Strategic business planning entails an organizational process in which entities define overall operating strategies. Decision-makers outline how resources will be allocated with the aim to fulfill operational targets listed in the blueprint. The planning may also cover a variety of control mechanisms, which provide guidance for the implementation of the blueprint.
The approach was introduced in the 1960s and it still plays a central role in strategic management. Business planners are tasked with the responsibility to execute the plan. The team uses multiple resources to analyze various internal and external factors to identify a viable strategy. A good plan makes it easier to gain a competitive advantage on the market. It has the capacity to improve both the formulation process and the implementation of objectives listed in the blueprint.
Strategic planning is characterized by a distinctive analytical approach. The planners need to carefully find and connect the dots to build a bigger picture that drives results and boosts the company’s bottom line. The formulation of strategy involves the connection of dots as part of a process known as synthesis. This is achieved via strategic thinking.
Strategic management processes and activities
The planning process is defined by a wide variety of factors, including activities, inputs, outputs and outcomes. However, the process comes with a significant number of constraints that must be ironed out. Role-players may engage in the planning phase informally or formally and the entire process is typically iterative. It is characterized by feedback loops.
Many segments of the process are continuous while others can be implemented in the form of discrete projects. They come with a definitive start and end in a given timeframe. The approach provides inputs for role-players to engage in effective strategic thinking. In turn, this guides the actual strategy formulation. Once completed, the organization will have a working plan that defines the overall strategy.
The planners take into account the competitive situation faced by the business based on their diagnosis of the market environment. The final blueprint outlines key initiatives or action plans. Organizations need to consider four elements during the planning phase. These include organizational values, company’s strengths and weaknesses, external expectations, operational risks and market opportunities.
Some of the factors focus on internal elements while others are externalized. These factors influence the decision-making process. When it comes to inputs, role-players gather data form multiple sources. They can achieve this objective by interviewing stakeholders, including the managers, key executives, conduct primary research and review relevant documents.
These actions may form part of the competitive intelligence program. Planners use the inputs to build an in-depth knowledge of the operational risks, business opportunities and competitors.