Strategic planning activities surround a business model that represents a top-down managerial approach. The strategic management process typically starts with missions or objectives that drive the company in the business environment. The different strategic planning activities in this process can be either a PEST or SWOT analysis. Each of these common business practices allows a company to create a whole review of activities or tasks that will help the business complete its mission and objectives. The strategic planning process may never end in a business as change is constant and fluid in most economies.
Both macro- and microenvironment have factors that can affect a business. PEST analysis — which stands for political, economic, social, and technological — helps a company to review these related factors. Political strategic planning activities review any government force that can alter a company’s operations. These factors can include government stability, private property protection, taxes, employee regulations, and many other laws or regulations. Economic analysis activities surround the nation’s economy, reviewing financial markets, including infrastructure, business cycle, inflation, and labor costs, among other factors.
Social strategic planning activities are a bit more limited in some ways. This analysis includes demographics, class structure, attitudes, and other items measured in an economy. Technological analysis reviews any new technology and related costs that can help or improve a company’s operations. In many economies, technology changes frequently, which motivates this kind of study in PEST analysis.
SWOT analysis may be a more internal analysis. The term stands for strengths, weaknesses, opportunities, and threats when used in strategic planning activities. Strengths represent anything a company does well, from producing goods to marketing products to handling customer complaints. Weaknesses are just the opposite as they are any items or activities a company does poorly. Each of these may grow or contract a company’s operations in the business environment.
Opportunities represent any new activity in which a company can engage that will grow the business. Strategic planning activities often focus heavily on these opportunities as growth leads to stability and competitiveness. Threats are any issues that can weaken a company, whether directly or indirectly. Companies need to strategically position themselves to ensure they do not allow threats to severely damage their operations. These latter two tasks in strategic planning activities usually do not stop as new opportunities or threats constantly arise in business.
