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The strategic planning process considers the external and internal impacts on the business, as well as looking at customers and markets to determine product and service fits The resulting information combined with a competitive analysis Strategic planning An leads to strategies that have annual process designed to the potential to grow the busiconduct an assessment of ness and sustain profits over a the business and to formu- KEY TERM long period (sustainability) late a multi-year strategy, typically a three- to five-year window This process is top-management-driven and feeds the business planning process The strategic plan is revisited every year to fine-tune assumptions and adjust to market conditions The most successful companies use linking mechanisms to bridge from one stage of planning to the next To link strategic and business planning, a strategy statement or summary of the strategic planning process is used to provide input into the business plan A medical device company in a highly competitive market used the expression for new product development, First is first and second is last This meant that they had to deliver new products to the market ahead of their competitors During the strategic planning process, top management developed a product pipeline strategy that would unfold over several years This information was passed down to key functions, such as R&D, product marketing, sales, purchasing, and manufacturing to incorporate into their business plans
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The business plan is completed by all department managers in profit centers and cost centers The business plan focuses on how to achieve
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revenue projections and fixed budget targets The linking mechanism to bridge to departmental plans and business initiatives is the business plan document It contains specific information regarding annual goals for revenue, profitability, etc, that can be used to complete detailed action plans A large manufacturing company developed a training program for managers called Know the Numbers in which all departmental managers where trained on the Profit and Loss Statement, including what was measured and how they could impact bottom-line numbers for their departments and overall company performance One of the objectives of the training program was to create the mindset that managers were using the financial resources of the company as if they were writing checks from their personal checking accounts Business planning An annual process designed to complete a one-year busiKEY TERM ness plan that links to the strategies established by top management
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This is an annual planning process of functional/departmental plans and supporting initiatives that will directly impact the achievement of business strategies and may SMART THE FUNCTIONAL/ DEPART- have multi-year objectives in MENTAL PLAN mind The functional/departmental Although these plans and plan may have multi-year MANAGING objectives in mind In addiinitiatives are prepared annution, a list of interdependencies should ally, a monthly reporting of be created for communication and feedprogress against plans and iniback prior to producing the final draft of tiatives is recommended for the planThis will encourage the prepavisibility to real-time performration of joint objectives and sharing of resourcesThis is of particular imporance This creates opportunitance if the plans are tied into bonus or ties for adjustments and other incentive programs corrections
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The Value of a Mission Statement in the Planning Scheme
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Whether it s a company mission statement or at the functional or personal levels, the mission statement has enormous value in planning Creating a mission statement should not be considered an obligatory exercise Your mission states the reasons you exist in the business It should reflect the reason that your business opens its doors every day The mission should represent your commitment to the busiSAMPLE MISSION ness and why you operate it STATEMENT FOR When your mission stateBen & Jerry s Ice Cre a m : EXAMPL E A product mission stated ment represents and reflects as: To make, distribute, and sell the your purpose it will attract and finest quality, all-natural ice cream and communicate to your cuseuphoric concoctions with a continued tomers and direct the work of commitment to incorporating wholesome, natural ingredients and promoting employees It can also provide business practices that respect the earth a backdrop for decision makand the environment This mission ing, asking the question, Is inspired Ben and Jerry to build a causethis consistent with our misrelated company sion With that in mind, ask yourself these questions:
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