The strategic planning process is the formulation of the company’s major objectives and execution plans. This process is of particular interest in GE. Strategy formulation is the process of choosing the best methods for a company where customer needs; competitive position and internal capability are the three factors that play the main role in strategic planning. Every manager needs to have at least a simple notion of strategic planning to formulate his strategic plans. Strategic Planning is a wide and complex subject. Strategic Management background is an essential basis of any organization.
Companies plan their various and multilevel activities. A company's strategic planning is a row of elements that describe how the company uses its resources concerning its inner and outer environments to reach its objectives. Resources contain financial, human, facilities and technology. Resources are limited that is why they are prioritized at GE to support the company's goals. The positioning and usage of resources includes all elements of the company and develops into strategic decisions of the company.
GE strategic planning objective is to increase its economies and at the same time to apply its advantages concerning company’s clients. There are three basic steps of gaining strategic planning within GE: The formulating of a major business strategy. This is the basis of efforts to build a serious competitive advantage.
The adaptation of the major business strategy to all the markets where the company’s products are presented.
The globalization of the major business strategy. It means the company has to integrate the strategy in all the places of business operation.
In order to implement all these factors of strategic planning into practice one should make the SWOT analysis. SWOT analysis is a set of major factors - Company’s Strengths, Weaknesses, Opportunities and Threats - for formulating strategic alternatives. The GE SWOT analysis shows its strengths, weaknesses, opportunities and threats in order to use this information in the Strategic Planning. When the SWOT analysis is done, it is used as the foundation of objective setting, strategy setting and usage. The SWOT analysis is concentrated upon the most important factors and it is useful in a difficult strategic situation. The strengths are analyzed to reach opportunities and to avoid threats. The search of weaknesses is of importance as it allows the manager to minimize them.
At the beginning of the 1980s General Electric, the big USA electronics company determined a goal of increasing its market share. This aim was achieved by acquiring Radio Corporation of America and advanced satellites divisions and disposing of its consumer electronics divisions. This was General Electric’s effective strategic planning that helped to increase the annual income. These are the GE strengths, weaknesses, opportunities, and threats that still form the basis of strategic planning. The developed GE culture is its strength as well as human resources. The competition is great that is why the competitive advantage is the strength too. Technology is an essential part of any business and its usage presents great opportunities to GE Company.
GE developed a vision, mission, and general objectives of the company to develop a strategic plan. Vision is the posibility of the manager to organize people together with a common idea. The mission is a broad notion of the company's vision. GE’s mission consists of severs factors: history, present preferences, the market environment, resources and competencies. The mission gives the company a reason for existence. A good strategic planning process means sharing the "vision" of the company with the employees and creation of a strong corporal culture. When GE goals are defined, strategies are developed to help in achieving its purposes. The GE culture is shapes under the strategic plan. The GE’s information systems are created to successfully use the strengths of human and other resources within the GE.
GE Strategic planning is the process of developing and analyzing the company's mission, near and long term goals, strategies and resources. The strategic planning process passes at the business and product level. It starts with the analysis of the GE's present strategic planning and goes on with the making up future perspectives. Strategic planning defines the methods of meeting the company’s future challenges and opportunities.
The strategic planning is necessary as it helps to create good decisions and affect the future of GE Company. It becomes obvious that effective strategic planning is a constant environmental analysis for applying the changes in the environment and turning them into the opportunities. It allows GE Company to manage or avoid undesirable environment effects.
Using the GE Strategic planning the near and long term goals are developed. GE strategy is a set of actions developed to gain long-term goals. Goals focus on vital changes. Two, three, or five years passes till the strategy is achieved. In general, GE has long-term goals for such factors as return on investment, earnings per share, or size. Purposes elaborate on the mission statement and constitute a specific set of policy, programmatic, or management objectives for the programs and operations covered in the strategic plan.
Tactical plans have shorter time frames and narrower scopes than strategic plans. Tactical planning provides the specific ideas for implementing the strategic plan. Operational plans support tactical plans and are the tools for executing daily, weekly, and monthly activities. They include policies, procedures, methods, and rules. GE has essentially grown in size and benefits since 1980’s. GE centralized financial management and strategic planning control, and practiced strategic planning management.