The Need for Strategic Planning | Friday January 30th, 2004 | |
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.
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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.
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