Strategic Business Planning: Analysis of the internal business environment
One of the first stages in a strategic business planning process is the internal business environment analysis. The purpose of the internal business environment analysis is to identify and document the company’s current and desired position, its strengths and weaknesses, to create a platform for an effective subsequent business strategy choice and formulation. This analysis includes the following major components:
Identification of the company’s existing business strategy
A strategic business planning process should always start with the management team identifying or re-examining of the company’s strategic vision (the way to the future) and mission (what we do). These and other strategic pointers would help to answer a number of questions to identify the existing business strategy: What business (products and markets) is the company in? Does the company pursue growth? What business (competitive advantage) strategy does the company have? What is the company’s desired position?
Identification of the key stakeholders and their expectations
While a stakeholder is any party which has an interest in the company, a key stakeholder is a party which can also influence the company’s strategy. The key stakeholder groups include the company’s owners, management team, governments, major suppliers and customers. It is important to identify their expectations and align the business strategy with them.
Identification of the strategic capabilities
Capabilities are organisational processes employed by companies in the activity chain. Strategic capabilities are capabilities which are superior to competitors, valuable to customers and are difficult to imitate. Strategic capabilities are valuable company’s assets and should not be overlooked in a strategic business planning process.
Measurement of the current performance
It is important to adequately assess organisational performance to understand if the company is successful. Balanced Scorecards allow assessing and tracking a set of financial and non-financial measures balanced around various stakeholder perspectives. This approach incorporates both traditional accounting performance measures, such as profit and cash flow, which help tracking the shareholder value, and internal process performance measures, such as conversion rates and delivery times. All the measures identified at this stage should be compared, or benchmarked, against other organisations, ideally the best performers.
Julia Podgorbunskaya, CPA, Head Planner at Professional Business Plans
June 2015
(61) 02 4295 0079
[email protected]
www.ProfessionalBusinessPlans.com.au
Identification of the company’s existing business strategy
A strategic business planning process should always start with the management team identifying or re-examining of the company’s strategic vision (the way to the future) and mission (what we do). These and other strategic pointers would help to answer a number of questions to identify the existing business strategy: What business (products and markets) is the company in? Does the company pursue growth? What business (competitive advantage) strategy does the company have? What is the company’s desired position?
Identification of the key stakeholders and their expectations
While a stakeholder is any party which has an interest in the company, a key stakeholder is a party which can also influence the company’s strategy. The key stakeholder groups include the company’s owners, management team, governments, major suppliers and customers. It is important to identify their expectations and align the business strategy with them.
Identification of the strategic capabilities
Capabilities are organisational processes employed by companies in the activity chain. Strategic capabilities are capabilities which are superior to competitors, valuable to customers and are difficult to imitate. Strategic capabilities are valuable company’s assets and should not be overlooked in a strategic business planning process.
Measurement of the current performance
It is important to adequately assess organisational performance to understand if the company is successful. Balanced Scorecards allow assessing and tracking a set of financial and non-financial measures balanced around various stakeholder perspectives. This approach incorporates both traditional accounting performance measures, such as profit and cash flow, which help tracking the shareholder value, and internal process performance measures, such as conversion rates and delivery times. All the measures identified at this stage should be compared, or benchmarked, against other organisations, ideally the best performers.
Julia Podgorbunskaya, CPA, Head Planner at Professional Business Plans
June 2015
(61) 02 4295 0079
[email protected]
www.ProfessionalBusinessPlans.com.au
