STRATEGIC PLANNING PROCESS IN REFERENCE TO ARCELOR MITTAL

MADE BY : PRIYANKA NIGAM KIRTIKA KANCHAN PRASHANT SRIVASTAVA PIYUSH PANDEY PRAMOD MISRA

STRATEGIC PLANNINGStrategic planning is an organisation’s

process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. It determines :

where an organization is going over the next year or more.

how it's going to get there.how it'll know if it got there or not.

STRATEGIC PLANNING PROCESS

MISSION & OBJECTIVES

ENVIRONME-NTAL

SCANNING

STRATEGY FORMULA-

TION

STRATEGY IMPLEME-NTATION

EVALUATION & CONTROL

MISSION AND OBJECTIVES

A company’s mission is a statement of ◦the basic purpose or reason for its existence◦its values (role to stakeholders - customers,

employees, society, etc.).

The vision goes beyond the mission statement◦ clarifies the long-term direction of the

company (where the company is going)◦reflects management’s aspirations for the

company

CONTD…Objectives are yardsticks for tracking a

company’s performance or end result.◦Financial performance objectives (e.g.,

ROA, ROI, ROE, Dividend growth, Stock price, etc.).

◦Strategic performance objectives (e.g., market share, growth, innovation leader, customer service, community & environmental responsibility, etc.)

ENVIRONMENTAL SCANNINGThe process by which organisations monitor their relevant environment to identify opportunities and threats affecting their business . The organisations can comprehend the environment in which they exist ,identify their environment and classify it into different sectors.

FACTORS TO BE CONSIDERED

EVENTS are important and specific occurrences taking place in different environmental sectors.

TRENDS are the general tendencies or the courses of action along which events take place.

ISSUES are the current concerns that arise in response to events and trends.

EXPECTATIONS are the demands made by interested groups in the light of their concern for issues.

APPROACHES TO ENVIRONMENTAL SCANNING

SYSTEMATIC APPROACHAD HOC APPROACHPROCESSED-FORM APPROACH

SYSTEMATIC APPROACH

Information related to an organisation’s business and industry environment is collected systematically, continuously to monitor changes and take the relevant factors into account.

AD HOC APPROACH

An organisation may conduct special surveys and studies to deal with specific environmental issues from time to time Such studies may be conducted ,for instance, when an organisation has to undertake special projects, evaluate existing strategies, or devise new strategies.

PROCESSED-FORM APPROACH

To adopt this approach ,an organisation uses information in a processed form,available from different sources both inside and outside the organisation.

Organisation uses information supplied by government agencies or private institutions.

EXTERNAL ENVIRONMENT

ECONOMIC SOCIO-CULTURAL

POLITICAL TECHNOLOGICAL

LEGAL & REGULATORY

ECONOMIC ENVIRONMENT Consists of macro level factors related to

the means of production and distribution of wealth which have an impact on the business of an organisation.

Eg.,economic indices such as national income,rate and growth of GNP,per capita income,rate of savings and investments,value of exportsand imports ,inflation,recession,etc

SOCIO-CULTURAL ENVIRONMENT

Related to the development,forms and functions of human relationships and learnt and shared behaviour of human beings that have an impact on business of organisation.

Concerns with population,environmental pollution,consumerism,corruption,mass medis,customs,beliefs,practises,life style patterns and educational levels.

POLITICAL ENVIRONMENT

Concerned with political system and its features , ideological forces, political parties and centre of power, political structure,its goals and objectives,operation of a party system, election, funding of election, legislation, political philosophy, government goals and business.

TECHNOLOGICAL ENVIRONMENT

Concerned with the knowledge applied and the materials and machines used in production of goods and services which have an impact on business of an organisation as sources of technology, cost of technology acquisition, technology development, rate of change of technology, communication and infrastructural technology.

LEGAL AND REGULATORY ENVIRONMENT

Consists of factors related to planning, promotion and regulation of economic activities by the government that have an impact on an organisation such as constitutional framework, directive principles, fundamental rights, division of legislative powers between central and local government and policies related to licensing foreign investment, monopolies etc.

STRATEGY FORMULATION Strategy

The plan of action that prescribes resource allocation and other activities for dealing with the environment and helping the organization attain its goals.

Strategy FormulationThe stage of strategic management that involves the planning and decision making that lead to the establishment of the organization’s goals and of a specific strategic plan.

CHARACTERISTICS OF ‘GOOD’ STRATEGYJudged by the results achieved NOT by the

processProcess must match:

◦business needs◦Culture◦Specific issues of the context

Process must be:◦Original◦Creative◦Easy to implement

NATURE OF THE FORMULATION PROCESSCan be both:

◦formal and informal◦simple and complex◦Analytical and qualitative◦Involve many people or just a few

THE 3 INTERLOCKING ASPECTS OF STRATEGY FORMULATION PROCESS

StrategicIntent

StrategicAssessment

Strategic Choice

STRATEGIC INTENT

◦Driver of Strategy Formulation Process

◦Provides direction for strategy

◦Answers question “Where do we want to go?”

STRATEGIC ASSESSMENT

Provides relevant knowledge of strategic context

Anchors future strategies in realityAnswers question “Where are we

now?”

STRATEGIC CHOICE

If no choice - no strategy neededThe link to actionAnswers question “How to get from

where we are to where we want to be?”

Activities and Results of Process

Activities in Process

Intending

Assessing

Choosing

Results fromProcess

Intent

Assessment

Choice

STRATEGY IMPLEMENTATIONo process by which strategies and

policies are put into action through the development of programs, budgets and procedures.

o might involve changes within the overall culture, structure or management system of the entire organization.

CONTD...

• Programs : A program is a statement of the activities or steps needed to accomplish a single-use plan. It makes the strategy action-oriented. It may involve restructuring the corporation, changing the company’s internal culture or beginning a new research effort.

CONTD..

• Budgets : A budget is a statement of a corporation’s program in terms of currency. Used in planning and control, budget lists a detailed cost of each program. It specifies through financial statements the expected impact on the firm’s financial future.

CONTD..

Procedures : Procedures or Standard Operating Procedures (SOP), are a system of sequential steps or techniques that describe in detail how a particular task or job is to be don, They typically detail the various activities that must be carried out in order to complete the corporation’s programs.

REFERENCE TO :ARCELOR MITTAL

MISSION ,VISION & OBJECTIVES OF ARCELOR MITTALVISION: “To be the most admired steel

institution in the world.” ALSO : "The purpose of the Foundation is to

promote and co-ordinate the policies of the ArcelorMittal Group in the following areas: Art and Culture, Environment, Education, Sports, Social promotion and Health and Safety.”

CONTD..MISSION : Invent the steels and steel solutions of

tomorrow.Improve Arcelor Mittal's competitiveness .Contribute to sustainable development .Continuously upgrade ArcelorMittal's

scientific knowledge and attract technical talent.

CONTD…OBJECTIVES :Developing products that create value for

customers and expand the use of ArcelorMittal's steels worldwide

Developing new and optimising current industrial processes to reduce cost and improve quality

Reducing environmental impactTalent mangement

MODELS OF ENVIRONMENTAL SCANNING USED BY ARCELOR MITTAL ORGANIZATION

ENACTING : This model is used when the organization perceive the environment to be unanalyzed but then proceeds to intrude actively into the environment in order to influence events and outcomes. information needs are those required for experimentation and testing the environment.

CONTD.. SEARCHING : This model is used when

organization perceives the environmental to be analyzable & it actively intrudes into the environment to collect an accurate set of facts about environment