What is Strategic Planning? All You Need To Know

November 15, 2018

What is Strategic Planning?

Strategic planning can be defined as an organizational administration activity that is implemented to set particular objectives, focus resources and energy, improve operations, ensure that both the shareholders and the staff members are working towards common objectives, set an agreement around expected results, and assess the company’s direction in response to volatile business environments. It goes well beyond just making sure there is a good financial plan in place. It is an effort that requires uttermost discipline that seeks to produce important actions and decisions that can significantly impact the direction and shape of an organization. Ideal strategic planning states not only where the company intends to go and the actions needed to achieve the objectives, but also how it will assess whether it is successful or otherwise.

The strategic planning definition refers to a company’s process of articulating its directions, overall strategy, and its decision making procedure to allocate enough resources to achieve its goals. The definition may also extend to highlight the control mechanisms for directing the overall implementation of the strategy. The strategic planning definition business became popular in organizations around the 20th century and remains a very critical aspect of strategic management to this date. The plan is, mainly, executed by strategists of executive planners who involve numerous research resources in their analysis of the company and its general relation to the business environment in which it operates.

Strategic Planning Definition

To effectively answer the question what is strategic planning, we will have to accurately picture what a strategic plan entails. A strategic plan is a paper used to express a particular company’s goals and objectives. This includes the business’ long term financial plans as well as service objectives to customers. The document should also indicate the actions required to achieve the highlighted goals and all important elements developed during the planning phase.

With this in mind, it will be easier to answer the question, what is the meaning of strategic planning? Simply put, strategic planning involves clarifying the general functions, purpose, and expected results of a particular company, and how those functionalities will be executed to achieve the desired results. There are many ways of doing this planning; this depends on the purpose of the exercise, the development stage or life cycle of the establishments, the kind of problems that the company is currently undergoing, and changes in the environment of the company. Making sure that you have great cost accounting and budgeting is key in this process.

For instance, numerous people prefer to use goal-based or vision-based planning, in which the plan revolves around the goals the company hopes to achieve in the future. Unfortunately, numerous people think that this is the only way of planning. Nothing could be further from the truth. There are other forms of strategic planning such as issues-based planning, in which the plan highlights current problems that the company might be facing and how it hopes to solve them.

Strategic Planning Questions

Accurate strategic plans require that a company’s administrators correctly answer about four questions. Some of the questions are highlighted below.

1. Where are you now? The first thing you should determine is your organization’s level of production and sales, the profitability of every service or product your offer, the prevailing market trends, your likely competition, and the level of liquidity you enjoy. You should start by taking a look at your current analytics.
2. How did you achieve what you have achieved thus far? Consider re-evaluating your company’s activities. Is every activity you are undertaking necessary to inspire customer loyalty? Is it possible to save more money?
3. What are your objectives? Describe the desired outcome of your company. Ensure that you highlight how much revenue do you wish to generate in the next decade?
4. What skills, knowledge, and resources are necessary to help you compete optimally? There are always a number of competencies that your company might need to develop with time.

This article has attempted to answer the question, what is strategic planning? In a nutshell, strategic planning is used to focus resources and energy towards the realization of common goals.