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The last holiday Garima took with her family was to Paris. In addition to creating a travel itinerary, she had made a list of the local restaurants and art museums she wanted to visit. She always tries to make the most of their family holidays making it fun as well as educational for her children.
Like Garima, many of us like to plan our trips in advance. We often have a goal of covering a number of tourist hotspots. While this may look like a simple task, we are essentially creating a strategic plan to cover must-see spots in a time-efficient manner. We establish goals in the process, hoping to achieve them as we cross places off the list.
Whether it’s vacationing somewhere or starting a new diet plan, creating goals and having a vision helps in achieving those goals. Businesses engage in a strategic planning process to determine their vision and identify future objectives and goals.
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What Is Strategic Planning?
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What Are The Benefits Of Strategic Planning?
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What Are The Types Of Strategic Planning?
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What Are The Steps In Strategic Planning Process?
What Is Strategic Planning?
Strategic planning is the process of creating specific business strategies that help to establish a direction for your organization. This management activity helps set priorities, utilize resources, boost operations and ensure that all employees and stakeholders are working toward common objectives or targets. In addition to creating a plan, the strategic planning process includes the implementation and evaluation of the results with regard to the organization’s overall long-term goals and expectations.
Strategic planning is a disciplined effort that encourages fundamental decision-making while guiding an organization to focus on the future. It not only reinstates where a business is headed toward but also how it’ll determine its success. This management technique gained popularity in the 1950s-60s, but fell out of favor in a few decades. However, realizing its importance, strategy and planning processes were revived in the 1990s and continue to hold relevance in modern businesses.
So, what is the strategic planning process doing in today’s workplaces and how is management responding to it? Simply put, the strategic planning process involves considerable thought, planning and organization on part of a business’s upper management. While creating the plan, executives may consider multiple alternatives but settle on a strategy that’s likely to create maximum positive outcomes. Therefore, one may say: what is strategic planning without proper evaluation and implementation?
What Are The Benefits Of Strategic Planning?
Business environments can be volatile. In other words, nobody can predict when there will be internal or external changes that affect the course of business. A good combination of strategy and planning helps organizations be proactive and prepare for issues with a long-term approach. They help organizations exert influence, instead of merely responding to the situation. Here are some benefits of strategic planning, highlighting its need in today’s world of work:
1. Identification Of Opportunities
Different types of strategic planning are instrumental in identifying opportunities for growth and change. They help you explore verticals that you may have previously overlooked. You’re able to tap into opportunities and identify strengths and weaknesses by studying the internal structure of your organization. You may even discover new ways to implement existing strategies.
2. Preparation For Future
In a fast-paced and digitally driven world, there’s a chance that you missed out on a potential opportunity. By investing your time in the strategic planning process, you can prepare for contingencies i.e., an uncertain future event. You can even evolve and adapt your strategies to keep pace with vital changes in the business sphere. Goal-setting is a key concept to prepare for the future.
3. Makes You Action-Oriented
Strategic planning keeps you from becoming complacent in your management style. When driven by action and purpose, you’re likely to alter policies and business plans without adversely affecting the organization. A sound action plan is one that’s sustainable and proves successful for the growth and survival of your organization. Consistent planning can help you assess the current scenario and take action to accommodate future needs.
4. Provides Competitive Advantage
What is the strategic planning process doing if not providing your organization a competitive advantage in the market? To do well in comparison to other players in the market and avoid failure when faced with setbacks, you need a plan that’s viable and long-lasting. By creating a strategic plan, you’re ready to face any unwanted situations and can prepare for uncertainties.
5. Improves Organizational Structure
Effective strategic planning enhances communication between employers and employees. It encourages managers and employees to be on the same page regarding policies and changes. Through open dialogue and participation, everyone shows their commitment toward achieving overall business objectives. This further encourages employees and managers to be creative, which strengthens the organizational structure and fosters future growth.
An increasing number of organizations are using strategic planning to create as well as implement effective business decisions.
What Are The Types Of Strategic Planning?
While strategic decisions are made by the top management, the planning occurs at all levels of the organization, including corporate, business and functional. Let’s look at the different types of strategic planning through these examples:
1. Corporate Strategy
The process of creating a corporate strategy is to set out a basic plan with strategic goals and milestones for what’s to be achieved and when. It aims to create corporate value, promote workplace culture and motivate the workforce to take appropriate actions toward achieving overall objectives. The importance of a corporate strategy is rooted in the way an organization makes use of available resources and capabilities to achieve overall objectives.
2. Business Strategy
A business strategy is a combination of decisions or courses of action that assist the management in achieving business goals and secure a competitive position in the market. It helps in making major decisions by encouraging an organization to work on its strengths. A successful business strategy model becomes the roadmap that leads an organization to growth and profitability.
3. Functional Strategy
Each department or functional area in an organization plays a pivotal role in making a difference. A functional strategy is an organizational plan that informs major functional areas of an enterprise. It’s usually short-term and is used for improving the performance of a key functional area. A functional business strategy helps maximize resource productivity (or utilization of resources) and helps achieve corporate objectives in addition to the business unit or departmental objectives.
Therefore, different types of strategic planning help management improve focus and responsiveness for achieving long-term goals and targets.
What Are The Steps In Strategic Planning Process?
When done well, your strategic plan is a streamlined process that will guide your management with their decision-making. However, to create and implement an effective business plan, consider this step-by-step process:
1. Assessment
You need to evaluate your strengths and weaknesses alongside other critical matters that need attention. It’s important to understand your target market and how you can survive the competition. If something isn’t working, you can come up with improved frameworks to perform better. By assessing your business’s current position, you can focus on things that need to be changed to make room for adjustments.
2. Formulation
After you’ve assessed the current scenario, you can start working on a solid, comprehensive strategy that should be followed by the entire organization. Whether or not you have a team dedicated to strategy, each member of the organization must be on the same page. Understand the changes taking place around you, roll out functional and simple guidelines, and prepare for the next stage. Communicate the action plan across departments so that everyone is familiar with the shared goal of achieving a sustained competitive advantage.
3. Implementation
Share the action plan developed in the previous step with your team members. This is where you can judge the effectiveness of true teamwork. Focus on collective effort and proper execution of your organization’s action plan. It’s important to collaborate with stakeholders to leverage team strengths and achieve larger team goals. Transparency, communication, feedback and navigating conflicts are some key concepts to tackle when working in a team.
4. Evaluation
Evaluation is the final step in the process of strategic planning. If you want to check the effectiveness of your plan, monitoring progress and success are essential. It’s important to note that this is a continuous and cyclical process to ensure longevity and profitability. Align your organization’s goals with individual goals in a way that’s controlled, direct, and free of errors. Alter your strategy if something isn’t going according to plan, promote team building for increased performance, and encourage feedback to identify gaps in communication.
Put On Your Thinking Cap
Whether you’re a manager or a junior team member, everyone plays an essential role in the strategic planning process. From assessing the industry, current competitors and market trends to defining your business goals while ensuring the availability and utilization of resources, creating a strategic plan requires critical thinking and problem-solving skills.
Harappa’s Creating Solutions course will teach you how to become an effective problem-solver. You’ll learn to use logic and data to understand multiple aspects of problems. You’ll even keep an open mind when approaching situations and look at them from various perspectives. The Synthesis Technique framework, in particular, will help you synthesize the results of analysis and draw actionable insights. Stand out at work as a problem-solver with Harappa!
Explore Harappa Diaries to learn more about topics such as Process of Strategy Formulation, Meaning of Price Leadership, Advantages Of The Waterfall Model, and Understanding the Definition Of Problem to classify problems and solve them efficiently.
