Any planning process has two key objectives. One is to understand the long term objectives of the organisation, and the other is to devise an organized action plan to meet these objectives. Any company that uses a formal planning process has a better chance of achieving higher profits and growth. It also helps the company to set objectives and monitor results.
Though planning is an essential part of a firm's strategy, most firms find it difficult to implement the plan successfully. This may be due to the largely complex process of planning and not adhering to certain generic guidelines, which are quintessential to the success of any planning system. Some of the basic guidelines suggested by the Boston Consulting Group are that planning is a collaborative effort and not merely the tool for a Vice President or a Line Manager. The key to a successful planning system is to be simple, achievable in terms of its goals and flexible to accommodate changes in the environment.
Difference between a Strategic and Tactical Plan
A strategic plan is different from a tactical plan or an operational plan. Most companies are so focused on their business plan to achieve their revenue targets that they tend to ignore the significance of strategic planning. A strategic plan should never be confused with a business plan or even an operational plan. A business plan would give the company a fair idea on the company's product features, marketing tactics, promotion, pricing, sales channels and other parameters which would help the company to assess its short term performance goals and profits.
A strategic plan is a tool devised to achieve long term objectives. The implementation of this plan would determine the long term direction of a business. Such decisions are strategic in nature and transform the entire business operation. For a company to chart out an effective strategic plan, it must focus on three distinct aspects.
1. Managing a company's business as an investment portfolio.
2. Assessing each business's strength by comparing the market potential with its relative market position.
3. Devise a strategy for each business, keeping the long term objectives in mind.
For example, a large conglomerate like Philips, which is a part of the elite Forbes list of best managed big companies in America, communicated a "Vision 2010" Strategic Plan. This plan charts out a strategy for the company to foray into the areas of Healthcare, Lighting and Consumer Lifestyle. This plan aims to position Philips as a market-driven and people centric company. The plan was in line with the vision of the company, and in congruence with its long term objectives.
Be it a large conglomerate like Philips or even a small company; charting out a strategic plan is extremely essential for not just growth, but also for survival in the long run. Strategic planning is hence crucial and would change the entire course of business. Strategic planning not only ensures growth of the organization, but also safeguards it in tough times like that of a global recession. It is a tool which needs to be used very carefully and with utmost precision.
http://ezinearticles.com/?How-to-Design-an-Effective-Strategic-Planning-System&id=3081820
Article Source: http://EzineArticles.com/?expert=Lawrence_Gilbert
Very detailed post
ReplyDeleteFor small business entrepreneurs, other than acquiring a business insurance plan, creating an effective marketing strategy is something that should be taken seriously.
ReplyDeletevery true, knowing your market and competition is also very important, and a creating a good marketing strategy accordingly, based on your products and service value offerings
ReplyDelete