Long-range business planning, otherwise known as strategic business planning is a strategy for where an organization is going and how it is going to get there. Strategic business planning can be focused over the period of a year or years, depending on the type of organization, and the time required to implement various aspects of the plan. There are many ways of looking at strategic business planning; however, most plans share a few common aspects such as strategic analysis, an outline of the strategic decisions and an actionable plan. A more detailed description of the various aspects of strategic business planning is provided below:
The strategic analysis is a two-part appraisal of the internal environment of an organization and the outside environment. The strategic analysis portion of the strategic business plan will include a review of culture and societal, political, environmental, demographic and economic conditions of both the organization and global or national circumstances. The analysis will also outline their potential for impacting the organization. Forces such as increased competition, demographic shifts will be considered in the strategic analysis. The analysis will breakdown the various conditions into a SWOT (strengths, weaknesses, opportunities and threats) which will form the cornerstone for making strategic decisions.
Another aspect of strategic business planning is to decide on a strategic course of action. This is the part of strategic planning that outlines to the conclusions made from the analysis. The outline will include analysis based goals and the methods for achieving those goals. In order to be the most useful to the organization, goals should be specific, measurable and actionable. This helps keep the focus narrow and enable easier monitoring and control.
The most tangible aspect of strategic business planning is the action planning. Action planning involves creating a detailed plan on how each strategic goal will be completed. The realization of strategic goals often involves undertaking a series of tactical objectives that cumulate in the realization of the strategic goal. In addition, to creating appropriate tactical objectives, action planning also identifies specific tasks and timelines associated with each of the objectives. It should also provide a means by which actions are monitored and controlled in relation to the overall strategic business plan.
Some organizations undertake or review strategic business planning on an annual basis. This helps outline the goals, responsibilities and timelines for individual divisions and departments which in turn helps layout budgets for each year. Even those organizations which create longer ranger strategic planning may find it beneficial to breakdown these long-term plans into yearly chunks which correspond with the financial year or budgetary year.
Regardless, of how strategic business planning is implemented; however, it is obvious that it is a useful tool in creating growth and development. After all, planning is simply a means of helping the entire organizational team focused on what is important, where improvements can be made, and what actions will yield the biggest return for the investment of their time and efforts. In fact, without strategic business planning, it is nearly impossible for an organization to manage survival much less to meet the level of success to which it might reasonably aspire.