Most businesses practice strategic planning as a means of staying prepared. Strategic planning refers to accumulating ideas and plans that the company can undertake to achieve its profound goal. The strategic plan aims to determine the purpose, how they will achieve this goal and what elements they would have to set to achieve their goal. Strategic planning can have immense benefits for businesses, so if you have a business or are keen on setting up one, here are a few benefits of why strategic planning is essential.
Direction
It is understood that with a well-structured plan, there is a better direction for a business. A business and its employees will understand what to expect of them and how their contributions can benefit their success.
Strategic planning to prepare the business
Natural or economic disasters can occur that can significantly impact a business. Businesses need to consider this and create a strategy. We call this type of procedure ‘Scenario Plan’. Scenario planning is useful to ensure that risks are kept low. An example of where to use scenario planning and make success in a business was in 1971. In 1971, the company Shell used a previously formed scenario plan in case of a potential oil crisis. Entrepreneurs put this plan into place as many oil companies suffered from low fuel. Shell managed to prepare and perform effectively, allowing them to lead competitively over their rivals.
Improved performance
Organisations will recruit employees from different areas of the company to require their expertise. Employees will use plans such as SWOT and PESTLE analysis to create detailed strategic plans. Additionally, employees will feel more valued and included as they would have to use their expertise and creativity to produce a meaningful strategy, so encouraging teamwork and employee involvement. Overall, their performance will enhance, which will reflect on the business.
Essentially, strategic planning is essential for businesses as it is a growth strategy. Every company aims to grow, and they will do this by creating a clear direction/plan for the future. Strategic planning solidifies this as it can allow a business to become more durable, so having an advantage over competitors.
Think about your own business. How can you incorporate elements of strategic planning? What plans have other companies used? Can you recognise them?
