Strategic Planning And The Achievement Of Organizational Goals

2.9    Strategic Formulation  Onwuchekwa ( 2002. P.163)
The process of selecting the strategy of an organization is strategy formulation. It involves two major activities as we observed above they are:
1.    Formulating the corporate strategy which is made up of the:
a.    Purpose
b.    Vision
c.    Mission
d.    Goals
e.    Objectives
2.    Formulating the growth strategies (Components o f corporate strategy) these are:
a.    production/market scope strategy
b.    Growth vector strategy
c.    Competitive advantage strategy
d.    Synergy strategy .
To decide which strategy will be selected, a detailed analysis of available data and situational factors are required. This analysis which helps to make decisions during the process of strategy formulation is called strategic planning.
So one approach to strategic planning is through the “Common thread” approach.
The second approach to strategic planning/strategy formulation is strategic portifolio management analysis. It is a more detailed approach to strategic planning process.
2.10    Strategic Planning Process 
There are two models of strategic planning process . We will look into one by Ansoff (1984) and the other by Stoner (1982) .
A.    Strategic Planning Process   (Ansoff 1984)

Strategic planning process by Ansoff 1984. As edited by Onwuchekwa C.I.
The Ansoff diagram of strate gic planning process shows that strategic planning process has four steps which are:
I.    .      Prospects Analysis
This analysis is expected to identify the scope of business activities of the organization concerned . The business areas are analysed and it is exp ected that these series of analysis will provide ideas about trends, in terms of changes and recent development, in this business sector in terms of technological innovations, product characteristics, government policies and regulations etc .
Prospects ana lysis is also expected to provide information about threats and opportunities with the present business segment of the focal organization . When prospect analysis might have come to conclusion, top management must have gained deep insight into the range of business activities available to their managers to exploit. Hence prospects analysis closes surveillance gap. So a segment of uncertainty has also been reduced in terms of what is our business or what is it expected to be .
II.    Competitive Analysis 
This type of analysis identifies the improvement in the firms performance which can be obtained from improvement in the respective business areas of the firm.
The competitive analysis typically shows that even if the firm were to pursue optimal strategies in all its business areas, some may have distinctly unpromising future.
As we observe above, competitive analysis involves describing the characteristics of the individual enterprises in the product/market s cope and the growth vector strategies eg market penetration, market development, product development, diversification etc. These individuals strategic entries in both product – market scope or growth vector may have competitive strategies in form of patent protection for some products break - through products d ue to recent technological innovation, pricing advantages etc. Those products or those business areas that provide competitive advantages are selected and analysed further, for making planning and programme development. This analysis is referred to as strategy portfolio analysis.
III.    Strategy Portfolio Analysis
The firms prospects in the different business areas are compared, priorities are established and future strategic resources are allocated among the business area. The overall performance which can be obtained if the firm implements the results of the competitive analysis and of the portfolio balance is shown as the present potential line in figure above. This closes the competitive gap.
The management may be willing to accept the present business potentials and opportunities. If it accepts it , the gap analysis is completed and programmes and budgets are developed for implementation.
There is the possibility that the present potential (which resulted from competitive and portfolio analysis) will n ot be acceptable to management. This may be either because the strategic vulnerability of the present portfolio or because the prospects of the growth ambitions of management are substantially above the potential line. The situation gives rise to diversifi cation analysis.
IV      Diversification Analysis  
The aim of diversification is to diagnose the differences in the present portfolio and identify new business areas into which the firm will seek to move. Diversification is production of new products that have no relationship with old product . When the performance expected from the new business area is added to the present potential line, the results are overall goals and objectives of the firm