Importance of Planning to a Business

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STEP 1: Identifying the organization's current mission, goals, and strategies. Every organization needs a mission- a statement of its purpose. Defining the mission forces managers to identify what it's in business to do. It is also important for managers to identify important goals and strategies here. STEP 2: Doing an external analysis. Analyzing the environment is a critical step in the strategic management process. In an external analysis managers should examine all components of the environment to see the trends and changes. Once they've analyzed the environment, managers need to pinpoint opportunities that the organization can exploit and threats that it must counteract or buffer against. STEP 3: Doing an internal analysis. Provides important information about an organization's specific resources and capabilities. After completing an internal analysis managers should be able to identify organizational strengths and weaknesses. STEP 4: Formulating strategies. As managers formulate strategies, they should consider the realities of the external environment and their available resources and capabilities and design strategies that will help an organization achieve its goals. Managers typically formulate three main types of strategies: corporate, business, and functional. STEP 5: Implementing strategies. Once strategies are formulated, they must be implemented. No matter how effectively and organization has planned its strategies, performance will suffer if the strategies aren't implemented properly. STEP 6: Evaluating results. How effectively have the strategies been at helping the organization reach its goals? What adjustments are necessary: Do assets need to be acquired or sold? Does the organization need to be reorganized? Part 2 SWOT analysis: The combined external and internal analyses are called the SWOT analysis because its an analysis

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