Characteristics of a Strategic Plan
Strategic planning consists of developing the company mission (to provide it direction), goals and objectives (to provide it methods and means for accomplishing its mission), business portfolio (to permit management to utilize all of the facets of the organization), and functional plans (plans to carry out every day operations from different functional disciplines). As most of the companies are interested in growth, this chapter explores various growth alternatives within the context of portfolio analysis and strategic planning. The product/market expansion grid indicates four avenues for growth: product development, market development, market penetration, and diversification. Various companies operate with no formal plans. However, formal planning may provide many following benefits:
- It forces managers to make clear policies and objectives.
- It encourages management to think ahead thoroughly.
- It gives clearer performance standards for control.
- It leads to improved coordination of company efforts.
- It is helpful for a fast-changing environment as sound planning helps the company anticipate and respond rapidly to environmental changes and sudden developments.