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Definition And Types Of Corporate Planning
Corporate planning is essential for sustenance and growth of a business. It aims to provide a sense of direction to the organization. It forms the basis of decision making regarding development and implementation of new technologies, marketing and several other vital aspects of a business. Such plans are usually long term plans devised in a methodical manner and based on available information. Time scale may vary from three to ten years depending on the nature of business.
Types Of Corporate Planning
There are different types of corporate plans. “Start up” plans are synopsis of goals and aspirations of an entrepreneur starting a new venture. This involves evaluation of viability of the business, product mix, projection of sales and profits. “Strategic plan” is for a business that has commenced operations and plans to grow by setting attainable goals.
“Growth plans” are made when the company plans to diversify in new areas of trade. Resources, finances, targets and strategies of new venture are detailed in the growth plans. There are corporate plans for big companies that may focus on managing human resource and finance of a company.
Corporate planning process is lengthy and complex. It may take long time to frame a suitable corporate plan that can successfully guide the business. It is desirable to devise a flexible plan that can be updated and modified easily.
Defining the area of business and scope of operation is the starting point of corporate planning. The process is initiated by reviewing the previous plan and its success and drawbacks. Progress achieved by the plan and areas where problems were encountered are evaluated in detail.
Then the internal situation of the organization is assessed by SWOT (strength-weakness-opportunity-threats) study. In this stage of planning it is desirable to include organizational culture and working conditions in the organization. Next step is to evaluate the external business condition through PEST (political-economical-social-technological) study. This study should focus on identifying challenges that business operations may face from external changes.
Devising The Plan
After you have gone through these studies and assessments it is time to set direction for the company by developing a corporate plan. In this stage SWOT is done for each unit like manufacturing, sales, marketing, finance, supply chain, etc. Internal and external information is synthesized to identify the strengths that can be relied on and weakness that need to be addressed.
This stage also identifies the opportunities that can be exploited with the available strengths and threats that may affect the performance. It is followed by determining what are required at each level to enhance performance level.After you have decided about the requirements it is time for setting goals and forming strategies for creating the final corporate plan. This involves development of operating plan for different units like manufacturing, sales, marketing, etc. It is also essential to devise a budget for these units.
A corporate plan should clearly state how it should be implemented at various levels. There should be a sound monitoring system to track implementation process. A contingency plan must be included to tackle any emergency situation. Formulating, implementing and evaluating a corporate plan should involve open communication up, down and across the organization.
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