The Importance of Strategic Planning for Companies | FITbiz

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Strategic planning is an organization?s process of determining its strategy, or direction, and making decisions on allocating its resources to execute this strategy, including its capital and personnel. Several business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological, Economic, Ecological, and Regulatory factors and EPISTELS (Environment, Political, Informatic, Social, Technological, Economic, Legal and Spiritual) Strategic planning is the formal consideration of an organization?s future course. All strategic planning deals with at least one of three key questions:

1. ?What do we do??
2. ?For whom do we do it??
3. ?How do we excel??

The third question is better phrased ?How can we surpass or avoid our competition??. (Bradford and Duncan, page 1).
In many organizations, this is viewed as a process for determining where an organization is going over the next year or more -typically 3 to 5 years, although some extend their vision to 20 years.

To determine where it is headed, the company needs to know precisely where it stands now, then decide where it wants to go and how it will get there. The result is known as the ?strategic plan?.

Business strategies can be categorized in many ways. One popular method is to assess strategies based on their degree of aggressiveness. Aggressiveness strategies are rated according to their marketing assertiveness, their risk propensity, financial leverage, product innovation, speed of decision making, and other measures of business aggressiveness. Typically the range of aggressiveness strategies is classified into four categories: prospector, defender, analyzer, and reactor.

Prospector strategy
This is the most aggressive of the four strategies. It typically involves active programs to expand into new markets and stimulate new opportunities.

Defender strategy
This strategy entails a decision not to aggressively pursue markets. As a result, they tend to do none of the things prospectors do. A defender strategy entails finding, and maintaining a safe and relatively stable market

Analyzer
The analyzer is stands between the prospector and defender. This strategy takes fewer risks and makes fewer mistakes than a prospector, but is not as committed to stability as defenders. Most firms are analyzers.

Reactor
A reactor has no proactive strategy. They react to events as they occur. They respond only when they are forced to by macro-environmental pressures. This is the least effective of the four strategies. It is without direction or focus.

Forming a business strategy and creating a plan to discover new business opportunities is exceedingly important to the success of any business.

The Cambridge Technology Group?, with?Professor Donovan, helps organizations find the next big business opportunity. CTG has three distinct components, all striving towards finding, enabling, and creating the next big business opportunity for our clients and partners: Executive Programs, Strategy Sessions, and Institutionalize.

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Related posts:

1. Strategic Planning for Success
2. Areas to Consider in Your Strategic Risk Analysis
3. Business success: It?s all in the planning
4. How to Write a Strategic Plan
5. What are the Reasons Why Companies Don?t Succeed?

Source: http://fitbiztools.com/2011/07/the-importance-of-strategic-planning-for-companies/

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