Essay on "Strategic Planning May (2010"

Essay 4 pages (1320 words) Sources: 4

[EXCERPT] . . . .

Strategic Planning

May (2010, p. 1) defines strategic planning as "a game plan for gaining competitive advantage and earning higher profits." The author notes several purposes of strategic planning. A business that has sufficient strategic plans in place, for example, are focused on creating value for the customer in terms of more efficient use of limited time, financial and other resources. Strategic planning also helps to mitigate crisis management, as a concrete plan that is in place minimizes crises as a result of surprises. It also promotes the communication process, creating effective channels of connection between the business, customers, investors, and employees. In this way, sustained and profitable growth can be managed by more effectively managing strategy.

Strategic planning is primarily based upon the components of the company's vision, mission, and values (May, 2010, p. 3). May summarizes these components as follows: Vision concerns the "why" of the business - the reason for being; Mission concerns the focus of operations -- what the business does. Values concern the behavior the business promotes for its employees and stakeholders -- or how business is being conducted.

May (2010, p. 4) also emphasizes the importance of articulating a vision, mission and values in terms of providing a basis for a strategic plan. It also functions as a basis for existing and new employees to find meaning in the work that they do and to position themselves in terms of the purpose of the business. These three components therefore function to help employees identify the larger context of the work they do, and in this way to find meaning in the day-to-day work they do for the company. By making the vision, mission, and values of the company part of its strategic plan, personnel are provided with a basis for motivation to deliver as much as they can for the good of the company as a whole.

While it is important to identify the internal components of the business as a basis for strategic planning, it is also important to consider the external environment and its influence upon these inner components of the company (May, 2010, p. 17). External factors are the threats and opportunities that influence the strategic plan, while an internal analysis concerns a company's strengths and weaknesses. The dynamic created by this analysis can then dictate the strategic plan that a company will ultimately create. A strategic plan then considers not only a company's ultimate purpose for existence, but also its reaction to external and use of internal factors to maintain its focus on this purpose and its pathway towards reaching it.

According to Boone and Kurtz (2010), strategic planning is the most far-reaching of plan types a business can engage in, because it considers both the internal and external environment of the business, and how these influence each other to help the business owner create the optimal plan for the long-range success of the business. The authors, however, also point out that strategic planning is not the only plan type a business might engage in.

Tactical planning, for example, concerns the practical implementation of activities identified during strategic planning. By nature, it is therefore a more short-term and immediate type of planning than strategic plans. Tactical planning can reveal the shortcomings of some components of the strategic plan and in this way provide businesses with the ability to modify any components when this is considered necessary.

Operational planning, according to the authors, provides a plant from of standards for implementing tactical plans. It is even more short-range and immediate than tactical planning itself, and lies at the basis of the planning hierarchy. In addition to being focused on the short-term, operational planning is also much more focused than strategic planning, in that it focuses on specific functional areas, rather than on the business as a whole.

A further component of planning is contingency planning, where a business foresees possible difficulties that may arise as a result of internal weaknesses or… READ MORE

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