What's the Definition of Strategic Planning and How Did it Come About
The definition of strategic planning is an organization's process of defining its strategy, or direction, and making decisions for allocating its resources to pursue this strategy. But what is a strategy and how did it develop.
A strategy gives a business consistent direction through a set of plans that need to be adaptable to the ever changing world. The strategy sits between the business and it's environment.
Strategy has Three Simple Main Components
It usually has three main components
- The setting of Long Term Goals
Every organisation needs to have simple and clear goals. All decision within the organisation should support these goals.
- A thorough Analysis of the Competition and the ever changing Environment
- An objective appraisal of Resources and Capabilities
A Brief History of Strategic Planning
In th 1950's Financial Planning was the big thing. Business were getting larger and larger and trying to control was the issue.
The in the 1960's Corporate Planning was the in-thing. Businesses tried to follow national ecomonic policies and direction.
In the 1970's Industry Analysis became vogue by trying to establish a competitive position. The share of the market became important role in driving profitability - e.g. Boston Consulting Matrix.
From the 1980's on establishing the firms Specific Strategic Advantage was the thing. Firms were encouraged to develop unique positioning or competitve advantage. This drove firms to boost or broaden their resources and capabilities.
The Balanced Scorecard is an example of this where Learning and Innovation supports Internal prcesses, which in turn supports the Customer and finally this supports the Financial position of the company or organisation. See also the example Strategy Map
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