How to Develop Strategic Plan
Developing proper strategic plan will help a company to identify its strength and weaknesses, to identify secure opportunities and give the ability to resist environment. Strategic plan is useful in allocating existing resources and utilizing the whole potential of the company in achieving desired outcomes. For example, if a company is rather successful, senior managers and leaders have to dedicate enough time to find out how to position a company the best and how to meet customer’s growing demands and requirements. And it is strategic planning that helps a company to thoroughly develop its policy. Apparently, developing strategic plan implies several steps.
(Posner 2004)The first step in developing strategic plan is to define business meaning that it is necessary to identify goals and objectives of the company. A company may define new growth possibilities and competitive challenges. Thus the aim of the first step is to ensure company’s invulnerability and develop basic philosophy. A company should pay attention to whether it is able to build its business through risky or cautious venture or it should pay attention to expansion from solid foundation. For example, the possible goal is to increase sales by 10% in the next year.
It would be achieved by expanding training curriculum on sales and paying closer attention to customer’s service. (Posner 2004)The second step is to establish clear goals, because they aim at reducing uncertainty and clarifying how the strategic planning will proceed. It is necessary to outline that goals should be consistent with company’s mission. For example, it is possible to involve employees, to improve their understanding of objectives and goals as well to increase their commitment to a company. To accomplish a goal means to set specific objectives related to the strategic plan. Further, it is necessary to remember to define the objectives according available resources and realities; to set performance report as a measure of progress; to adopt objectives to changing priorities and conditions as well as to customer’s demands.
The third step is to analyze environment and current market or industry trends. It means that while working on strategic plan it is necessary to consider external environment as it strongly affects company’s performance. Thus it is required to find solutions to monitor threats and to make use of emerging opportunities. Actually, company is affected by economic and political conditions, competitive landscape, market position as well as demographic shifts in population, emerging of electronic businesses, etc. In this stage, the company should adopt various approaches to monitor business environment. For example, company may develop advertising and pricing strategies.
Furthermore, it is necessary to assess employees’ diverse skills, because it will assist in business growing. (Posner 2004)The fourth step is to analyze internal business environment. It is mentioned that “identifying the resources that give your company a competitive advantage is critical for any successful business venture”. Competitive advantage may be yielded by trademarks and patents, strategic partners and employees, etc. Thus, strategic managers should assess company’s strength and realize weaknesses.
They should consider what product lines to generate or should define which line is stagnant. The company may capitalize opportunities, to neutralize weaknesses, to take advantage of existing resources. Strategic plan will succeed only if the company is aware of its strengths and weaknesses. (Posner 2004)Finally, strategy implementation is the most difficult part of strategic planning. Actually, plan is developed for 1-5 years. Thus, the first task is to involve employees and get input from them as much as possible to increase chances for successful implementation.
Then, it is possible to involve individual goals to the plan. Realistic schedule, periods of slowdown and actors assessing play important role for successful strategy implementation. Managers should establish quantifiable measures for monitoring progress. Further, developing control systems will assist in correcting organizational oversights. Mangers can set standards for profits, units produced, quality of goods, etc. (Frese 2000)ReferencesFrese, Michael.
(2000). How to Plan as a Small Scale Business Owner: Psychological Process Characteristics of Action Strategies and Success. Journal of Small Business Management, 2, 4, 14-16.Posner, Roy. (2004).
Develop a Strategic Plan. Retrieved December 12, 2006, from http://www.gurusoftware.com/GuruNet/Business/Topics/StrategicPlan.htm