BPSM Unit-4 Strategy & Long-Term Objectives

BPSM
Unit-4
Strategy & Long-Term Objectives :
A strategic plan with key long-term objectives serves as a framework for making decisions and
provides a basis for planning. Putting together a strategic plan can provide the insight needed to
keep a company on track by setting goals and measuring accomplishments. By analyzing the
information in the long-term plan, executives can make necessary changes and set the stage for
further planning.
Long-Term Objectives :
Long-term objectives represent the results expected from pursuing certain strategies. Strategies
represent the actions to be taken to accomplish long-term objectives. The time frame for
objectives and strategies should be consistent, usually from 2 to 5 years. Without long-term
objectives, an organization would drift aimlessly toward some unknown end. It is hard to
imagine an organization or an individual being successful without clear objectives. Success
rarely occurs by accident; rather it is the result of hard work directed toward achieving certain
objectives.
A long-term strategic objectives includes :
 Vision and Mission Statement to formulate strategic objectives to explain how you will
reach where you want to go (a road map). Vision articulates of what the business will
look like in three or four years. This vision is used to prepare a mission statement
describing the activities the business will perform. It may include a statement of
corporate values, explaining the standards governing the company's relationship with
such entities as the customer, suppliers and the community.
• SWOT Analysis which means examining the internal strengths (S) and weaknesses (W) of
the company, as well as the opportunities (O) for advancement and threats (T) to the
company's well-being. Each heading should have several items listed under it. For
example, strength might be location, a focused managerial staff or the acquisition of a
major client. One weakness may be the need for training of sales staff. An opportunity
may be the chance to expand into global markets, and a threat could be the launch of a
new product from the competition.
 Goals and Action Plans for moving on to major goals and strategic action plans. The plan
should be reviewed to make sure it is realistic and practical. It should also include
specification to get the company from one point to another point in the upward
direction. Key goals are set to be achieved within the next few years. These goals should
be expressed in terms of quantities and can relate to sales, market segments, products
or anything else identified in the plan. A final step in developing a strategic objectives
plan is to outline five or six action programs. This is the time to become specific about
deadlines, budgets, time frames and objectives. The action programs must be in order of
importance, with the most important one at first.
• Business Objectives to think about the progress the orgaisation expects to make in the
coming three or four years, in broad terms the achievements the organisation expects.
Strategic Analysis and Implementation :
As environment changes, companies need to change their strategies to adapt to the
environment not only to prosper but also to survive. Based on the multiple strategic choices,
each choice is analyzed and the best one is selected and implemented.
Strategic analysis and choice are two important components of the implementation stage of
the strategic management plan. These two components are crucial links in the strategic
management implementation procedure.
The strategic management process has three main components as shown below :
Strategic analysis is all about analyzing the strength of businesses’ position and understanding
the important external factors that may influence that position. Factors Taken into
Consideration for Strategic Analysis and Choice
Key Internal Factors
 Marketing
 Management
 Operations/Production
 Accounting/Finance
 Computer Information Systems
 Research and Development
Key External Factors
 Political/Governmental/Legal
 Economy
 Technological
 Social/Demographic/Cultural/Environmental
 Competitive
 Techniques Used in Strategic Analysis
The following devices or techniques are used in the procedure of strategic analysis :
 Five Forces Analysis

 PEST Analysis (Political, Economic, Social and Technological Analysis)
 Market segmentation
 Scenario planning
 Competitor analysis
 SWOT Analysis (Strength, Weaknesses, Opportunities, and Threats Analysis)
 Critical Success Factor Analysis
Strategic choice involves understanding the nature of stake-holders’ expectations, identifying

the strategic option, evaluating and selecting the best / optimal choice amongst all.
Strategic implementation is the penultimate stage of strategic management and strategic

analysis and choice are two significant constituents of that process.
Characteristics of Strategic Analysis and Choice
Following are the features of strategic analysis and choice:
 Establishment of long term goals

 Producing strategy options
 Choosing strategies to act on
 Selecting the best option and accomplishing the mission
At the time of performing strategic analysis and arriving at strategic choices, long term goals are
fixed and different types of strategies are chosen that are most appropriate for the mission of
the company and the variable conditions.
Strategic analysis and choice of strategies are done with the help of a number of techniques. If
the appropriate strategy is chosen, a company would become more efficient to establish
sustainability in competitive advantage and maximize firm valuation.
Strategy Implementation :
Definition : Strategy Implementation refers to the execution of the plans and strategies, so as
to accomplish the long-term goals of the organization. It converts the opted strategy into the
moves and actions of the organisation to achieve the objectives.
Simply put, strategy implementation is the technique through which the firm develops, utilises
and integrates its structure, culture, resources, people and control system to follow the
strategies to have the edge over other competitors in the market.
Strategy Implementation is the penultimate stage of the Strategic Management process, the
other three being a determination of strategic mission, vision and objectives, environmental
and organisational analysis and formulating the strategy. It is followed by Strategic Evaluation
and Control.
Process of Strategy Implementation :

1. Building an organization, that possess the capability to put the strategies into action
successfully.
2. Supplying resources, in sufficient quantity, to strategy-essential activities.
3. Developing policies which encourage strategy.
4. Such policies and programs are employed which helps in continuous improvement.
5. Combining the reward structure, for achieving the results.
6. Using strategic leadership.
The process of strategy implementation has an important role to play in the company’s success.
The process takes places after environmental scanning, SWOT analyses and ascertaining the
strategic issues.
Prerequisites of Strategy Implementation :
 Institutionalization of Strategy: First of all the strategy is to be institutionalized, in the sense

that the one who framed it should promote or defend it in front of the members, because it
may be undermined.
 Developing proper organizational climate: Organizational climate implies the components
of the internal environment, that includes the cooperation, development of personnel, the
degree of commitment and determination, efficiency, etc., which converts the purpose into
results.
 Formulation of operating plans : Operating plans refers to the action plans, decisions and
the programs, that take place regularly, in different parts of the company. If they are framed
to indicate the proposed strategic results, they assist in attaining the objectives of the
organization by concentrating on the factors which are significant.
 Developing proper organisational structure : Organization structure implies the way in
which different parts of the organisation are linked together. It highlights the relationships
between various designations, positions and roles. To implement a strategy, the structure is
to be designed as per the requirements of the strategy.
 Periodic Review of Strategy: Review of the strategy is to be taken at regular intervals so as
to identify whether the strategy so implemented is relevant to the purpose of the
organisation. As the organization operates in a dynamic environment, which may change
anytime, so it is essential to take a review, to know if it can fulfil the needs of the
organization.
Even the best-formulated strategies fail if they are not implemented in an appropriate manner.
Further, it should be kept in mind that, if there is an alignment between strategy and other
elements like resource allocation, organizational structure, work climate, culture, process and
reward structure, then only the effective implementation is possible.
Aspects of Strategy Implementation :
 Creating budgets which provide sufficient resources to those activities which are relevant to
the strategic success of the business.
 Supplying the organization with skilled and experienced staff.
 Conforming that the policies and procedures of the organisation assist in the successful
execution of the strategies.
 Leading practices are to be employed for carrying out key business functions.
 Setting up an information and communication system, that facilitate the workforce of the
organisation, to perform their roles effectively.
 Developing a favourable work climate and culture, for proper implementation of the
strategy.
Strategy implementation is the time-taking part of the overall process as it puts the formulated
plans into actions for getting the desired results.

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BPSM

Key Internal Factors

Key External Factors

 Five Forces Analysis

Strategic choice involves understanding the nature of stake-holders’ expectations, identifying

Strategic implementation is the penultimate stage of strategic management and strategic

Characteristics of Strategic Analysis and Choice

Following are the features of strategic analysis and choice:

 Establishment of long term goals

Process of Strategy Implementation :

 Institutionalization of Strategy: First of all the strategy is to be institutionalized, in the sense

Aspects of Strategy Implementation :

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