Strategic planning is an important process for determining overall objectives, policies and strategies of a business.
Strategic planning is a long range activity that is often constructed to cover a period of up to ten years. Strategic planning and analysis are a part of a larger concept known as strategic management.
Strategic management is the process a business follows to establish its objectives and formulate actions to achieve established objectives within a specified time frame.
Strategic management also covers implementation of formulated actions and assessment of progress and results.
Strategic management is the guide to charting a business’s long term direction, developing strategic moves and techniques and, executing the strategy in ways that guarantee the attainment of desired goals.
What this means is that, for goals to be met, interrelated tasks must be performed.
What are the 5 tasks of strategic management?
- Establishing a mission,
- Translating the mission into specific short and long term objectives,
- Constructing a strategy,
- Implementing the adopted strategy and,
- Evaluating performance.
- Establishing a mission:
The first strategic management task is to develop a concept and form a vision that defines the direction of the business. It’s the function of establishing the mission of the business. That is, define the purpose of the business.
The benefits for defining the mission of a business are;
a. Easy identification of the scope of the business and its products or services and,
b Provision of long term direction for the business. In other words, a clearly stated mission of the business gives a business its corporate focus.
2. Translating the mission into short and long term objectives:
The next strategic management task is to translate the mission and direction into specific objectives. Then aim to achieve these objectives within a defined time frame.
Why should a business have specific objectives? Setting specific objectives eliminates internal confusion about the corporate focus, discourages complacency and minimizes the chances of poor corporate performance.
By setting short term objectives, management understands areas to pour resources into and how to focus on quickly achievable and measurable goals that form the foundation for the attainment of long term goals.
Short term objectives are the building blocks of long term success.
3. Constructing a strategy:
A business that is serious about achieving targeted performance needs a means by which to meet objectives.
The business has to set an overall business strategy and specific strategies tailor made for each product or service.
What a business strategy does is to reveal how a business could achieve targeted results in the light of opportunities and threats.
So, a business must critically analyze both internal and external environments in order to come up with a result-oriented strategy.
4. Implementing the adopted strategy:
Strategy implementation is the translation of strategy into action. Strategy implementation is action driven and therefore, requires building appropriate capabilities, developing performance driven budgets and building a reward system on the basis of performance.
Furthermore, creation of a great work environment, installation of supportive policies and provision of effective leadership are all necessary for effective strategy implementation.
Strategy implementation task is the most complicated and most time consuming part of strategic management.
It cuts across all parts of managing and requires the taking of actions from several points within a business.
Strategy implementation therefore, has to be made as fluid as possible by creating fits between strategy and internal business activities. There have to be fits:
- between strategy and business structure,
- between strategy and business capabilities,
- between strategy and allocation of resources,
- between strategy and budgets,
- between strategy and policies.
One important point that should not b overlooked is that strategy implementation is a function of business design.
5. Evaluating performance:
After reviewing results from the strategy implemented, there may arise the need to take remedial actions.
The strategic management task of evaluating performance involves the taking of remedial actions where necessary.
Such remedial actions or corrective adjustments may lead to the redefinition of mission statements and long-term direction.
This task is an ongoing process. Nothing is final and all prior actions are subject to constant review or modification.