Understanding of Strategic Planning In Effective Business - Essay Example

Running Head: Strategic Planning Understanding of Strategic Planning In Effective Business of Understanding of Strategic Planning In Effective Business Introduction to Strategic Planning For the success of any business organisation, it is vital to have a proper and complete strategic plan defining the decisions, allocation of capital, resources and manpower required for the decision making and proper functioning of all of its departmental areas. Depending on the types of business, methodologies have to be accordingly adopted which may include divisions and sub-divisions within an organisation like research and development, manufacturing, procurement, marketing etc. with organisation and support services by the management, marketing, clerical, information technology, stores and despatch, accounts, personnel and time-keeping and workshop and other required infrastructure along with their relevant staff. Background to Strategic Planning Usually based and depending upon the feasibility of each individual business set-up, strategic planning differs in their approaches. The most typical amongst these approaches is the three stages: "Situation" evaluation of current state and future state scenarios, "Target" defining of the detailed goals and objections, and lastly the "Path" indicating the route for attaining the targeted goals and objectives. Another popular approach is the "Draw" stage in which the image and targeted end goal and objective are visualised, then comes the "See" stage where comparisons are made between the likely positive and negative extreme that could be encountered in any given situations, and finally the "Plan" stage where all the required resources are considered for the activation of a business. In general, and as a standard practice being utilised by a number or newly setting up businesses, proper strategic planning for business should be consistent of the following points: A clear VISION setting the businesses mission statement Detailed ANALYSIS of the approach towards the desired end goals and objectives A FORMULA defining the line of actions to reach the desired end goals and objectives A proper and workable IMPLEMENTATION plan according to the agreed upon line of actions Proper CONTROL to ensure and monitor that the correct implementation process is working according to the laid-down plans Assertions For the success of any strategic planning in a business, input of internal and external analysis are necessary to be considered during the development of strategies to identify opportunities, threats, including the possible changing of unforeseen environmental situations which would effect trade and commerce relationships with customers and its likely impact on a business. An analytical consideration of the existing competition and the likely possible future competition has also to be taken into account to ensure that a business could continue to exist and flourish even under the most severely challenging market conditions prevailing at any given period of time. Arguments It is a universally accepted practice to have a strategic plan defining goals, objectives and targets to achieve positive end goals and objectives through a definitive roadmap. Accordingly policies, tactics based on legally correct rules and regulations and actions with clarity are implemented. The correct stepping stones towards eventual success should start with the sequencing of goals from short term to medium term to long term, thus creating a climbable stairway to the future. A mission statement therefore, is necessary as a vital tool in the strategic plan because without a time-frame it visualises the identity of a business, what it represents and where its stands in the future. Counter Argument Realistically the main reasons for the failure of strategic plans can be based on its being incorrect or inappropriate and/or its poor implementation. The reasoning behind incorrect or inappropriate strategy planning can be one or in combination with each other as per the following noteworthy points: Poor preparation of the required feasibility statistics, market research and all other relevant information Lack of identifying the possibly negative current and future environmental stages The strategy not being conducive for the proper co-ordination of its internal and external factors Improper management and selection of required resources and manpower At times an illogical hurry to initiate a business set-up by a new player in the business field without the proper know-how, experience and expertise Some of the factors for failure due to reasons of poor implementation of strategy planning can be any one or in combination with others the following points of note: The overestimation of available financing, resources and capabilities Underestimation of available finance, resources, manpower and time frame Breakdown in co-ordination of an internal nature of an external nature Loss of management and manpower due to unconducive working environment Poor management and supervision of the business set-up Example As would be a natural factor, individually or groups initiating any business normally should have the right qualifications to understand its know-how. This usually is backed up with experience. The combination of qualifications and experience normally merits the success of any business. Construction Business Following is one detailed examples of strategic planning behind the business of construction. The business of construction is specialised and complex in nature. Its set-up is backed up by a vision with which its initiator makes a plan. For its success, feasible strategies are planned based on prevailing and future opportunities, availability of resources and financing to support its operating premises, necessary manpower and construction support structures. Detailed and flexible budgeting requirements have to be considered keeping in view the lean periods when there would be no work and the varying working periods where manpower, equipment, material and resources would dynamically increase and decrease depending upon the stages the construction work reaches. The success of failure would absolutely depend through the tight control by its management from the top down to the bottom tiered workforce inclusive of direct construction work to the required support services. Timely correct decisions in procurement, execution of work and its completion before set deadlines means and increase in profitability. Delays for whatever reasons they may be means not only the loss of man-hours, but money because certain jobs can not be left half finished and left to be completed at a later time. It is not only the work, but proper time-management that controls the volatility of the profits or losses that a construction business makes. Conclusion The intentions behind all strategy plans for the success of businesses is to ensure profitability. Principles basically remain the same but vary in relation to the different types of businesses undertaken. Proper and professional management attribute towards success backed by the reputation a business builds through the quality of its work or services. Identification, recruitment and retaining of qualitative, dependable and responsible team of personnel contributes towards the professionalism and reputation of a business. To put the conclusion in a nutshell with regard to the understanding of strategic planning for effective business, it all comes down to "HOW THE CUSTOMER OR CLIENT VIEWS A BUSINESS" and not how its planners view them. References Strategic planning - Wikipedia, the free encyclopediahttp://en.wikipedia.org/wiki/Strategic_planning Accessed 13 February, 2007 Strategic Business Planning, Co http://bizplan.com/index.html Accessed 13 February, 2007 Strategic Planning, Strategic Plan, Business Strategy, Strategic Planner, Mission Statement, Vision, Swots, Strategy Development http://www.planware.org/strategicplan.htm Accessed 13 February, 2007 Strategic planning http://www.allianceonline.org/FAQ/strategic_planning Accessed 13 February, 2007 Strategic & Business planning http://www.nahb.org/category.aspxsectionID=903 Accessed 13 February, 2007 Read More