Strategic Planning

Definition
Strategic planning is the systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them. In contrast to long-term planning (to meet estimated future needs), strategic planning begins with the desired-end and works backward to the current status. strategic planning looks at the wider scenario and is flexible in choice of its means.

Strategic planning is critical to any business, without it no body will not understand his key opportunities and risks. The following flow chart of strategic planning focus on linking long-term vision and business objectives with key operational strategies. It is key to layout of any roadmap to success regardless of the market nature.

Merits of Strategic Planning

The following are main advantages can be achieved by implementing a strategic planning process.

Focus is placed on the important things. Resources (time, talent, money) are properly allocated to those activities that provide the most benefit. Prove an awareness of the changing environment as a foundation for needed change. Analyze the internal business culture and evaluate its impact on the company's performance. Recognize the impact the changing business environment is having on the company and affect the needed changes in direction. Become aware of the company's potentials in light of its strengths and weaknesses. Identify and analyze available opportunities and potential threats. May bring about a needed change of direction of the company. Strategic issues can be brought up for top management review. Able to set more realistic objectives that are demanding, yet attainable. A need for better information for decisions making may be recognized.

Growth can be accelerated and improved. Poor performing areas can be identified and eliminated. Gain control of operational problems. Develop better communications with those both inside and outside the company. Provides a road map to show where the company is going and how to get there. Develop better internal coordination of activities. Develop a frame of reference for budgets and short-range operating plans. Gain a sense of security among employees that comes from better understanding of the changing environment and the company's ability to adapt.

Demerits of Strategic Management

The Future Doesn't Unfold As Anticipated It Can Be Expensive Long Term Benefit vs. Immediate Results Impedes Flexibility It is both costly and time consuming It is prescriptive in nature There is excessive formalizations in the process Lack of flexibility Loss of initiative to enterprising firms Lac of realism