Strategic planning can be described as a management activity through which an organization sets its priorities, strengthen operations and focus its resources and energy as well as ensuring that all employees and stakeholders work towards a common organization goal. Through strategic planning employees and stakeholders agrees on outcomes and readjust the direction of the organization to conform to prevailing changes in the environment. Strategic planning can also be described as an organized effort that results to essential decisions and feats that guides and moulds the real face of the organization, its clients, activities and the reasons behind these activities focusing on its future (Simerson 17). Strategic planning is a broad aspect of management and it not only focus on the future of an organization and the course of action to make progress but also outlines various elements which would indicate success.
Strategic planning is characterized by a well demonstrated leadership commitment on both the plan and the process. The planning should be broad based and all members i.e. stakeholders and employees should be involved in the development. In order to come up with the best strategic plan, the planning process must promote an environment that encourages common understanding of priorities and goals. To be sure of a smooth implementation of the strategic plan the planning process should create a sense of ownership and recognize efforts of the team in the strategic planning (Simerson 37). Strategic planning should also involve assessment of the current and the previous status of the organization and ground the future directions on these assessments. Flexibility should as well be considered in strategic planning to allow future adjustments for future success. The overall success of the strategic planning is based on its ability to communicate with clarity unit priorities to the stakeholders in pursuit of quality enhancement.
The strategic planning process starts with coming up the mission and objectives in respect to the strategies. The mission and objectives emanates from the organization’s vision. The strategic and financial objectives should be measurable. The next step is the environmental scan which involves internal, industry and the eternal macro-environment analysis of the organization. The internal analysis entails SWOT analysis of the firm while the industry analysis evaluates the industry in terms of the entry barriers, customers, substitute products, suppliers and industry rivalry. Political, economic, social and technological (PEST) analysis is done when considering the external macro-environment. This information guides the planners in the next step which is strategy formulation. Strategy formulation involves matching of strengths to opportunities while seeking remedies for the weaknesses and external threats (Wittmann and Reuter 78). The next step is implementation of the strategic plan which is followed by evaluation and control. Evaluation and control is all about monitoring and adjusting the implementation of the laid down strategy.
When and Why Use Strategic Planning
Strategic planning may be appropriate to use when an organization’s profitability is declining or is faced by stiff competition (Simerson 24). It can also be used when the operational performance is low and the costs are increasing. Sub-optimization, that is, employees working towards distinct and specific goals which are not in line with those of the organization may also be another reason why an organization may opt to use strategic planning. The strategic plan functions as a blue print on how to reinstate profitability, operations or achieve the desired state in the organization (Wittmann and Reuter 49). This is the major reason why strategic planning is used to guide an organization into future.
Simerson, Byron K. Strategic Planning: A Practical Guide to Strategy Formulation and Execution. Santa Barbara, Calif: Praeger, 2011. Print.
Wittmann, Robert G, and Matthias P. Reuter. Strategic Planning: How to Deliver Maximum Value Through Effective Business Strategy. Philadelphia: Kogan Page Ltd, 2008. Print