Conduct a situation or SWOT analysis

by assessing strengths and weaknesses and identifying opportunities and threats. A situation or SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is critical to the creation of any strategic plan. SWOT is the assumptions and facts on which a plan will be based. Analyzing strengths and weaknesses comprises the internal assessment of the organization.

Assess the strengths of the organization. What makes the organization distinctive? (How efficient is our manufacturing? What is our market share?)

Assess the weaknesses of the organization. What are the vulnerable areas of the organization that could be exploited? (Are our facilities outdated? Is research and development adequate?) Analyzing opportunities and threats comprises the external assessment of the environment.

Identify opportunities. In which areas is the competition not meeting customer needs? (What are the possible new markets? Are our rivals weak?)

Identify threats. In which areas does the competition meet customer needs more effectively? (Are there new competitors? Are market tastes changing?) The best strategy is one that fits the organization's strengths to opportunities in the environment.

Set goals and objectives.

Strategic goals and objectives are developed to bridge the gap between current capability and the mission. They are aligned with the mission and form the basis for the action plans. Objectives are sometimes referred to as performance goals. Generally, organizations have long-term objectives for such factors as return on investment, earnings per share, or size. Objectives elaborate on the mission statement and constitute a specific set of policy, programmatic, or management objectives for the programs and operations covered in the strategic plan. They are expressed in a manner that allows a future assessment of whether an objective has been achieved.

 

Part 2.Tactical plans

Develop related strategies (tactical and operational). Tactical plans are based on the organization's strategic plan. In turn, operational plans are based on the organization’s tactical plans. Top level managers set very general, long-term goals that require more than one year to achieve. Examples of long-term goals include long-term growth, improved customer service, and increased profitability. Middle managers interpret these goals and develop tactical plans for their departments that can be accomplished within one year or less. In order to develop tactical plans, middle management needs detail reports (financial, operational, market, external environment). Tactical plans have shorter time frames and narrower scopes than strategic plans. Tactical planning provides the specific ideas for implementing the strategic plan. It is the process of making detailed decisions about what to do, who will do it, and how to do it.

Managers and supervisors implement operational plans that are short-term and deal with the day-to-day work of their team. Operational plans include a budget, scheduling the work of employees, identifying needs for resources, policies, procedures, methods, and rules. The terms themselves imply different degrees of scope.

A policy is a general statement designed to guide employees' actions in recurring situations. Thus, policies are guidelines.

A procedure is a sequence of steps or operations describing how to carry out an activity and usually involves a group. An example of a procedure is the sequence of steps in routing of parts.

A method sets up the manner and sequence of accomplishing a recurring, individual task. An example of a method is the steps in cashing a check. A rule is an established guide for conduct. An example of a rule is "No Smoking."

Monitor the plan. A systematic method of monitoring the environment must be adopted to continuously improve the strategic planning process. To develop an environmental monitoring procedure, short-term standards for key variables that will tend to validate the long-range estimates must be established. Although favorable long-range values have been estimated, short-term guidelines are needed to indicate if the plan is unfolding as hoped. Next, criteria must be set up to decide when the strategy must be changed. Feedback is encouraged and incorporated to determine if goals and objectives are feasible.