Strategic planning

Strategic planning is the logical process used to arrive at a vision for the future. This vision is then broken down into a series of manageable steps that can be followed in order to achieve the desired corporate direction. These action items are widely disseminated through the organization, so that employees are consistently engaged in activities that will force the organization in the direction of achieving the plan. The basic steps followed in strategic planning are as follows:

  1. Assess the current environment and the company's capabilities.
  2. Formulate strategy.
  3. Translate the overall strategy into an operational plan.
  4. Continually refine the plan through an ongoing feedback process.

Strategic planning is typically directed at where an organization should be a number of years from now. This longer duration differs from the tactical orientation followed by most organizations, which are more concerned with simply following the direction indicated by the annual budget.

The ideal strategic plan is intended to bring a business into a competitive stance that cannot be easily attacked by competitors, and which allows it to generate above-average profitability for an extended period of time. The plan should also anticipate how long this enhanced competitive position will last, so that it can be adjusted to shift the business into an ongoing series of competitively robust positions.

Strategic planning is the primary responsibility of the senior management team. More junior staff may contribute ideas to the process, but senior managers are expected to formulate the plan and ensure that it is implemented. These managers must also maintain a high level of awareness regarding changes in the competitive landscape, so that they can adjust the strategic plan on an ongoing basis to ensure that the organization's expected future position aligns with the current and expected competitive landscape.