One of the large companies in the UAE recently faced
a problem – whether to expand or not. We got in and conducted strategic study.
I had the privilege to take an hour’s presentation to the ultimate decision
takers- Board of Directors, who quizzed me with sizzling questions as Board was
not so keen with the expansions while the top management was full of enthusiasm
as they were more confident due to market awareness and day to day operational
challenges. Our solution which was best
suited for the company was accepted by both Board and the top management
wholeheartedly.
Is, strategic plan an isolated event which
companies undertake once in a while?
Strategic management process is an ongoing process
that evaluates and controls the business and the industries in which the
company is involved. It includes assessment of its competitors and sets goals
and strategies to meet all existing and potential competitors; and then
reassesses each strategy annually or quarterly [i.e. regularly] to determine
how it has been implemented and whether it has succeeded or needs replacement
by a new strategy to meet changed circumstances, new technology, new
competitors, a new economic environment., or a new social, financial, or
political environment. The Strategic Plan will enable understanding of the key
drivers of the market, its growth, market size, demand/supply balance, etc.
Ideally, the Plan must have steps to identify areas linked to economic growth -
to ensure that the performance of the company is in line with the economy.
Usually, it includes the following steps:
·
Evaluate current performance
results
·
Review corporate governance
·
Scan the external environment
·
Analyse strategic factors
(SWOT)
·
Generate, evaluate and select
the best alternative strategy
·
Implement selected strategies
·
Evaluate implemented
strategies
Strategy management may consider several options,
depending upon the circumstance. It may include one of the following:
ü
Corporate Strategy-decisions
regarding the flow of financial and other resources to and from a company’s
product lines and business units.
ü
Directional Strategy-A
corporation’s directional strategy is composed of general orientations towards
growth
ü
Functional business strategy supports overall
business strategy in much the same way that operational managers support upper top
management. Marketing, human resources, logistics and production are all
examples of functional areas.
Many organisations overlook functional strategy,
which is very vital for efficient functioning of the business. It answers questions
that impact a company’s competitiveness and efficiency. i.e:
§
Are you consistent with
materials cost, labor and delivery?
§
What is the most
cost-effective way to transport your materials?
§
Are you using social
networking to target new customers?
§
Do you keep inventory flowing
or work just-in-time?
§
What are your sources and
scope of your competitive advantages?
§
Do you know your market
position?
§
Is your brand easily
identifiable from the competition?
