Strategic plan

From CEOpedia | Management online

A strategic plan is an organized approach to achieve specific goals within a certain time frame. It is used to create a common vision for the organization, prioritize objectives, and identify the necessary resources and actions needed to reach the desired outcome. It includes key elements such as:

  • Goals: Strategic plans should include realistic and measurable goals which are aligned with the overall mission of the organization. These goals should be specific and achievable, and should have a timeline for completion.
  • Strategies: Strategies are the action plans used to achieve the goals outlined in the strategic plan. These strategies should include the steps for implementation, resources needed, and any potential obstacles that may arise.
  • Objectives: Objectives are the measurable outcomes that the organization hopes to achieve. These objectives should be aligned with the organization's mission and should be attainable within the specified timeframe.
  • Evaluation: Evaluation is necessary to measure the progress of the strategic plan. This evaluation should assess the success of the strategies and objectives, as well as identify any areas which need improvement.

Example of Strategic plan

A strategic plan for a company may include a goal to increase sales by 15% within the next six months. Strategies to reach this goal may include creating a new product line, expanding marketing efforts, and offering incentives to customers. Objectives to measure progress may include increasing the number of website visits by 10%, increasing the number of product orders by 20%, and increasing brand awareness by 30%. Evaluation of the plan may include tracking website visits, customer feedback, and sales figures to measure the success of the plan.

When to use Strategic plan

A strategic plan is used to guide the implementation of an organization's mission and vision. It helps to focus efforts and resources, prioritize objectives, and ensure that the organization is on track to achieve its desired outcomes. It is typically used in situations where the organization needs to make changes in order to adapt to its environment or meet the needs of its stakeholders. Examples of when a strategic plan might be used include when an organization is looking to enter a new market, launch a new product, or expand its operations.

Types of Strategic plans

A strategic plan can be divided into four different types: operational, tactical, operational-tactical, and portfolio.

  • Operational: Operational plans focus on the daily operations of the organization. These plans typically involve developing processes and procedures to ensure that operations are running smoothly and efficiently.
  • Tactical: Tactical plans are designed to achieve short-term goals. These plans typically involve developing strategies and actions that can be implemented in the near future.
  • Operational-Tactical: Operational-tactical plans are a combination of operational and tactical plans. This type of plan involves both the development of processes and procedures for daily operations, as well as the development of strategies and actions for short-term goals.
  • Portfolio: Portfolio plans involve the development of a portfolio of different strategies. This type of plan is used to balance risk and ensure the success of the organization by diversifying the strategies used to achieve goals.

Steps of Strategic plan development

A strategic plan typically involves several steps in order to successfully achieve the desired outcome. These steps include:

  • Goal setting: This is the first step in developing a strategic plan. It involves outlining the desired results and determining the resources and timeframe needed to achieve them.
  • Developing strategies: After the goals have been established, the organization must develop strategies to reach the desired outcome. These strategies should include the steps needed to implement them, the resources needed, and any potential obstacles that may arise.
  • Establishing objectives: Objectives are the measurable outcomes that the organization hopes to achieve. These objectives should be aligned with the organization's mission and should be attainable within the specified timeframe.
  • Evaluation: Evaluation is necessary to measure the progress of the strategic plan. This evaluation should assess the success of the strategies and objectives, as well as identify any areas which need improvement.
  • Implementation: Once the plan has been evaluated, the organization should begin to implement the strategies outlined in the strategic plan. This includes the necessary steps to achieve the objectives and goals.

Advantages of Strategic plan

A strategic plan has many advantages, including:

  • Clarity: A strategic plan provides clarity on the direction and goals of the organization by outlining a clear path to success.
  • Focus: By having a clear plan, the organization is able to stay focused on achieving the desired outcomes and is less likely to be distracted by external factors.
  • Alignment: A strategic plan ensures that all the resources and efforts of the organization are aligned with the overall mission and objectives.
  • Accountability: A strategic plan holds everyone in the organization accountable for their role in achieving the desired outcomes.

Limitations of Strategic plan

A strategic plan is not a panacea for an organization's problems and there are several limitations which should be kept in mind. These include:

  • Time: Strategic plans require a significant amount of time and resources to be properly implemented. This can be a challenge for organizations with limited resources.
  • Inaccurate Forecasting: Strategic plans often rely on forecasting which may be inaccurate due to external changes in the market or unpredictable events.
  • Unrealistic Goals: If goals are not realistic, then the organization may be unable to reach them.
  • Lack of Flexibility: Strategic plans are not always flexible enough to account for unexpected changes or events.

Other approaches related to Strategic plan

In addition to a strategic plan, there are other approaches and tools which can be used to ensure the success of an organization. These approaches include:

  • SWOT Analysis: SWOT stands for Strengths, Weaknesses, Opportunities and Threats. This is a tool used to analyze the internal and external environment of an organization in order to identify any potential areas of growth or improvement.
  • PEST Analysis: PEST stands for Political, Economic, Social and Technological. This is a tool used to identify any potential external factors which may impact an organization.
  • Balanced Scorecard: This is a tool used to measure the overall performance of an organization. It looks at four perspectives such as financial, customer, internal processes and learning/growth.


Strategic plan — recommended articles
Planning process — Strategy of the organization — Short term planning — Execution of strategy — Critical success factors — Significance of strategy — Proactive strategy — Strategic priorities — Strategy

References

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