Unit 2: The Strategic Planning Process

2a. Describe how organizational goals are established

  • What is the POLC framework? 
  • What does each step in the POLC framework involve?
  • How is the POLC framework used to create the organizational goals?

The POLC framework stands for planning, organization, leading, and controlling. These steps are used to help develop larger organizational goals and determine how resources should be allocated to make these goals a reality. Planning involves setting the mission and vision, strategizing, and setting goals and objectives to help you reach your bigger mission. The organizing aspect revolves around organizational design, culture, and social networks. Leading means making good decisions, communicating well, and motivating your people to reach goals. The controlling aspect means creating systems and processes, and ways you can measure the outcomes of your goals. All areas of the POLC framework are important because they are the steps you will take to set your goals.

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2b. Identify internal and external factors that impact strategic planning

  • What is SWOT analysis used for?
  • What elements of SWOT would be considered internal factors of the organization?
  • What elements of SWOT would be considered external factors of the organization?

A SWOT analysis is used ahead of time to help the organization see where its strengths, weaknesses, opportunities, and threats lie within its operating environment. This helps set the stage for the strategic planning that will come later. Strengths and weaknesses are considered internal factors, while opportunities and threats are external factors—both factors could positively or negatively affect your business.

PEST stands for political, economic, social, and technological elements. A PEST analysis is performed before developing the strategic plan to consider external factors that may affect an organization. PESTLE/PESTEL stands for political, economic, sociological, technological, legal, and environmental elements. A PESTLE/PESTEL analysis is used similarly to a PEST analysis but adds legal and environmental elements. Using these tools in conjunction with SWOT analysis is a good basis for strategic planning.

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2c. Apply the appropriate strategic management tools based on internal and external analysis

Porter's Five Forces framework is a strategic tool used to evaluate the competitiveness of an industry by analyzing five key factors: the threat of new entrants, the threat of substitutes, the intensity of rivalry among competitors, and the bargaining power of both buyers and suppliers. To enhance strategic planning, the Five Forces model is often paired with frameworks like PESTEL, which examines political, economic, social, technological, environmental, and legal factors. Additionally, competitive dynamics and competitor profiling are important for understanding evolving market conditions, enabling firms to anticipate rivals' moves and react strategically. These models can help companies determine the best direction to go with their strategy.

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Unit 2 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

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