- Strategic planning is a process through which organizational leaders lay down long term procedures of how they want the organization to be in the future.
- The strategic plans also act as guidelines of where leaders would like the organization to be in the future.
- It entails creation of a vision for an organization and then coming up with procedures and operations on how to achieve those long term visions.
Strategic planning may be likened with long range planning but the difference is that strategic planning primarily focuses on the strategies that can be laid down in place and the means through which such visions will be achieved in the short and long term. A strategic plan can be developed by a company’s staff through a boards meeting where discussions such as components of the strategic plan are laid down.
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Moreover, it is at this stage that the board discusses on the potential benefits that the company stands to get from adopting such a strategic plan. The cost of adopting the strategic plan must also be considered at this point, with references made to the financial stretch it would have on the company. If the financial capability of the company can handle the pressure that comes with the visions, then the strategic plan can be adopted. On the contrary, if the company has no financial capability to meet the strategic plan, then such a move should be dropped.
- Strategic marketing prevents business owners from making impulse marketing decisions
- The process involves gathering information from the markets where the business operates
- Details collected from the markets are helpful in coming up with analyzed long-term marketing goals for the company.
- A business owner gets to understand deeply the markets in which their business operates.
In strategic marketing, just like the name already suggest, it’s a process that stops business owners from coming up with impulsive marketing decisions. On the contrary, the process requires that a business marketing departments embarks on the process of collecting and gathering marketing information. The collection process is supposed to be done in a systematic manner so that the data is collected qualitatively and then analyzed to get a long term strategy. The marketing plan is supposed to cover a large horizon that the business can deal with. The marketing plan is always supposed to be flexible enough to meet the daily changes that take place in the world of business.
A strategic marketing plan is important for a business because it defines the path through which a business intends to follow over a given time period. It also pins down the business in terms of the costs to be incurred over the mentioned period as well as the profits that should be expected over the given time frame. The marketing plan also touches on the customer related goals that the business will intend to achieve.
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The customer related goals will be in terms of the expected pricing strategy that the business will use in order to gain market share.
Creating a marketing plan is important because it weeds out the unproductive initiative that the business might have started or planned to start at some point. Moreover, once a strategic plan is in place, then the business can be said to be based on a solid ground for success. In most cases, a good marketing plan is what separates a successful business venture and a failed business operation.
- Organization culture is all about the people, the procedures, positions and the cultures within an organization.
- Organization structure is what determines how the processes and the various departments in an organization work together.
- It is important because it helps in solving marketplace problems and also makes communication to be much easier within the organization.
A strategic plan of an organization is related to the organizations structure in such a way that if the strategy changes then the structure must also change so as to align with the new strategy. Everyday operations of a business organization is based on the structural process of the same company. The company must always think carefully of its structures whenever it wants to adopt a new strategy. Every member of the organization must be focused on the visions and the direction to which the company is headed. The structure of an organization is designed in such a way that every resource and efforts of the organization is geared towards meeting and supporting the strategy.
A good strategic plan and structure work in hand in hand such that everyone is given a task according to their performance capabilities. Such a plan helps in preventing work confusion for the employees especially in companies that desire to achieve long term goals. In the event that tasks overlap, two different employees in two different departments may find themselves performing the same task. Such an overlap in tasks may cost the company a lot of money. The organizational structure provides a framework for ease of flow of information or communication within the organization. When there is a distribution of authority, it becomes easy for one employee to know to whom exactly they will be reporting to at the end of the day. Similarly, the structured organizations gives chance for effective evaluation of the employees performance at their workplaces. A supervisor can easily monitor the work of the junior staff and ensure they perform according to the expectations of the company. Such monitoring process can help in working towards the long term visions.
- International operations is primarily a strategy that is used by the global companies in coming up with effective strategies.
- The organizations evaluate both the internal and the external environments where the business operates.
- The decisions on how to achieve the short and long term goals are all decided based on the strategies that have been laid down in place.
The international operations become very important for the global businesses because a majority of the customers are from the external environments. The strategic plan that is adopted by the global businesses is more complex due to the complexity of the business environment. The domestic competition is in most cases directional and optimized. On the other hand, the type of competition in the global arena is so complex such that if a good strategy is not put in place then chances of survival might be so slim. In international operations the corporate center should be given the chance to be the sole decider on the roles that each of the subsidiaries will play. For instance, the corporate center can set on goals on the expectations on the returns on capital expected from the venture. The subsidiaries are then given specific roles to play within such kind of an environment. Once such goals have been set, then it becomes the responsibilities of the subsidiaries to decide on the sales revenue targets. Additionally, they come up with the geographical scope within which they will operate to meet their targets. There are also issue to with the human resource policies that they will choose for their respective companies.
On the extreme end, the decision making process of the international operations will be centralized for harmony and consistency purposes. One such decision could be to allow the subsidiaries to have competition between themselves in the same products or market. It is also possible that the company can create boundaries for the subsidiaries products and markets.
Financial and accounting Management
- Financial management is the ability to take care and control the finances over time in order to enable the business meet its needs.
- Strategic planning involves giving directions to the business so that it aligns with the visions
- For the visions to be achieved within the timeframe put in place, the finances of the company must be properly managed.
- The amount of money available at the disposal of the company determines the options the company can entertain
Finance management just like it has been mentioned involves taking care of the finances so that they are able to meet the needs of the organizations visions. Both strategic planning and finance management involve gathering information and close analysis of the information. Once the analysis has been done, what follows is the implementation plan after which one monitors the outcome of the plans.
In finance management, one should know that the money within their disposal is what determines the strategic plan to be adopted. For instance a company can have $ 40, 000 within their disposal with three options of projects that costs $50,000, $35,000 and $38,000. In this case, the company’s finance managers should be in a position to tell that the $ 50,00 project is way out of the company’s league.
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Apart from that, the finance management process also plays a role in determining the free cash flow of the company. The financial soundness of the firm can easily be determined so that it is known whether the company’s resources are utilized correctly in the generation of additional resources. The free cash flow metric helps the company’s directors in which the company is headed in relation to its already initiated projects.
Through correct finance management, the company can establish whether its projects are economic added value or otherwise. If the projects are profitable then the business will make effective decisions to continue with the implementation of such projects and drop those that do not add economic value to the organization.
Compliance and Legal Considerations
- A company’s compliance is very important especially when it comes to following the law to the latter.
- Legal considerations must also be taken seriously if the business operations are to steer off from contradictions with the law.
- The policies of any business are said to be legally complete at the point where such policies are free from legal gaps.
- Business with short and long term goals should always ensure that their operations are done within the stipulated laws.
In strategic planning, the businesses must come up with procedures that ensure that the business lives up and operate within the required laws. If a company starts to operate in a manner that contravenes the laws, then achieving its goals may not be possible. Legal compliance also includes operations within certain ethic standards and codes that are stipulated within certain working environments. For instance, a global business must be ethical in its business operations through acts such as paying taxes to the government. On the contrary, if such businesses are unethical then the strategic plan may not work in favor of the company both in the short and the long term.
For a company to be considered to be law compliant, it must first of all ensure that its policies are consistent with the law of the land or the business laws. Secondly, the business should also ensure that policies are complete as per the requirements of the law. Additionally, companies need to do a lot of self-monitoring that ensures the operations within the organization do not lead to workplace indiscretion. If a company has a strong legal team then chances are high that the risks can be detected in advance and measures taken early to avert such risks before they happen. The legal teams should be given the chance to work closely with the executives so that they help in aligning the company’s goals with proper communication patterns.
Internal Control and Evaluation
- One of the recipes of avoiding business failure is creating a strong internal control and evaluation system
- A strong internal control system should be able to manage the risks associated with the business as well as preserving the value of the business
- The evaluation process should be able to counter the threats that faces the organization and instead turn them into opportunities for the prosperity of the business
- The internal control systems help in minimizing chances of both intended and unintended fraud within an organization
- In the event that the errors occur, they are arrested at an early stage before they become big problems to the organization
Most of the successful businesses know the importance of taking advantage of opportunities for the business that can help them to counter the threats that faces the company. One way through which such businesses operate is through the implementation or coming up with strong internal control systems that also enhances performances within the organizations.
The internal control system should be designed in such a way that it becomes effective in controlling the risks associated with the business. If the control systems are aligned with the strategic plans of the business then it becomes easy for the businesses to achieve their long term goals. For instance a good internal control system should be able to determine the roles and responsibilities in relation to the governing body. All the employees should be placed under certain management channels so that all operations runs smoothly. Additionally, the control systems put in place should also be designed in such a way that they foster a motivational culture. All the members of the organization should be motivated to work towards the organizations objectives, and that motivation can only come from the top management level.
Finally, the management body should be in a position to link the organizations internal control achievements to those of individual achievements and performances. Every person is supposed to beheld responsible for their personal performances within the organization.
- Information is an integral part of development for any business venture because it improves the communication speeds as well as data processing
- Information tech ology can also be used efficiently to gather a lot of market intelligence
- Cost efficiencies can also be achieved in companies through the use of modern technology systems
- Modern technology, if used appropriately can drive revenue growth in companies creating a competitive advantage over rival companies in the market place
Information technology has been in existence since 1890s when it was first discovered. A number of companies and economies have been able to grow over the years as a result of the use of information technology. It is important to note that a good strategic plan should always incorporate the use of information technology. One of the advantages that IT plays is the ability to cut down on costs incurred by the businesses. Information technology makes work become easier and also improves on the speeds and efficiencies of completing such tasks. Apart from that, the companies that desire to grow globally must incorporate information technology into their strategic plans because it is a core factor for such growth. For instance global companies must operate at a near perfection in telecommuting as well as outsourcing. All those factors can only be in place when a company uses an efficient technology system. A global company can decide to outsource for its core functionalities outside their original homeland. For instance it can outsource for human resource, finances or even decide to use international networks to lin k up with some its overseas employee.
- Leadership is all about an interpersonal dynamics and the ability of an individual to create influence.
- A leader is someone who has the ability to direct the rest of the people in to doing what they are supposed to be doing within the stipulated timeframes.
- Effective leaders do not coerce the rest into doing what the leader thinks is the correct thing for the others to do. On
- Effective leaders take charge and lead the pack where the rest are connected with their immense abilities to realize their potentials
A good leader is one who realizes that the business environments and dynamics are changing on a daily basis across the globe. Additionally, the profile of people who join organizations keep changing from time to time. Therefore a good leader is none who acknowledges the above concepts and has the willing to change as the above factors changes.
Leaders create differences between performances of business organizations. A good leader is able to inspire, motivate and empower others to do more even when they have very limited resources. It is normally said that a team is as good as its leader and a leader is as good as his team. It means that if the leader is excellent at his top position then the rest will most likely follow suit. Strong leaders guide their employees towards the right direction of achieving the company’s strategic plans and objectives . Leaders are supposed to build the morale of their employees so that they are encouraged to work towards a common goal.
The managerial body should be able to provide the correct leadership required in an organization otherwise if they fail to do so informal leadership will take charge. The dangers of informal leadership is that it can result in regulation of employees behavior pattern Such regulations may in the long run come into conflict with the formal leadership.
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