Strategic Business Plan
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A strategic business plan is a way to identify the long term goals within the ambit of the business plans and to direct and efficiently manage the company towards fulfilling the objectives. It should not be confused with the business plan in general which is a much more substantial and detailed document. A strategic business plan can be defined as a step by step guide created by a business or organization which essentially maps out or provides a recipe for the attainment of a stated vision, to capture a targeted market and to serve its customers effectively, consistently and profitably every single time. It provides a foundation or framework for a business plan.
With an objective to integrate all the aspects of the businesses’ activities, the strategic business plan serves as a systematic and management tool for problem solving and product development strategies and the issues of market planning. Strategic planning integrates the topics of assessing the current business environment, deciding the company’s purpose or mission in terms of its future objectives of growth and expansion after, say, after a period of five years. Undertaking a strategic business plan involves an appraisal of the strengths and weaknesses of the company, the opportunities that the future holds and reviewing the threats posed by competing business rivals. Strategic business plan is especially necessary for small businesses as they are found to be competing with larger corporations in this world of increasing competition. This necessitates the implementation of strategic business planning techniques by the small businesses as the larger companies are well versed with its benefits and practice them. From the point of view of rapid changes in technology which is making business management complex by the day, a strategic business plan helps a business to foresee and react quickly to market changes and identify the areas in which the business is lagging behind. A good financial control alone is not enough to ensure a business’ success these days and in addition to the budget, long-term goals determining the future direction of the company are needed. Measures should be taken to evaluate and improve upon the controllable variables (where the business or individual can affect the outcome).
One of the basic approaches to strategic planning is a critical review of the past performance by the owners and the management of the business in relation to its present day performance. The current status, objectives and strategies act as a precursor for the strategic business plans of the future. It should be noted that the futuristic plans of the business or organization should relate to the medium-term, i.e. for three or four years. There should be focus on matters of strategic importance and it should be differentiated from the day-to-day activities of the business. Each strategic objective is supported by a tactical objective which is usually very short-term and specific objectives. Eventually tactical objectives are prioritized to a greater extent and steps are taken for their completion within the target dates. The basis for a sound strategic plan rests on the periodic review of the plan and it should be written down. Strategic business planning can be more effective if all the employees of a business functioning in all areas of the business are involved in the process. They can thus share the long-term goals of the organization. A reasonable and coherent strategic plan also helps to convince bankers and financial institutions who put down money in the business. Money is much needed for the expansion of the business and a sustained growth in sales and earnings of the company.
The critical success factors if a business is to achieve its vision and mission statement as stated in its strategic business plans are:-
