Strategic planning benefits

Strategic planning is a management tool to help an organization in performing a better job in meeting the organization goals and adjust to the organization's direction in response to a changing environment. Strategic planning process is complex as it responds to the conditions of the organization's environment. Strategic planning and business development are interlinked. However, Strategic Planning is a long term business goal and Business Plan is a long term goal.Busines span provides the foundation and framework for the Strategic planning.

A sound strategic plan should:

Serve as a framework in taking decisions approval,

Explain the business to others in order to inform, motivate and involve,

Assist benchmarking and performance monitoring,

Motivate changes and building block for future plan.

SWOT analysis is an important Strategic Planning tool to assess an organization and its environment throughly. To be a successful business firm it is very important to analyses how well it interacts with the external (operations with the outside world) and internal (office/shop/factory) factors of business environment. To meet this challenge, companies perform SWOT analysis to develop long term strategies. SWOT is the acronym for "Strengths", "Weaknesses", "Opportunities" and "Threats". It is said that learning one's strengths provides key insights into the existing business opportunities, whereas weaknesses may cause immediate threats.

With the help SWOT analysis, an organization can develop in different areas like:

Sales - marketing - distribution - promotion - support;

Management - systems - expertise - resources;

Operations - efficiency - capacity - processes;

Products - services - quality - pricing - features - range - competitiveness;

Finances - resources - performance;

R&D - effort - direction - resources;

Costs - productivity - purchasing;

Systems - organization - structures.

The main benefits of Strategic Planning are:

You can focus only on some important factors of the comapany and the important resources will be distributed properly to the activities.

Strategic Planning provides an awareness of the changing environment as a foundation for needed change.

It also analyzes the internal business culture and evaluates its impact on the company's performance.

Recognize the impact of changing business environment on the company in the direction of course of action.

It highlights the company's strengths and weaknesses.

Identify and analyze available opportunities and potential threats.

A Company can set more realistic objectives by bringing the strategic issues to the top management review.

Helps as an important tool in decision making.

The loopholes of the company can be identified and eliminated by gaining control of operational problems.

You can enhance the organization's communications both inside and outside the company.

It is an effective tool in guiding, where the company is going and how to get there.

It works as a framework in the preparation of budgets and short-term plans.

It recognizes the occurring changes in the areas of size and segmentation, growth patterns and maturity, international dimensions.

Enhanced developments in the areas of customers, distribution channels, economic factors and social/demographic issues.

Strategic Planning identifies performances, market shares, likely plans, aggressiveness and strengths & weaknesses.

Next Article

Banner Ads