Strategic planning occurs after analyzing its competitive environment and future expectations. Strategic planning creates a framework for achieving its vision, increasing market share, and driving overall performance. More specifically, strategic planning is identifying a course of action that will help meet strategic goals. This process relies heavily on human resource management(HRM) to establish the best ways to reduce current barriers and potential threats to a company’s well-being.
Strategic planning is the process of evaluating your current position and setting goals for the future. The five-step process of strategic planning usually includes:
1. Assessing your current position.
2. Determining the overall direction you want to go.
3. Analyzing your strengths and weaknesses against competitors or market trends.
4. Develop a plan to fulfill your goals and objectives.
5. Creating specific action steps that lead to achieving your goals and objectives.
The types of strategic plans are as follows:-
Corporate strategy is the framework to drive your business. This strategy sets the direction for an organization and its approach to achieving the business goal. The business strategy is the roadmap to complete the set goal. This strategic plan should address how we should compete. It is also called corporate-level strategy.
A functional strategy helps you achieve the goals of individual departments and employees of a corporation by addressing how they should compete. This strategic plan should address how we should contest and define the objectives for each department to retain their goals by bringing out their core competencies and exploiting their strengths to reduce their weaknesses.
Management strategy combines business strategy, functional strategy, and corporate strategy. The organization has to identify the goal and objectives of the strategic plan and then create a framework.
The strategic plan encompasses a short-term goal as short as one year and a long-term goal that could stretch up to 5 years. The mid-term goals usually are 2 to 3 years in length. The plans are the same for all organizations and are not specific to an organization based on its size or type of structure but may be modified to fit its needs.
The strategic goals should reflect the company’s vision, mission, and objectives. They should be realistic, measurable, attainable, yet challenging (i.e., stretch goals). An essential part of each short-term goal is a statement of specific action steps to achieve the goal. If a goal is not attainable in one or two years, it would be considered a long-term goal (i.e., not annual).
Short-term goals may be set year by year, quarter by quarter, or month by month, depending on the nature of the business. The mid to long-term goals will have milestones that significant progress towards accomplishing these goals.
The process of strategic planning involves the following steps:
1. Planning your strategic position
2. Write down your objectives and plans that you wish to achieve
3. Conduct proper analysis, both internal and external and identify any issues that arise
4. Develop the plan based upon these issues and review the final plan.
The components of strategic planning are Vision, Mission, Goals, and Objectives.
Vision is the overall aim of the company or organization. It should be relevant to the customers and shareholders alike. A vision statement can also include an image of how the organization will look in the future. For example, if your company wants to become a leading supplier in the market, then this is a future aim for you.
The mission of any business organization is to get it done by satisfying the needs of customers and clients in the most efficient way possible. The mission statement describes what a business or institution does. In simpler words, it tells us why the company exists.
Goals naturally come next as they answer the question “”What?””. They are specific targets in a general direction but have no particular set deadline to complete them. Goals are aggressive and time-bound, making up a bridge between objectives and vision statements. Without goals, there would have been no purpose of writing objectives first, as dreams are essential for any strategic plan.
Objectives finally focus on what gets done within a given time frame. They should be precise and quantifiable so that they can be tracked easily by management and workers at all levels of the company because without tracking we
Managers need strategic planning to make their work easy. Strategic planning is essential for managers to make their work easy. Strategic planning gives managers a clear direction and a sense of purpose. It helps them set clear goals and train people effectively.
Targets are set, plans are made, and strategies are developed. Strategic planning is an effective tool to understand each team’s goals to attain the company-wide goal.
Strategic planning is essential to any organization as it helps managers know where they should take the company in the future and how they could do it. It also helps create a proper strategy to help the organization succeed in its objectives.
There are four primary reasons that strategic planning benefits companies:
It breaks down the large company wide goals into achievable small day-to-day targets.
Takes into account the number of assets available and thus keeps track of them.
Gives a sense of direction and purpose.
Guides the employees to increase productivity.
Stay up-to-date with all things Akrivia HCM
By subscribing, you agree to our terms and conditions.