2.2 What strategic planning is not? Strategic planning is not driven by one goal, one idea, or one set of demands, nor is it about trying to form a plan that is all things to all people. The plan itself is not about everything we do. It should not be full of jargon. It should not be ‘left on the shelf’. 3. Strategic Planning Terms and Definitions
Why do some firms not do strategic planning?
10 Reasons Why Strategic Plans Fail
- Having a plan simply for plans sake. ...
- Partial commitment. ...
- Not having the right people involved. ...
- Writing the plan and putting it on the shelf. ...
- Unwillingness or inability to change. ...
- Having the wrong people in leadership positions. ...
- Ignoring marketplace reality, facts, and assumptions. ...
- No accountability or follow through. ...
What are the principles of strategic planning?
- Build on the past years’ momentum
- Leverage what we’ve already invested in programs, clients, markets and staff
- It’s good to say “yes” to opportunities that present themselves
- Being in action is a key to success
- It is best to have several business lines designed to weather economic ups and downs than to be focused on only one area of expertise
What are the consequences of not planning?
What are the consequences of not planning? The results of poor planning are discussed below. Poor time management. Poor clear definitions of project's objectives. Budget not set out. Dissatisfied customers. Lack of support from stakeholders. Failing to plan exposes the project to unpredicted high risks and problems. Is planner a diary?
Why do companies need strategic management planning?
strategic management
- Benefits of strategic management. Strategic management is generally thought to have financial and nonfinancial benefits. ...
- Strategic management concepts. ...
- Types of strategic management strategies
What is not strategy?
A strategy is not simply a plan. Having a plan does not enough to constitute having a strategy. A strategy may contain a plan for implementation, but a plan alone is not a strategy and a strategy is not simply a plan.
What is the opposite of strategic planning?
Tactical Planning. Strategic planning lays out the long-term, broad goals that a business or individual wants to achieve. And tactical planning outlines the short-term steps and actions that should be taken to achieve the goals described in the strategic plan.
Why a plan is not a strategy?
While they may be called strategic plans, sadly they are just plans. What is the Difference? In short, strategy is the act of making an integrated set of choices, which positions the organization to win; while planning is the act of laying out projects with timelines, deliverables, budgets, and responsibilities.
What strategic thinking is not?
In other words, strategic thinking is not mindlessness, not imitation, not thoughtless persistence. Nor is it purely cerebral: separating self from the subject of strategy and working it out cleverly in a meeting. Most people would agree that strategic thinking means seeing ahead.
Which is not the objective of strategic management?
Policy-making is the process of formulating policies on the basis of which the company or an organization works. Top executives and directors usually brainstorm and decide upon the policy to be adopted. Hence, policy-making is not an objective of management.
What is opposite to strategic?
The opposite of strategy = ad hoc, reactionary, unplanned.
What is not a plan?
"An Idea is not a Plan.
What are the limitations of strategic planning?
Limitations of Strategic Planning:Lack of knowledge: Strategic planning requires lot of knowledge, training and experience. ... Interdependence of units: ... Managerial perception: ... Financial considerations:
Can you have a plan without a strategy?
Both define expectations, outline milestones and targets to measure progress and performance. Still, a strategy is frequently long-range and more directional than the near-term specifics found in a plan. You can have a plan without a strategy, but a strategy without a plan is a story unfulfilled.
Which of the following is not part of the strategic planning process?
The correct option is: D) conducting a job analysis Strategic planning as a process includes: Defining and developing a mission.
Which of the following is not a major element of the strategic management process?
Assigning administrative tasks is not a major element. The process of strategic management does not include assigning administrative responsibilities.
What is an example of strategic planning?
One of the most commonly available examples of strategic planning, a corporate strategy is designed to increase revenue and brand reputation. From new products and quality enhancements to aggressive marketing and sales techniques, there are many ways to tap into growth opportunities.
What's another word for strategic planning?
What is another word for strategic plan?game planplanmaneuverUStacticsmaster planground planroad maptactical planworking planmethod238 more rows
Is SWOT part of strategic planning?
A SWOT analysis is one of the most common tools companies use to analyse their current condition and position themselves for the future. It is often used as part of a strategic planning process, as well as to evaluate projects or parts of an organization.
Is there a difference between corporate planning and strategic planning?
Corporate planning deals with the internal aspects of the company. Strategic planning deals with the overall business (i.e. internal and external) and external environments.
Is corporate planning and strategic planning same?
Planning for the company as a whole is known as corporate planning. It lays down objectives, strategies and policies for the entire organisation. It is also known as strategic planning.
What is strategic plan?
They usually have three major parts. The first is a vision or mission statement that sets out a relatively lofty and aspirational goal. The second is a list of initiatives—such as product launches, geographic expansions, and construction projects—that the organization will carry out in pursuit of the goal. This part of the strategic plan tends to be very organized but also very long. The length of the list is generally constrained only by affordability.
What does "strategic" mean in management?
But management typically commits only to year one; in the context of years two through five, “strategic” actually means “impressionistic. ”. This exercise arguably makes for more thoughtful and thorough budgets. However, it must not be confused with strategy.
What happens when a company is comfortable with its strategy?
That’s good—but only up to a point. If a company is completely comfortable with its choices, it’s at risk of missing important changes in its environment. I have argued that planning, cost management, and focusing on capabilities are dangerous traps for the strategy maker. Yet those activities are essential; no company can neglect them. For if it’s strategy that compels customers to give the company its revenue, planning, cost control, and capabilities determine whether the revenue can be obtained at a price that is profitable for the company. Human nature being what it is, though, planning and the other activities will always dominate strategy rather than serve it—unless a conscious effort is made to prevent that. If you are comfortable with your company’s strategy, chances are you’re probably not making that effort.
Why is strategy paired with plan?
Virtually every time the word “strategy” is used, it is paired with some form of the word “plan,” as in the process of “strategic planning” or the resulting “strategic plan.” The subtle slide from strategy to planning occurs because planning is a thoroughly doable and comfortable exercise.
Why is cost based planning important?
Costs lend themselves wonderfully to planning, because by and large they are under the control of the company. For the vast majority of costs, the company plays the role of customer. It decides how many employees to hire, how many square feet of real estate to lease, how many machines to procure, how much advertising to air, and so on. In some cases a company can, like any customer, decide to stop buying a particular good or service, and so even severance or shutdown costs can be under its control. Of course there are exceptions. Government agencies tell companies that they need to remit payroll taxes for each employee and buy a certain amount of compliance services. But the proverbial exceptions prove the rule: Costs imposed on the company by others make up a relatively small fraction of the overall cost picture, and most are derivative of company-controlled costs. (Payroll taxes, for instance, are incurred only when the company decides to hire an employee.)
Is revenue planning the same as cost planning?
The trouble is that planning-oriented managers tend to apply familiar, comfortable cost-side approaches to the revenue side as well, treating revenue planning as virtually identical to cost planning and as an equal component of the overall plan and budget.
Is revenue planning easier?
Of course, shorter-term revenue planning is much easier for companies that have long-term contracts with customers. For example, for business information provider Thomson Reuters, the bulk of its revenue each year comes from multiyear subscriptions. The only variable amount in the revenue plan is the difference between new subscription sales and cancellations at the end of existing contracts. Similarly, if a company has long order backlogs, as Boeing does, it will be able to predict revenue more accurately, although the Boeing Dreamliner tribulations demonstrate that even “firm orders” don’t automatically translate into future revenue. Over the longer term, all revenue is controlled by the customer.
What is strategic planning?
Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting. Accounting Accounting is a term that describes the process ...
Why is strategic planning important?
Strategic planning helps firms prepare proactively and address issues with a more long-term view. They enable a company to initiate influence instead of just responding to situations. Among the primary benefits derived from strategic planning are the following: 1.
How does strategic planning help managers and employees?
It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals. Strategic planning also helps managers and employees show commitment to the organization’s goals.
Why is it important to decentralize the strategic planning process?
The increased dialogue and communication across all stages of the process strengthens employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is that of the Walt Disney Co., which dissolved its separate strategic planning department, in favor of assigning the planning roles to individual Disney business divisions.
Why is it important to evaluate the performance of a chosen strategy after the implementation phase?
Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase. Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program in order to attain the desired improvements in customer relations.
What happens after a strategy is formulated?
After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action.
What are the three levels of strategic planning?
All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.
Why is strategic planning important?
Organisations often engage in it in order to develop, implement and evaluate their strategies. Strategic planning refers to the decision-making and planning process that guides the long-term direction of an organisation (Plunkett & Attner, 1994).
Why do strategic plans fail?
Strategic plans often fail due to outside influences such as changes in the economic environment, competitor actions and/or technological change (BPP Learning Media, 2010). Macro-environmental factors may sometimes change extremely rapidly which may frustrate any strategic plans.
What are the advantages of strategic planning?
Therefore, organisations need to have some mechanisms in place to identify these risks. One of the most important advantages of strategic planning is that it helps organisations identify and manage risks. Strategic planning forces managers to think.
How does strategic planning help managers?
Strategic planning forces managers to think. It can encourage creativity and initiative by tapping the ideas of the management team (BPP Learning Media, 2010). It may include both top-down and bottom-up approaches to engage employees in the strategic planning process.
How long does it take to implement a strategic plan?
If organisations carry out strategic planning thoroughly, it becomes a costly, rigid, and time-consuming process. It may sometimes take five or more years to implement a strategic plan. Consequently, benefits of strategic planning may not be immediately visible.
How to make strategy more interesting?
To make strategy more interesting — and different from a budget — we need to break free of this obsession with planning. Strategy is not planning — it is the making of an integrated set of choices that collectively position the firm in its industry so as to create sustainable advantage relative to competition and deliver superior financial returns. I find that once this is made clear to line managers they recognize that strategy is not just fancily-worded budgeting and they get much more interested in it.
Is strategy a singular thing?
That strategy is a singular thing; there is one strategy for a given business — not a set of strategies. It is one integrated set of choices: what is our winning aspiration; where will we play; how will we win; what capabilities need to be in place; and what management systems must be instituted?
Can a strategy be executed without investments?
Obviously you can’t execute a strategy without initiatives, investments, and budgeting. But what you need to get managers focused on before you start on those things is the strategy that will make these initiatives coherent. That strategy is a singular thing; there is one strategy for a given business — not a set of strategies.
Strategic Planning Process
Benefits of Strategic Planning
- The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are typically only viable for the short-term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a more long-term vie…
Wrap Up
- An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.
Additional Resources
- Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful: 1. Auditing 2. Broad Factors Analysis 3. Scalability 4. Systems Thinking