View Larger Image Advantages and Disadvantages of PESTLE Analysis In this ever-changing, highly complex and competitive global business environment, the organizations and the managers are facing enormous challenges and paying much more attention on strategic planning and analysis. Strategic planning tools and analysis help organizations to identify key elements affecting the environment as well as performance and growth of the organization.
Meaning, Importance and Limitation Article shared by: After reading this article you will learn about: Meaning of Strategic Planning 2. Features of Strategic Planning 3.
Meaning of Strategic Planning: Strategic planning means planning for making and implementing strategies to achieve organisational goals. It starts by asking oneself simple questions like: What are we doing, should we continue to do it or change our product line or the way of working, what is the impact of social, political, technological and other environmental factors on our operations, are we prepared to accept these changes etc.
Strategic planning helps in knowing where we are and where we want to go so that environmental threats and opportunities can be exploited, given the strengths and weaknesses of the organisation.
Strategic planning is based on extensive environmental scanning. It is a projection into environmental threats and opportunities and an effort to match them with organisational strengths and weaknesses.
Strategic planning is done to comprehend, anticipate and absorb environmental vagaries. It is a continuous process. Every time business organisations want to increase the growth rate or change their operations, desire for better management information system, co-ordinate activities of different departments, remove complacency from organisations; they make strategic plans.
Features of Strategic Planning: The following are the salient features of strategic planning: It answers questions like where we are and where we want to go, what we are and what we want to be.
It aims at long-term planning, keeping in view the environmental opportunities.
It helps organisations analyse their strengths and weaknesses and adapt to the environment. Managers should be farsighted to make strategic planning meaningful. It is done for all organisations, at all levels; nevertheless, it involves top executives more than middle or lower-level managers since top executives envision the future through scientific techniques of forecasting.
It reallocates resources from non-priority to priority sectors. Strategic planning is a continuous process that enables organisations to adapt to the changing, dynamic environment.
Importance of Strategic Planning: Strategic planning offers the following benefits: Firms that make strategic plans have good sales, low costs, high EPS earnings per share and high profits. Firms have financial benefits if they make strategic plans.
Guide to organisational activities: Strategic planning guides members towards organisational goals. It unifies organisational activities and efforts towards the long-term goals. It guides members to become what they want to become and do what they want to do.
It focuses on specific goals making it clear for members to know the direction towards which they have to move. Allocation of resources and attempts to meet the goals is facilitated through clear specifications in strategic planning.
It makes the objectives operational and provides right direction to organisational activities.Regardless, it is important to ensure that the implementation of a strategic management process is consistent with the needs of the organization, and that appropriate controls are implemented to allow the cost/benefit discussion to be undertaken, prior to the implementation of a strategic management process.
What Are Some Disadvantages of Strategic Management? by Sam Ashe-Edmunds - Updated September 26, Strategic management is a long-term approach to growing a business, requiring careful planning that sets both macro and micro goals for a company.
The possible benefits and restrictions are analyzed as following through the execution of internal and external strategic direction. The ultimate end of scheme is to make value for the house, while the function of scheme analysis is to place and work the beginnings of this value.
Strategic planning requires huge amount of time, money and energy.
Managers may be constrained by these considerations in making effective strategic plans. These limitations are by and large, conceptual and can be overcome through rational, systematic and scientific planning. Advantages of Strategic Management Process: The process of strategic management is a comprehensive collection of different types of continuous activities and also the processes which are used in the organization.
The strategic management is a way to transform the existing static plan in a proper systematic process. The potential benefits and limitations are analyzed as following through the implementation of internal and external strategic management. The ultimate goal of strategy is to create value for the firm, while the role of strategy analysis is to identify and exploit the sources of this value.