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A strategic plan is the formal roadmap that describes how a company executes its long term strategy. A plan outlines where an organization is going over the next year or more and how it’s going to get there.

Typically, the plan is organization-wide or focused on a major function such as a division or a department. A strategic plan is a management tool that serves the purpose of helping an organization achieve its goals as it aligns and focuses all the resources, and time of everyone in the organization in the same direction.

Characteristics of a strategic plan are:

• Defines the purpose of a business and it's general direction
• One of it's goals is to communicate the long term company strategy to all staff
• Is usually done by top level management of companies that are serious about growth.
• Helps building the company's competitive advantage.
• Assesses business opportunities
• Specifies and outlines financial requirements for future plans and growth.
• Provides focus and direction to move from plan to action business plan, on the other hand,
• It is also for new business owners who are serious about starting a business
• .Helps plan human resources and various needs on the operational level.
• Provides structure to ideas and helps create an initial plan of action.
• Is critical if funding is required.

 

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The  main components of a strategic plan are:

The following are the main components of any strategic plan that must be understood and looked at one at a time in order to have a complete and effective strategic plan  and direction for your business.

• Strategy and culture: Your organization’s culture is made up of people, processes, experiences, ideas, and attitudes. Your strategy is where your organization is headed, what path it takes, and how it gets there. You can’t have strategy without culture or vice versa. Your culture is like your house, and if it’s not in order, the best strategy in the world can’t take your company anywhere.

• Internal and external: Similar to the strategy and culture framework (previous bullet), you have an internal and external framework. The strategy is external. You gather information from your customers, competitors, industry, and environment to identify your opportunities and threats. Through employee surveys, board assessments, and financial statements, you identify your company’s strengths and weaknesses, which are internal.

• The Balanced Scorecard perspectives: The Balanced Scorecard is a framework used to develop goals and objectives in four areas (instead of departments) financial, customers, internal business processes, and people. The financial, internal business processes, and people areas are internal. The customer area is external.

• Market focus: Growth comes from focusing on your customers and delivering superior value to them consistently year after year. Built into your strategic plan is a market-focus framework because of how critical this is to your organizational growth.


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