Strategic Initiative plan - Research Paper Example

Strategic planning is a necessary managerial function that must be used to create a long term plan for a company. Most strategic plans foresee three to ten years into the future, but managers can also use strategic management tools to make decisions associated with the day to day operations of the company. “Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages” (Eca). There are different ways that managers can implement strategic decisions.

For instance a manager can approve a capital project that increases the production capacity of the company. The launch of a new advertising campaign can be used as a strategic move to spur a sales jump in the short term. Financial planning is another important function that is correlated to strategic planning. A financial plan must be prepared to determine how much investment is needed for any initiatives or strategic projects the company desires to implement. Financial planning involves determining how to obtain the resources needed to finance a project.

Some of the sources that can be used to finance a strategic plan include selling common or preferred stocks, bonds, sale of assets, and loans from financial institutions. Strategic planning and financial planning are correlated because the implementation of a strategic plan is dependent of the budget available. A financial planning technique that can be used to predict the future financial outcome of a company is pro-forma financial statements. The master budget is also used to keep track of inflows and outflows of a project.

“The master budget is a summary of companys plans that sets specific targets for sales, production, distribution and financing activities” (Accountingformanagement, 2012). Multinational corporations often utilize strategic and financial planning to achieve the goals of the company. The company I work for has utilized strategic planning effectively in the past. Last year the company entered into a strategic marketing alliance with a competitor in order to increase the overall demand for the product.

The firm also utilized strategic planning in its human resource function. Due to the increase production demand the firm had to hire an additional 25 employees. A financial planning initiative that the company performed last year was obtaining a $4 million business loan that was used for leasehold improvements, research and development, and to finance an expansion project. Large companies such as Starbucks Café also utilize financial and strategic planning on a recurrent basis. The company a few years had to make the strategic change in their expansion strategy because the firm was adversely affected by the global recession.

Instead of expanding the number of stores the firm contracted for the first time in decades. During its most recent financial reports the company demonstrated very strong numbers. The company reached global revenues of $11.7 billion which represents an improvement of 11% in comparison with the previous year (Annual Report: Starbucks, 2011). Another strategic move the firm made last year was improving its customer service function. Starbucks is a very socially responsible company. References Accountingformanagement.com (2012).

Master Budget. Retrieved June 17, 2012 from http://www.accounting4management.com/the_master_budget.htm Annual Report: Starbucks (2011). Retrieved June 17, 2012 from http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-reportsAnnual Uca.edu. Defining Strategic Management. Retrieved June 17, 2012 from http://www.sbaer.uca.edu/publications/strategic_management/pdf/01.pdf