to make the organization powerful and deal with every concerning body in a proactive manner. The fact that I do not work in any organization or does not hold any clear knowledge and understanding about any organization due to which I have attempted this assignment through theoretical perspective and have highlighted various concepts and have given explanations and personal evaluation for them as this is also allowed in and mentioned in the assignment detail list. 1) Strategic Aims & Objective: According to Joyce & Woods, (2001) that, strategy refers to ways and methodologies for achieving any particular thing in the long run perspective. Strategy diverts everything from short term to long term and helps the organization to actually workout its goals for continual achievement. Strategy focuses on long term perspective, therefore it highlights key issues which are necessary to be maintained throughout the business life cycle for continuous achievement of the objectives. Strategic aims and objectives are what an organization really wants to achieve in the longer run a company may be planning and working to achieve 10 percent of market share within next two years but a strategic aims will identify as to what the organization is planning to achieve within the next 20-25 years and where it wants to reach. Secondly the strategic objectives are one step ahead of the strategic aims as they tell the business as how that strategic aims could be achieved in the longer run. So we see that one tells what and the other tells how. Hill & Jones, (2007)

Primarily I believe that for the success of every organization it is important that the enterprise focus on strategic aims rather than short term as this ensures that the organization remains competitive. Mission: According to Scott et al, (1993) that mission defines the core purpose of the existence of the organization or enterprise. Personally I believe that is important for every organization to have a mission and mission statement which could identify the enterprise and its employees as to what their actual target is so that they could work out their way towards achieving it. David, (2006) highlights that a strong strategic mission statement is the one which resembles with the organization`s work and activities and it clearly represents what the organization is doing and is involved in. here I would also like to mention the quote of Peter Drucker which is that: A business is not defined by its name, status but it is defined by its mission. A strong mission and purpose of the organization makes it powerful David, (2006).

Components of Strategic Plan-Planning: This includes Mission and Objectives External Assessment Internal Assessment Strategy actions, analysis and choice Strategy Implementation plan & implementation Evaluation

Joyce & Woods, (2001) Personal Evaluation & Analysis: All these areas are very important for the active strategic planning of the objectives of the organization. Personally I think that the sequence of these steps or stages of strategic plan and

strategic planning is also very important. The organization need to initially look at its mission and what it really want to achieve and how it thinks that it is possible for them. This blue print of the overall standing of the organization makes the strategic managers able to understand the concepts and ideas through which it could correctly identify the factors which could affect the them from inside as well as from the outside of the organization towards achieving those goals and aims. So from there the strategic managers can get down to step two and three where they can potentially highlight all the factors that could affect the organization in achieving their strategic aims and objectives. The next step is the fact that every organization has a limit and range of attributes through which actually identifies what it can potentially do in order to remove these internal and external obstacles. The strategic managers after the identification of the strategic aims and objectives highlight the possible ways through which the affect of these elements can be minimized or removed. Once this evaluation is done, the strategic managers figure out proper strategic to implement for the achievement of organizational goals. They are called strategic plans. The strategic managers divide the strategic plan in to further categories and further formulate for every department to show them what they have to do and the respective managers of those departments take further actions according to that plan. After the implementation of the strategic plan in every section of the organization the managers give feedback as to where the plan is not giving the desired results and what is lagging behind in it for rectification and improvement in the future. Looking at the series mentioned above by Joyce & Woods, (2001) I believe that this is how the organization`s strategic planning is done. Personally I think that whole of the strategic planning section is very important as this highlights the various components through which it could do better in terms of the overall attainment of the objectives. Factors that affect the strategic plan of the organization: In the line of strategic planning every prospect is important and every aspect of strategic planning caters some sort of issues within them selves. It would be nonsense to say that an organization can smoothly achieve every objective without any hurdle. There are various factors that affect the strategic plan of an organization which comes under stage two of strategic planning. External Environment:

Steiner, (1997) The second step that strategic planning consists is the analysis of the business trends which at times if also called the external assessment. In this component the business managers and strategic planners and advisors of the enterprise work on and figure out the areas and prospects which affect the business and areas that may influence the business. External environment factors are mainly uncontrollable factors as they are outside of the organization and an organization possess a very little of no authority over them. There are various tools used to evaluate and assess these external forces such as PEST analysis:

Poliltical

Economical

Social

Technological
Figure: 1.0 PEST (Drawn Personally from the theoretical concept.) PEST analysis refers Political, Economical, Social and Technological factors. Political factors highlight as to what is the position of political environment, how stable it is, what is going on in terms of business, what is the government`s strategy and policy for business and the policies for the economy. All these things are uncontrollable factors that affect the strategic plan of every organization. We can understand this by an example that if a multinational company is planning to increase its business by 10 percent every year and the government puts the policy to expand at the rate of 5 percent every year in order to provide opportunities for local

businesses to grow also, then the organization can not do any thing but to revise its plans and follow what the government says. Economical factors highlight the uncontrollable factors such as interest rates, inflation in the economy, affordability of the general population, GDP and GNP of the country etc. Social highlights as to what the beliefs of the people, what is the religion are being followed, how they see business and what they prefer, what language they prefer, how they look at the society and themselves and their thinking. Technological factors involve things such as technological advancement and its level in the economy, use by general public and awareness to technology, use to technology in products, services and their distribution etc Steiner, (1997) These are some of the external forces that may affect the strategic plan of the business and strategic managers need to potentially revise their plans and change policies or implement alternative strategies for the achievement of their objectives. According to David, (2006) that there are many micro factors which also affect the strategies and strategic plans of the business. These factors are related with customers, suppliers and the other various stake holders of the business. The author believes that to an extent they are controllable but at times they are not. The famous tool used for this purpose if the Porter`s five forces model. Michael E Porter gave this theory in which he has highlighted that in order to gain competitive advantage it is important that the organization remain competent form five areas of the business. Mintzberg, (2000) Before going in detail about this model I would like to mention the connection of this model which is that these factors which porter discusses are also very important for the smooth implementation and execution of the strategic plan and an organization can not ignore these micro factors and successfully implement its strategic plan and achieve its aims.

Supplier Power

Barriers to Entry

Rivalry

Threat of Substitutes

Buyer Power

Figure 2.0 Porter`s Five Forces: Drawn personally from the theoretical concept. All these five forces are significantly important and an organization needs to maintain them. In connection tp suppliers we see that for an organization to successfully achieve its strategic aims and implement its plan it is important that its suppliers working is going parallel to its strategic plans and that the organization effectively get good agreements with the supplier which could save money for the company and get quality products and services. if the supplier asks for more money or give poor quality than the organization can not successfully achieve its strategic plan. The same is the case with buyer power, threats of substitutes and barriers of entry. If there are too many alternative products available in the market of your product then you may need to potentially change your strategic plan or alter it or diversify it in order to achieve your objectives. It is important that we understand the need and importance of strategic components and strategic aims so that we have platform to effectively implement our strategic plan. Mintzberg, (2000)

NOTE: These above discussed tools (PEST & 5 Forces) are also called strategic analysis tools through which the strategic managers conduct research on the business environment in which the business is operating in order to see the business progress towards the achievement of the strategic aims. Remember that these tools are NOT just to evaluate and analyze the environment at the initial stage of strategy planning and formation but they are constantly used at the later stages as well for the evaluation of the progress. We will discuss one more tool which is famously used which is SWOT Analysis. Source: www.mindtools.com SWOT stands for Strengths, weaknesses, opportunities and threats. SWOT is a strategic planning tool basically which helps the strategists to evaluate possible advantages that could be achieved, threats to avoid, weaknesses of the businesses to improve and opportunities to avail for the successful achievement of business objectives. All these analytical tools are implemented in order to achieve more focus on the plans and gain competitive advantage and remove possible hurdles so that the organizational direction is done properly. Strengths highlights as to what the organization can do better than other, what we are unique at, what is the competitive edge of the organization, etc. Opportunities includes as to what are the gaps that your organization can fill in the society or in the product/service category, what innovation this organization can done, which market the organization can potentially focus etc. Weaknesses highlight what your competitors are good at, what you need more but have less, what weakness you have within your organization etc. Threat includes what political, social economical policies could affect your organization, what policy changes can harm the business strategy, what impact negatively on the competition etc. Source: www.mindtools.com So we see that the these strategic tools give a great help and support to analyze the overall situation in which the business is operating ranging from internal to external. The important thing over here is the right selection of the tool as per need and then the effective use of that tool.

This whole process may be time consuming but gives huge benefits at the strategic level of the business. Understanding the organization`s Strategic Position: It is important for the business to clearly keep an eye on its business operation and see as to where is it going and how far it has achieved it strategic aims? Grant, (2005) The above mentioned tools also help the organizations to look at the various aspects of the business and the external factors with which the business is connected and compare with what was strategically planned to achieve to find out the gap and then fill it with effective alternative strategic or revised plans. Understanding the strategic position of the organization varies for every organization as every industry holds different internal and external features. We can take the example of hotel industry to understand this that for a hotel to know its current strategic position, the areas that it needs to analyze could be Service Quality Access Innovation etc

So taking all these factors a hotel can potentially figure out what level of service it strategically planned to give and what it is giving now and what quality level it holds and what it could do better in order to achieve its strategic aims. These areas could also be focused and compared in connection with the competitors to see where the company stands in front of them. Again according to Grant, (2005) that, there are many quality management tools and practices available through which the organization can actually maintain its quality concerns and keep an eye on its business activities to constantly maintain them. Finance: Financial position and financial stability of the company also helps the company to analyze the strategic position of the company. The company potentially looks at the level of liquidity, revenues generated, profits, debts (if any) and the overall financial position of the company in

order to see what the company was planning for and where it is standing now. Finance is the back bone for every organization. A company cannot be run without money; therefore sufficient funds are always important for constant operations, expansions and the achievement of the organizational goals. Mintzberg et al, (2005) Customer Feedback: According to Stinnett, (2004) that, customer feedback is a free of cost business consulting. What author is trying to say here is that it does not cost a single penny to ask a customer as to what they think about the organization of regarding its products and services but all those ideas, suggestions and complaints actually consults you as to what your organization should be doing compare to what it is doing now. This feedback clearly highlights where the organization is lagging behind on the track of achieving its targets and what it should be ideally doing. Is an organization can not take positive criticism, and then it can not progress and satisfy its customers.

Stake Holders Needs: There are various stake holders of every business but the key ones which are highly important are suppliers, share holders, customers and trade parties involved in the business Mintzberg et al, (2005) It is highly important for the business to focus on harnessing the needs of the stake holders as they are the life of the business. According to Svendsen, (1998) that, there is a systematic process for the identification of stake holders and their needs in order to satisfy them. Identify the organization`s business stake holders Choose the potential key stake holders and identify their needs Identify the strategic factors to satisfy their needs Develop strategies to satisfy their needs Evaluate

Explanation, Evaluation & Influence of Stake Holders: Once the key stake holders are highlighted as that we mentioned that they are normally suppliers, manufacturers, customers and share holders of the business. The organization need to formulate strategies in order to satisfy their needs. Remember that as strategic manger you need to keep all the needs of your stake holders in mind so that your plan actually fulfills their requirements. We can understand it more clearly through an example that the share holders are always concerned with more dividends so the strategic plan should clearly focus this so that the organization generates sufficient amount of profits to give healthy dividends to the share holders. An organization can not literally ignore the stake holders needs and achieve its strategic aims as per it`s plan. So we can finalize this that clear understanding and following of the stake holders needs is crucial for every organization in the longer run. There are many other stake holders as we mentioned above that play a very important role and have great influence over the strategic aims and objectives of the business. Customers are very important part of the business. The business can only survive with healthy number of customers. According to Svendsen, (1998) that customers are the life blood of an organization and an organization must keep great care of its customers in order to achieve long term benefits and fruitful results. A customer generally wants good quality products and services with low prices. This need of the customers possess a great influence on the strategic plan of the organization as the organization need to play with its resources in a manner and negotiate with all its producers and manufacturers in order to get the best price for its customers. This need and demand will ultimately refer to organization to focus on its financial position, use of resources, supplier bargains, profit ratio and overall revenues. Not only this but there also a great influence of all the stake holder upon each other. If we focus on what we mentioned above we will realize that in order to satisfy the need of customers, the organization has to negotiate with the suppliers and its third party manufacturers. Now the strategic manager plans to devise a negotiations menu so that the organization could get all the stake holders down to certain points on which every one agrees and the company could easily achieve its aims as well. So in practical it would take the organization to formulate a pricing strategy which is acceptable by the supplier(s), customers and also makes sufficient profits for the company to sustain and give dividends to its share holders.

Contingency Planning: Efficient strategists always prepare contingency plans for emergency and alternatives. Mintzberg et al, (2005) Contingency plans are sort of alternative strategies which are used if the main strategy goes wrong all of a sudden or fails due to any internal or external reason. It is important for every organization for its strategic prosperity to have contingency plans ready at all times as if anything goes wrong, the organization possess clear plan to implement in order to handle the situation. This planning is also called alternative strategy planning. These alternative strategies again vary for every organization the formulation and implementation of these strategies also varies form industry to industry. According to David, (2006) that the formulation of alternative strategies is as important as the main strategies as they are back up plans for the organization. There are clear grounds through which we can see that the alternative strategies are very important for the business. We can understand this clearly by taking an example that if a company introduces to raise the price of its products by 2 percent and the strategy move fails then the organization need to have an alternative plan which will define as to what it will do in that case, either it will go back to previous rate, or hold it for a bit of time or stop the product etc. so we understand that without the alternative strategy in this case the organization would have stuck in between and would have failed to take the next step forward in order to dissolve the issue. This dummy example clearly identifies and highlights the importance of alternative strategies for every organization. Lastly what I would like to discuss here is the recognition of the achievements of the people involved in formulating strategic plans and alternative strategies. Reward and recognition is important for the continual success and to maintain high level of employee motivation and commitment to the organization. According to Dessler, (2008) that it is important for HR manager to identify potential players in the organization and reward them so that they remain firm with the company and committed to the goals of the organization. This becomes double the times important to strategists as they do one of the important tasks of identifying ways of running the business and how the organization can achieve its aims. They are the one who show the ray of hope to the businesses in difficult

times through effective alternative strategies. Therefore proper reward and recognition is very important for them. There are many ways through which organization reward each their employees such as through money, holidays, bonuses, pay rises, certificates, promotions etc Dessler, (2008) Conclusion: We have seen in this assignment that the strategic planning and management is highly significant foe every business and every enterprise need clear strategies for the successful achievement of its goals and objectives in the long run. The 21st century is the century of competition and only the fittest can survive; therefore it is necessary that an organization should have clear strategies in terms of what it wants and how it will achieve and at what rate it will operate to achieve its targets and when it stands. The organization also needs to have clear contingency plans so that it successfully tackles problems and hurdles. Reflective: Due to the fact that I don`t have any close contact and knowledge regarding any organization, therefore I selected to attempt the assignment through theoretical prospects as it was mentioned in the assignment guideline, therefore through this perspective I came to learn a lot about strategic planning and how to make a Strategic Plan and what is the need and importance of strategic planning in the real world. This assignment also gave me the opportunity to study and discuss the various tools through which an organization can analyze its strategic position and formulate plans accordingly. In short this assignment has given me a general view as to how strategies are made at corporate level and what the factors those are very important for an organization in terms of its successful achievement of aims and objectives.

References:
Dessler. G, (2008) HRM, 11th Edition, NYC Pearson Prentice Hall Joyce. P & woods. A, (2001), Strategic Management, London Kogan Page Limited Grant. R, (2005), Contemporary Strategy Analysis, 5th Edition, Oxford; Blackwell Publishing Hill. C, & Jones. G, (2008), Strategic Management, Mason, South Western Cenegage Mintzberg. H, (2000), Rise and Fall of Strategic Planning, Illustrated Edition, NYC; Prentice Hall Financial Times Minzberg et al, (2005), Strategy Safari, Illustrated, NYC; Free Press Paperbacks Scott et al, (1993), Organizational vision, values and mission, NYC; Crisp Publications Steiner. G, (1997), Strategic Planning, NYC; Free Press Paperbacks Stinnett. B, (2004), Think like your customer, New York; Mc-Graw Hill Publishers Svendsen. A, (1998), The stake holder Strategy, San Francisco; berrett-Koehler Publishers Inc David. F, (2006) Strategic Management, 12 Editions, NYC, Prentice Hall Financial Times www.mindtools.com Accessed on 22-08-2010