The Need for Strategic Planning
| Summary: Poor planning and lack of planning are
repeatedly cited among the top reasons for business
failure. Attempting to perform the basic managerial
functions of organizing and controlling your business can
be difficult to impossible without a good plan. |
Strategic planning is identifying how your business can
realistically secure opportunities given the company's
environment and existing resources. If your business is to
succeed and grow, it is essential to dedicate the time in
identifying how to best position your company to meet existing
resource demands.
The strategic planning process helps guide you in deciding how
to productively manage your relationships with competitors,
suppliers, customers, and other environmental forces. It is a
process that has become even more critical in today's environment
as business managers face technological breakthroughs and a
global marketplace that has made the business environment less
predictable.
To plan effectively, you need to have a clear understanding of
your business's strengths, weaknesses, mission, goals and
objectives. You will also need to collect, screen and analyze
information about the company's environment, including the
economy, market, competitive forces, and regulatory changes.
Acquiring this understanding inevitably involves a great deal of
research and work, however, it will help you realistically assess
your business and develop a feasible timetable for implementing
your plan.
The Changing Business Environment
Given the major changes in the business environment, strategic
planning plays an important part in your overall business
strategy. Advancements in information processing and
telecommunications have impacted most industries and given rise
to new threats and opportunities. Additionally, the growth of
foreign economies and the rise of new competitors has created a
global marketplace and redefined certain industries. As a result,
consumers are exposed to a wide selection of choices, and
customer loyalty has diminished.
Proactive Management
Plan carefully before investing your time and, especially,
your money in any business venture. Proactive planning in a
dynamic, technology-driven business environment is vital for a
successful business endeavor. Rather than reacting to
environmental changes or being blindsided by change, proactive
planning requires that you analyze the company's environment and
make effective resource-allocation decisions. Clearly outlining
how you will position, market and distribute your product or
service will help you strategically maneuver your business to
where it needs to be in the future.
