Strategic planning plays a key role in business management across functional areas. Strategic planning is an integral part of creating a company’s vision, goals and initiatives. It underlies the breadth of managerial practices, informing decision-making, problem-solving and planning for growth.
Reflecting this, the University of North Carolina at Pembroke (UNCP) online Master of Business Administration (MBA) program culminates with a capstone course on strategic planning. The capstone integrates strategic planning with subjects like international business, marketing and leadership. This programmatic emphasis on strategic planning prepares organizational leaders to effectively manage challenges and opportunities to drive business success.
What Does Strategic Planning Mean?
Indeed describes strategic planning as the “collective roadmap” of an organization, defining strategic planning as follows: “a process used by organizations to identify their goals, the strategies necessary to accomplish those goals and the internal performance management system used to monitor and evaluate progress.”
Strategic planning involves evaluating and analyzing an organization’s performance and areas for improvement or growth prospects. Strategic planning also anticipates potential challenges or threats as well as possible opportunities. This type of organizational evaluation is often referred to as a SWOT (strengths, weaknesses, opportunities and threats) analysis.
A business may also perform a more targeted gap analysis. According to TechTarget, a gap analysis assesses “the space between ‘where we are’ as a part of the business (the present state) and ‘where we want to be’ (the target state or desired state).”
Organizations use information gained from such analyses to establish goals and objectives for change (growth, diversification, optimizing performance, etc.). Professionals formulate strategies detailing the actions needed to affect change and achieve objectives. They use these insights to implement a plan, including how to measure performance, progress and timelines for benchmarks and incremental objective achievement.
Strategic planning may be high-level, defining and working to achieve an organization’s vision, mission and overarching goals. Or, strategic planning may be focused on driving organizational change in specific areas. Strategic planning is also a central component of individual organizational processes, be it marketing, supply chain management or human resources (HR).
Importantly, strategic planning at any level should ensure all business processes are aligned with the organization’s overall strategic goals and vision. The intent is for all employees, departments and other stakeholders to work together to achieve that vision in actionable and measurable ways.
What Is the Role of Strategic Planning in Overcoming Business Challenges?
Considering potential threats in terms of competition, disruption, uncertainty and other factors is an important part of strategic planning. Well-developed plans will have strategies to help management address problems quickly and adeptly. For instance, the COVID-19 pandemic has highlighted the fragile nature of global supply chains. Therefore, strategic planning in the supply chain management sector should focus on remediating current inefficiencies and lowering costs while proactively mitigating the effects of potential supply chain disruptions.
UNCP’s elective courses on supply chain and logistics management focus on all aspects of planning, design and control of supply chains. This coursework involves planning for resiliency in production, sourcing, transportation, warehousing and inventory management.
Supply chain managers must strategically balance cost- and time-effective operations with agility and risk/disruption management. Strategic actions like diversifying sourcing, securing backup suppliers and transportation and warehousing buffer inventory can help mitigate disruption. These tactics are essential for maintaining continuity in supply, production cycle timeframe and long-term customer relationships. However, they can also add cost, so careful planning, measurement and monitoring are crucial.
Similarly, strategic planning in HR addresses potential staffing shortages. Talent acquisition plans build talent pipelines for potential high-level position vacancies or developing leadership roles. Effective recruiting strategies ensure current vacancies are filled quickly with qualified candidates.
These strategic planning tactics are both preventative and proactive. They help professionals avoid challenges and provide rapid solutions and action plans for emerging problems.
How Does Strategic Planning Support a Business’ Growth?
As Balanced Scorecard Institute notes, strategic planning at any level is intentionally developed “with a focus on the future.” Strategic planning identifies growth and competitive advantage opportunities, defines goals for growth and sets out a roadmap for achieving and measuring that growth.
This process represents the goal-oriented side of strategic planning, focused on achieving an organization’s vision through accomplishing specific objectives. Organizations that fail to plan for growth in measurable ways can stagnate and lose their competitive advantage in rapidly changing business environments.
Strategic planning is a fundamental part of effective management. The in-depth study of strategic planning can help business leaders effectively incorporate it into organization-wide practice. Through intentional, disciplined strategic planning, managers and employees at all levels can tackle challenges head-on and work to achieve the same vision and goals.
Learn more about UNCP’s online MBA program.
Have a question or concern about this article? Please contact us.