Strategic planning is done at the organization’s level. It considers a global approach to the company, so it is based on general objectives and strategies, as well as strategic plans, which affect a wide variety of activities but seem generic and straightforward.
Because strategic planning considers the company, it must be conducted by the company’s top management and projected in the long term, theoretically for a period of 5 to 10 years. However, in practice today, it is usually done for three to a maximum of 5 years due to the constant changes in the market.
However, the company’s other tactical and operational plans are drawn up based on strategic planning, so a strategic plan cannot be considered the sum.
Like all planning, strategic planning is mobile and flexible. Every so often, you must analyze and make the necessary changes. Likewise, it is an interactive process involving all the company members, who must be committed to and motivated to achieve the objectives.
Let us see below what process or steps are necessary to conduct strategic planning:
Vision Statement
The vision is a statement that indicates where the company is going in the long term or what it intends to become.
The vision answers the question: “What do we want to be?“
Mission Statement and Establishment of Values
The mission statement encapsulates the company’s enduring purpose and raison d’être, outlining its fundamental objectives and guiding principles.
The mission answers the question: “what is our reason for being?”
On the other hand, values are a company’s positive qualities, such as the pursuit of excellence, the development of the community, and the development of employees.
Furthermore, both the mission and the values give identity to the organization.
External Analysis of the Company
External analysis consists in detecting and evaluating events and trends that occur in the company’s environment to understand the situation and detect opportunities and threats.
For the external analysis, the economic, social, governmental, and technological forces are evaluated, as are the company’s competition, customers, and suppliers.
However, it assesses aspects that already exist and characteristics that might exist (trends).
Internal Analysis of the Company
The internal analysis consists of studying the distinct aspects or elements that may exist within a company to know the status or capacity with which it has and detect its strengths and weaknesses.
A company’s financial, human, material, technological, and resources are evaluated for internal analysis.
Establishment of the General Objectives
The general objectives refer to the goals that define the company’s direction, which is always long-term.
Once the company’s external and internal analyses have been conducted, the objectives to achieve the mission have been established, external opportunities and inner strengths can be capitalized, and external threats and internal weaknesses overcome.
Moreover, these objectives are established considering the company’s resources or capacity and the situation of the environment.
Design, Evaluation, and Selection of Strategies
Once the company’s general objectives have been established, we design, evaluate, and select the processes that allow us to reach those objectives in the most viable way.
The process of designing, evaluating, and selecting strategies is as follows:
Information about the external analysis is evaluated (the situation of the environment), information about the internal investigation is considered (the resources and the capacity of the company), the statement of the mission and the values are evaluated, the objectives are assessed, and they evaluate the strategies that have been used previously, whether they have had superior results.
Moreover, considering the information analyzed in the previous point, a manageable series of feasible strategies are designed.
The proposed strategies are evaluated, and the advantages, disadvantages, costs, and benefits are determined.
Furthermore, the strategies used are selected and classified according to their attractiveness.
Design of Strategic Plans
Finally, once we have determined the strategies we are going to use, we proceed to design the strategic plans, which consist of documents that specify how the general objectives proposed will be achieved, that is, how they will implement or execute the strategies formulated.
In the strategic plan, it should be noted:
- What will be the specific objectives that allow reaching the general objectives?
- Which will be the particular strategies or courses of action that will be conducted to reach the objectives.
- What resources are going to be used, and how are they going to be distributed?
- Who will be responsible or responsible for the implementation or execution of the strategies?
- When will the strategy be implemented or executed, and at what time will the results be obtained?
- How much will be the investment required for the implementation or execution of the strategies?
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