Strategic planning is one of the most crucial activities for an organization as it sets up the organization’s future. Whether a multi-million pound or a small SME, strategic planning is of essence. This is because it analyses the current challenges and opportunities and prepares the organization to tackle future challenges and take advantage of opportunities. The fact that any management is future oriented and would want to supersede the previous financial year performance makes a strategic plan the centre of focus. However for it to be successful, there is need to consider factors that affect the plan ranging from environmental factors, financial issues, employee changes and lot of other factors that may affect the business directly or indirectly.
Importance of External Factors
The environment in which a business operates weighs heavily on the organization’s performance because in most cases it is forms part of its market or suppliers. The external environment constitutes of various forces such as demographic forces, global forces, technological forces, social forces and political forces. However these forces do not affect the business in equal nature and their impact may vary depending on the nature of business the organization is involved in. Take for instance Williams Performance Tenders which was ranked as the most promising SME in Thames Valley SME 100 in 2012. The SME which focuses on jet tenders may use the PEST tool as means of analyzing its external environment forces. The P represents political factors, E represents Economic factors, S represents social factors and T represents Technological factors (Fisher, 2014). For the SME, the technological and economic factors may have more impact than the other factors since technological advancements lead to more efficient production systems hence more profits while economic meltdown such was the case during the recession leads to low sales. Social factors may also have an impact due to the fact that the jets are luxurious product and hence a social trend may favor the business.
Needs and Expectations of Stakeholders
The stakeholders in any organization are the key determinants of the direction which an organization takes because they are the reason for the existence of the business. There three main types of stakeholders are primary stakeholders, secondary stakeholders and key stakeholders (Rabinowitz, 2013). The key stakeholders for an SME are usually the customers because the businesses are usually focused on sales but for already established companies the shareholders take the spot. The customers’ expectations are usually focused on quality of the products or services offered and whether they get value for their money. The investors’ expectations on the other hand are to meet their set sales target, experience growth and make profits. The employees who are also part of the stakeholder expect to have a conducive working environment and fair remuneration and finally the government expects the organization to follow the laws and regulation and submit tax returns as well (Rabinowitz, 2013).
Major Changes in External Environment
The level of competition in the business world has made the business so sensitive to changes in external environment due to the fact that a business must be socially responsible. However there are changes that have more impact than others. Government decisions in most cases have more impact than market forces due to the fact that they are mandatory and they are not influenced by market forces. For instance regulation of water sports may have a direct impact on William Performance. Technological changes also have a big impact on business operations due to the fact that they alter the budget and strategy of organizations such as the emergence of online trading (Fisher, 2014). Finally the customer lives and preferences are of utmost importance since they determine the direction which the organization should take.
BUSINESS PLANS AND STRATEGIES
Analysis of Current Business Plan
Williams Performance Tenders is promising SME and its operations are already showing signs of it being a big company in the near future. One of the key strategies of WPT was to expand its operations beyond United Kingdom. This strategy has been successful so far and its progress can be analyzed using the value chain analysis. This is a tool that is used to determine or create the most possible value for a consumer (Manktelow, 2013). The organization has embarked on a plan to create more value for its customers by making their products available at a closer location. This has been achieved by appointment of its first authorized dealer based in Fort Lauderdale USA. The organization also had plans to expand its operations in Australia, Dubai, Brazil and North America in 2012.
Position in Current Market
The boat and yacht manufacturing industry has not been very competitive due to the existence of already established and trusted brands making it very hard for new entrants to make inroads into the market. However William Performance Tenders have defied all odds becoming the world’s leading jet tender specialist with less than two decades into the market. This was achieved through the introduction of a better and more efficient tendering process for jet tenders. The organization has however not reached its set target as it plans to expand its operations to more markets throughout the world. The market share analysis is the best tool to analyze the position of WPT as it involves the description of the industry and its outlook, information about the target market, size of the primary target market and the competitive analysis. These procedures should identify the position of WPT in the market which is usually hard for SMEs.
Competitive Strength and Weaknesses
WPT was acknowledged in 2011 is the world leader in jet tenders which was a landmark for an organization that was established in 1995. This itself is a strength and the management has used it to expand its operations and partner with the best analysis. The strategic plan of expansion can also be said to be opportunistic in that the organization has experienced tremendous growth in the recent past and therefore aims to use the current customer relations and good industry reputation to develop contacts. The strategy however can be faulted to be overly ambitious due to the fact that the organization is quite small with only 46 employees the company would have opted to expand its operations in Europe as a test market. The company’s tenders are relatively small in comparison with its competitors such as Zodiac Marine being able to deliver more making the expansion plan quite tricky.
DEVELOP OPTIONS FOR STRATEGIC PLANNING
Developing a Strategic Option
Williams Performance Tender has been quite successful in its expansion strategy and has made contacts with the partners in the market. However the organization is yet to become as popular as other established companies in the market. Therefore the best tool for WPT is the Mintzberg’s 5Ps of strategy since the tool is specifically potent in dislodging competitors from their comfort zone (Smith et al 1999). The first process is Planning which will be used to design actions which should be taken to make WPT a brand name. The second P represents Ploy which is a maneuver to threaten the already existing brands through participation in boat shows and investment in strategic advertisements (Smith et al 1999). This is followed by the creation of a Pattern which the organization will follow and Positioning of WPT strategically to take advantage of opportunities to improve the brand name. Finally the last P represents a Perspective which will be shaped by the organization’s culture and practices ((Manktelow, 2013).
For a SME to be successful, a thorough analysis of its established competitors and SME competitors is a must. This acts as a guide in the creation of a strategic plan as well as in the identification of a market niche. The boat building industry is quite competitive especially in the yacht building sector. WPT should therefore follow the portfolio analysis tool as it helps the management in identifying opportunities and identification of resources. This approach has the benefits of simplification of complex situations and a useful in identification of a company’s strengths and weaknesses which WPT should exploit (Thomas et al, 2007). The technique is also useful in understanding business and product lifecycles which are very important in the analysis of competitors. This approach is also effective in the comparison of individual business achievement and the industry’s development which is very important in determining the influence of a competitor on the market.
Williams Performance Tenders has established itself in the market as the leading jet tender specialist. However to maintain this, the organization needs to establish itself as unique player in the market. This will only be achieved through the establishment of a strategic plan which the SME should adopt as brand identity. The most effective strategy for a market leader is efficiency in production. This strategy not only ensures that the firm maintains its lead but also creates confidence in the customers which promotes its sales. This strategy provides a wide range of options for expansion in the future since the market is bound to change and once the organization expands it will need to re–strategize its market approach which will be guided by the established strategy.
STRATEGY PLAN CONSTRUCTION
WPT does not have a vision or mission statement on its website so the first step in the strategic plan should be a well written vision and mission statement of the organization. The vision of the organization should be to ‘establish a brand that will be the market leader in quality and efficiency in yacht and jet tenders’. This would give a sense of direction and act as a motivator to employees as it specifies its target. This should be followed by a mission statement which should explain the organizations activities and how it aims to achieve them and maintain the market leadership position. The values of the organization should be included in the strategic plan so as to act as a guide. The strategy should then be specific on the objectives which it should achieve and the specific goals which have been set indication within which time the goals should be achieved. If there any specific programs that the strategic plan will introduce, it should be clearly indicated on the plan.
Once a strategic plan is developed and implementation takes place, there is always a need to monitor the progress of the plan so as to identify any hitches or challenges that may arise. This can be achieved using two approaches; using a quantitative approach or a qualitative approach. The quantitative approach which is also known as the measure of validity seeks to determine to what degree or extent does the strategy achieve what it purports to achieve or how many goals among those set have been achieved (Oxford, 2011). The second approach is the measure of reliability which seeks to determine the accuracy, precision and consistency of the strategic plan in achievement of the set goals and objectives (Oxford, 2011). These tools are used to ensure that the strategy being implemented is in course to achieve both short term and long term objectives which determines its efficiency.
Implementation of a strategic plan can be a tricky affair especially for an organization that has not had another plan implemented on a prior date. This because of the resources needed to implement the project in terms of personnel, financial resources and specialized skills. This may necessitate the hiring of specialized services from other organizations as well as hiring more qualified personnel and in the case of WPT increasing the workforce. The strategic plan should also outline the resources needed for its implementation especially the financial estimates so as to be in a position to come up with a budget for the plan.
FACTORS AFFECTING STRATEGIC PLAN
The core values of an organization play an important in creation of customer confidence and marketing the sales of a company since they portray the image of the organization. They also play an important part in decision making and also in the recruitment and retention of staff as they act as a code of conduct. Williams Performance Tenders has not outlined its organizational value on its website however in the customer testimonies there is a clear indication that honesty and quality customer service are at the core of its operations. The organization’s objective is to become the world’s leading jet tender specialist through partnership with the leading suppliers and yacht manufacturers. The objective and its core values seem to complement each other since the achievement of the objective can only be guaranteed by a close relationship and trust between the organization and the partners as well as the customers.
Vision and Mission Statement
The success of an organization is anchored on its mission and vision statement as it is what gives direction for the organization. This is because no organization or business can progress without understanding and what it is trying to achieve (Karami, 2007). The vision and mission are however different because the mission statement indicates what the organization is today while the vision indicates what it will be in the future (Karami, 2007). A vision is a state which an organization aspires to be and is always a source of motivation for the organization’s staff. A suitable vision statement for WPT would be ‘To be the world leader in yacht and jet tenders and be recognized for our eye for detail and quality.’ The mission statement on the other hand ought to be more comprehensive as research indicates they make more successful SMEs. In the case of WPT ‘To be the trend setter in the yacht and jet tender industry. Through our highly qualified staff and an eye for detail we plan to keep the industry competitive and innovative with the customer’s preference being optimized. We are committed to improving the industry following the set of laws and rules that govern the industry.’
Management Objective Setting
The management objective is a shared vision which the other parties being suppliers, customers, employees and lenders (Karami, 2007). This is because the management focus is not only on the internal business operations but also on the interaction with the other parties. The objectives can either be aimed toward growth, maintenance of the current position, survival, improved profits or discontinuation of a specific line of production (McCalley, 1992). In the case of WPT the objective should be growth oriented. The management objectives for WPT are to develop a good customer relationship and use the word of mouth marketing tool to our advantage. We also aim at developing a wider network of partners through referrals so as to expand our reach developing Williams Performance Tenders to an international brand rather than only a successful business.
Measures of the Strategic Plan
Once any plan is set up, there must be a process through which the progress of the plan is assed so as to keep track of both time and level of activity. This is done through a number of measures which determine the progress of the plan in terms of its relevance to goals and target achievement in the pre-set timeframe. The strategy will be subject to a number of measures each of different approach and different frequency. There will be qualitative measure that will be carried out after every three months of business to determine the value addition taking place. There will also be a half-year measure that will be both qualitative and quantitative and will go hand in hand with the half-year financial report. Finally there will be a qualitative measure at the accomplishment of each goal along the entire strategy’s life span.
PLAN FOR IMPLEMENTATION
The first step in the implementation process of a strategic plan is usually evaluating the plan an activity that is already done. Therefore the first step in creation of an implementation schedule is the identification of landmarks which maybe inform of goals or time limits to achieve a specific level. This will then be followed by selecting a number of staff members who will help in implementing and monitoring progress of the plan. The third part of the schedule will be the determination of the frequency of meetings to discuss the progress reports. Finally the last step will be to involve the executive management where necessary (Lorette, 2014).
The stakeholders are a very important part of the organization and in strategic plan implementation the employees. For an SME there are no shareholders and in most cases the owners operate the business thus the employees are the only stakeholders that need to be addressed. The most crucial step is informing them of the details of the plan so as they feel part of the plan which avoids sabotage and promote facilitation. The manager in charge should take the decision whether to inform the employee of the underlying changes the plan may bring. Finally there should be a reward or acknowledgement provision on the plan’s implementation schedule to serve as a motivator (Irwin, 2011).
Monitoring and Evaluation
Monitoring is the process through which the progress of a plan is measured when the plan is still being implemented while evaluation takes place after the strategic plan has been implemented. The first monitoring tool will be the strategy objectives and landmarks which will be used to monitor the progress in relation to time. Another monitoring tool will be the use of exogenous indicators such as the target market’s preference or internal indicators such as increased sales. Evaluation on the other hand will involve the comparison of the achievement of the project with the set objectives and the time within which the strategy was implemented.
Competition is the only way through which we as the consumers are assured of getting value for our money. However for the business elite, this has brought the need for complex, time guided and budgeted plans better known as strategic plan. This is the only way through which an SME can have a breakthrough in an expensive industry such as the yacht industry and have a brighter future than their already established competitor. Strategic planning is a crucial part of the businesses today and takes into account the business environment, other plans, and stakeholders and involves various steps in its implementation.
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