Strategic planning for business is used to formulate a framework for strengthening operations, setting priorities, focusing resources and energies, creating common goals and establishing agreements about the intended results. A strategic plan puts all of this information and more into a single cohesive document that communicates effectively to everyone in the organisation what the goals of the business are and what actions are required to be able to achieve those goals. Marcel Kooter has vast experience in strategic planning, primarily focusing on the oil and gas industry over the past 20 years. Kooter’s area of specialisation is commercial strategic planning for the downstream sector of the oil industry. More information about the downstream oil sector can be viewed in the PDF attachment to this post. There are many benefits to both having a strategic plan in place and reviewing that plan on a regular basis.
Forming Proactive Strategies
Having a clearly defined and understood business strategy allows companies to be proactive rather than reactive when it comes to meeting challenges and overcoming obstacles. A coherent strategic plan helps business leaders to predict future events and be prepared to act accordingly. Changing trends, unfavourable markets and other difficulties can often be foreseen without too much trouble when all of the information required is in place. With an effective business strategy, companies can anticipate future events and make plans that will help them remain ahead of the competition. A definition of proactivity can be seen in the short video attachment.
Establishing Realistic Goals
One of the primary purposes of a strategic plan is to define the business goals and objectives. Clearly defined goals are more realistically achievable than vague concepts of profitability. The objectives contained within a strategic plan will be laid out in accordance with the mission and vision of the business and the brand characteristics. The highest–level objective underpinning any strategic plan is to increase value for the business owners. This is achieved through earning profits, sustaining those profits and making those profits grow. A strategic plan outlines the activities the business intends to undertake in pursuit of this highest objective, often through a series of smaller projects to reach various milestones.
Improving Operational Efficiency
Businesses that have a coherent strategic plan are likely going to be more efficient than those that do not. When the steps required to be taken both now and in the future are clearly defined, a business can streamline the processes used to take those steps and reach the ultimate goal. Resources can be allocated effectively towards the areas where they are most needed in order to be able to achieve the goals of the business, thus reducing waste and inefficiency across the board.
Good strategic planning can help businesses to gain valuable insights into important areas such as market conditions, consumer segments and trends, and to gain a deeper understanding of offerings of products and services already available that may have an effect on the overall success and profitability of the business. With the right information to hand, a business can target its approach to sales and marketing to attract a wider demographic and create the best possible outcomes from all sales and marketing activity.
Businesses that do not design and implement an effective strategic plan are more likely to fail than those that do. Read some surprising statistics for strategic planning in business in the embedded infographic. Formulating a winning business strategy means being prepared to change and adapt to differentiate the company from its competitors in all market conditions.