Strategic Planning – Why it is essential
A dynamic business climate where organizations are faced with geo-political, social, economic, environmental, and technological changes give cause for effective strategic planning (Zand, 2010). Strategic planning is not about validating the plans of yesterday, but also should include conducting an environmental scan and forecasting into the future how business within a specific sector and globally will continue to evolve (Petrick & Martinelli, 2012).
Executives are encouraged to not only manage the day-to-day business activities, but to also find ways to evaluate the ecosystem and identify threats and opportunities which may impact business plans. Rather than spending most of their efforts solving the business problems of the day, it is important to identify the opportunities of tomorrow. At the same time, it is essential to invest in knowledge or inputs beyond the corporate walls. They must rigorously challenge the assumptions and avoid “group think” which often occurs in organizations insulated from the external ecosystem (Drucker, 1994).
Furthermore, organizations are competing not only domestically, but internationally for access to supply-chain resources, value-chain support, and customers. It therefore becomes critical for not only large organizations, but smaller firms as well to develop business strategies which foster sustainable competitive advantages.
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