Strategic planning is a systematic process that helps you set an ambition for your business' future and determine how best to achieve it. Its primary purpose is to connect three key areas:
your mission - defining your business' purpose
your vision - describing what you want to achieve
your plan - outlining how you want to achieve your ultimate goals
Strategic planning is different to business planning. It requires stepping back from your day-to-day operations and articulating where your business is heading, by setting long-term goals, objectives and priorities for the future.
Importance of strategic planning
Strategic planning is necessary to determine the direction of your organisation. It focuses your efforts and ensures that everyone in the business is working towards a common goal. It also helps you:
agree actions that will contribute to business growth
align resources for optimal results
prioritise financial needs
build competitive advantage
engage with your staff and communicate what needs to be done
Another key purpose of strategic planning is to help you manage and reduce business risks. Growing a business is inherently risky. Detailed planning may help you to:
remove uncertainty
analyse potential risks
implement risk control measures
consider how to minimise the impact of risks, should they occur
Effective planning usually results in a written strategic plan. This is a formalised document that describes your business goals, and the actions needed to achieve them.
You can use a variety of models and approaches in strategic planning. Many businesses include a SWOT analysis or a PESTLE analysis as key elements of their strategic plan.
Other common elements are:
vision and mission statements
core values
clearly defined goals and objectives
action plans
You may also want to include an implementation schedule, key performance indicators (KPIs) and other accountability measures.Learn more about the key elements of strategic planning.
Difference between a strategic plan and a business plan
Both strategic and business plan documents are essential planning tools for your business. However, depending on the business stage and goals, one may be more useful than the other.
Strategic plan
A strategic plan is for a 3-5 year period and sets out the tasks, the milestones and the steps needed to drive your business forward. Find out how to develop a strategic plan.
Business plan
A business plan focuses on a shorter term, usually no more than a year, and serves a specific goal - eg starting a business, getting funding, or directing operations.See how to prepare a business plan for growth.
The purpose of strategic planning is to set overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is headed and what its priorities should be.
Strategic planning is necessary to determine the direction of your organisation. It focuses your efforts and ensures that everyone in the business is working towards a common goal. It also helps you: agree actions that will contribute to business growth.
The strategic planning process helps you break your organization's vision for the future into strategic objectives. You'll prioritize which strategic goals to focus on, when they should happen, and how you'll achieve them.
Strategic management provides overall direction by developing plans and policies to achieve objectives and allocating resources to implement the plans. Ultimately, strategic management exists for organisations to gain a competitive edge over their competitors.
A purpose statement provides the reason or reasons you exist. It is about why you exist, whereas the mission is about what you do and for whom. This distinction is often difficult to extract from strategic plans or corporate websites.
Effective strategic planning is a process that should be broken down into three separate, equally important components: strategic thinking, long-range planning, and operational planning.
Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company's overall long-term goals or desires.
The purpose of strategic management is to exploit and create new and different opportunities for tomorrow; long-range planning, in contrast, tries to optimize for tomorrow the trends of today.
Strategic management involves providing the enterprise with an overall direction, setting organizational goals, developing policies and plans to achieve those goals, and allocating resources to implement the plans.
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