The formal strategic planning process after establishing the mission

Step 1:    Goal formulation

Setting the goals of the organization is the most essential step in strategic planning, because this step defines the mission of the organization and establishes the objectives that will help translate that mission into concrete terms.

Step 2:    Identification of current objectives and strategy

After the mission has been defined and translated into objectives, managers must identify the objectives that are already in place and see how well they fit in the newly defined mission.

Step 3:    Environmental analysis

Tries to identify which aspects of the environment will have the greatest impact on the organizations ability to achieve its objectives. This step tries to identify the ways in which changes in any of the environmental factors facing the organization (e.g. economics, technological, political/legal and sociocultural) can indirectly influence the organization.

Only those factors that are crucial should be paid attention to. At this stage managers should also try and anticipate the reactions of such groups as competitors, customers, suppliers and government agencies to a new strategy.

Step 4:    Resource Analysis

This step helps to identify the organizations competitive advantages and disadvantages i.e. its strengths and weaknesses. Here management answer questions such as "what do we do well or poorly" "what are we able to do better/worse than others" "in which resources are we weak?" "which resources do we possess in abundance?"

In these steps, profiles of the organization's resources should be developed, key success requirements of the product/market segments should be determined and a comparison made between the resource profile and the key success requirements to determine the major strengths on which a strategy can be based. A comparison between the organizations strengths and weaknesses and those of major competitors.

Step 5:    Identification of strategic opportunities and threats

Here the opportunities that are available to the organization and the threats it faces are determined.

Step 6:    Determine the extent of strategic change required

The aim here is to see whether depending on the various resources and the environment, the existing strategy needs to be changed. In essence performance gaps i.e. difference between the objectives established in goal formulation and the results likely to be achieved if the existing strategy continues should be identified. If the gaps are present, then changes are required in strategy and the greater the gap the greater the change in strategy that is required.

Step 7:    Strategic decision making

This step involves identifying, evaluating and selecting alternative strategic approaches.
In identifying the alternatives you look at the different ways in which the performance gap can be bridged. Evaluation of the alternatives involves a matching process, between the alternatives and the goals, resources and the anticipated outcomes of the organization. The strategy that best fits with the goals resources and conditions of the organization should be then selected.

Step 8:    Strategy implementation

This involves incorporating the selected strategy into the daily operations of the organization.

Step 9:    Measurement and control of progress

Here the progress of the strategy is monitored in order to ensure that the implementation is going as planned and that the strategy is achieving the intended results.