Strategic Planning Is Vital to Long Term Business Growth
Strategic planning and business reviews are important for businesses to provide timely and accurate insights into customer desires, environmental trends and potential competitor actions so that your business can create methods and tactical plans to achieve long-term business success. Strategy reviews should be undertaken annually at least, to ensure strategies remain focused and in line with current business goals and direction. These reviews also provide a good platform to track and measure business results enabling businesses to understand the effectiveness of tactics in creating the desired result.
Each business has different requirements of their strategic planning process. Some businesses will need to create a corporate strategy, so your business plan. Your business plan provides direction on the overall company strategy (low-cost, focused, niche), what your goals are for the total business, what resources are required to achieve these goals and what competitive advantages you can utilise. Other businesses, especially those simply undertaking their annual review are most likely to need a marketing plan. The marketing plan divides the overall business into segments (generally based on product groups). It then goes through which segments to target, what to offer to each segment, what tactics should work in each segment, right down to what prices are recommended for the products.
Planning is critical to sustaining long-term profitable growth as they plans you create help you identify market opportunities, prepare for, and where possible avoid or minimise market threats while understanding and capitalizing on your strengths and minimising weaknesses. They help you understand what works and should be replicated, what doesn’t work and should be avoided ensuring that you are not spending time and effort on tactics that are ineffective. Planning also helps to minimise risks by making calculated decisions based on data. Most importantly they give you the ability to track your progress, measure (and celebrate) achievements and have a realistic vision of what you can expect to achieve in the future, helping to manage expectations and avoiding large disappointments.
It is common practice for businesses to review their business and/or marketing plans annually. Generally this is done 2-3 months prior to the end of a calendar year or financial year (depending upon company preference) to help the company prepare for the year ahead by reviewing the effectiveness of the strategies implemented throughout the year, to understand the goals for the following year and then what resources; people, financial, logistical, etc are required to fulfil the gap (gap analysis) of where you are now, to achieving the goals for the following year.
It is important not only to create a strategic plan, but to review it annually as Strategic Inertia is becoming a major issue in today’s markets with the increasing levels and rates of change. Monitoring these changes is vital as they could affect the productivity of your business, the competitiveness of your product (quality, pricing, time to market, etc) as well as the effective methods to reach your target market. Social Media Marketing (LinkedIn, Facebook, Twitter, etc) is a fantastic example of how technology has transformed the marketing field in terms of ways to reach and communicate with your target market.
Current economic conditions have made the competitive environment harder for businesses and those that are unprepared, do not understand their USP (Unique Selling Point) or are ineffective at getting their message across will find it more and more difficult to survive. Strategic planning is critical in creating a long-term competitive position; effectively reach your target market and focusing your energy and efforts in the best, most responsive direction.
Article by Lorraine C Salvi
