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Strategic Planning Introduction

Introduction to Strategic Planning (long-term or business planning)

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The discussion in another section emphasizes the importance of devising a decision making process. That discussion assumes the decisions involve a relatively short time period; that is, the length of time between the need to make a decision and when the decision is made, implemented and reviewed is relatively short.

Managers also need to think about the long-run. This section introduces long-term decision making, or what is often called "business planning" or "strategic planning."

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Does a strategic plan enhance one's "willingness to assume risk?"  Does a firm need both the capacity and the willingness to assume risk to pursue profit-potential activities?

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A strategic vision provides a framework for making and implementing short-run decisions. It allows short-run decisions to be made within the context of working towards the manager's or the business' long-term goals.

Without a long-term vision, a series of short-term decisions may not achieve the decision maker's long-term goals. Instead, there is a risk that each short-term decision will be analyzed independent of other decisions, rather than being analyzed within the context of an overall vision. Independent analysis could lead to short-term decisions that conflict with one another. A long-term vision is needed as part of making short-term decisions.

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Strategic planning can be accomplished in a variety of ways.  This discussion offers only one set of suggestions.  Other credible descriptions of strategic planning processes are available; include several that are listed below.

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Steps in strategic business planning

Define the mission of the business; formulate goals for the business; assess the resources of the business; survey the business environment; identify and select strategies to achieve the business goals; implement and refine selected strategies

General questions a manager will ask:  where are we, where do we want to go, and how do we get there.

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Introduction to Strategic Planning

Strategic planning or long-term business planning is a continuous process of assessing the status of the business, the owners' goals, and strategies to achieve those goals.  Other descriptors of the process are

  • Strategic planning is a multi-step, on-going process.
  • The three basic questions (where are we, where do we want to go, how do we get there) expand into numerous secondary questions, such as

    1. What is the current status of my business? (inventory the business)

    2. What are my interest and skills? (consider the owners' skills and interests)

    3. What are my expectations about the future? (assess the business environment)

    4. What do I want to accomplish? (establish business and personal goals)

    5. Will the current business be feasible in the future? (assess capacity of current business to fulfill the owners' goals)

    6. What alternatives are feasible for the future? (identify alternatives and assess whether those alternatives can fulfill the owners' goals)

    7. What steps are needed to implement the feasible alternative?  (develop a plan to implement the chosen alternative)

    8. What might prevent me from implementing the plan? (identify potential risks and opportunities; prepare contingency plans)

    9. How do I monitor progress over time? (develop processes and benchmarks to monitor and control implementation)

    10. How should I prepare to document, share, and revise my plan? document information assembled and considered, assumptions made, and analysis completed; prepare to share appropriate information; and review/revise the thought process

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    The order in which the planning steps are addressed and re-addressed can vary; however, it is most critical that each step be completed, reviewed and revised on a regular basis.

    • Developing the initial plan can be a multi-year process.
    • Managers may want to begin their business planning by reading the following sections about the Business Planning Process.

    Managers may also want to consider the types of topics they likely need to consider in developing a long-term vision and the steps involved in developing goals.

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    Other Description of Strategic Planning

    Note the quote "SWOT analysis is a powerful tool to help a company align its strategy with its environment. However, embedded within every strength is a weakness and hidden in every opportunity is a threat. You need to look beyond the obvious to gain real strategic insight."

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    Are you ready to begin developing your long-term planning process?

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