The Strategic Planning Process Essay Sample
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The Strategic Planning Process Essay Sample
The Strategic planning process includes an organization’s process of defining its strategy, the direction the company will move, and the resources allocated to pursue this strategy. In order to determine the direction of the organization, management must determine the right product to market and the exact moment in time to market the product in order to make a profit. But in order for a strategic plan to be successful, management must be committed. However, every stakeholder that has an interest in seeing the business succeed must take an active role. When looking at a strategic plan, one of the following three key questions must be dealt with: “what do we do, for whom do we do it, and how do we excel” (www.en.wikipedia.org). When answering these questions management can answer based on their long term goals, generally a three (3) to five (5) year term. “The foundation of a successful strategic plan is the overarching vision of the leadership for an organization or company” (Amann, 2000).
A clear mission statement is bringing to life of what has been envisioned for the company. Simply put, achieving the future state of the organization or the “reason for its existence” (Peter & Donnelly, 2011). In order for these two to be effective, they must be embedded into the organization’s culture. Since the mission and vision statement is so interchangeable they must be looked at from the standpoint of employees as well as stakeholders.
There are several factors to consider when developing a mission statement: the organization’s history, the organization’s distinctive competencies, and the organization’s environment. To accurately determine the success of an organization, the company’s past must be considered, their competitive advantage, and finally a SWOT analysis. A SWOT analysis will be vital to any organization that is in the process of developing its mission statement. A SWOT analysis will review the strengths – area that are currently stronger than its competitors, their weakness – what areas of the company can be improved, opportunities – ways to improve the current organization structure and lastly threats – how will a new and upcoming organization capitalize on the existing customers.
For an extended period of time many people have mistaken the vision statement for the mission statement but in simplest terms, the mission statement indentifies the major targets the organization is trying to reach.
The next phase of the strategic planning process is the development of the organizations objectives. The organization objective is a simple way of identifying the company’s goal and developing a way to use company resources to achieve them in a certain period of time. “The plan outlines the specifics of the objective including the ways in which success or failure will be measured, who inside and outside the company is to be affected by the completion of these goals and a time frame” (www.smallbusiness.chron.com).
When defining objectives, they must be clearly stated in order to avoid any differing interpretations. Objectives must be realistic, mutually agreed upon by management and measurable. Some of the areas in which organizations set objectives include how well the company will perform financially, how it will compete against its competitors, and at what level will it be able to produce the product or services needed to survive. If implemented properly, they can accomplish things such as providing directions, establish long term goals and they can facilitate management control (Peter & Donnelly, 2011). Organizational objectives are the goals the company has worked toward in an effort to achieve its mission statement.
The third phase of the strategic planning process is developing organizational strategies. Organizational strategy is concerned with focusing on the future of the company, setting standards in the eyes of its stakeholders (customers), and maintaining a strong position in the marketplace. At this stage of planning, strategies must be consistent with goal and objectives. Strategies are formulated and implemented to assure the activities of the organization are coordinated to achieve its objectives.
Management must look at where the organization from the standpoint of a timeline, where they are now, and the direction it wants to work toward according to the vision and identify steps to achieve the vision. When evaluating an organization strategy, there are several components that need to be discussed: appropriateness, feasibility, cost benefit and timing. All of these components will help to determine if the strategies outlined are moving in the right direction which is towards the end vision.
Organizational Portfolio Plan
The final phase of the strategic planning process is the creation of the organizational portfolio plan (Peter & Donnelly, 2011). In order to implement the strategic plan key people must be involved who will be responsible for implementing the plan. The plan must be realistic with things such as specify timelines, who will document and distribute the plan. A vital part of the entire plan is to nominate a key person the ultimate responsibility to carry out the completion of the plan. Once a key person has been nominated, management must be realistic about minor setbacks; they must be flexible and have the ability to pull key players at any given time in order to implement a successful plan.
Example of the Strategic Planning Process
One company that took advantage of a package of free strategic planning software was Idaho Hospital Association. The hospital is among the first state hospital nationwide to take advantage of the program. The Idaho Hospital Association will elevate its strategic planning process through the use of Web-based tools, including dashboards, scorecards, and automated email notifications and alerts. Through this system, we will elevate our strategic planning process and provide relevant information and tracking on the myriad of issues, projects, and services we provide,” said IHA President Steve Millard. By utilizing this system, the work we do on a regular basis can be tracked so that we can assure that we are giving members what they want and need” (www.prweb.com).
The focus of a strategic plan is usually on the entire organization. Simply put, it is an overview of the organization. The plan looks at where the organization is going over the next several years, what steps it will take to get there, the action plan on getting there and the end results – determining if it got there or not. In order for an organization to be successful, planning should be looked at twice a year for companies that have products and services that are changing rapidly and looked at once a year for organizations with fairly stable marketplace. When a strategic plan is completed, it is important that there be ways to evaluate the results to help improve future plans. The company needs to determine if the changes made during the execution of the plan were effective, whether company resources were used properly and what could have been done better to make the plan more efficient.
Amann, M. (2000) Developing a strategic plan for the new millennium. Workplace health & Safety, 48(30, 145-147. O’Brian, J. A., & Marakas, G. M. (2011). Management Information Systems. New York: McGraw –Hill/Irwin Peter, J. & Donnelly, J. (2011). Marketing Management Knowledge and Skills (10th ed). New York, NY: McGraw-Hill/Irwin.