Strategic Planning

Strategic planning is a periodic, typically annual process in which organizations' top managers review the organization's strategy, which is its overall direction, competitive positioning, and the resources needed to achieve its short- and long-term goals and objectives. Strategic planning has several phases: formulation, analysis of the strategic environment internally and externally, development and selection of strategic alternatives, and implementation, with feedback from results incorporated as necessary changes in the plan. Strategic planning is part of the overall strategic management process and represents a formal opportunity for the management team to review, assess, and redirect, if necessary, the company's plan of action for a specified period of time into the future. One criticism of the strategic planning process is that [Page 2013]it is based on a rational and logical view of the management process, which may not be realistic in today's competitive and highly dynamic environment, so many strategic planners recognize the need to constantly revise the strategic plan as new information is received or conditions facing the organization shift.

Strategic planning begins with specifying an organization's long-term vision or mission, that is, its purpose for existence; focusing on the development of goals and objectives that will enable the organization to achieve that vision; and identifying the means through which the vision will be achieved, typically through the major business units and functions of the enterprise, such as marketing, operations management, finance and accounting, technology and information systems, and human resources. The analytical phase of strategic planning focuses internally on the company's resources, capabilities, core competencies, and its strengths and weaknesses, in what is called the resource-based view of the firm. External strategic planning focuses on the organization's positioning within its industry using industry and competitor analysis. Most often, strategic planning is undertaken by the chief executive officer of an organization and the top management team, including the top managers of any business units. Sometimes many others are involved in the process as well so that the process is inclusive and the goals developed are well understood and agreed to by all the people who will have to implement the plan.