Strategic Planning

Definition

What is Strategic Planning?

Strategic planning is the process of documenting and establishing a direction by assessing how your business is going over the few years. 

It is a disciplined effort that produces foundational and helpful decisions and actions. These will then guide the organization on its next steps. 

Strategic planning is a great way to record your mission, vision, values, long-term goals, and action plans you’ll use to reach customers. 

This strategy is the art of creating specific business strategies, setting priorities, strengthening the company’s operations, and ensuring that everyone is working toward the same goals. More often, strategic planning focuses on various departments such as accounting, finance, marketing, and human resources. 

Strategic Planning
What is Strategic Planning?

Benefits of strategic planning

The process of creating strategic planning can take some time, but it is beneficial for everyone.

Here are some key benefits of strategic planning:

Establishes realistic goals and objectives

One of the major benefits of strategic planning is solving some of the organization’s major issues.

Strategic planning makes an outstanding contribution to improving a company’s overall performance because the company can establish realistic goals and objectives altogether.

Identify strength and weakness

Strategic planning helps managers realize and identify the strengths and weaknesses of their business plan.

By identifying your business’ strengths and weaknesses, the strategic planning process will give companies an idea of the plans that require improvement.

Build better coworking relationships

Strategic planning helps to build a better and stronger team in the staff and employees. Strategic planning allows managers to come up with ways to provide better processes and working environments.

Strategic planning process

The strategic planning process needs a lot of research and planning from a company’s top management. Since it plans the direction the company is taking, it needs to be well-thought-out.

From there, executives may evaluate and consider a variety of choices before deciding and selecting how to implement it strategically. 

Finally, the company will choose a most likely strategy to provide positive outcomes while avoiding financial risks.

Strategic planning process

Strategic planning development and execution are typically viewed as these three critical steps:

Strategy formulation

A firm will conduct an internal and external audit to analyze its existing condition before formulating a strategy. 

The goal is to identify the company’s strengths and weaknesses, and opportunities and threats (SWOT Analysis).

Management determines which strategies to focus on, how to allocate the company’s resources effectively. Taking steps like expanding operations through a joint venture or merger is also a good strategy.

Only the top management is authorized to assign the resources needed for the implementation of the business strategy.

Strategy implementation

After a strategy is formulated, the business must set precise goals for putting the plan into action. Then, they will need to allocate resources to execute the strategy.

The effectiveness of the implementation stage is usually determined by how top management puts their chosen strategy into action.

Strategy evaluation

Entrepreneurs believe that success today does not guarantee success tomorrow. 

Because of that, after the implementation phase, the top management needs to evaluate the performance of a chosen strategy.

Strategy evaluation involves three crucial activitiesreviewing the internal and external factors affecting the implementation, measuring performance, and taking reactive steps to make the plan more effective. 

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