Management department
Department of Management and Marketing
TEST
discipline: Innovation management
Topic: Strategic planning innovation activities
Completed by a 3rd year student
UZs21.1_B2-14,
Prokopova Oksana Alexandrovna
Lecturer: professor of the department. Alekseev A.N.
Introduction
The concept and essence of innovation
1General theory
2 Types of innovation
3 Classification of innovations taking into account the subject of innovations
Planning innovation activities in the organization
1 Preparation of an innovative project
2 Drawing up a business plan for an innovative project
3 Risk management in innovation
Conclusion
Introduction
In the last decade, innovation activity has been actively introduced into the market system. One of the most important tasks is to increase the innovativeness of enterprises, namely: their ability to clearly and adequately respond to changes in the market by releasing new or improving existing products, introducing new production and marketing technologies, restructuring, improving the internal management system and using the latest marketing strategies. As a result, the formation and development of innovative potential becomes an integral part of the strategy modern enterprises. For achievement commercial success entrepreneurial structures need to create products and services that can attract the attention of consumers, despite the existence of many similar products on the market. This is especially important for small and medium-sized businesses that cannot compete with large companies in terms of costs and pricing policy, however, thanks to innovation, that is, the introduction of a new product to the market that can satisfy the needs of consumers better than existing products, can increase their entrepreneurial income. The purpose of this work is to consider the following main issues:
The essence of the innovation strategy in the activities of the enterprise,
The main stages of innovation planning in an organization are:
Preparation of an innovative project,
Creation of a business plan,
Accounting for risk in innovation.
The relevance of the topic is due to the fact that in a dynamic external economic and socio-political environment of the organization's activities, achieving long-term positive results is impossible without constant updating of the applied technological, managerial and procurement and marketing processes, the range of products (goods, services) and the search for new market opportunities (development of new market segments).
1. The concept and essence of innovation
Innovations are the main means of ensuring the competitiveness of products and ensuring the sustainability of the success of an enterprise (corporation) in the market as a whole. As a result, innovation management is integral part and one of the main directions strategic management enterprise.
The concept of innovation (in Russian - innovation) comes from the English word innovation, which in English means the introduction of innovations (innovations). Innovation means new order, new method, a new product or technology, a new phenomenon. Thus, innovation is an activity aimed at the development, creation and distribution of new types of products, technologies, organizational forms.
Innovation in a broad sense refers to the profitable use of innovations in the form of new technologies, types of products and services, organizational, technical and socio-economic decisions of an industrial, financial, commercial, administrative or other nature. In other words, innovation is interpreted as the transformation of potential scientific and technological progress into real, embodied in new products and technologies.
An analysis of various definitions of innovation leads to the conclusion that the specific content of innovation is change, and the main function of innovation is the function of change. The Austrian scientist J. Schumpeter identified five typical changes:
· use of new equipment, new technological processes or new market support for production · introduction of products with new properties · use of new raw materials · changes in the organization of production and its logistics · emergence of new markets In the innovation process, a significant role is played by the creators of innovation (innovators), who are guided by such criteria as the life cycle of the product and economic efficiency. Their strategy is to outperform the competition by creating an innovation that will be recognized as unique in a particular field. However, the development and implementation of innovation in everyday practice requires certain financial resources. 1 Types of innovation strategic planning innovative Innovation can be divided into two main types: technical and organizational. Technical innovations include: new products, new technologies or new services. Often the success of an enterprise is determined by the joint effect obtained from the introduction of a new product, new technology and new services. Technical innovations can also be classified by their science-intensive, by the amount of capital costs, by payback periods and by their impact on the development of a particular enterprise or industry. In this case, they can be classified as basic and applied innovations, innovations to improve products, technologies or services, and modification innovations. The most radical impact on the success of the enterprise and the economy as a whole are the basic innovations associated with the development of scientific and technological progress. largest specific gravity in practice industrial enterprises have innovations to improve (improve) products and the smallest - modification innovations. The main objective prerequisites (root causes) for the emergence of technical innovations are new technical capabilities and new needs, on which two well-known models of the innovation process are based. Statistics on the results of root cause analysis of various innovations in various industries and in various countries indicate that the need plays a more important role. important role than new technical capabilities in the development of innovative processes. At the same time, practice shows that in order to achieve success, it is necessary to take into account and use both root causes and the corresponding innovative models in a timely manner. Organizational innovations usually pay off faster than technical innovations, and therefore, are also essential to the success of the enterprise. These include: innovations in the organization of production, new marketing methods, financial innovations, new management methods, structural innovations, innovations related to changes in competition, characteristics and market segmentation, and other innovations. 2 Classification of innovations taking into account the subject of innovations Technical and technological innovations are manifested in the form of new products, technologies for their manufacture, means of production. They are the basis of technological progress and technical re-equipment of production. Organizational innovations are the processes of mastering new forms and methods of organizing and regulating production and labor, as well as innovations involving changes in the ratio of spheres of influence (both vertically and horizontally) of structural units, social groups or individuals Management innovations - a purposeful change in the composition of functions, organizational structures, technology and organization of the management process, methods of operation of the management apparatus, focused on replacing elements of the management system (or the entire system as a whole) in order to accelerate, facilitate or improve the solution of the tasks set for the enterprise. Economic innovations in an enterprise can be defined as positive changes in its financial, payment, accounting areas of activity, as well as in the field of planning, pricing, motivation and remuneration and performance evaluation. Social innovations are manifested in the form of activating the human factor through the development and implementation of an improvement system personnel policy; systems of professional training and improvement of workers; systems of social and professional adaptation of newly hired persons; systems of remuneration and performance appraisal. It is also the improvement of the social and living conditions of workers, the conditions of safety and health at work, cultural activities organization of free time Legal innovations are new and changed laws and legal documents defining and regulating all types of activities of enterprises Environmental innovations are changes in technology, organizational structure and management of an enterprise that improve or prevent its negative impact on the environment. Innovation management is one of the areas of strategic management carried out on highest level company management. Its purpose is to determine the main directions of scientific, technical and production activities firms in the following areas: · Development and implementation of new products or services. · Modernization and improvement of manufactured products. · Improving and developing the production of traditional types of products and services for the enterprise. · Creation of conditions to ensure more efficient operation and increase the competitiveness of the enterprise. Thus, innovation is the end result of innovative activity, embodied in the form of a new or improved product introduced to the market, a new or improved technological process used in practice or in a new approach to social services. 2. Planning for innovation in the organization An innovative project can be defined as a set of purposeful, interdependent activities, largely unique and autonomous, planned and documented, aimed at developing and / or introducing an innovation of a commercial or technological nature, limited in terms of time and resources. Planning an innovative project consists of three stages: preparation of an innovative project, drawing up a business plan for the project and taking into account risks, as well as their features. The preparation of an innovative project includes: defining the problem and purpose of the innovative project; creation of a working group; understanding the project, developing a plan and stages of project implementation, as well as their timing; definition of expected results; drafting calendar plan execution of project work. Drawing up a business plan for an innovative project includes: determining the requirements for a business plan for an innovative project; drawing up the content of a business plan and evaluating the effectiveness of investments in an innovative project. Risk stage innovative projects consists of determining the classification of innovative risks and creating the basic methods for managing the risks of innovative projects. 1 Preparation of an innovative project Consider the first stage of creating a project - the preparation of an innovative project. Common to all projects is problem identification and goal setting. Development research project consists of next steps: analysis of the degree of development of the problem and the collection of material for its solution; processing of received materials; presentation of research results. The preparatory stage of the project is important for all participants, especially for the investor or customer, who decide on the feasibility of the project and the prospects for its implementation. For the researcher, it begins with identifying the problem and initiating ideas. A problem is understood as either any significant deviation from established norms, requirements and standards, or the most important task that does not have an unambiguous solution. Problems are solved by preparing and implementing innovative projects. One of essential conditions the success of the project - the presence of clearly defined realistically achievable, long-term and current goals that are directly generated by problems. The description of the goals of the project determines its essence. Goals are structured according to their importance and all subordinate ones in relation to the main one act as tasks that must be completed in fixed time during the preparation, implementation and implementation of the project. Project customers can be any legal and individuals, government agencies, extra-budgetary and charitable foundations and foreign investors and foundations. The procedures for processing application materials for the implementation of R&D (research work) and R&D (experimental design work) projects are strictly regulated, especially if the project is financed at the expense of state budgetary funds. For implementation and implementation, a team is created, consisting of managers and specialist performers. The composition and structure of the team depends on the significance and requirements of the project. The team is formed by the leader or project manager. When selecting a team, along with professional ones, compatibility factors and personal qualities are taken into account. Simultaneously with the preparation of documents for the implementation of research and development projects, contracts for the creation of scientific and technical products, the coordination of prices for it, the project is understood as a system of interconnected, interdependent elements that are in unity and perform various (specific) functions, in contrast to the project generally. The system view has a number of advantages and allows you to get a synergistic effect as a result. joint activities participants. The material embodiment of a complete understanding of the project is the development of a methodology and a feasibility study for research and development. The most important elements of the terms of reference are: the purpose of the work, the scope of the results, the content of the work, the program for its implementation, technical, economic and other indicators, the requirements for the work, the level and method of its implementation, the results of the work, the scientific, scientific, technical and practical value of the expected results; the intended use of the results and the type, form of presentation of reporting materials. When the starting materials and documents are accepted and approved, the organizational conditions for the implementation of the project are prepared, the planning of the execution of work is carried out - this stage of the preparatory process, which provides for the accounting definition of the subject area of applied research or R&D, the timing of the project and its individual stages, the cost of work and stages, the final and intermediate results, the procedure for acceptance and sources of funding for the work. Along with the development of a calendar plan for the implementation of research, development work, technological work and the provision of scientific and technical services, a cost estimate is mandatory, which justifies the need for expenses for the purchase of equipment and materials, remuneration of performers and co-executors, calendar plans. After determining the cost of the project, the development of the budget is carried out, which is the distribution of costs in accordance with the stages and terms of work. The final indicators obtained as a result of the project implementation can be material (materials, process, technology), organizational (norm, standard), scientific and technical (design documentation, research, scientific and technical report, program), intangible (patents , monographs, articles) and other forms. The economic meaning of the expected results of the project is the excess of the organization's income from the implementation of the project over the costs of implementation and implementation. 2 Drawing up a business plan for an innovative project The second stage is to write a business plan for an innovative project. The choice of strategy is one of the main parts of the strategic management of an innovative project. At the same time it is necessary condition and the basis for developing a plan for any innovative project. The presence of a methodological base of completed studies and tools allow you to choose the most appropriate strategy of behavior depending on the market, technological and resource positions of the project, the state of the external competitive environment and personnel opportunities. For example, with a stable external environment, moderate competition, and the availability of fundamentally new technologies and products, the innovation strategy should be of a leading, offensive nature. It must be remembered that the creation of new knowledge and skills and new technologies in itself does not lead to the realization of long-term goals of maximizing income and fruitful growth. Goals, strategies for long-term development should be grounded situationally, taking into account the current state. The strategic stage of the implementation of the innovation strategy is based on an accurate analysis and forecast of the situation, an alternative choice based on the analysis data of the most appropriate type of strategy, followed by management of the implementation of this strategy. Under a favorable external and internal environment(stable environment and radical innovation) the only alternative is the leader's strategy. And vice versa, with an unstable external environment and imitation technological activity, favorable circumstances in the form of weak competition and low costs should not push the enterprise to an offensive strategy, because the situation dictates the possibility of only one strategy - following the leader. At the same time, with a stable market and high demand, the same enterprise can form a low-cost leader strategy. A business plan is a comprehensive, strategic, final document that substantiates and evaluates an innovative project in various aspects and contains data from all areas of its analysis. It reveals the strengths and weaknesses of the project, the possibility of obtaining the expected income and livelihood in a competitive market environment, which is the basis for obtaining financial support and means of raising capital for its implementation. The main reasons for developing a business plan are: · the ability to detect problems as a result of the study before they arise; · the need to attract investment. Currently, a business plan is a standard document for getting acquainted with a project and a mandatory requirement on the part of a civilized market. The composition of the document, its structure and the degree of detail depend on the target orientation, scale and cost of the project, i.e. - the more significant the project, the more detailed and exhaustive the business plan should be. Its most common form at present is a document that reflects information about the enterprise that will implement the innovative project; products (goods, services, works); sales markets for products; competitors; marketing strategies and financial strategy; risks and their compensation; production, organizational and financial (sometimes legal) plans. Most innovative business plans belong to the group of investment projects that differ significantly from typical ones both in content and in methods and techniques for evaluating the effectiveness of their application. Investment projects involve the use of borrowed funds and therefore the definition of commercial, financial and economic efficiency is absolutely necessary as a justification for guarantees of the return of funds within the prescribed period. 3 Risk management in innovation The final stage in the creation of an innovative project is to take into account the risks and their features. We will consider the risks of innovative projects from two positions: according to classification criteria; and on the main methods of risk management of innovative projects. Innovative projects belong to the category of the highest investment risk. Therefore, when looking for investments from commercial sources, the initiator of an innovative project needs to realistically assess his chances. The risk of innovative projects takes into account the probabilistic nature of the expected result under conditions of uncertainty. In other words, the risk of innovative projects is the uncertainty associated with making decisions, the implementation of which occurs only over time. Risk assessment is a part of any entrepreneurial decisions, including those related to innovative projects. Innovative projects are associated with investments in certain industries, enterprises, and production. When constructing a risk classification of innovative projects, it is advisable to use the block principle. The block principle of risk classification of innovative projects involves the distribution of risk by categories, subtypes, groups and subgroups, and other levels. It is precisely because of the variety of risks of innovative projects that the classification of risks is carried out not according to the end-to-end, but according to the block principle. Risks can be external, internal and mixed. External risks include general economic, market, socio-demographic, natural and climatic, information, scientific, technical and regulatory types of risk. At the same time, the reasons for external economic, market, natural and climatic, information, scientific, technical and regulatory types of risk may lie in the actions of subjects external environment, as well as internal, so they are classified as mixed. Mixed risks are associated with the activities of developers of innovative projects. To manage innovation risks, it is advisable to systematize them. In innovative projects, it is important to take into account the risk of not being in demand for new products, new design solution and etc. To avoid the consequences of not being in demand for products, the manufacturer must analyze the reasons for this. Therefore, it is necessary to classify risk factors for not being in demand for products. The risk of not being in demand for products is the probability of losses for the manufacturer due to the possible refusal of the consumer from his products. It is characterized by the amount of possible economic and moral damage suffered by the company for this reason due to a drop in demand for its products. The risk of not being in demand for products belongs to the category of mixed and is associated both with the uncertainty of the external environment and with the activities of the enterprise itself that produces and (or) sells products. The emergence of the risk of not being in demand for innovative products is due to internal and external reasons. Internal causes depend on the activities of organizations. These include: · insufficient qualification of personnel; · improper organization of the production process; · improper organization of supply of the enterprise with material resources; · improper organization of sales of finished products; · fuzzy business management. External causes, as a rule, do not directly depend on the activities of the developers of innovative projects. The main external factors causing the risk of not being in demand are: · engineering and design; · solvency of the consumer; · transport; · organization of work and the state of the financial system; · increase in interest rates on deposits; · socio-economic; · demographic; · geographic; · legal. Risk management of innovative projects involves solving the following tasks: identifying risks; grade; impact on potential risks; risk control (collection and analysis of information about the risks arising in the process of project implementation, actions aimed at eliminating risks, etc.). Classical decision theory models provide for the following situations: · game situation: the state of the surrounding world is determined by the possible actions of a rational opponent/competitor; · risky situation: the state of the environment is characterized by certain probabilities known to the decision maker; · situation of uncertainty: the criteria/probabilities characterizing the events of the surrounding world are unknown or not objectively given. The following options for making a decision in a risky situation are possible: · risk avoidance - the decision maker seeks to avoid possible risks as much as possible, therefore he is ready to bear high costs for various measures to control and insure risks; · risk preference - the subject willingly meets the risk, he takes only minimal measures to insure it and is ready to bear responsibility for its consequences. This strategy is typical for those individuals who expect profitable returns as a result of speculative risks, so it is often used by young, growing enterprises; · indifference to risk - the decision maker seeks to optimize risk costs and tries to carefully apply various tools and methods of insurance and risk elimination The distribution of risks between project participants, as a rule, is fixed in the project contract. It is important to keep in mind that behavior in a risky situation depends mainly on the level of awareness of one or another project participant regarding various parties and aspects of project implementation. In order to manage risks, they need to be assessed. When a risk is detected, first of all, it is necessary to determine the existence of risk zones for the work being carried out, and if they exist, at least qualitatively assess the importance of these risks. Method algorithm peer review economic risks include: development of a list of possible risks for all stages and key events of the implemented solution; determination of the danger of each risk for the possibility of implementing the managerial decision and achieving the goal; finding the risk probability. Thus, the development and implementation of innovative projects is influenced by various factors. To reduce the risk of innovative projects, it is important to conduct marketing research, which will determine the demand for innovative products. The predictability of the result reduces the degree of risk. With zero variance, there is no risk at all. The risk can be reduced by conducting a design analysis of new products (commercial, technical, organizational, social, environmental, economic), which is important for the development of an innovative project. In large innovative projects, timing risks are of particular importance. They can lead to a situation where project deadlines are not met, resulting in additional costs (delayed payments, loss of interest, etc.; increased project costs). All innovative projects (research and venture) are subject to expert review, the results of which are taken into account when making a decision on project financing. In some cases, the most effective way to avoid negative consequences or reduce the level of risk in innovation is direct managerial impact on possible manageable risk factors. Such as the: · analysis and evaluation of an innovative project; · verification of prospective partners in an innovative project; · planning and forecasting of innovative activity; · selection of personnel involved in the implementation of innovative activities, etc. Of great importance for reducing innovation risk is the organization of the protection of trade secrets in the organization. The choice of a specific way to minimize risk in innovative activities depends on the experience of the leader and the capabilities of the innovative organization. However, to achieve a more effective result, as a rule, not one, but a combination of risk minimization methods is used at all stages of the project. Conclusion As a result of innovation, new ideas, new and improved products, new or improved technological processes are born, new forms of organization and management of various sectors of the economy and its structures appear. Innovative activity is a powerful lever that helps to overcome the recession, provide structural adjustment and saturate the market with a variety of competitive products. A firm may find itself in a crisis if it fails to anticipate changing circumstances and respond to them in time. In conditions market economy It is not enough for a manager to have a good product, he must closely monitor the emergence of new technologies and plan their implementation in his company in order to keep up with competitors. Modern management should be an innovative type of management, that is, it should have a certain innovative potential. In a market economy, there are tendencies to accelerate development, compact time, increase the number and variety of changes that characterize the conditions for the functioning of the company. Management must keep up with the changes that are actually happening in reality. And the factor of such compliance of management with the changes that are taking place in economic life, science and technology is the innovative potential of management, which is formed in work with personnel, training of managers, organization of management focused on dynamics. In conclusion, it should be said that the support of innovative entrepreneurship is one of the priorities of the state scientific, technical and economic policy in all countries with a developed market economy. In general, the implementation of innovation activity is of great importance for the development of the economy of each country, it is on what form of innovation activity is predominant that forecasting depends economic development national economies of all countries of the world. Bibliography 1. Barasheva A.V. Innovation Management: 2015 Goncharov V.I. Management. M. Modern school, 2014 Kirina L.V., Kuznetsova S.A. The strategy of innovative activity of the enterprise. 2016 Lapin N.I. Theory and practice of innovation. 2016 Morozov Yu.P. Management of technological innovations in the conditions of market relations. N. Novgorod, 2015 Nerisyan T.Ya. Entrepreneurship. 2014 Schumpeter J. Theory of economic development (a study of entrepreneurial profit, capital, credit, interest and business cycle)2015 Yarkina T.V. Enterprise economy. 2016Similar jobs to - Strategic planning of innovation activities
The development of any organization should be determined by a specific program of action for a specific period - a strategy that allows you to take into account risks and opportunities, and effectively allocate resources. Having a strategy is a necessary element of management modern organization. Success or failure is largely related to how actively the organization uses innovations and what in this strategy.
An innovation strategy is an interconnected set of actions to strengthen the viability and develop the capacity of a particular organization. It is a detailed comprehensive plan to achieve the set goals.
The innovation process, depending on the level of novelty of the product, may be in the nature of differentiation or diversification. Product differentiation is the process of developing a set of significant modifications to a product that makes it different from competitors' products. Product diversification is applied when an organization begins to produce additional goods, which plans to offer to new markets. With diversification, it is possible to change both the product and the markets, or a combination of them.
Based on this, there are two approaches to setting goals and implementing an innovation strategy:
1. method of successive improvements
2. method of leap innovations
The method of successive improvements (conservative method) involves the consistent introduction of changes in the existing technology and product. It is characterized by the following points:
1) does not require significant financial investments and is less risky;
2) involves the search for a segment of the external environment where the existing potential of the organization can be realized;
3) suitable for capital-intensive industries with an increased share of special low-liquid assets, as well as for innovative processes with a long-term low financial attractiveness;
4) it turns out to be more effective, provided that the company has a sufficiently strong innovative potential - it has an innovative product and it is necessary to maximize marketing efforts to find possible markets (marketing is necessary to turn the product into a product required on the market).
The disadvantage of this strategy is that improvements cannot continue indefinitely, at a certain stage, profits decrease.
The method of leap innovations (radical method) involves the implementation of radical changes in technology and product, sometimes unrelated to the previous activities of the organization. This method is characterized by the following points:
1) it is associated with a high risk to the potential of the organization;
2) is focused on choosing the most promising (solvent) market segment and bringing its own innovative potential to its level;
3) it is typical for more dynamic small and medium-sized businesses, for larger organizations it is acceptable, provided that the innovation process is spun off for radical innovation and venture capital is attracted there;
4) the emphasis should be placed on scientific and technical activities that would allow the organization to achieve the required level of innovative potential.
The goals and the possibility of implementing an innovation strategy are determined by the state of the organization's potential and its compliance with the external environment. (Table 6.1.)
In the event that the potential and the external environment are relatively balanced, the organization follows the goals of expanding activities, then strategic planning is aimed at maintaining competitive advantage. Such strategic planning is defined as regular marketing.
At the same time, the organization follows a strategy to improve and maintain the quality of goods and services provided, studies their competitiveness, analyzes the competitive advantages of existing and potential clients, constantly engaged in innovation policy.
However, in reality, situations are more common when the innovative potential of the organization and the state of the external environment are not balanced. A variant is possible when the organization has sufficiently strong advantages (scientific and technological achievements, resources, etc.) and does not find demand for its products. Another case is when the innovative level of demand is higher than the potential of the organization, i.e. it is not able to offer the market a modern product. Here, sanitation marketing is more applicable, the essence of which is the reorganization of the innovation process associated with the redistribution of resources, change organizational structure and management style. In this case, innovation processes are associated primarily with saving the most expensive resources and reducing costs.
The need to form and implement an innovation strategy is determined by two main goals:
1. Efficient allocation and use of resources: "internal strategy". In this case, we talk about the development of portfolio strategies, which determines the combination of activities of the organization.
2. Adaptation to the external environment: effective adaptation to changing external factors. Here, based on the assessment of competitive advantages, competitive strategies are developed that determine the approaches from which the organization should operate in its industry.
In order to optimally allocate resources and select a portfolio strategy, product portfolio matrices are used (BCG matrix, GE, etc.). At the same time, strategic planning of innovative activity is based on the management of the product life cycle, which involves the choice of a specific strategy at each stage of product development. With considering life cycle an organization can form a product range by changing the combination of products, introducing new products and removing those that can no longer become a product that provides the necessary demand. In this case, the decisive factor is how the company realizes its innovative potential, how the risk is distributed at various stages of the innovation process, how resources are distributed.
When adapting to the external environment, the organization must determine its position in relation to competitors and in relation to partners (suppliers, consumers, intermediaries).
In relation to competitors, an organization can choose the following strategies:
- an offensive strategy, when sufficient R&D is taken in order to achieve a lead;
- a defense strategy that orients its own NIKOR to a level that makes it possible to reproduce the achievements of leading firms in a short time;
- absorption strategy, the meaning of which is to imitate advanced technology, and direct the main efforts to ensure high efficiency of the production process.
In relation to partners (suppliers, intermediaries, consumers), organizations must decide what work it will perform independently, and which with their participation. In this case, the organization can choose one of several cooperation strategies:
1. direct contracting - temporary transfer on a contract basis third parties a separate organization for marketing, distribution and sale of goods (works, services).
2. reverse contracting - transfer of individual production and support functions
3. joint production - an association with another organization to ensure the performance of individual production and service functions.
When developing a new business, there are two ways to increase the number of successful products:
1. Increase the speed to market of a new product;
2. Consistently launch small batches of different projects on the market in the hope that one of them will find a steady demand.
Most companies have a policy aimed at increasing the speed to market of new products, which includes market research, analysis of its segments, comparative analysis indicators of the quality of the developed product with the goods of competitors, analysis of the structure of the industry. But, as a rule, market research of a product based on the use of new concept, are very inaccurate, underestimation of success is as common as overestimation, in both cases the result is detrimental. If the opportunity for success is grossly underestimated, the pioneering company runs the risk that its competitor may try again using the product idea. Conversely, an overoptimistic valuation will create such a gap between expectations and reality that the company will not be able to realize this opportunity.
Considering that consumers are often unable to form clear ideas about new products, the challenge is to acquire knowledge of the market reaction as quickly as possible, so the so-called forward marketing strategy becomes preferable. As you can see, the name contains an analogy with the concept of "expedition", and this alone suggests that this type of marketing is used in the study of undeveloped markets, just as an expedition is equipped to discover or explore new territories.
G. Hammel and K. Prehalad give the following definition of forward marketing: "The task of forward marketing is to accurately determine the goal of the activity, in other words, the set of functional characteristics of the product that are of real value to the consumer, and the distance to the goal are technical and other problems that needs to be decided to achieve a balance between price and performance that will open up new competitive space."
In accordance with the concept of forward marketing, one must quickly master the production of small series of cheap goods and monitor the reaction of the consumer. Now a product or service is quickly established in its intended market only if there is an exact match between functionality, price and technical specifications. The development of an unknown territory is a process of successive approximations (iteration method). The most important thing is not hitting the spot the first time, but the speed with which the arrows are launched. How fast a company can find the right balance between product features, price, and functionality will determine its market success."
True knowledge of consumer response is acquired only when a product, however imperfect, is put on the market. Forward marketing increases the number of market successes, not because it increases the speed of product launches, but because it increases the number of opportunities for exploring different niches and the reaction of different consumers to product modifications. Thus, its main merit is that it increases the rate of accumulation of knowledge about potential markets.
The problem is how to increase the opportunity for frequent "invasion" of the market with minimal risk to the company. The solution is to minimize the time and cost of product modification.
The speed of each iteration towards the goal depends on the time it takes to develop a product, launch it into production, collect data from the market, make subsequent changes, and re-launch into production. Each modification is the result of some design changes made on the basis of information received from the consumer, and an improved version for the next "invasion". If a company's product development cycle is longer than the life cycle of its competitors' products, it has no chance of winning over the consumer.
The speed of mastering and modifying new products at Toshiba allows it to explore every possible competitive niche and leaves no chance for competitors such as Zenith, Grid, Compak to keep up with it. From 1986 to 1990, Toshiba produced 31 laptops, and in that time it discontinued more models than its slow-moving competitors launched.
From the point of view of forwarding marketing, the cost of production is no less important than the speed of development of the product. If every arrow is golden, the leadership is unlikely to want to shoot a large number of arrows into the fog. Japanese car firms are penetrating every market niche, from large luxury cars to "motorized shopping carts." Such experiments are only possible due to the extremely low costs of model development and production retooling.
Naturally, the manufacturer, whose costs for the creation of each modification are 3-4 times higher than the costs of a competitor, have problems. Such a company cannot afford the risk of being a market leader. It has loyal, long-term customers, but it certainly won't be able to attract new ones. Leadership will be held by companies that expand the ability to fulfill consumer expectations.
Frequent experimentation with the development of modifications also allows the company to accumulate information about the needs and requests of specific customer groups.
The possibility of successful implementation of an innovation strategy is determined by the following factors:
- Excellent product: differentiated, with unique properties that bring additional benefits to the buyer.
- Strong marketing orientation: focus on the customer and the market.
- Global product concept: orientation of product design and development to the global market.
- Intensive initial analysis: a feasibility study is needed before development begins.
- Precise formulation of the concept: presentation of a list of specific tasks, selection of the target market, a set of properties and product positioning.
- Structured development plan: transition from the intended positioning to the operational marketing plan based on the marketing mix.
- Cross-functional coordination: interaction between R&D, production and marketing during the implementation of the strategy.
- Necessary management support: provision of resources, incentives.
- Use of synergy: involvement of external participants in the interaction.
- Market attractiveness: assessment of the market in terms of attractiveness and profitability.
- Preliminary selection: assessment of the success of the product based on preliminary analysis.
- Control over the progress of development: ensuring control over the implementation of the strategy.
- Access to resources: human and financial resources should be seen as an investment, not a cost.
- The role of the time factor: a quick entry into the market, which can become a competitive advantage for the organization.
- Risk: what level of risk does the firm consider acceptable for each of its decisions?
- Knowledge of past strategies and the results of their application: this will allow the company to more successfully develop new ones.
- Reaction to the owners: the strategic plan is developed by the company's managers, but often the owners can exert forceful pressure to change it.
An important factor in the successful implementation of an innovation strategy is its effective organization, which involves determining the structure and nature of the relationship between the participants in innovation
“Innovation in the activity of an enterprise matters only when it improves the activity in accordance with the business development strategy. In fact, innovation in the process of enterprise activity is impossible if they are random one-time impacts and will not be focused on the strategic part of doing business and will imply the achievement of strategic goals.
Innovative business even more than other types commercial activities needs strategic planning. Strategic planning ensures the ability of an innovative business to be competitive through the concentration of innovative resources, a significant improvement in the results of innovative activities and the disclosure of those innovative opportunities that would make it possible to obtain investment resources. For those investors and lenders who are considering financing an innovative business, an innovative enterprise development strategy makes it possible to distinguish the enterprise from its competitors and increase the chances of obtaining financing.
The strategic planning process includes four stages:
- Strategy Development
- Planning
- Execution
- Continuous improvement.
Each stage is an integral part of the strategic planning process. The strategy determines where the main efforts should be focused in order to achieve the goals. Planning for the most part involves sharing information about the new strategy within the enterprise and discussing ways to implement this strategy with the enterprise's shareholders, customers, investors, and creditors. Execution is the implementation of enterprise plans. And finally, continual improvement means continually adjusting and improving plans as they are implemented over time. Therefore, developing a successful strategy is an ongoing process, not a one-time event.
Why engage in strategic planning?
- To ensure sustainable development in an uncertain business environment;
- To take advantage of rapid changes in technological capabilities;
- To evaluate the restrictions placed on your activities;
- To search for opportunities;
- To remain competitive.
What is strategic planning?
Strategic planning is the process of developing and constantly strengthening the sustainable competitiveness of an enterprise. Strategic planning involves such management of the enterprise, which allows you to achieve your goals. Strategic planning solves the following problems of the enterprise:
- What customers will the company have and in what markets will the company operate;
- What business processes should be developed at the enterprise;
- What are the external factors that most affect the results of the enterprise;
- What new products or new services will be offered by the enterprise;
- What specific parameters of the enterprise need to be developed most of all;
- What financial, logistical and human resources will be needed to implement the chosen strategy.
In other words, strategic planning shows how you will manage the activities of the enterprise over the next few years, what resources are needed to make your activity successful, what you need to do in order to achieve your goals and what risks await you on this. way.
The most limited are resources such as time and money. Therefore, one of the most important tasks of strategic planning is to make decisions about the allocation of resources between the various needs of the enterprise. This decision-making process is the core of strategic planning. Without strategic planning, resource allocation can be spur of the moment and based on considerations of momentary need rather than strategic importance, i.e. work on the principle of "solving burning" problems.
The enterprise must determine where its efforts will be concentrated in order for it to develop its full potential. Will the enterprise depend on customers, or will it rely on innovation, excellence technological processes, clear logistics management or technology?
The strategy is not a producer of different plans. Plans are just a by-product of strategy development. Strategy is the producer of results. The strategy is part of the enterprise management process. As in any other process, when developing a strategy, everyone "gets what they sow." Investing both time and money in strategic planning pays huge dividends in unleashing the potential of the enterprise, building an efficient team and constant attention aimed at achieving the set goal. Ultimately, strategic planning leads to an increase in the competitiveness of the enterprise.
Table 1.
Characteristics of Strategic Planning Systems
|
Characteristics of strategic planning
The specific characteristics of strategic planning systems are summarized in Table 2 and are based on a five-point Likert scale ranging from 1 - "no focus on this characteristic" to 5 - "highest concentration on this characteristic" Orientation inward is assessed through the possible degree of attention paid to customer service , the efficiency of the production process, attracting and retaining highly qualified personnel and analyzing the strengths and weaknesses of the enterprise.
Outward orientation is assessed by four factors related to the analysis of opportunities for the use of investments and retained funds, competition and market analysis. Functional orientation is assessed on a four-point scale that distinguishes the expected degree of emphasis placed on functional planning, coordination and integration in strategic planning activities. Key personnel participation is measured by the extent to which the enterprise manager, board members and managers at various levels are involved in the strategic planning process. Creativity in strategic planning is assessed on a nine-point scale that describes the ability of an enterprise to anticipate surprises and crises, adapt to unforeseen circumstances, etc. Aspects of management are evaluated on a 10-point scale, showing the degree of concentration on the motivation of managers, cross-exchange of information in the hierarchy of the organization, integration of production aspects, etc. And, finally, the use of planning methods is evaluated by the degree of emphasis placed on the use of financial models, analysis of the investment portfolio and methods of predictive analysis.
Table 2.
Weight characteristics of Strategic Planning Systems
|
What does strategic planning provide?
- Assessment of the direction of business development - how the functional tasks of the business are changing;
- Assessment of the direction of development of the enterprise as a company;
- Assessing the direction of technology development – which technologies will be cost-effective in the future;
- Strategic plan, coinciding with the essence and objectives of the enterprise;
- A strategic plan that reveals critical parameters in the activities of the enterprise.
What are the benefits of strategic planning for an enterprise?
- Concentration on the parameters that are critical for the successful achievement of the goals of the activity;
- Risk minimization;
- Improving the use of resources;
- Increasing the flexibility of the enterprise;
- Getting rid of redundant parameters of the enterprise;
- Establishment of priorities for the enterprise;
- Determination of the general direction of development of the enterprise;
- Reducing the volume of unfulfilled tasks and unachieved goals.
What is the price of the fact that the enterprise does not have a strategic plan?
- Loss of competitiveness;
- Control crisis - control actions solve accumulated problems, and do not anticipate their appearance;
- Moving in too many directions and accumulating unfulfilled tasks and unachieved goals;
- The enterprise is strongly influenced by the external environment;
What critical questions need to be answered to determine the essence of business development?
- What business do we want to work in?
- What abilities and capabilities can we take with us to move forward?
- What will our competitors do?
- What to do to stay competitive?
Opportunities for innovative business are constantly expanding. Until recently, many innovative enterprises, especially at the initial stage of development, were limited only to local markets. At present, even for the most beginners, world markets are open. At the same time, global competition is also intensifying. This leads to the fact that the main task of strategic planning is to ensure the sustainable competitiveness of the enterprise. The constant introduction of new technologies is often for many enterprises the main strategic factor for successful competition. Moreover, an even more important factor in competition between innovative enterprises is the speed with which new developments are introduced. Over time, there are more and more investment funds in the economy. But at the same time, investors are becoming more and more selective. Therefore, the need for strategic planning, which would determine the prerequisites for the successful operation of the enterprise, becomes acute and relevant.
InvestmentsOften businesses develop business plans to obtain funding. However, at present, investors and lenders are more likely to require a potential investment object to develop strategic planning, rather than writing a production business plan. Therefore, the business plan should reflect approaches to strategic planning. Such approaches are an indicator of how successfully the management of the enterprise manages its activities. The business plan is a reflection of the fact that the management understands the state of the company and the environment in which it operates, all members of the company understand the goals of the company and the strategy for achieving these goals. Lenders and investors are more interested in your strategy than in financial projections because your approach to enterprise development strategy shows how more or less likely it will be for you to achieve the financial projections shown.
Why engage in strategic planning?A strategic plan is like the game plan of any sports team. Without a specific game plan, the coach could simply instruct the team with the words "Get on the field and play." Although such a team could win due to the physical ability of the players, this is unlikely. At the same time, good players alone are not enough to win games. Many entrepreneurs have great ideas but fail to implement them successfully. You need to have both a great strategy and a great execution. Even so, success cannot be guaranteed. However, having both, the entrepreneur significantly increases his chances of success. This principle is the key to strategic planning: combining great strategy with perfect execution. At the same time, what is ultimately important is not strategic planning itself, but how it is complemented by three key parameters: planning, execution and continuous improvement.
Strategic planning and excellent execution are essential elements in achieving success in today's competitive world. Another essential element is the exchange of information. In the process of implementing plans, there should be feedback and constant adjustment and adaptation of plans. This process is called continuous improvement.
Investing in strategy development increases the company's chances of success, unites the company's management and performers to solve the same problems. In this regard, is strategic planning a short-term or long-term task?
Many people think that strategy is a long-term goal. The fact that the strategy can be short-term is disputed. In reality, strategy has nothing to do with time. Strategy deals with competition. The following example can serve as a demonstration of the last statement. Imagine that you are the general of the only army in the world. There are no competitors like other armies. As a result, you don't need a strategy. Instead, you need a good production plan that decides what color uniforms soldiers wear and how to select musicians for regimental bands. However, it is worth introducing another competitor into the “battle”, as immediately the strategy becomes an important factor. Therefore, the strategy has nothing to do with time. Strategic planning deals with competition.
Is strategic planning the prerogative of large enterprises? Strategy has nothing to do with the size of the enterprise. In any competitive environment, enterprises that can think through their actions better than competitors, plan their activities better than competitors, and maneuver better than competitors in the market, receive competitive advantages.
Small and medium enterprises should develop a strategy covering competition over the next three years. Since there will be rapid technological and marketing changes, these businesses will need to adjust their plans to changes in the internal and external environment. Like the general above, you will need to rethink your tactics and hone your maneuvering techniques. This flexibility is the key to success.
Strategic planning is a dynamic process. As the enterprise implements the process of its development, the behavior of the enterprise in the market also changes. Action must be taken fairly quickly. Rapid action based on a strategic approach and quick success create the momentum to move forward.
Most entrepreneurs, especially those in innovative business, take great solutions according to the development strategy, because they are constantly thinking about how to improve their business. In this regard, there is no shortage of strategic ideas. That's why when innovative business fails, it is most often the result of weak planning, execution, and continuous improvement processes. Many entrepreneurs think that everyone else on their team understands the goals of their business and therefore doesn't take the time to communicate the goals of the business to everyone. Many entrepreneurs have great ideas but fail to successfully execute them. Often businesses cannot simply focus on the critical parameters that would help them succeed.
StrategyThe process of developing a strategy should be fun, based on clear motivations and uplifting the spirit of the enterprise. The process of developing a strategy is a time of reflection on the business, it is a process of moving away from daily worries and thinking about the future of the enterprise. To strengthen strategic thinking, it is recommended to break away from daily worries with the entire management team for at least two days and invite an independent specialist - a consultant to help formulate the strategy. The consultant must know the process of strategic planning, have experience in business in order to create practical advice and also have the ability to systematically summarize the results of group discussions.
The strategic planning process begins with an honest assessment of the current business situation. Albert Einstein is credited with saying that if he had only one hour to solve a problem about how to save the world, he would spend the first 50 minutes analyzing the problem itself. This concept is also true for strategic planning. However, many entrepreneurs indulge in daydreaming and never develop a plan to achieve their goals.
The strategy development process answers the following 4 questions:
- Where are we now?
- Where are we going?
- How will we reach the goal?
While this may seem like a very simple task, it really isn't. However, the strategic planning process, which consists of the above 4 components, provides a structure for the efforts of entrepreneurs and helps to get the maximum result from entrepreneurial activity.
Where are we?The answer to this question is an understanding of what the enterprise and its activities are today. This is an objective assessment of production activities in the broadest sense of the word. This analysis of a business is often referred to as "looking at your business from the opposite side of the street." You need to look at your business through the eyes of others. To do this, you need to look at your enterprise from the point of view of the shareholders of the enterprise, the clients of the enterprise, its personnel, suppliers, as well as from the point of view of management itself. At this stage, it is necessary to assess the strengths and weaknesses of the enterprise, describe its successes and failures that have befallen the enterprise, evaluate the achievements and problems, opportunities and threats to successful activity. Strategists use another expression to describe this process: hot air balloon” or “View from 10,000 meters”. This process of collecting information about the enterprise is not limited to a simple review of the financial parameters of the enterprise. This process also includes information exchange between shareholders of the enterprise. Finally, sometimes the first step to solving a problem is to acknowledge that there is a problem.
The process of collecting data for strategic planning should include the creation of overviews of all activities of the enterprise, as well as the collection of external information about the markets and the economy in which the enterprise operates. All collected data is then presented to the group that will develop a strategic plan for an objective assessment of the business.
To facilitate the collection of objective information, it is recommended to conduct a survey of those who represent individual elements of the enterprise, as well as all shareholders. These surveys should also cover the personnel of the enterprise, including various levels of managers, customers and suppliers. These surveys should be conducted by persons who are not dependent on the management of the enterprise, since if these surveys are conducted by the management itself, then it will not receive objective results. Since it is impossible to interview everyone, it is necessary to select representatives of various groups of respondents. The survey should be carried out on the basis of a single questionnaire and contain enough space to discuss those issues that respondents consider important for the development of the enterprise's business.
During the development of the strategy, the first day is devoted to the processing and discussion of the strategic assessment of the enterprise. The more accurate the assessment, the easier it will be to determine what needs to be worked on in order to achieve the goals.
After an assessment of the current state of the enterprise has been presented to the strategists, the next step is to analyze this state. Simple and effective way conducting this analysis is SWOT - analysis, or analysis of the strengths and weaknesses of the enterprise, the opportunities of the enterprise and the threats to its activities. SWOT analysis allows you to structure information and determine how to take advantage of strengths, how to deal with weaknesses, how to consider opportunities and how to defend against threats. As you go through this analysis, you will inevitably respond to the information by developing solutions to the identified problems.
However, you should not fall into this trap. You need to listen, study and analyze all the facts before making decisions. Your advisor should write down all ideas and suggested actions so that you can review them later. At this stage, the main task is not to focus on problems and weaknesses, but an objective assessment of the situation in which the enterprise is today.
At this stage, you can only determine those aspects of the enterprise on which you must concentrate in order to achieve your goals. Only when you have seen where your business is today can you look to the future through the lens of what you would like to achieve, where you would like to be with your business, and how you can get there.
Where are we going?Once you have done a strategic assessment of your business, you need to understand where the business should go. You must submit your business after 3 years. What will you achieve in three years? What opportunities have you developed? What do your customers, suppliers, staff and shareholders say about your business? What financial results have you achieved? What are the key achievements you have been able to achieve? While this process involves a certain amount of daydreaming, you must remain realistic and your future must be achievable. You need to strike a balance of far-reaching goals with the understanding that the future you envision is achievable. An achievable future must be understood by all team members. Then the future will become "desired" by all.
In the process of strategic planning, team members must describe in detail the vision of the future state of the enterprise with all its main elements. The more clearly this vision is described, the easier it is to understand this future and convey it to the entire team. Vision is an appropriate term because the term itself implies that you have to see what the future should look like. When developing a vision for the future of the enterprise, you must consider the strategic goal of developing your business. This means that you must decide whether you will focus on manufacturing excellence, customer relationships, products and services, innovation, sales and marketing, or channel development. Determining concentration points will form a vision for the future and help you focus on the highlighted points in the process of executing your chosen strategy. The choice of the main goal of the business or the driving force of the business helps to determine what knowledge the team needs to have in order to achieve the goals. It takes at least half a day to develop such a vision for the future of the business everyone wants.
How will we reach the goal?Once you have assessed the current state of the business and developed a shared vision for the future of the business, the process of determining how to achieve your goals becomes much easier. This process is often referred to as "discrepancy analysis". This analysis identifies the discrepancies between where you are now and where you want to be.
In this stage, you identify the aspects of your business that you need to change and focus on in order to move from where the business is now to where you have defined the future. While you can't foresee every possible impediment, your goal is to focus control actions on identifying the critical parameters that determine the success of your business. The strategic vision you developed in the previous stage helps define these critical parameters. You need to answer the following questions: What parameters of the enterprise do you need to develop in order to achieve your goals? What infrastructure objects should attract your attention in the first place? What obstacles do you have to face? What resources do you need?
The answer to the question "How are we going to achieve our goals?" also includes identifying those key performance indicators that correspond to those that are critical to success. These key parameters form the basis for managing change in the enterprise, and these parameters may differ from the management methods that you have applied in your business before. One of the keys to successfully executing your strategy is to manage the measurables of your business. The old adage “You are what you measure” holds true in this case. Identifying and measuring the key parameters that describe your business helps you focus on the critical success factors in order to make the future you envision a reality. This helps you implement the changes in your business that are necessary to achieve your goals.
Finally, you must decide how the organization of your business is in line with the strategy you have chosen. For example, do the compensation programs you use improve the achievement of your goals? Often a business plan states one goal, and the company's management stimulates completely different ones with compensation programs. It is important that all structures of the enterprise understand their benefits from the fact that the enterprise will achieve its goals.
How will we support the process of constant change?The key to success is constant change to reflect the changing environment. Many businesses engage in strategic planning but then lack the will to put the chosen strategy into action and make constant changes to their organization. For example, when you return after developing strategic plans to the daily concerns of the enterprise, you may again plunge into routine and momentary problems. This cannot be allowed to happen. In the process of strategic planning, it is necessary to develop activities that will provide an environment for the continuous implementation of strategic plans. This requires a certain amount of structure and discipline and usually involves constant discussion of what has been achieved.
Upon completion of strategic planning, it is necessary to address those problems and questions that have accumulated during your absence. Only after you have dealt with industrial crises can you focus on the strategically identified factors that are critical to your success. It is necessary to develop a process for the continuous implementation of the elements of the strategic plan so that the “plan lives on”. Otherwise, strategic success cannot be achieved. In order for the strategic plan to "live", it is necessary to discuss the goals set, plans to achieve them, and the state in which the company is on the path to achieving these plans. In order to formalize and structure the process of work on the implementation of the strategic plan, it is necessary to perform the following set of works:
- communicate to all employees of the company the goals set for the enterprise;
- assign responsibility for certain key components of the strategic plan;
- define group and individual goals;
- identify key activities to implement the strategic plan;
- holding ongoing discussions on the progress of the strategic plan.
It is recommended that discussions on the progress of the strategic plan be held at least once every two weeks. This is a good way to refresh the enthusiasm that was generated in the development of the strategic plan. Discussing the strategic plan allows for a clearer understanding of the implementation challenges of the plan and ensures team members' commitment to the strategic plan. Creating a constant driving force to achieve your goals requires a lot of discipline. Part business activity there should be constant changes in the business processes of the enterprise. The introduction of new methods for assessing the performance of the enterprise, new forms of reporting on the progress of work, new compensation plans that coincide with strategic goals, new investment priorities - all this can help in the implementation of strategic plans.
PlanningAfter you have developed a company development strategy, you know in which direction you are moving and how you should reach your goals. After that, you need to convey the content of the strategic plan to all structures and employees of the company. Many companies do not devote enough time to this process of information exchange. However, if the communication process is not established and the employees and shareholders of the company are not aware of the strategic plans, the implementation of the strategic plan will be very difficult. It is necessary to explain the content of the strategic plan to all owners, shareholders and employees of the enterprise, as well as customers and investors, emphasizing how they can help the implementation of this plan and what they will receive from the implementation of this plan. Repeat information about your plans and report on the progress of their implementation at every opportunity.
Communication should begin as soon as the strategic plan is developed, while all ideas are still fresh in the minds of all involved. This will also make it possible for all participants in the process to understand what agreements have been reached, to understand what contribution each member of the team can make, what prospects the enterprise expects. The communication process may include regular meetings to discuss the progress of the plan. strategic development, development of corrective control actions, redistribution of responsibility and material and technical resources.
A month after the development of the strategic plan, a meeting with staff should be held to discuss the results achieved. The manager of the enterprise should explain what has been done in the past and describe the goals that have been developed. Such a meeting should be motivational. If the meeting is held on the rise, then the team should have a sense of the success of the enterprise in the future. It is necessary to explain the essence of the factors that are critical for success, and the parameters that show the effectiveness of the company. Need to distribute summary report to all present. The main task of such a meeting is to present the developed strategy, create motivation among the team and ensure that all team members contribute to the overall success of the enterprise. Only through the participation of all team members can you achieve commitment to your idea. Your employees must understand their roles and understand what is expected of them to succeed throughout the enterprise.
Writing a business planSometimes notes taken at a strategic plan meeting by the management team may be sufficient to share information on the results of strategic planning. However, a more detailed presentation of all aspects of the enterprise's activities in the context of the implementation of the strategic plan may be required. Therefore, another effective means of communicating information about the strategic plan is the business plan. Growing businesses usually lack cash flow. Therefore, the development of business plans helps the enterprise to identify funding needs and ways to attract this funding. If additional funding is needed to implement the strategic plan, most lenders and investors will request a business plan in writing. Such a plan is prerequisite obtaining financing and is a document useful both for investors and for the founders of the enterprise itself and its employees. While a well-written business plan does not guarantee funding, a poorly written business plan will result in your proposal being rejected.
Before you develop a business plan, you need to develop a strategy. Although this axiom seems obvious, many entrepreneurs start by writing a business plan. If you don't have a well-defined strategy, you won't be able to implement your plan or get funding. Investors and lenders have a well-trained eye for recognizing that project managers have not thought through the details of a project and/or have not developed project strategies. While lenders and investors will consider financial indicators your plan, they are most interested in the strategy behind the plan. They want to make sure that the opportunities are achievable, that the plans to achieve the goals are good, and that the management of the enterprise is able to turn the plan into reality.
A good plan should convey this information to the reader. While external consultants can help develop a business plan and strategy, the plan must grow from the core of the enterprise. An effective business plan should be a useful tool for running the business. If the business plan captivates the reader, he/she will want to know more about the opportunity presented in the plan.
An important component of the business plan are financial projections. This data is a quantitative expression of your business development plans, they are expected financial result implementation of your plans. Many entrepreneurs make a common mistake when developing a business plan with specific calculations. Calculating financial projections that reflect what the reader wants to see in a business plan, rather than demonstrating a strategy, is good recipe in order to fail. This approach is often referred to as "planning turned upside down". Profit is not the result of focusing on the quantitative performance of your business. Profit is the result of your business developing correctly. Making a profit is not a strategy, it is a result. Strategic planning allows you to determine the critical factors that determine the achievement of your goal. Demonstration of quantitative indicators should be the end of the business planning process, which will show where you are going and how you will achieve your goals. The numbers become a simple financial expression of the plan.
The content of the developed planOnce you have developed a strategic plan and collected background information, you can begin to develop a business plan. Although you need to include certain standard information in your business plan, you must reflect unique features your company and your situation. Be aware that for some readers, the information contained in your business plan may be the only information about your company. Therefore, you must create a positive impression of your company. You can imagine that writing a business plan is writing several memos on various topics. This approach facilitates the process of developing a business plan and allows you to delegate the functions of developing individual parts of a business plan to different team members. A well-designed business plan shows what indicators of the enterprise's budget or balance sheet demonstrate the effectiveness of the enterprise, provides the criteria that management uses to decide management decisions, and invites external readers to familiarize themselves with the directions of the enterprise's development. The business plan should reflect the culture of the enterprise, its values and distribution of leading roles in the company. The plan should be clear, concise and free from errors. The content of the business plan should be logical, for example, financial projections should be consistent with sales volumes and marketing plan. This may seem obvious, however, there are many situations where a business plan does not make sense. Imagine the reaction of a potential investor if, while reading a business plan, he encounters conflicting statements and spelling errors. What would you think of the people who presented you with such a plan?
ExecutionThe execution of a strategic plan is what distinguishes one company from another. The strategy should become part of your business culture and part of your daily work. One of the most effective methods The introduction of this approach is to change the parameters by which you evaluate the success of your enterprise. For each of the 5-6 success-critical factors identified in the strategic plan, you need to identify those key parameters of the enterprise that you must constantly record. In this case, all changes will be tightly woven into the business processes at your enterprise. This may cause you to register parameters that you previously did not notice at all. For example, you may determine that customer relationships are essential to the success of your business. Then you can periodically assess the quality of these relationships by communicating with customers. To improve the effectiveness of such management, you must share with your team the results of this activity, whether they are positive or negative, and concentrate your team's efforts on implementing such changes that would ensure the achievement of the desired result.
Another factor in the successful implementation of the strategic plan is the allocation of "shock positions". This is one of those changes that can be quickly implemented in order to create the key to success and give impetus to moving forward. It is necessary to single out such “shock positions” and distribute priorities between them. Intermediate successes should be celebrated in order to accelerate the implementation of changes. Other effective tool execution of the strategic plan is to change the compensation strategy. It is necessary to link compensatory measures with the results of activities, evaluated in terms of the critical success factors identified in the strategic plan. This allows you to force team members to concentrate on certain aspects of the enterprise. These factors and activities should reflect the content of your plan and be consistent with the compensation and reward structure. This process is also called "levelling".
Another component of successful execution is the degree to which you stick to the plan you have developed. While small changes to the plan are unavoidable, major changes and frequent changes to the rules of the organization of activities can lead to the fact that employees of the enterprise no longer take the activities you implement seriously. The top management of the enterprise not only needs to support initiatives and pave the way for them, but they need to constantly remind employees about what needs to be concentrated on during the implementation of the plan. It is necessary to constantly celebrate successful employees, because. recognition of contribution to the common cause and moral encouragement is also an important component along with monetary compensation.
Continuous improvementEven after a strategic plan has begun to be successfully implemented, there is always room for improvement. This process of continual improvement includes an analysis of what could be done better, what worked better, and what didn't. We need to make sure that the team is not so fixated on the strategic plan that it leaves no room for maneuver and change. For example, the strategy may change if the external environment has changed in the form of the emergence of new competitors or changes in economic legislation. Changes can be made through the mechanism of continuous evaluation of the enterprise. It is recommended to hold meetings dedicated to discussing the results at least once a month and developing measures to correct the course. A successful strategy includes concentration, structuring, discipline, soundness, driving force, commitment, measurability, compensation, communication, funding, goals, and an environment that supports the implementation of the strategic plan. But if this process were simple and easy, everyone would realize their plans, be rich and happy.
The main function of the innovation strategy is to determine the main long-term directions of scientific developments, the introduction of innovations, and the provision of resources to achieve the set goals. The state harmonizes the interests of the participants in the process, controls and regulates innovation activities.
The choice of strategy is influenced by the achieved level of social development, financial and material and technical resources of the state. Domestic scientists distinguish three types of innovation strategy: "transfer", "borrowing" and "building".
"Transfer" strategy consists in the fact that in order to develop the production of new products abroad, licenses are purchased for the latest highly effective scientific, production and technological achievements. This is done in order to save time and money to create and develop our own research and production potential, which after a certain period of time will be able to provide the entire innovation cycle - from fundamental research and development to innovation (Japan's strategy in the post-war years).
"Borrowing" strategy is to use cheap work force to master the output of products that were previously produced in developed industrial countries. This provides stimulation and development own production and scientific and technical potential (used in China and in a number of countries in Southeast Asia).
The "growth" strategy prefer countries where, along with the development of their own scientific and technical potential, they use the achievements of scientists and designers of other countries, including for the development of innovations and their implementation in production and in the social sphere (USA, England, Germany, France, etc.).
Common to these types of strategies is the stimulation of innovation in order to achieve progress in the economy and the transition to innovative development. The state innovation strategy is the unification of the efforts of science, production and education, the creation of favorable institutional conditions for innovators and entrepreneurs in order to ensure competitiveness and the country's transition to the ranks of leaders.
Enterprise innovation strategy
The innovative strategy of an economic entity (organization, company, enterprise) is developed depending on the tasks that it has to solve, taking into account positioning in the market, diversification or specialization of activities, possible competitive advantages that its innovative potential can provide. The most widespread are:
offensive strategy, its goal is to ensure a leading position in the market, which requires high costs for innovation;
defensive- keep close to the leader, borrowing his innovations and making some changes to them (this reduces the cost of innovation processes);
imitation- to follow the leaders, repeating all their actions and not spending a lot of money on innovations;
dependent-- self-preservation of the company by performing work on a contract basis for innovative enterprises;
traditional-- to fight for survival, using the usual conservative technologies with a minimum cost of innovation;
opportunistic -- occupation of free niches in the market, while the costs of innovation are determined by tactical considerations.
These innovative strategies are implemented individually or, depending on the circumstances and the availability of funds, simultaneously in different combinations.
An economic entity can determine its own innovation strategy if it clearly understands the needs of the market; is able to develop attractive offers and has a reliable network of agents to bring these offers to the market. The strategy determines the forms of innovative activity of the company and the most effective actions to achieve the intended goal.
A new strategy is always accompanied by risks, as it is developed under conditions of high uncertainty in obtaining positive results in the implementation of innovative projects. They are designed to be difficult to copy. Therefore, when determining an innovation strategy, it is necessary to take into account the phenomenon of "hypercompetition". This term is used by Richard D "Aveni, who developed a model (the so-called "7S") that takes into account those aspects that affect the innovation management process:
- 51 -- Superior Stakeholders Satisfaction;
- 52 -- strategic forecasting (Strategic Soothsaying);
- 53 -- speed (Speed);
- 54 -- surprise (Surprise);
- 55 -- changing the rules of competition (Shifting Rules of Competition);
- 56 - signaling strategic goals (Signaling Strategic Intent);
- 57 - joint and consistent strategic opposition (Simultaneous and Sequential Strategic Thrusts).
Hypercompetition affects four areas.
- 1. Price and quality (Cost & Quality - C--Q). Price competition and price wars inevitably lead to the need to use new means of fighting for the market, competition for the quality indicators of goods and services unfolds (when defining an innovative strategy, aspects S1 and S3 are used).
- 2. The choice of the moment of change and know-how (Timing and Know-how - T - K). Technological advances, new resources and know-how are used, and a strategy of innovation leaps is implemented to ensure that the product is improved so that it cannot be copied or created a worthy substitute (Aspects S2, S3 and S4 apply).
- 3. Invasion (Strongholds - S). Measures are taken to create various kinds of barriers to repel attempts by competitors to invade a region, field of activity or market segment that is controlled or included in the zone of influence of a particular company (use aspects of S6 and S7).
- 4. Usage financial resources(Deep Pockets -- D). It's about about the fight large companies with significant resources that enable them to different ways eliminate competing enterprises and small entrepreneurs. This forces small firms to create and develop informal alliances, seek government assistance, or use workarounds to stay out of the areas of large companies (aspects of S5 and S7 apply).
If traditional approaches to strategy emphasize the importance of "creating an advantage," Richard D'Aveni points to the need to "creatively destroy a competitor's advantage" with a series of quick actions and reactions. For competitors, the company's behavior must be unpredictable so that their strategies, designed to counteract, do not In their book Competing on the Edge: Strategy as Structural Chaos, S. Braun and K. Eisenhardt note that strategy is a diverse, dynamic, and complex phenomenon, and the advantage achieved is always temporary.
To implement the formulated strategy, specific plans, programs and projects are being developed that pursue the goal of efficient distribution and use of resources and adaptation to changes in external and internal conditions.
Establishing the relationship between methodological approaches to the evaluation, selection and implementation of strategies and innovations. Production and economic activity of the enterprise based on innovative development causes a change in the composition and content of strategic planning tasks. In this case, the interrelation of the functions of strategic and innovation management makes it possible to develop effective directions for the strategic management of innovative development through the formation of an innovative strategy.
The intensification of innovative activity at all levels is relevant for the country's economy, and only an innovative development path will ensure the competitiveness of products and enterprises through the constant updating of equipment and technologies, expanding sales markets, the effective use of scientific and technological potential and stimulating its growth.
Innovative development should be defined as based on the integration of methods for assessing development strategies and selecting innovations
The ability of an enterprise to develop dynamically on its own basis through the systematic formation of a set of actions aimed at the development, implementation, and further modification of innovations. Innovative potential expresses the totality of the available resources of the enterprise, isolated through their ability to be involved in the innovation process.
Before the strategic innovation management the task is to effectively distribute the available resources of the innovation potential, determine the need for resources to ensure innovation throughout the entire life cycle, develop a set of measures to strengthen the viability and capacity of the enterprise - the formation of an internal strategy for innovation development, and adaptive implementation of mastered innovations in accordance with the stages of the innovation process and changes in the external environment - an external strategy for innovative development.
The importance of strategic management of the innovative development of an enterprise creates the need to define an innovative strategy in the structure of the overall strategy of the enterprise. Innovative development, in turn, is based on a system of interrelated stages aimed at the effective evaluation and selection of innovations for implementation in the enterprise. These steps are justified economic methods the effectiveness of innovation so that enterprises at the corporate level, when determining long-term goals, can analyze and take into account the tasks of innovative development.
The convergence and interpenetration of strategic and innovation processes is ensured by the integration of methods for assessing development strategies and selecting innovations based on the following main stages:
1) analysis of the external environment and development of innovative behavior;
2) analysis of the internal environment and assessment of innovative activity;
3) consideration of alternative options for achieving strategic goals;
4) selection of innovative projects;
5) feasibility study and organizational and technical justification of innovative strategies;
6) analysis of innovative potential;
7) evaluation of the effectiveness of the development and implementation of product and technological innovations, taking into account internal infrastructure capabilities;
8) analysis of the innovation process to identify the correspondence between the achieved and planned results of the implementation of innovations.
Thus, the implementation of one of the essential characteristics of the mechanism for integrating strategic and innovative development, which consists in the convergence and interpenetration of these two processes, can be performed on the basis of a model for establishing the relationship between methodological approaches to the assessment, selection and implementation of strategies and innovations.
This contributes to the implementation of effective sources of innovative development of the enterprise, namely:
– definition of strategic goals and objectives based on innovations,
– building an effective innovation policy,
– development and implementation of innovations as directions of strategic development,
– investment support for innovation processes at the corporate level.
Considering the development of an enterprise as a continuous process of acquiring and expanding its resource capabilities. It should be emphasized that since the course of development of each enterprise is strictly individual. This means that each enterprise has an individual set of resources, it is impossible not to take into account the impact. Which renders the existing resource set to the choice of enterprise strategy. Arguing that an important factor in the choice of an enterprise of one or another type of innovation strategy should be resource provision in an organic combination with the goals of the strategy. Let us study the interaction of these two factors and their influence on the formation of an innovative development strategy by an enterprise. Noting that the innovative goals of the organization stem from the overall strategic goals, and the resource set of the enterprise forms the necessary innovative potential.
So, it can be argued that the management of the innovative development of an enterprise is not limited only to determining the goals of the innovative strategy, but requires an assessment of the company's capabilities for their implementation.
It follows that innovation goal forms a vector of development, which should ensure the achievement of the set goals, but the best results can be obtained by an enterprise only if its goals correspond to the existing innovative potential through which the organization develops.
The choice and implementation of an innovation strategy depends on the state of the innovation potential. The formation of which can be carried out at the expense of the components and elements of the internal environment of the organization. The set of resources available to an organization forms its innovative potential and characterizes its readiness for systematic innovative development. And consequently, it affects the structure and direction of the innovation strategy.
In contact with
