Effect not Equal to cause when Planning Strategy When reviewing a business it is essential to cut through the symptoms of problems and reach the underlying causes. Questions which can assist in revealing the real causes include the following: "What stopped the business from?" "What caused the cause of?" "Why didn't the business achieve a 25 return?" by way of an example consider why this company may be unable to increase its. The moral in this case is that there are no major customers due to under-capitalization! Also have a look at the discussion on causes of business failure in devising Business Strategies. Swots - keys to business Strategies having built up a picture of the company's past aims and achievements, the all-important swot (strengths, weaknesses, opportunities and threats) analysis can commence. Strengths weaknesses Strengths and weaknesses are essentially internal to the organization and relate to matters concerning resources, programs and organization in key areas. These include: Sales - marketing - distribution - promotion - support; Management - systems - expertise - resources; Operations - efficiency - capacity - processes; Products - services - quality - pricing - features - range - competitiveness; Finances - resources - performance;.
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And locate the reasons for differences between the actual and desired performance. Drill Down a useful technique for exploring performance shortfalls is to review the business's financial return and to drill down through the components of this return to locate and assess the key determinants of performance. For example, return on shareholders' funds is a key measure of profitability which can be expressed as: Net income sales x sales Shareholders' funds take each item in this formula, explore its contents and derive performance measures or ratios. For example: Sales break down into sales values, units, prices, discounts, commissions, bad debts and. Net income is derived by deducting costs (materials, labor, power etc. expenses, interest and depreciation from sales revenue. Shareholders' funds are based on the value of fixed assets, current assets, current liabilities, debt etc. Use of cascading ratios is illustrated in this dupont-type profitability chart (click essay thumb opposite) which is automatically generated by more powerful versions of Exl-Plan to show the impact of specific changes in key variables and assumptions on overall write profitability. Subject the resultant ratios to critical examination and attempt to compare them with industry norms. The paper entitled Managing Working Capital explains key working capital ratios. Note that the Exl-Plan financial planners generate extensive ratios based on projected p ls, cashflow forecasts and balance sheets for 1-3-5-7 years ahead.
Describe the actual strategies followed over the past few years in respect of products/services, operations, finance, marketing, technology, management etc. Critically examine each strategy statement by reference to activities and actions in key functional areas covering such matters apple as: How has the company been managed? How has the company been funded? How has the company sought to increase sales and market share? How have productivity/costs moved? Take each element and quantify by reference to actual performance. Ask of each "why not"?, "why only"?, or "why so"?
Use hindsight when Strategic Planning Statements on vision, mission, objectives, values, strategies and goals are not just elements of future planning. They also provide benchmarks for a historic review. Most managers will find it exceedingly difficult to develop a future strategy for a business without knowing its current strategies and measuring their success to date. Assess Current Position The starting point must be to determine a company's existing (implicit or thesis explicit) vision, mission, objectives and strategies. Then judge these against actual performance along the following lines: Is the current vision being realized? How has the company's mission and objectives changed over the past say, three years? Why have the changes occurred or why have no changes occurred? Identify primary reasons and categorize them as either internal or external.
Goals should be quantifiable, consistent, realistic and achievable. They can relate to factors like market (sizes and shares products, finances, profitability, utilization, efficiency. The Programs The final elements are the Programs which set out the implementation plans for the key strategies. These should cover resources, objectives, time-scales, deadlines, budgets and performance targets. It goes without saying that the mission, objectives, values, strategies and goals must be inter-linked and consistent with each other. This is much easier said than done because many businesses which are set up with the clear objective of making their owners wealthy often lack strategies, realistic goals or concise missions. Top of Page.
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When drafting a mission statement, critically examine every noun, adjective and verb to ensure that they are focused, realistic and justified. The admissions values The next element is to address the values governing the operation of the business and its conduct or relationships with society at large, customers, suppliers, employees, local community and other stakeholders. The Objectives The third key element is to explicitly state the business's Objectives in terms of the results it needs/wants to achieve in the medium/long term. Aside from presumably indicating a necessity to achieve regular profits (expressed as return on shareholders' funds objectives should relate to the expectations and requirements of all the major stakeholders, including employees, and should reflect the underlying reasons for running the business. These objectives could cover growth, profitability, technology, offerings and markets. The Strategies Next are the Strategies - the rules and guidelines by which the mission, objectives etc. They can cover the business as a whole including such matters as diversification, organic growth, or acquisition plans, or they can relate to primary matters in key functional areas, for example: The company's internal cash flow will fund all future growth.
New products will progressively replace existing ones over the next 3 years. All assembly work will be contracted out to lower the company's break-even point. Use swots to help identify possible strategies by building on strengths, resolving weaknesses, exploiting opportunities and avoiding threats. For further discussion on strategies, refer to the paper on devising Business Strategies as well as these items below: Use hindsight when Strategic Planning, effect not Equal to cause when Planning Strategy and swots - keys to business Strategies. The goals Next come the goals. These are specific interim or ultimate time-based measurements to be achieved by implementing strategies in pursuit of the company's objectives, for example, to achieve sales of 3m in three years time.
Our mission is to enhance our customers' business by providing the very highest quality products and services possible. Our customer support strategy is based upon total, no-compromise customer satisfaction and we continually strive to offer a complete package of up-to-date value added solutions to meet our customers' needs. We value above all our long term customer relations. Intel's original plan, written on the back of a menu (view copy is an excellent example of a hard statement: The company will engage in research, development, and manufacture and sales of integrated electronic structures to fulfill the needs of electronic systems manufacturers. This will include thin films, thick films, semiconductor devices, and.
A variety of processes will be established, both at a laboratory and production level. As well as the development and manufacture of special processing and test equipment required to carry out these processes. Products may include dioded transistors. Principal customers for these products are expected to be the manufacturers of advanced electronic systems. It is anticipated that many of these customers will be located outside california. If you'd prefer a soft statement, use the. Dilbert Mission Statement Generator.
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The following table contrasts hard and soft mission statements. Hard, soft, what business is/does, primary products/services, key processes technologies. Main customer groups, primary markets/segments, principal channels/outlets, reason for existence. Competitive advantages, unique/distinctive features, important philosophical/social issues, image, quality, paper style, standards. Stakeholder concerns, compare the following statements: Hard Statement, soft Statement, x Corp. Designs, develops, assembles and markets systems for data base management. These systems integrate its proprietary operating system software with hardware supplied by major manufacturers, and are sold to small, medium and large-sized writings companies for a range of business applications. Its systems are distinguished by a sophisticated operating system, which permits use without trained data-processing personnel.
By 32, i will have been invited to the White house. Attributed to Arnold Schwarzenegger who was elected governor of the State of California in 2003. The mission, the nature of a business is often expressed in terms of its. Mission which indicates in a factual way the purpose and activities of the business in terms of operations, (unique) characteristics, functions, customers, help offerings, sectors/segments, scale/scope/penetration, methodologies, technologies, resources etc. Just answer the questions as to what the business really is and does in qualitative terms. If planning for a startup, base the mission statement on the business as it would be once operational - be realistic and practical rather than aspirational. For example, "to design, develop, manufacture and market specific product lines for sale on the basis of certain features to meet the identified needs of specified customer groups via certain distribution channels in particular geographic areas". A statement along these lines indicates what the business is about and is infinitely clearer than saying, for instance, "we're in electronics" or worse still, "we are in business to make money" (assuming that the business is not a mint!). Also, some people confuse mission statements with value statements (see below) - the former should be very hard-nosed while the latter can deal with 'softer' issues surrounding the business.
structure, scale offerings etc. Answer the question: "if someone from Mars visited the business, what would they see (or sense)?" Consider its future products, markets, customers, processes, location, staffing etc. Here is a great example of a vision: I will come to America, which is the country for. Once there, i will become the greatest bodybuilder in history. I will go into movies as an actor, producer and eventually director. By the time i am 30 I will have starred in first movie and I will be a millionaire. I will collect houses, art and automobiles. I will marry a glamorous and intelligent wife.
It covers objectives, strategies, sales, marketing and financial forecasts. A business plan helps you to: clarify your business idea spot potential problems set out your goals measure your progress, youll need a business plan if you want to secure investment or a loan from a bank. Read about the finance options available for businesses on the business Finance guide website. It can also help to convince customers, suppliers and potential employees to support you. Key steps towards a strategic Plan. The preparation of a strategic plan is essay a multi-step process covering vision, mission, objectives, values, strategies, goals and programs. These are discussed below.
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Download free business plan templates and find help and advice on how to write your business plan. Business plan templates, download a proposal free business plan template on The Princes Trust website. You can also download a free cash flow forecast template or a business plan template on the Start Up loans website to help you manage your finances. Business plan examples, read example business plans on the Bplans website. How to write a business plan. Get detailed information about how to write a business plan on the Start Up Donut website. Why you need a business plan. A business plan is a written document that describes your business.