Strategic planning Essay
Describe the strategy you would follow and explain the link between tactical decisions and strategy? (Strategy LO 3 & SS Organisation & Time Management LO 1 & LO 3) Before I detail what strategy I would follow in operating my business I will first go into some detail about what both each strategic and tactical planning are. I will also provide a conclusion which will detail the link between the two.
A definition of strategic planning that I think defines it well comes from a book by William Glueck, called Business Policy – Strategic Formation & Management Action. Glueck states that strategic planning is: “That set of decisions and actions which leads to the development of an effective strategy”
Strategic planning is a management tool for organizing the present on the basis of the projections of the desired future. A strategic plan is a road map to lead a business from where it is now to where it would like to be in five or ten years. Strategic planning allows a business to plan a course of action that is dynamic and able to react to the current situation of the business and the market in which it functions. To show you what I mean, if we look at the firms that operate in the airline industry, they could never have predicted the events of September 11th. Because of this, their strategy would have immediately changed. This might have been from making a profit to survival.
Strategic planning could benefit a business by allowing it to be able to respond to seen or unseen, changes within their environment. This might be a new competitor that has entered the same market or an unpredictable change such as a natural disaster. In today’s business world it may not be enough anymore to rely on predictions when planning the long term future of a business as circumstances could change over a very short period of time. This would make a long term business plan unworkable. Strategic planning enables a business to determine its long term goals and also to identify the best approach for realizing those goals.
Strategic planning can benefit businesses at all different times. For example, at the beginning of a businesses lifecycle, when it’s still starting up, a detailed strategic plan may help it to gain investment. This is because if the business was to show that it has planned where it wants to go i.e. target markets, and then also how it plans to get there, it may prove to be more appealing to a potential investor. Also, if the company is at the mid-point of its life cycle, in that it’s up and running and progressing, then strategic planning can allow a business to inform stakeholders, especially employees, exactly where it is planning to go and how it intends to get there. Most people perform better if they know what is expected and where the business is going. It can provide a strong incentive for the employees to achieve company objectives.
Strategic planning can provide a basis for measuring performance. This allows a business to keep an eye on where it’s going and how well it performs along the way. This can prove to be essential when forming future strategic plans as it provides a foundation upon which to set future objectives. Strategic planning reveals and clarifies future opportunities and threats. This is a big benefit of strategic planning to a business.
Here is nice definition of what tactical planning is as given by www.businessdictionary.com “A systematic determination and scheduling of the immediate or short-term activities required in achieving the objectives of strategic planning.” Tactical planning is all about how to get things done. It focuses on operations which involves creating an effective action plan. Tactical planning is the process of taking the strategic plan and breaking it down into specific, short term actions and plans. The relative length of the planning horizon will differ from one market to another but in general the strategic plan will cover a period greater than three years while the tactical plan covers the period from today through to the end of year three.
As the definition says, the point of tactical planning is to reach the goals and objectives of the strategic plan. However, markets and the business environment can very quickly change. When this happens, it is best for a business to have another look at how tactics are performing against stated goals and to make some changes to the tactics if necessary.
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Strategic planning refers to the whole picture with the importance on the long term goals and objectives, usually from around a few years to five. However, tactical planning deals with the short term goals usually aimed at anything from a month to three years. Strategic planning looks at what and why whereas tactical refers to the how. When we talk about a strategic approach we generally look at the plans which involve the guiding principles of a business and its goals including the mission and vision.
To give a better understanding of how both the strategic and tactical planning are linked, I will provide an example. A tactical plan lays out the procedures and plans for getting close to the defined strategy. An example would be the strategic plan is to become a market leader in men’s designer clothes. The tactical plan might include hiring a top male corporate as the brand ambassador for the collection, setting up the retail store in the city, and offering special discounts for certain corporate customers. Ways to monitor staff performance There are a variety of different methods that a business could implement in monitoring its staff. I will now go into detail about some of the ways I feel are the best for monitoring staff performance.