Chapter Two

Building Relationships through Strategic Planning

What is Corporate Planning?

Corporate Planning may be defined as the process of deciding long term goals and objectives within the
ambit of organization’s strength and weaknesses in the existing and prospective environmental setting
to ensure their achievement either by integrating the short term and long term plans or by adopting
such measures which may bring even structural changes in the composition of the organization, after
taking recourse to financial resources.

Corporate planning is a type of strategic planning, responsible for mapping out a course of strategies
and their implementations to empower top-management. It optimizes exposure, reach, leads, sales,
profits, credibility, loyalty, sustainability, and opportunities of a business. With the help of corporate
strategic planning, a business can efficiently channelize corporate management by leveraging its
resources with better acumen than the other market players.

Corporate Planning is defined as forming long-term goals and objectives within the organization’s
strengths and weaknesses in the existing and prospective environment. This is done to ensure the
achievement of their plans by combining their short-term and long-term objectives or bringing
amendments in the structural working in the organization’s composition.

Corporate planning includes the setting of objectives, organizing the work, people and systems to enable
those objectives to be achieved, motivating through the planning process and through the plans,
measuring performance and so controlling progress of the plans and developing people through better
decision-making, clearer objectives, more involvement, and awareness of progress.

Corporate Planning is a strategic process applied by several business organizations to form a

roadmap to grow in the market, enhance profits, gain industrial exposure, and strengthen brand
identity.

It is a vital tool that successful business organizations use to leverage their existing resources
better and more analytically than competitors.

It is the determination of business goals, formulation of diverse strategies for attaining

objectives, transforming the goals into tactical plans, implementing and reviewing it to find out
the progress of strategies, and finding out loopholes.

Importance of Strategic Corporate Planning

The importance of corporate planning can be justified because some companies even hire
departmental corporate managers to check the industry’s current scenario and the current status
of the organization in the market. Some of the points that describe the need and importance of
corporate planning are mentioned below:

1. Long-term goals

Corporate Planning broadly focuses on long-term goals and sets a blueprint to achieve them in a
stipulated period. Long-term goals help an organization keep its core focus on maintaining its
efforts, workforce, and efforts on a pre-decided target. Corporate Planning keeps the employees
engaged in their respective tasks with deadlines and ensures effectiveness and efficiency. It also
brings harmony, peace, and cooperation among the employees and supervisors in a firm as they
all smoothly work towards a common objective.

2. Focus

A strategic business plan helps a business organization provide a focal point not to get deviated
or distracted from its end goal. The first and foremost step of corporate planning involves
devising a mission statement that tells the world its roles and objectives. Formulation of a
mission statement aids the firm stick to its focus, do all the requisite tasks, assign responsibilities
to the employees, and evaluate their work to achieve that final destination.

3. Better Decisions

Developing a strategic plan helps a company make better decisions that are beneficial and
helpful in attaining the mission statement. A corporate plan should be structured to spell all the
information in the organization’s interest, like the skills required with the employees, machinery
or equipment required, etc. Forming a roadmap to achieve the final goal helps the business
people hire the best personnel for their form, arrange funds according to the tasks, and further
invest in the most viable propositions.

4. A Measure of Success

Corporate planning also acts as a yardstick to determine an organization’s success in achieving

its goals. A firm shall periodically analyze its work to check its progress and make further
amendments like replacing personnel, hiring more employees, arranging more funds, upgrading
the machinery, etc.

Finding, evaluating, and analyzing the loopholes periodically that block the ways of achieving
the mission statement helps in the up gradation of the work and ensure efficiency and
effectiveness of the tasks devised. The touchstone function of corporate planning works best in
the organizations that devise plans that allow for changes in attaining the tasks.

5. Saves money

The extra benefit associated with corporate planning is that it forms budgets that help save
substantial sums. Budgeting allows a firm to allocate its financial resources to the projects that
require it the most by cutting out unimportant expenses. Having a detailed budget tells how much
cash is earned, spent, or lent. This wipes out confusion regarding the amount of money allocated
to different projects.

Elements of Successful Corporate Plan

There are six elements in a successful corporate plan:

1. Gathering information

Having all the information related to the firm, industry, and competitors are the primary step
towards a well-defined corporate plan. Either a business is big or small, it should be aware of the
happenings in the market in its sectors, find out opportunities, grab them at the right moment and
beware of the threats.

2. Set the objectives of the plan

Having a well-devised mission statement helps a firm stick to its focus of achieving it and keeps
all the strategic work smooth in operations. Setting objectives helps form a clear mind about the
work done, and the purpose of doing the work makes it fascinating.

3. Devise strategies to meet goals

Having a blueprint helps in effectively achieving the objectives. Forming strategies define the
work to be done by the employees. Managers and leaders mainly devise strategies considering
the funds available, personnel in the organization, and the deadline to achieve the requisite
target. It brings efficiency to the operations of a business.

4. Implementing the plan

The next step is to implement the plans effectively. It involves the execution of the assigned
tasks by the personnel within the guidelines and deadlines set. It involves the execution of the
assigned tasks by the personnel within the guidelines and deadlines set.

5. Monitor plan performance

An organization should monitor its work by forming progress reports, finding the drawbacks,
and work on them immediately.

6. Evaluate the effectiveness of the plan

In the end, a firm should see if the corporate strategy devised by it is competitive or up to the
market standards. A plan should be challenging to achieve. A plan that is easy to achieve may
not be a viable option in the existing scenario. This may require the organization to reset its plans
and considering the market standards.
Sales Plan

Any business is all about sales. Whether a company practices B2B or B2C, the main goal is to
receive revenue. Only a steady approach with a defined sales plan can guarantee a successful
outcome.

A strategic sales plan is the map for business processes related to trading, dealing with
customers, and organizing sales operations.

A sales plan is a business plan that features the development of the company’s sales activity with
set objectives within a particular time frame.

In other words, it’s a strategic plan where one specifies sales goals, tactics, challenges, target
market and steps you will take to execute the plan. Setting goals and time frame to achieve them
isn’t the only aim. Give the same importance to working out tactics and a precise sales strategy.
This part includes analyzing all the resources, deciding on the amount to use, and describing the
specific activities.

Sales planning process

The sales planning process is very important for an organization as success cannot be achieved
by haphazard actions. Sales planning process is usually done in the second stage of planning and
can be carried out only when the company has a strategic marketing plan in place.

The first thing that an organization does is make a strategic marketing plan. Once the strategic
marketing plan is made, the organization knows the segment that has to be targeted, and also, the
consumer buying behaviour for that segment. Accordingly sales planning is done.

1) Setting Sales Process objectives

Your sales planning is going to start only when you have defined the objectives for the sales
team. For example – The objective of an air conditioning company might be to increase the
market share of the company. For this, it will have to penetrate a new geographic market. Thus
the objective of sales planning is to penetrate a new market to increase market share.

2) Determine the actions necessary

Once you know the objectives of your sales plan, you have to forecast what actions you need to
take and the operations which are needed in effect before you implement the sales planning. This
is a crucial step in the sales plan process because if you do not forecast the correct operations
strategy, then in future you will face operational difficulties which will hamper you in meeting
your sales objectives and plan.
For example – The air conditioning company needs to penetrate a new geographic territory to
increase market share. Thus it needs Sales as well as service operation backup in this territory.
The marketing department should also know the new territory so that they can come up with
aggressive marketing tactics to target that territory.

3) Organize your actions

Coming back to the first point – haphazard actions will never bring results. Once you know the
operations that are necessary, you need to organize your sale planning. For example – The first
priority of the air conditioning company in new territory will be to have a service setup. Than to
have a sales plan with setup and the necessary channel in place. Once that happens, they will
have to bombard the new territory with aggressive marketing tactics. Thus an organized action
plan needs to be made during the sale planning process.

4) Implement the Plan

Once you have your actions planned and organized, implementing them is the next step.
Although it may sound easy, there are many real time and real world problems you may face
while implementing a sales plan. For example – The customers of the new territory might not
respond to the new air conditioners entering the market. On the other hand, the product might be
picked up readily by the customers and you might not be able to adapt with the unexpected
demand which can make your brand lose face from the start.

5) Measure results from your sales plan

As in any planning process, the fifth and very important step in the sales planning process is to
measure the results. Unlike advertising, sales results are very easy to measure because everything
is documented and recorded. For example – the air conditioning company will measure the total
sales plan of the geographic territory in study. At the same time it will find out the competitors
sales as well for record keeping.

6) Revaluate Plan
When you have the sales records in hand, ensure that you analyse the sales records to know
whether or not the sales planning process has succeeded. The analysis will tell you what you did
right and what went wrong. Thus, based on the analysis you can know the good work that has to
be repeated as well as the bad work which has to be avoided.

For example – Your sales report shows that you have succeeded in penetrating the new
geographic territory. This stage will help you set your objectives for the next year and you will
plan increasing your brand equity through quality of sales and service. If on the other hand, you
have failed to penetrate the market, then you need to study the reasons which caused the failure
and in the next year, sales planning should be done taking these negative results into account and
the sales objectives should be re planned.
PURPOSE OF CORPORATE PLANNING

Every business needs to understand its market and its ambitions. It needs to have a clear set of
goals that will drive operations and help the business become profitable. A corporate plan sets
out the actions required, and identifies the resources available, to deliver the stated aims and
objectives. Your corporate plan is an important document that will help you continually monitor
finances and liabilities, identify opportunities and control your internal systems and structures.

Setting Your Strategy

The fundamental purpose of a corporate plan is to set your business' strategy. At this stage you
must decide on your mission and vision -- what it is you want to achieve from your business.
You also need to look at the opportunities and threats from the markets you want to operate in,
and assess your business strengths and weaknesses. By analyzing this information you should be
able to set some realistic goals that will define how you're going to move your business forward.
Planning Your Operations
Once you know what you want to achieve, you can use these objectives to look at how you will
achieve them. At an operational level, the purpose of corporate planning is to help you plan and
prepare the resources you need to deliver your objectives. For example, at this stage you must
ensure you have the correct finances in place, the ability to obtain inventory and the correct staff
and other resources to convert this into your final product or service. An effective corporate plan
enables you to make workable plans to deliver the value to your customers.
Monitoring and Control
Incorporated into your plan should be clearly measurable indicators that allow you to assess how
well you are performing against your initial plans. Such metrics will include financial
information to enable full accounting, but should also look at whether key milestones have been
passed and whether customers value your output. Any examples of variance from the plans you
set earlier should be examined to determine if remedial action is possible to control any further
deviation.
Review
Corporate planning is not just done once, when you establish your business. Your business will
hopefully grow and change with every year, and so will the pressures it faces. Establishing a
realistic timetable to review your plans is essential. This enables you to respond to changing
circumstances in the economy or the wider market you operate in. For example, the rapid pace of
development in technology markets may very quickly open up new opportunities that could lead
to new products, services and revenue streams.

Corporate planning-5major steps

There are five major steps in corporate planning:

Step # 1. Environmental Scanning:

(a) External Environment:

Business environment is scanned to secure up-to-date information on opportunities and threats

revealed by the changing environmental forces, such as customers, customer needs, competition,
economic, social and political climate, ecology, and technology. The situation analysis indicates
where we are, how we got here and where we are now going.

(b) Internal Environment:

Marketers must also have adequate knowledge of internal situation through self-analysis, i.e., on
corporate strength and weakness. The corporate resources are the limitations on exploitation of
marketing opportunities knocking at our door. The environmental opportunities may not become
specific corporate opportunities.

Company opportunities constitute a set of marketing undertakings in which a particular company

has competence and capability to enjoy the competitive benefit because of its particular and
unique market approach. There should be a happy marriage between the company resources and
company opportunities so that the marketer can accomplish the set corporate goals.

The internal and external environmental scanning offer us SWOT, i.e., Strengths and
Weaknesses as well as Opportunities and Threats. Threats are considered as challenges to be met
or overcome by strategic planning. Marketing information and research enables us to scan
external environment. Sales audit and cost analysis enable us to study internal environment.

Step # 2. Defining Corporate Mission:

The statement of basic purpose or mission offers customer-oriented answers to a few questions,
e.g., what is our business? Who is our customer? What is our goal? The mission focuses the
attention on the fundamental customer needs.

Examples of Mission- What is our business?

Communication Co. We offer varied forms of reliable, efficient, cost-effective services in

telecommunications.
Step # 3. Setting Objectives:

The mission answers the question, “What is our business?” The objectives answer the question,
“What do we want to achieve?” Objectives must be clear, ambitious but realistic, measurable and
time-bound. The mission points out the needs to be served. The objectives indicate performance
standards, e.g., market share, profit, services, customer satisfaction, etc. Please note that
objectives or goals are the desired or planned outcome.

Step # 4. Identifying Strategic Business Unit (SBU):

Within a multi-product or multi-business corporation, we may have one or more business areas
or SBU. In the corporation there may be more than six divisions but in reality we may have only
three distinct businesses. Hence, for strategic planning, all divisions will be grouped into only
three strategic business units.

In order to identify SBU, a business is defined on the basis of consumer-orientation (not product-
orientation) in terms of three dimensions- (1) Customer needs to be met, (2) Group of customers
to be served, and (3) Product or service to fulfil those needs.

The SBU has three features- (1) It is a collection of related products meeting similar needs, (2)
The unit has its own rivals and it wants to surpass them through best marketing strategies, (3)
The manager of SBU organization is directly responsible for strategic marketing planning,
control and profits.

Step # 5. Selecting Appropriate Strategies:

Once the corporation has planned where it wants to go, the next step is to answer the question
“How are we going to get there”? Corporate strategies supply the best answer to this vital
question, viz., the best means to achieve the desirable goals and fulfill the mission.

There are four alternative strategies before the corporation or an SBU:

1. Invest Strategy- Marketing efforts are intensified further to strengthen the SBU or the
enterprise.

2. Protect Strategy- The SBU will be given help to maintain its present position in the market.

3. Harvest Strategy- The SBU is used as a cash-flow source to help other SBUs to grow or
maintain the position.

4. Divest Strategy- The sick or unwanted SBU may be just sold out and the corporation gets rid
of that SBU.
The Relationship between Sales and Marketing
One of the more significant challenges in any business is finding the best way to get sales teams and
marketing managers on the same page. When you look at the basic purposes of sales and marketing
teams, it comes down to this: marketing is responsible for developing strategy, while salespeople are
responsible for implementing strategy. To use more marketing-friendly terminology, marketing develops
the value proposition, while salespeople are the stewards of the value proposition.