We explain what strategic planning is, its elements and its stages. Also, why it is important, strategic planning models and how to do one with an example.
What is strategic planning?
Strategic planning is a process that consists of determine what the objectives of a company or an institution are and what plan must be implemented to achieve them. It is a type of planning that seeks to indicate the best path to achieve the goals that an organization or a person has set for itself.
Strategic planning It is an organizational tool in different areas such as the military, business, educational, academic, governmental and financial.
This occurs because it is a method that serves to clearly indicate what objective is intended to be achieved in the long term, and what tasks and resources are the most convenient for it. In addition, it allows you to improve decision-making, foresee possible problems to try to avoid them, and design methods to solve problems.
When a reliable and judicious planning is developed, The bases are established for other administrative processes that are carried out later such as the organization, direction and control of subsequent work. In this way, all people in a company or institution perform various tasks following a single guideline.
See also: Organizational objectives
Elements of strategic planning
The elements that make up strategic planning are:
- Mission. It is the reason for being of a company or an institution, which is defined by the characteristics of the organization, what it does and who participates.
- Vision. It is the set of goals of a company or an institution, which are determined by an ideal version, that is, what the organization seeks to be in the future or where it is heading.
- Goals. They are the changes or results that are sought to be obtained.
- Strategies. They are the set of activities that must be carried out to achieve the objectives.
- Budget. It is the amount of money that is available to carry out the planned strategy.
- Resources. They are the objects, people, places, computer programs, among others, that are available to carry out the plan.
- Program. It is the plan in which the strategies are detailed, where their order, duration, who will carry them out and with what resources are indicated.
- Values. They are the ethical principles that guide the actions and behavior of the members of the company or institution.
Other elements: In some strategic planning, other elements are taken into account, such as what the strengths and weaknesses of the organization are, what the market situation is and how the competition is characterized.
Stages of strategic planning
The planning It is the first stage of every production cycle since it determines what will be done from now on and in what way. The stages of strategic planning are:
- Determination of general objectives. The result or general objective that is sought to be achieved in the long term is determined. To do this, the mission, vision and values of the company must be taken into account.
- Analysis of the situation. An analysis is carried out of the available resources (material, human, technological, etc.) and the external variables (challenges, difficulties, competition, etc.), because strategies cannot be undertaken for which resources are not available. , nor should it be ignored the potential of the organization.
- Program formulation. A plan or program is made with short-term tasks or goals, easy to envision and carry out over time, whose articulation will allow the general objective or long-term result to be met. In this stage, it is explained who will carry out each activity, how long it will take, how much it will cost, what resources will be allocated, among other indications.
- Program implementation. The program is carried out in the organization. It is recommended that there be one or more people responsible to guide the process. In some cases, prior to performing this step, the individuals involved need to be trained.
- Program evaluation. How the program is being implemented is monitored to know how close its results are to what was initially projected. In addition, you can determine where the flaws, difficulties or challenges are and how they can be solved to obtain greater efficiency and optimal results.
Continue with: Management in administration
Importance of strategic planning
On many occasions, The difference between success and failure depends on the strategy implemented. In this sense, strategic planning becomes a very important organizational tool.
Although no plan is infallible, the best plans are those that are based on a thorough evaluation of the available resources, the challenges that will be faced and other factors that intervene in decision making. It is not about foreseeing the future, but about making predictions: evaluate the risk and choose the safest so that the journey to the goal is as productive and efficient as possible.
Thus, carrying out strategic planning provides a series of benefits:
- Provides relevant information to make better decisions.
- In most cases, it allows large changes to be implemented very successfully, since it has been detailed how they should be achieved.
- It serves to devise better procedures, which without prior analysis would not have emerged.
- It improves performance, because it allows you to detect what should be implemented, what should be avoided, and what should be corrected.
- It positively impacts the communication of individuals, since they constantly interact to achieve the same objective.
- It allows all the people involved to know well what their tasks are and how they should perform them.
- Achieve more effective work, because waste of time, money and resources is avoided.
Strategic planning models
There are various conceptual models to think about or define strategic planning. Each one is equipped with ways of representation and more or less didactic procedures.
The best-known strategic planning models are:
- Balanced scorecard. It is a model in which four perspectives are taken into account: financial, customer, process, and learning and development. On the one hand, the objectives of each of these areas are indicated and, on the other, general objectives are established to organize the total work.
- Porter Analysis. It is a model that focuses on investigating the competition to develop a production process or a business plan. To analyze competition, five areas, also called forces, are taken into account: threats from new competitors, bargaining power of suppliers, bargaining power of customers, threats from substitute products, and rivalry among existing competitors.
- SWOT Analysis. It is a model that is used to evaluate and carry out strategic planning taking into account four factors: strengths, weaknesses, opportunities and threats. The first two concern the internal and the last two to the external, which draws a fairly didactic grid of the current situation and allows us to design a plan for the future.
- PEST Analysis. It is a model whose name comes from the words political, economic, sociocultural and technological. These are the four strategic areas that this model proposes to understand any organization. It is an analysis that indicates how external factors influence, and is ideal for industrial environments. In some cases, the evaluation of natural resources is also included.
- BCG Matrix. It is a model that combines the analysis of products and investments. In this way, you can determine when a product will make profits and how much the approximate amount will be.
Example of how to do strategic planning
To carry out strategic planning, you can follow a series of steps:
- Define the objective. You must determine what the central objective is, that is, what you want to achieve in the long term. For example, a textile company wants to launch a line of jackets that offers a different model at each start of the season.
- Adapt the objective to the vision, mission and values of the organization. It must be taken into account that the objective must be consistent with the characteristics and identity of the company or institution. For example, jackets must be of good quality, have a novel design and be made with materials that reduce environmental impact.
- Analyze internal and external conditions. It must be taken into account what the organization's strengths and weaknesses are, and what the external opportunities and threats are. To do this, you can use the SWOT matrix model. For example, the company has good designers and sales agents. marketingbut they must improve the quality of the materials. Furthermore, this objective is an opportunity to demonstrate the brand's identity in the market.
- Formulate the program. It must be determined what activities are necessary, who will carry them out and when, and how much they will cost. For example, tasks can be assigned in the areas of design, production, distribution and marketing.
- Apply the program. The program must be implemented taking into account that one or more people must direct it and review along the way what must be modified to achieve the final objective in the most efficient way.
References
- Chiavenato, I. (2016). Strategic planning. Fundamentals and applications. McGraw Hill.
- Lerma and Kirchner, AE and Bárcena Juárez, S. (2012). Strategic planning by functional areas. Practical guide. Alfaomega.
- Palacios Rodríguez, M. Á. (2020). Strategic Planning, a functional instrument within organizations. National Administration Magazine, 11(2).
- Pérez Brito, AE and Bojórquez Zapata, MI (2013). Strategic planning. A pillar in business management. Pacioli's Mailbox, 814-19.
- Rojas López, MD and Medina, LJ (2012). Strategic planning. Editions of the U.
