Organizations and businesses employ different approaches to generate revenue and become profitable. One thing they have in common Is that they all need a clearly defined and strategic plan to attain peak profitability. Every organization needs to create and implement a strategic plan to guide its operations and engagements.
However, despite the significant role that strategic plans play in the success of organizations, not all companies exist with a clearly defined and communicated plan. It is crucial that the top management of a company have to be kept abreast of the strategic plan but they’re not the only ones that need to be kept in the loop. A company’s workforce also has to be informed of the master plan so they understand the direction of the organization.
Strategic Planning is the process and activities involved in communicating and defining the direction and strategy of a company and also making decisions related to generating, allocating, and utilizing the required resources to achieve the defined organizational strategy. It incorporates the processes and procedures with which an organization’s goals are defined, communicated and executed.
Strategic planning is fundamentally different from other planning processes in an organization because it employs a holistic, long-term approach unlike the procedures used to execute single organizational projects. Strategic planning has a much wider scope as it lays down the specific path through which set objectives will be achieved with organizational resources.
Control mechanisms are used to measure the efficacy of a strategic plan and also serve as a guide for plan implementation and modification as required. Strategic planning involves procedures and is itself a process that requires inputs and monitoring.
According to Michael Porter, four elements are key for consideration when creating organizational strategy. They are; the strengths and weaknesses of a company, the values of organizational decision makers, analysis of opportunities and threats in the industry, and expectations in the society at large. These elements incorporate both internal factors and external factors alike.
Strategic Position and Readiness
This is the first step in the strategic planning process. The requirement at this stage is to determine if the conditions at the company are adequate to create and implement a master plan. Possible hindrances also have to be considered so they can be avoided. This stage requires decision-makers to determine where the company is, where it is headed, and the specific methods to drive it towards the desired destination. A SWOT analysis is quite effective at determining an organization’s readiness and position.
Develop Objectives and Create a Plan for the Company
Once the organization’s position has been determined, next comes clearly defining the objectives of the company. These objectives must be created with a consideration of the vision of the company and need to position it for achieving goals. The techniques with which company objectives will be achieved have to be determined and outlined at this stage. Techniques for measuring performance also need to be determined here.
Data Collection, Review, and Plan Execution
Putting a company’s strategic plan into effect is as important as creating a strategic plan in the first place. Data related to finances and sales projections and position need to be collected and analyzed before putting a plan into action. The plan has to be clearly communicated to everyone in the organization.