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Management can not be successful without planning; the ability of any organization goes a long way to determine the success of its goals. Many business managers and entrepreneurs on most occasions preoccupy themselves with immediate issues affecting their organization so much that they lose sight of their eventual objectives. This is why a business review or preparation of a strategic plan becomes necessary. This does not mean that the business will automatically succeed, but without it, there arte more chances of the business failing. In other words, strategic planning ensures the long term health of an organization. Knowing in which direction your business is going is very important to strategic planning and the overall success of the business. Every business organization aims to grow and expand at one point in time, this is a goal that comes about during strategic planning. It is often said that if one does not know where he or she is going, then he will not get any where at all. This is the same for businesses and organizations, to know where they are going; they will need a plan to move to the desired destination. This article will address the issue of strategic planning for organizations (Almond Killis & Barlow Janis p 2).
As shown above, for a business to be successful, it should have a roadmap for that success. This will help in giving direction and focus to all the involved parties. It cites the specific results that should be arrived at and puts in place an action plan for achieving them. Strategic planning also helps the various work units in an organization to align themselves with goals that are common. The whole process revolves around planning because it targets the setting of goals, picking on a desired future and progressively working towards it. For strategic planning process to be focused and productive, it must follow a disciplined order and pattern. During the process, a number of questions usually come up that enable planners to look at the experiences, test the existing assumptions, collect and incorporate information about the present situation and use it to anticipate the future environment in which the organization will be working (Almond Killis & Barlow Janis 2). Basically the process is about important decisions and measures because it involves making of choices in order to answer the rising questions. The planners must decide on what to do, why they will be doing it, and how it will be done. Because everything can not be done at once, this means that some decisions and actions carry more weight than others, calling for tough decisions to be made in regards to what is important to the achievement of the organization's goals.
The process of strategic planning involves many steps that cover areas such as vision, mission, values, strategies, objectives, programs and goals. This process can be challenging, complex, ands sometimes messy if not handled well. To understand it better, one needs to be conversant with the above steps.
The first thing a person or organization should do in strategic planning is to develop a vision to the business that is realistic. This should be projected over a span of time; usually a span of more than three years is taken to be ideal. This should be in terms of its physical appearance, size, and the activities it will be involved in. during this step, the organization's future products, markets, processes, staffing, customers, and location, are envisioned.
How a business appears or its nature, is usually an expression of it mission, which simply shows the purpose and the activities that the business is involved in. for instance a mission statement can follow this lines, "to design, develop, manufacture, and market a product line that is specific on the basis of specific features to meet the needs that are specific to certain customer groups through certain distribution channels in particular geographical locations" (PlanWare p1). Such a statement clearly shows what a business is involved with. The mission should also be realistic, focused and justified.
These are business traits or qualities that are seen to be worthwhile. Value statement defines how the various stakeholders in an organization behave towards each other. It shows how the organization values its customers, suppliers, and its internal community. All these values sum into what is called the corporate culture of an organization. Organization should therefore come up with clear, concise values with shared meaning by all the parties in an organization as part of strategic planning. For instance, a values statement can read, "to preserve and improve human life." (Heathfield Susan p 4)
The objectives of the business should be stated explicitly in terms of the needed results to be achieved in the long run or in short run. Objectives do not just indicate the necessity of achieving profits regularly, but also relate to the requirements and expectations of all the involved parties, and should also reflect the reasons for the business being in operation. Profitability, growth, technology, markets and offerings may also be covered under objectives.
These are basically the guidelines or rules by which objectives and the mission may be realized. These can encompass the whole business, looking at matters like diversification, organic growth, and acquisition plans, or they can address primary concerns in most important functional areas. For instance weigh whether the internal cash flow of the company will fund future growth on its own, whether new products will replace existing ones progressively over the next three or more years, or whether all the company's assembly work will be contracted out so that the break-even point of the company is lowered. Possible strategies can be arrived at with the use of SWOTS; this means the organization can build on strengths, resolve its weaknesses, explore on the available opportunities, and avoid possible threats (PlanWare p1).
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These are measurements based on time that should be realized when strategies are implemented in line with the objectives of the organization. For example, an organization can aim at achieving $5 million in three years, this is its goal. Just as the vision and the mission, goals should also be realistic, quantifiable, consistent, and achievable. They should be based of factors such as the market, products, finances, and many others.
These come in as the last step to help in setting out plans for implementing the key strategies. These address an organization's resources, time-scales, objectives, deadlines, budgets, and performance targets. It should be important to note that all these steps must be interlinked and also consistent with each other. This is where many organizations fail in that they come up with clear objectives but fail to come up with strategies, concise goals, or they just set up unrealistic goals (PlanWare). The above statements are not just ways through which future planning can be done but can also be used as benchmarks for a historic review. Past strategies can be used in developing strategies for the future. The starting point in strategic planning is to first assess an organization's current position. This is judged along questions such as; is the current vision on course to be realized? How has the mission and objectives of the company changed over the years? Why have the changes occurred or not occurred? Look at the strategies that were used critically identifying points of weakness. Then the organizations financial return should be reviewed making sure that important determinants of performance are identified and assessed. For example return on shareholder's funds can be used as a measure of profitability.
Another important factor that can contribute a lot to make strategic plans is the use of SWOTS. SWOT analysis can help one get a picture of the past aims and achievements of an organization. A SWOT analysis is simply a strategic planning tool that is used by organizations to evaluate the internal and external factors affecting the operations of a company. Strengths and weaknesses are usually influences emanating from within an organization and therefore can be controlled directly. Opportunities and threats on the other hand are influences from outside the organization, from the organization's competitors and therefore can not be controlled. Information gathered during a SWOT analysis helps an organization to enhance its strengths and minimize its weaknesses, exploit available opportunities, and manage its threats (Ingram David p1). During an internal analysis, internal factors affecting the competitive advantage of an organization are identified. By analyzing the strengths and weaknesses within an organization, the management will be able to identify aspects of the business that might have been overlooked during previous strategic planning initiatives. Strengths are usually aspects that increase the competitive advantage of an organization. Every organization or business, be it small, has its strengths; these can come in form of experience in management, good relationship with suppliers, geographical advantages, superior technology and processes, and many others. If these are properly focused and refined then there will be no doubt for an organization to stay ahead of its competitors. Weaknesses on the other hand affect an organization's competitive advantage negatively. This can be in form of lack of capital, poor business relationship with financial institutions like banks, legal restrictions, under skilled employees or poor technology and many others than can slow down performance. Identifying such issues earlier in strategic planning can help minimize or do away with their effects.
After analyzing the internal factors one can now look at the external factors. These are the opportunities and threats that are beyond an organization's control. Opportunities can be in various forms such as change in the legal climate, technological advances, developments of new markets, and sometimes the weakening of competitors. If these opportunities are matched with the strengths, then an organization's competitive advantage will be greatly boosted. Threats on the other hand come sometimes from similar sources as those of opportunities such as a worsening in the legal and, political climate, change in consumer preferences, and any other opportunity that has been taken up by a competitor will turn into a big threat to an organization. All these therefore call for a thorough understanding of the strategic climate in a market in which an organization competes so that it can get a solid base for its strategic planning endeavors (Goodstein, Nolan, & Pfeiffer 226).
From what has been shown so far, it is evident that in the business world today planning is paramount for any gains to be realized. Today's businesses are done on a global market; change on the other hand is happen at a very fast rate. Business leaders should therefore be looking ahead, anticipating change, and coming up with strategies to help in going through the changing times. Strategic planning provides purpose and direction to many organizations. No organization will get anywhere if it does not know where it is going. All parties in an organization should know what the organization engages in, what its target customers are, and also how it competes with others. Without a proper plan, the organization will crumble down. Statics have always shown that companies that don't plan have had high chances of collapsing eventually. Creating company visions, values, and strategic plans can appear daunting to many business leaders and owners, but these people should understand that past successes will not ensure future prosperity. Future success calls for a change in behavior, coming up with new procedures and i9mplementing them, hiring new workforce, and putting new systems in place, all these involves strategic planning. It is often said that best plans and ideas without proper execution are meaningless; they will yield nothing (Lawlor John 2). A strategic plan is therefore an important tool that connects all business activities of any organization, whether small or big.
As it has emerged, strategic planning is a very important component to any business activity. This does not mean that it is not important to the public sector; it helps a lot in planning in areas such as schools. There are many steps involved in strategic planning, these include coming up with a vision, values, objectives, strategies, goals, and end up with a clear roadmap that shows how they will be achieved. A very important aspect of strategic planning is to do in such a way that is easy to implement and achieve, in other words, it should be realistic. Most organizations usually come up with very good goals but which can not be articulated in the organization's day to day operations that are needed to see the goals achieved, such goals are unrealistic. As part of strategic planning, an organization should carry out a SWOT analysis so that it can build on its strengths, resolve its weaknesses, exploit available opportunities, and avoid possible threats. When all these are factored in, then an individual or organization will rest assured that a good strategic plan will be arrived at.