What is strategic planning process in business

Implementation Schedule Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals. How will we use the plan as a management tool?

What is strategic planning process in business

Michael Porter [5] Strategic planning activities include meetings and other communication among the organization's leaders and personnel to develop a common understanding regarding the competitive environment and what the organization's response to that environment its strategy should be.

A variety of strategic planning tools described in the section below may be completed as part of strategic planning activities.

The organization's leaders may have a series of questions they want answered in formulating the strategy and gathering inputs, such as: What is the organization's business or interest?

what is strategic planning process in business

What is considered "value" to the customer or constituency? Which products and services should be included or excluded from the portfolio of offerings? What is the geographic scope of the organization? What differentiates the organization from its competitors in the eyes of customers and other stakeholders?

Which skills and resources should be developed within the organization? The strategy may include a diagnosis of the competitive situation, a guiding policy for achieving the organization's goals, and specific action plans to be implemented.

The organization may use a variety of methods of measuring and monitoring progress towards the objectives and measures established, such as a balanced scorecard or strategy map. Companies may also plan their financial statements i. The term operational budget is often used to describe the expected financial performance of an organization for the upcoming year.

Capital budgets very often form the backbone of a strategic plan, especially as it increasingly relates to Information and Communications Technology ICT. Outcomes[ edit ] Whilst the planning process produces outputs, as described above, strategy implementation or execution of the strategic plan produces Outcomes.

These outcomes will invariably differ from the strategic goals. How close they are to the strategic goals and vision will determine the success or failure of the strategic plan. There will also arise unintended Outcomes, which need to be attended to and understood for strategy development and execution to be a true learning process.

Tools and approaches[ edit ] Video explaining the strategic plan of the Wikimedia Foundation Wikimedia Movement Strategic Plan PDF A variety of analytical tools and techniques are used in strategic planning.

Responsive Evaluationwhich uses a constructivist evaluation approach to identify the outcomes of objectives, which then supports future strategic planning exercises.

In business, the term "financial plan" is often used to describe the expected financial performance of an organization for future periods. The term "budget" is used for a financial plan for the upcoming year.

A "forecast" is typically a combination of actual performance year-to-date plus expected performance for the remainder of the year, so is generally compared against plan or budget and prior performance. The financial plans accompanying a strategic plan may include 3—5 years of projected performance.

The four stages include: Financial planning, which is primarily about annual budgets and a functional focus, with limited regard for the environment; Forecast-based planning, which includes multi-year financial plans and more robust capital allocation across business units; Externally oriented planning, where a thorough situation analysis and competitive assessment is performed; Strategic management, where widespread strategic thinking occurs and a well-defined strategic framework is used.

Categories 3 and 4 are strategic planning, while the first two categories are non-strategic or essentially financial planning. Each stage builds on the previous stages; that is, a stage 4 organization completes activities in all four categories. Sekora, Project Socrates founder in the Reagan White House, during the cold war the economically challenged Soviet Union was able to keep on western military capabilities by using technology-based planning while the U.

Mintzberg argues that strategic planning can help coordinate planning efforts and measure progress on strategic goals, but that it occurs "around" the strategy formation process rather than within it. Further, strategic planning functions remote from the "front lines" or contact with the competitive environment i.Strategic planning need not be a difficult undertaking.

Determine Desired State Even before the planning process begins, decide what you want to achieve through the planning process. The IT strategic planning process itself generates value to the end customer and, consequently, to the company.

In addition to decreeing the end of the automotive GPS industry, WAZE is much more efficient. Strategic issues are critical unknowns that are driving you to embark on a strategic planning process now.

These issues can be problems, opportunities, market shifts or anything else that is keeping you awake at night and begging for a solution or decision.

Nov 06,  · Strategic planning Magazine Article Michael E. Porter Awareness of these forces can help a company stake out a position in its industry that is less vulnerable to attack.

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.

It may also extend to control mechanisms for guiding the implementation of the strategy. Developing a strategic plan is an essential component of every successful business. It requires imagination, patience and a diligent approach, but can yield tremendous rewards.

A business strategy.

Strategic planning - Wikipedia