The strategic plan of a business maps out sectors of operation for profitability and growth.
Strategic planning is a process of defining the business design strategy or direction. It involves understanding and making decisions on allocating its resources to pursue this strategy, including its capital and people.
Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis (Socio-cultural, Technological, Economic, Ecological, and Regulatory factors) and EPISTEL (Environment, Political, Informatic, Social, Technological, Economic and Legal)
Strategic planning is the formal consideration of an organization’s future course. All strategic planning deals with at least one of three key questions:
- “What is my core business?”
- “Who are my customers/clients?”
- “How does the business make a profit?”
There are four other components of a strategic plan that also guides operations:
Vision: Defines the desired or intended future state of a business, organization or enterprise in terms of its fundamental objective and/or strategic direction.
Mission: Defines the fundamental purpose of a business, organization or enterprise, basically describing why it exists. A mission statement can be simple or elaborate, but it should concisely represent why the business exist.
Values: Defines the beliefs that are shared among the stakeholders of a business, enterprise, or an organization. Values drive the organization’s culture and priorities.
Ethics: Defines the principals behind how a business, enterprise, or organization does business. An ethics statement may be enfolded in a values statement, but oftentimes it is not.