11.08.2022

Strategic plan of the company - a condition for success?

Highlights

  • Without a solid plan, companies can struggle to achieve their goals. Strategic planning makes it possible to envision the future, define goals and set a path to achieve them.
  • Planning can range in time horizon and scope from operational plans for the current year, to tactical plans for 1-5 years, to strategic plans for more than 5 years.
  • The key steps in developing a strategic plan include analyzing the environment and the company, identifying needs and goals, selecting a strategy, implementing it and monitoring its effects.
  • Despite the risks associated with the unpredictability of the future, a well-developed strategic plan provides the company with a number of benefits, such as improved resource management, decision-making, oversight and cost reduction.
  • The strategic planning process should be meticulously thought out and requires the involvement of many people in the organization. Analyses should be conducted to help set strategic goals.
  • The creation of a strategic plan should be the task of a strategic planning team, consisting of members of the organization at various levels. External strategic consulting may also be used.
  • A company's mission statement should be a key component of its strategic plan, helping to define courses of action that are consistent with its core purpose.

A certain country's 1,000-meter running championship will be held next year. Many runners are set to compete, but two are particularly determined to take the top spot on the podium. The first has a training plan written out for each month, clearly defined milestones, and is working with a nutritionist on his diet. In short, he knows what he needs to do to maximize his chances of success. The second runner also cares about winning, but still has no plan. Sometimes he will run a few kilometers, go to the gym once in a while and eat something healthy. However, all his activities are chaotic and rather occasional in nature.

The answer to the question of which one is more likely to win is obvious. Having a plan increases the likelihood of success Not only in sports. This truth also applies to other areas of life. Business is no different.

Planning the company's strategy, that is?

Through planning, we design our vision of the future - it is intended to help define goals and choose the right actions to achieve them. Based on the time horizon and the nature of the plan being developed, we distinguish:

  • Operational plan - developed for a maximum of one year, although in practice it is more common to see monthly or quarterly operating plans,
  • Tactical plan - With a time horizon of one to five years,
  • Strategic Plan - mostly developed for a period of more than five years.

What to keep in mind when creating a strategic plan?

Of particular note is the strategic plan. However, before defining the concept more broadly, it would be necessary to first clarify what strategy is. It is one of those concepts that, due to its wide range of interpretations, has many definitions. So let's assume, following Professor Kezhun, that strategy is a set of decisions that define a company's business prospects and its anticipated relations with external parties. To design a company's strategy means to make a choice of activities in which it wants to be active and to determine the resources necessary for survival and further development.

It is clear from this that developing a corporate strategy is one of the key activities within any organization - regardless of its size.

Strategic planning process - setting strategic goals

Strategic planning involves many elements, but one of the most important is setting strategic goals. A good strategic plan helps a company determine where it wants to be in the future and what steps are necessary to achieve that goal. Strategic planning must include an assessment of the organization's strengths and weaknesses, the resources it has at its disposal, and the areas in which it can improve its operations. A good strategic plan includes clearly formulated goals for the company's operations, which are in line with the organization's mission and help implement strategic actions.

An important part of the strategic plan is also to determine what resources the organization will need to achieve its goals. This includes the human, financial, technological and other resources that are needed to achieve the strategic goals. As part of this process, the organization should also have a detailed action plan that describes what steps will be taken to implement the strategy. Developing such a plan requires both a deep understanding of the company and the environment in which it operates.

What does the company's strategic plan include?

  • Environmental analysis, which should include answers to the questions: what is our market? What is our share of that market? Who do we count as substitute competitors and who are our potential competitors? Who are our suppliers and what is their negotiating position? What is the labor market situation? What are the legal regulations affecting our business? At this stage, it is useful to use tools such as Porter's 5 forces analysis or PEST analysis.
  • Enterprise analysis, providing information on: size and profile of production, financial system, incentive system, information flow, research and development expenditures, patents and licenses held, employment, marketing policy and organizational structure of the company.
  • Needs analysis, which is a key stage in the development of the strategic plan. What are our goals? What market share do we want to achieve? What do we want our sales volume to be? How do we want to be perceived by customers and contractors? In what direction do we want to grow? What should we invest in? What will our company and environment look like in 5 years? A needs analysis must provide answers to all these questions.

The result of the analysis should be the selection of the right strategy, and then - implementing it throughout the enterprise and controlling the effects.

As you can see, it's nothing easy. It requires considerable intellectual effort and the dedication of considerable resources (money, time). In addition, such planning is fraught with risk, as we can never be sure of what will happen in a week or two, let alone looking ahead several years. A financial crisis, a natural disaster, a sudden change in consumer preferences or government policy - any of these factors can render our entire plan, or at least a significant part of it, obsolete.

Who to entrust with creating a strategic plan?

Strategic management is crucial to the success of any organization, regardless of its size. Both a small company and a large company need a well-developed strategic plan that provides direction and helps achieve goals. Creating a strategic plan is a task for the strategic planning team, which is made up of key members of people in the company, usually at the management level.

The strategic planning team should focus in detail on strategic planning, taking into account the various action strategies that can help the company achieve its goals. It should include people from different areas of the organization, such as finance, marketing, operations and human resources. Each member of the team brings unique insights and expertise that are essential to developing an effective strategic plan.

In the process of creating a strategic plan, the team should first define the company's mission, strategic goals and assess the organization's strengths and weaknesses. Then, he should develop an action plan to help the company achieve these goals. This can include everything from changes in marketing strategy, to investing in new

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    Setting a course of action consistent with the organization's mission?

    When creating a strategic plan, an organization should keep its mission in mind. A company's mission statement defines its essence, defines what it is and why it exists, and is the primary reference point for all company activities. It must always be present in the strategic planning process, as it helps define courses of action that are in line with its main goal. Based on the mission statement, the organization can plan in detail its strategic activities that will help it achieve the goals it has set. This approach will allow the organization to effectively manage its goals and coordinate the activities of all team members. Ultimately, this is the key to achieving strategic goals and sustained growth of the company.

    What is strategic planning?

    Despite the disadvantages mentioned above, a well-developed strategic plan is of great value to a company. First of all, it sets the direction of the company, explains why the company exists and what it does. It binds together the members of the organization at every level, provides a sense of belonging to an important enterprise and motivates further action. In addition:

    • It helps predict potential problems before they occur so that preventive action can be taken,
    • When problems arise, it makes it easier to resolve them faster
    • With the help of numerous analyses, it facilitates more optimal management of owned resources, thus improving the functioning of the organization
    • Assists management in making better decisions, as they have more complete information about the environment and the company itself
    • Improves oversight and management processes
    • Enables cost reduction and profit increase

    So, is it possible to succeed without having any plan? Perhaps in the short run it is possible, but in the long run we entrust the future of our venture to fate and hope that it will favor us. If you can reduce risk and provide a competitive advantage, why not do it?

    The concept of business consulting has emerged in the Polish economy along with private entrepreneurship and the facilitation of business start-ups. The steady increase in the number of small and medium-sized enterprises, of which there are now about 1.5 million in Poland, also means a dynamic increase in competition. The greater it is, the more difficult it is to stay in the market and defeat opponents.

    And which of the athletes are you? The one who trusts only his intuition and counts on luck, or the one who knows exactly what he is doing and has a recipe for success written out?

    If, after reading this article, you are still struggling to create a strategic plan for your company -. CONTACT US. Our specialist will tell you how we can help your business on the free consultation.

    Wojciech Karas

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