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Developing Strategic Plan in Business (Part 1)


If you don't know where your business is going, any road will get you there. Entrepreneurs and business managers are often so preoccupied with the immediate issues that they lose sight of their ultimate objectives. That's why a business review or preparation of a strategic plan is a virtual necessity. This may not be a recipe for success, but without it a business is much more likely to fail. A sound plan should:
  • Serve as a framework for decisions or for securing support/approval.
  • Provide a basis for more detailed planning.
  • Explain the business to others in order to inform, motivate & involve.
  • Assist benchmarking & performance monitoring.
  • Stimulate change and become building block for next plan.
A strategic plan should not be confused with a business plan. The former is likely to be a (very) short document whereas a business plan is usually a much more substantial and detailed document. A strategic plan can provide the foundation and frame work for a business plan.
A strategic plan is not the same thing as an operational plan. The former should be visionary, conceptual and directional in contrast to an operational plan which is likely to be shorter term, tactical, focused, implementable and measurable. As an example, compare the process of planning a vacation (where, when, duration, budget, who goes, are all strategic issues) with the final preparations (tasks, deadlines, funding, weather, packing, transport and so on are all operational matters).
A satisfactory strategic plan must be realistic and attainable so as to allow managers and entrepreneurs to think strategically and act operationally.








Basic Approach to Strategic Planning

A critical review of past performance by the owners and management of a business and the preparation of a plan beyond normal budgetary horizons require a certain attitude of mind and predisposition. Some essential points which should be observed during the review and planning process should:
·   Relate to the medium term i.e. 2 - 4 years
·   Be undertaken by owners/directors
·   Focus on matters of strategic importance
·   Be separated from day-to-day work
·   Be realistic, detached and critical
·   Distinguish between cause and effect
·   Be reviewed periodically
·   Be written down.
As the precursor to developing a strategic plan, it is desirable to clearly identify the current status, objectives and strategies of an existing business or the latest thinking in respect of a new venture. Correctly defined, these can be used as the basis for a critical examination to probe existing or perceived Strengths, Weaknesses, Threats and Opportunities. This then leads to strategy development covering the vision, mission, values, objectives, strategies, goals and programmes.

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