Tsygankova N.A., Moiseieva F.A.     

Donetsk national university of economics and trade

named after Mykhaylo Tugan-Baranovsky

 

STRATAGIC PLANNING AS BASIS OF EFFECTIVE BANK ACTIVITY

 

The strategic planning is a process of determination main aims for a future and ways of their achievement. The strategy of development is a general conception, which is to be the basis for acceptance the key administrative decisions. The strategic planning is a factor which includes relation between desirable level of profitability, possible risks, and methods of achievement the aim. A strategic management in commercial bank is a complex of administrative processes and functions which provide realization of mission and strategic aims of bank activity.

The general strategy of development is realizing for all bank establishments as for one economic unit during a long period.  Strategic planning does not foresee limitation for realization of purpose as a rule. The strategy touches conceptual and important direction for a bank activity. The development begins with determination of the system of strategic aims of a bank.

The strategic plans are used to be at a long-term prospect. They based on the analysis of existent progress of economy trends, financial markets. Plans also contain the elements of prognostication and description of basic principles of making decision.

There are no details and exact dates of implementation in strategic plans. So I fully agree with that assertion that the strategic planning is not the simple fixing of bank activity indicators in long-term prospects, but foresees the choice of such directions and spheres of bank activity, which will provide the growth of its competitiveness. Taking into consideration the strategic planning is a function of bank development, and corporate strategic planning - the function of time.

The development of strategic plan is based on the results of structural subdivisions bank activity. A strategic analysis enables to carry out the estimation of bank, to find out its features of development according to external and internal environment. The strategic planning supports the formulation of informative base for prognostication and the optimum choice of the strategy development. The important line of strategic analysis is an orientation on a prospect. The management of a bank must foresee the perspective estimation of a bank activity.

The economists noticed that a strategic plan does not need permanent update and correction in the conditions of stable environment. The strategy formulation doesn’t impact on bank activity in such case. The strategic plan becomes the most necessary element of providing the successful bank activity in the conditions of dynamically developed markets.

The high-quality methods of researches are usually used in a strategic analysis (diagnostics, interviewing, scanning-out, heuristic methods, benchmarking, and factor analysis).

 The most known method of strategic analysis is SWOT. This method is adopted after the initial letters of the English words: Strength - strong parties, Weaknesses are weak parties; Opportunities are possibilities, and Threats. The method enables to discover and estimate strong and weak parties of bank activity, potential possibilities and risks.

The logical continuation of swot-analysis became the method of SPACE. Here the economists concentrate attention to the financial aspects of activity. That is why I consider it is more acceptable to all banks. The method of pest-analysis is used for research of external environment. This method adopted after English abbreviation Policy, Economics, Society-company, and Technology. It’s directed on minimization of negative influence of macroeconomic factors and use of the favorable state of market. A factor analysis is a determination of influence of separate factors, reasons, on the effective index of the research. Benchmarking is a continuous process of comparison of commodities, production processes, methods and other parameters of the enterprise, with is to be analogical by structural subdivisions.

Taking to the point methods of the strategic planning, it is possible to come to conclusion, that it’s necessary to use complex methods in this question for adjusting effective profitable bank activity. It’s necessary to analyze external and internal factors by a swot-analysis at first. It will give the possibility to form the strategy of a bank including advantages and disadvantages. To revise the range of own goods and services from the point of demand and perspectiveness. It is expediently to apply a factor analysis. It will give the possibility to find out the reasons of rejection of actual results from planned.

The system of all these measures will give the possibility to estimate the situation and prospects, to define the position on the market. It became possible to find out failings, to accept optimum administrative decisions. 

Research in the area of the strategic planning, has also some difficulties:

-                             It can be quite difficult in the high changeable terms of environment (a company and economy is unstable);

-                              It can provocate to go to dangerous changes in current plans, instead of  beginning everything again, coming from a new prospect;

-                             Strategic planning is  deal with the heavy costs and production labour, when they are needed for the decision of current problems;

-                             The strategic planning - valuable measure. The budget of organization has no money for consultants, organization of meetings with specialists and other necessary charges.

All these difficulties are incomparable with the effect which became valuable.

To keep to the point, we can summarize, that the strategic planning is process and phenomenon of prediction future and could be interpreted sufficiently widely. Scientists examine it as a process of preparation and making certain type of decision, as providing of preparedness for competitive activity on markets, as formulation of aims and determination of ways of their achievement.

Not a single bank can successfully function without conceptual principles of the development at modern economic terms. The strategic planning grew into the obligatory constituent of effective bank management.

The strategic planning itself can not be a panacea from all «illnesses» of bank development. But effective bank management activity impossible without planning.