The strategic planning process-II: three levels of planning must come together in order for a strategic plan to work. The second of a three-part series.
Last month we discussed the business environmental scanning Environmental scanning is a concept from business management by which businesses gather information from the environment, to better achieve a sustainable competitive advantage. process, the first of three steps necessary to successfully develop a strategic plan.
Environmental scanning encompasses the monitoring, evaluating and disseminating dis·sem·i·nate
v. dis·sem·i·nat·ed, dis·sem·i·nat·ing, dis·sem·i·nates
1. To scatter widely, as in sowing seed.
2. of information from external and internal environments to key persons within a corporation. Its purpose is to identify strategic factors--the external and internal elements that will determine the future of the corporation. The simplest method for conducting environmental scanning is through SWOT analysis SWOT Analysis
A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. . The external environment consists of variables (opportunities and threats) that are outside of the organization and not typically within the short-run control of management. These variables form the context within which the corporation exists.
STRATEGY FORMULATION formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating.
American Law Institute Formulation
Strategy formulation is referred to as strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. or long-range planning and focuses on developing a corporation's mission, objectives, strategies, and polices. The "formulation process" starts with a situation analysis: the process of finding a strategic fit between external opportunities and internal strengths, at the same time avoiding external threats and working around internal weaknesses.
SWOT is an acronym acronym: see abbreviation.
A word typically made up of the first letters of two or more words; for example, BASIC stands for "Beginners All purpose Symbolic Instruction Code. used to describe particular strengths, weaknesses, opportunities and threats that are strategic factors for a specific company. SWOT analysis should identify a corporation's unique competencies--the exacting capabilities and resources that a firm possesses and the superior way in which they are used. But also the identification of opportunities that the firm is not currently able to take advantage of due to a lack of suitable resources.
Typically, a SWOT analysis looks like the chart on the previous page. SWOT details the factors associated with a company's strengths and compares this its weaknesses, and in doing so, it cold-bloodedly recognizes the factors it possesses. The same detailed and ruthless honesty Honesty
See also Righteousness, Virtuousness.
ancient Greek personification of truth. [Gk. Myth.: Zimmerman, 18]
Better Business Bureau
nationwide system of organizations investigating dishonest business practices. [Am. must prevail when considering both opportunities and threats.
In a SWOT analysis, it is important to record not only quantifiable Quantifiable
Can be expressed as a number. The results of quantifiable psychological tests can be translated into numerical values, or scores.
Mentioned in: Psychological Tests factors, but those factors that defy de·fy
tr.v. de·fied, de·fy·ing, de·fies
a. To oppose or resist with boldness and assurance: defied the blockade by sailing straight through it.
b. quantification quan·ti·fy
tr.v. quan·ti·fied, quan·ti·fy·ing, quan·ti·fies
1. To determine or express the quantity of.
2. and can only be mentioned as a qualified statement of belief. An example would be under the strengths assessment (high customer loyalty factor).
PRODUCT LINE ANALYSIS
A SWOT analysis can be used at various levels of a company. Certainly one can use it as an overview of the entire corporation but, the most effective use of this tool is at the product line or market segment level. At this level, product/market comparisons can be made and determinations as to strategic ranking can result.
One of the most useful outputs of a SWOT comparison is the TOWS TOWS TIROS Operational Vertical Sounder
TOWS Threats, Opportunities, Weakness, and Strengths (usually seen as SWOT)
TOWS Tactical Oceanographic Warfare Support program Matrix, which was developed by H. Weihrich of Kidington, UK. It illustrates how external opportunities and threats facing a particular company can be matched with that company's internal strengths and weaknesses to result in four sets of alternative strategies. This matrix is a great way to summarize sum·ma·rize
intr. & tr.v. sum·ma·rized, sum·ma·riz·ing, sum·ma·riz·es
To make a summary or make a summary of.
sum each set of product lines or market considerations.
Once SWOT and TOWS are considered for each key product line or market, a match-up can be made comparing market attractiveness to company strengths utilizing a weighting system for each of the elements that make up the market these areas. This exercise "forces" more reality into the strategic plan equation and develops an more refined look at strategic alternatives.
Next month, we will consider this latter "attractiveness" scenario in our third and final column.
Contributing Editor A contributing editor is a magazine job title that varies in responsibilities. Most often, a contributing editor is a freelancer who has proven ability and readership draw.
Phil Phillips heads the Chemark Consulting Group, a Southern Pines, NC-based consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee
business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a focusing on the coatings, adhesives and sealants industries. He can be reached at email@example.com, by calling 910-692-2492 or by logging onto www.chemarkconsulting.net.
OPTIONS vs. SWOT STRENGTHS * Dispersion--Basket mills, processing maximization * TPO direct bonding * Extremely efficient * WB PU 30-day pot life * WB PU high solids * WB PU lower resin costs * Low gloss, "soft feel" PU * Expandable acrylic= "hold out" * Custom design resins * Strong inventory control management * Batch-to-batch consistency * Excellent customer relationships * High loyalty factor * Product Stability * Processing "ART" OPPORTUNITIES * High-end dispersion-mid-cap paint companies * Joint venture in target markets. * Select distribution by market segment * Color systems offering to broad base segments * Supply PU resins only * Supply pigment dispersions only * Supply pigmented coating formulations only * Supply combinations * Offer acrylic/PU blends * Offer low-no VOC PU @ medium solids + no HAPS * Offer no NNP * Container & leather "appendage" * Extend XYZ globally--"arms-length" JV-"piggyback" * China "appendage"--leather/container WEAKNESSES * Channel to market * How to sell it * Where to sell it * No offshore position * Purchasing * No formal business plan * New opportunity sea and marketing * Standard cost system * Mgt. Leadership Change Need THREATS * 2nd dispersion process that fits current customer base * Management backup * Offshore leather & container imports * "Protein" vinyl substrate leather intrusion