Strategic Planning is a comprehensive process for determining what a business should become and how it can best achieve that goal. It appraises the full potential of a business and explicitly links the business’s objectives to the actions and resources required to achieve them. Strategic Planning offers a systematic process to ask and answer the most critical questions confronting a management team—especially large, irrevocable resource commitment decisions.
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How Strategic Planning works:
A successful Strategic Planning process should:
- Describe the organization’s mission, vision and fundamental values
- Target potential business arenas and explore each market for emerging threats and opportunities
- Understand the current and future priorities of targeted customer segments
- Analyze the company’s strengths and weaknesses relative to competitors and determine which elements of the value chain the company should make vs. buy
- Identify and evaluate alternative strategies
- Develop an advantageous business model that will profitably differentiate the company from its competitors
- Define stakeholder expectations and establish clear and compelling objectives for the business
- Prepare programs, policies and plans to implement the strategy
- Establish supportive organizational structures, decision processes, information and control systems, and hiring and training systems
- Allocate resources to develop critical capabilities
- Plan for and respond to contingencies or environmental changes
- Monitor performance
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Companies use Strategic Planning to:
- Change the direction and performance of a business
- Encourage fact-based discussions of politically sensitive issues
- Create a common framework for decision making in the organization
- Set a proper context for budget decisions and performance evaluations
- Train managers to develop better information to make better decisions
- Increase confidence in the business’s direction
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