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What Is Strategic Business Planning?

Guest post by: Devang Jhaveri

Article Overview: Strategy can be seen as an on going positioning process for an organization and strategic planning can be seen as a separate activity reviewed at periodic well defined intervals. Strategy involves achieving a competitive advantage for an organization in meeting the needs of customers and fulfilling the expectations of stakeholders. Planning helps to make sure that the efforts of an organization are deliberately co-ordinates and that managers and staff are not heading in different directions. Also provides competitive advantage and improve performance.

What Is Strategic Business Planning?

Strategy can be seen as an on going 'positioning' process for an organization and strategic planning can be seen as a separate activity reviewed at periodic well defined intervals. Strategy involves achieving a competitive advantage for an organization in meeting the needs of customers and fulfilling the expectations of stakeholders. A strategic plan may be 'an intended method' or a 'scheme for accomplishing a purpose' as the dictionary states, rather than "a representation projected on a flat surface".

In fact, corporate strategic plans are often "representations projected on a flat surface" in that they are written documents, with diagrams and charts, and in some cases videos and computer disks. In large companies there may be special teams whose role is to produce a corporate strategic plan in conjunction with senior management, and then to make sure that it is implemented through a monitoring process.

These corporate plans do, of course, attempt to reflect the strategy of the organization and may be a very useful tool in the implementation of this strategy. Strategic business planning is the key to developing a business so that it runs effectively and efficiently. This may involve developing different products, services or markets. Also involve acquiring compatible companies or changing the whole nature of the business.

Purpose of strategic planning:

1. The real value of SBP lies in the planning process: discussion, developing new understanding, generating new ideas for the business.
2. Strategic business planning is about setting a direction for the business, a direction to which everybody, executives and employees, can become a committed.
3. SBP provides competitive advantage and improve performance.
4. Planning helps to make sure that the efforts of an organization are deliberately co-ordinates and that managers and staff are not heading in different directions.

Advantages of planning:

• Co-ordination of work
• Long term thinking
• Control
• Rational management
• Commitment
• Key to strategic formulation

Disadvantages of strategic planning:

• Uncertainty of forecasting
• Assumptions
• Rigidity
• Creates opposition to change
• Internal and external reactions
• May be confused with strategic plan

Incremental strategy:

The formulation of strategy by increments is a process of doing things and gradually blending together initiatives into a coherent pattern of actions. The process is one, which involves sense-making, reflecting, learning, experimenting and changing the organization.

A plan is an intended course of action and it can be argued that without a plan of one kind or another, an organization does not have a sense of direction and will simply drift, pushed this way or that way by the latest influence.

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Article Tags: advantages of planning, bussiness strategy, coordinates, intervals, planning approch, strategic business planning, strategic plancompetitive advantage, strategic planning



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