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Strategic planning and setting goals
Classic strategic planning approach
Classic strategic planning approach
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Strategy – A View from the Top
What Is Strategy?
Understanding how a strategy is created is very important. It is also very important to understand that there is a connection between good strategic planning and long-term performance. Companies that succeed seem to have a better understanding of the customers’ wants and needs and how they can create value.
It is hard to define a “strategy” in one sentence but it could be defined as the “positioning an organization for competitive advantage”. Its main objective is to create value for stakeholders by providing customer value. (pg. 2) Strategies always change as the context in which strategy is developed always changes. For example, the evolution in the past fifty years has shifted from an industrial economics to a resource-based perspective to human an intellectual capital perspective. The can most definitely change strategies for business owners. New business ideas and concepts are created every day. A lot of different efforts are put into a corporation in order to enhance competitiveness. Sustainable superior performance can only be achieved if a company can reserve differences between itself and its competitors.
Strategic thinking focuses on taking different approaches to delivering customer value and providing a basis for a competitive advantage. A company should choose what activities to perform and how to perform them. A good strategy focuses on creating value by satisfying the needs and wants of customers of the customers better than any other rivals. If a company has a superior strategy it usually can deliver value to its customers better than its competitors. What is valuable today might not be tomorrow. With ideas and wants changing on day to day basis it is important ...
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...nspires them to do their best. (pg. 10)
The Balanced Scorecard (BSC)
The balanced scorecard (BSC) is a strategy performance tool. It can be used by managers to keep track and monitor activities and their effects. The four boxes represent the four components of a balanced scorecard which are connected by the business organization's vision and strategy. The four perspectives are interrelate and cannot function independently.
Financial: The costs involved, in terms of rate of return on capital (ROI) employed and operating income of the organization.
Business Process: Consists of measures such as cost and quality related to the business processes.
Customer: Measures the level of customer satisfaction, customer retention and market share held.
Learning and Growth: Consists of measures such as employee satisfaction, employee retention and knowledge management.
The Balanced Scorecard is a business strategic planning system used by management to make decisions based on information provided about the business from four different perspectives. The first of the four perspectives is the financial perspective. Which means that we evaluate our business and conduct research from the shareholders perspective. Next is the internal business perspective, which is an internal evaluation of what the business must be good at to excel. Next is the innovation and learning perspective which is an evaluation of the firm’s ability to continue to improve and create value. The final perspective is the customer perspective, which is looking at the business activities from the customers
The "balanced scorecard is a model and performance tool used to monitor financial and quality performance" (Pane, 2011) and "translates mission and strategy into outcomes and
The balanced scorecard has been used in the business community for many years (Evans, 2002). The balanced scorecard is used to put all the information that a company needs for its strategic plan into an easy to understand and read chart. There are many different versions of the balanced scorecard, but the standard scorecard lays out how the company can increase its profits by looking at the internal working of the company, the customer service, and the education of the company. The Heathrow Terminal 5 project used a unique balanced scorecard. The Heathrow Terminal 5 project really showed just how versatile the balanced scorecard can be (Basu, 2009).
Balanced Scorecard The balanced scorecard (BSC) is a strategy used in organizations to determine their performance measures (Meredith & Shafer, 2016). The BSC provides knowledge into four perspectives of an organization; financial performance, customer performance, internal business process performance, and organizational learning and growth (Meredith & Shafer, 2016). There are many elements of the BSC, including the strategy map which displays the cause and effect relationships between the four perspectives to achieve a specific organizational goal (Meredith & Shafer, 2016).
Using the balanced scorecard method you are able to get a balanced view on how your company is performing. Using this method you get a full view on if your company is meeting its objectives. Even though your company may be performing well financially other areas of your company could be failing. When using this approach your company will look at objectives short and long term and determine the health of your company. Lastly when using this approach any strategic actions that are implemented will match your desired outcome. (Bowen,
The Balanced Scorecard is a management tool used for strategic planning in business and industries to align activities with a vision and strategy. The tool is used in the organizational setting to improve communications (USAID,
A Balanced Scorecard can be defined as a “performance management tool which began as a concept for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy” (Wikipedia 2009, ¶ 1). Scents & Things will need to develop a balanced scorecard that will assist in meeting and help define the company’s values, mission, vision, and SWOT analysis. The balance scorecard is made up of four perspectives; financial, customer, learning and growing, and internal process. This paper will define each of the four perspectives objectives, performance measures, targets, and initiatives. The paper will also show how the perspectives relate to Scents & Things vision, mission, values, and SWOTT analysis.
Numerous definitions of strategy exist, in most circumstances strategy can loosely be explained as an overall plan of deployment of resources to ascertain a favourable position within a market (Zablah, Bellenger and Johnston 2004; Grant 1994, p 14). Further, imbedded in many successful organisations are strategies, the importance of which is to remain relevant in the market, and successful in the various attributes of business; profiteering, employee motivation, maintaining sustainable core competencies, effectiveness in operation, or efficiency in the conduction of operations. Therefore challenges involved in the formulation and implementation of a strategy can revolve around the overall external market, as well as internal
The balanced scorecard is a strategic planning and management tool that is used extensively in businesses to align business activities to the vision and strategy of the organization performance, improve internal and external communications, and monitor organization performance against strategic goals.
Strategic management is the ongoing process of ensuring a competitively superior fit between the organization and its ever-changing environment (Kreitner, G13). Strategic management serves as the competitive edge for the entire management process. It effectively blends strategic planning, implementation, and control. Organizations that are guided by a coherent strategic framework tend to execute even the smallest details of their mission in a coordinated fashion. The strategic management process includes the formulation of a strategy/strategic plans, implementation of the strategy, and strategic control. A clear statement of the organizational mission serves as the focal point for the entire planning process. People inside and outside the organization are given a general idea of why the organization exists and where it is headed. Working from the mission statement, management formulates the organization's strategy, a general explanation of how the organization's mission is to be accomplished. Then general intentions are translated into more concrete and measurable plans, policies, and budget allocations. Implementation is the most important part of the strategy. Strategic plans must be filtered down to lower levels to be success. Strategic plans can go astray, but a formal control system helps keep strategic plans on track. In the strategic management process general managers who adopt a strategic management perspective appreciate that strategic plans require updating and fine-tuning as conditions change. Given today's competitive pressures, management cannot afford to let strategic plans sit as is. A strategic orientation encourages farsightedness. Sun Microsystems Inc. is one company that developed a strategy to become the competitive leader and become the most reliable in the net business. I will explain how Sun's strategy integrates their marketing, management, technology, and service functions into one effective strategy. First I'll discuss who Sun is and what encouraged them to develop their strategy.
Throughout the global economic environment the desire to out-perform the competition is always present. In every situation, the companies who do better are the ones with superior strategy (Rothaermel, 2013). Strategic management is therefore important in every company, no matter what industry or market they operate in; and as stated by M. Carpenter and G. Sanders, 2013, is described as "The process by which a firm manages the formulation and implementation of its strategy". Strategic management is a constant topic under discussion with different schools of theorists with different beliefs and attitudes which is described as "A tense array of disagreement" (Rees, 2012).
The Balanced Scorecard was developed out of a belief that traditional ways of thinking that relied primarily on financial accounting measures were becoming obsolete. As the developers explained, so as to appreciate sustainable growth and organizational success in the future, an organization should:
The Balanced Scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals. It is used extensively in business and industry, government and non-profit organizations worldwide to provide a framework that not only provides performance measurements, but helps planners identify what should be done and measured.
...ement systems which combines both financial and non-financial measures which are considered more appropriate with the growing market. For instance, the two well-known performance measurements used by wide range of companies: Balanced Scorecard (BSC) and Performance Prism.
...c management or planning presents a structure or agenda for dealing with issues and solving problems, therefore, understanding potential risks or pitfalls of strategic management and being prepared to deal with them is critical and vital to success. Strategic management not only permits top leaders and managers to be more proactive than reactive in building or developing their own potential or outlook in an organization, and it also lets them to make the first move and influence activities, consequently, executives and management can control or in charge of the company’s own future, and achieve its main goals and objectives. Overall, increasing cost-effectiveness and efficiency, improving the value for its stakeholders, and advancing customer services and management excellence are the key objectives of strategic management and decision making in an organization.