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Strategic Planning

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In today's highly competitive business environment, it's crucial for new businesses to engage in a proper planning and management process. "New businesses fail usually due to poor planning and management, not because of the idea for the business." (Peter Drucker, internationally renowned management expert). Strategic planning is a process of clearly defining an organization's goals and how to reach those goals within a specified time frame. It focuses on the entire organization. According to Bartol & Martin, strategic planning is normally targeted for a period of 3 to 5 years. To convert the organizational goals into actions, strategic management is applied. Strategic management is defined by Bartol & Martin as a process applied by managers to formulate and implement strategies to achieve long term goals. Five steps are involved in a strategic management process. The flow of the entire process is as below : Source : Modern Management Pg.179, Samuel C.Certo & S.Trevis Certo, 10E, Pearson Pearl Rubber Tiles Sdn Bhd Pearl Rubber Tiles Sdn Bhd is a new manufacturing organization in Malaysia. It's business nature is manufacturing of raw natural rubber into Rubber Tiles. Rubber Tiles is one of the most advanced and modern flooring systems developed currently. One of its main features is that it provides protection against injury. Rubber tiles are durable, safe and comfortable. These are only some of the many unique features of rubber tiles. Pearl Rubber Tiles Sdn Bhd plans to export rubber tiles into the EU market considering the usage and demand of the product in the European nation. In order for the organization to be sucessfull in it's business a comprehensive strategic planning and management has to be carried out. To start off, Pearl Rubber Tiles Sdn Bhd conducts an analysis on it's environmental conditions. Environmental Analysis According to Samuel C & Trevis C, the environmental analysis is done to identify environmental factors that can influence the organizational operations. ...read more.


> Shortage of local workforce in the rubber industry due to its physical demanding work environment. To overcome the problem, organizations are forced to employ foreign workers. > Loyalty suspicion of foreign business partners. To overcome this, the organization has to build and maintain a good rapport with its business partners and continuously deliver promises made in terms of quality, on-time shipment delivery and services., Upon completion of the SWOT analysis, a SWOT matrix is used to construct strategies. 4 types of strategies can be developed using a SWOT matrix. They are: * SO strategies: Combines strengths and opportunities. The organization uses its strengths to take advantage of its opportunities. * WO strategies: Combines weaknesses and opportunities. The organization takes advantage of its opportunities to overcome weaknesses. * ST strategies: combines strengths and threats. The organization takes advantage of its strengths to overcome threats. * WT strategies: Combines weaknesses and threats. The organization acts to minimize the effect of its weaknesses and threats. Taking into accounts the results of the above analysis, Pearl Rubber Tiles Sdn Bhd uses a SWOT matrix to develop WO strategies to take advantage of the opportunities available to overcome its weaknesses. The strategies the organization came up with are as below: i. Establish business alliance with Carrefour in EU market to promote Pearl Rubber Tiles ii. Obtain funding from Malaysian Rubber Export Promotion Council (MREPC) 2. Porter's model for industry analysis Porter's model concentrates on the five forces, the relationship between these forces and the competitiveness of the forces within an industry. The five forces are rivalry, bargaining power of customers, bargaining power of suppliers, threat of new entrants and threat of substitute product. Rivalry Rivalry happens when competitors with the same product base affects the market by using tactics like price competition, frequent advertising, increase customer services or warranties if it applies. These tactics are able to lower down profits of other competitors with the same product base by either forcing them to lower down price or increase the cost of business to compete. ...read more.


One way of implementing strategy control in Pearl Rubber Tiles Sdn Bhd is by reviewing the entire plan quarterly at the initial stage. There are a few reasons why it's important for organizations to review plans. First, to be aware of the need to either allocate or reallocate strategic resources. Example, the need to recruit an experienced R&D analyst to assist the R&D department. Second, to assess performance of individuals as well as departments. Third, to suggest solutions issues that might have popped up during implementation. Reviews are done to reemphasize the organizational vision and missions to employees and motivate them through recognition and praises. Finally, to ensure that implementation of actions are aligned with the organization's vision. Conclusion Organizations have been relying on strategic planning and management process for decades. Strategic planning and management is crucial especially in new businesses. Through proper planning and management, managers formulate and implement strategies to help guide the organization towards its vision. The overall process assists organizations identify and develop an edge in the competitive market. Pearl Rubber Tiles Sdn Bhd has gained tremendously by applying strategic planning and management. The organizational journey is much clearer now. By analysing its environment, Pearl Rubber Tiles Sdn Bhd identified factors that can influence its operational functions. Through the SWOT analysis, the organization recognized its strengths, weaknesses, opportunities and threats. Porter's model introduced the organization to the five forces and competitiveness of these forces within the rubber industry and how these forces hinder the growth of the organization. Being aware of its surroundings, threats, weaknesses, strengths and opportunities Pearl Rubber Tiles Sdn Bhd adopted the focus strategy to help the organization reach its goals. To put the strategy into action, implementation was done and finally strategy control to monitor and evaluate the progress of the strategy. This completes the entire process of strategic planning and management. Pearl Rubber Tiles Sdn Bhd can now start the business with a planned vision to be achieved 5 years from now. ...read more.

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