Strategic Planning is the management process used to create a long-range plan of how to achieve an ideal end-state or a set of goals often called a vision. This long-range plan is called a Strategic Plan

The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options

 Strategy Formulation

In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization’s strengths and weaknesses, as well as opportunities and threats – SWOT Analysis

Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action

 Strategy Evaluation

Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase. Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective

It allows organizations to be proactive rather than reactive
A strategic plan allows organizations to foresee their future and to prepare accordingly. Through strategic planning, companies can anticipate certain unfavourable scenarios before they happen and take necessary precautions to avoid them. With a strong strategic plan, organizations can be proactive rather than merely reacting to situations as they arise. Being proactive allows organizations to keep up with the ever-changing trends in the market and always stay one step ahead of the competition

It sets up a sense of direction
A strategic plan helps to define the direction in which an organization must travel, and aids in establishing realistic objectives and goals that are in line with the vision and mission charted out for it. A strategic plan offers a much-needed foundation from which an organization can grow, evaluate its success, compensate its employees and establish boundaries for efficient decision-making

It increases operational efficiency
A strategic plan provides management the roadmap to align the organization’s functional activities to achieve set goals. It guides management discussions and decision making in determining resource and budget requirements to accomplish set objectives — thus increasing operational efficiency

It helps to increase market share and profitability
Through a dedicated strategic plan, organizations can get valuable insights on market trends, consumer segments, as well as product and service offerings which may affect their success. An approach that is targeted and well-strategized to turn all sales and marketing efforts into the best possible outcomes can help to increase profitability and market share

 It can make a business more durable
Business is a tumultuous concept. A business may be booming one year and in debt the next. With constantly changing industries and world markets, organizations that lack a strong foundation, focus and foresight will have trouble riding the next wave. According to reports, one of every three companies that are leaders in their industry might not be there in the next five years… but the odds are in favor of those that have a strong strategic plan