Components of a Corporate Strategic Plan

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A corporate strategic plan is a document that describes the steps necessary for an organization to grow and become more profitable. The benefits of strategic planning include making sure all members of an organization are working toward common objectives, and that the corporation's resources---financial and human---are allocated as efficiently as possible.

Mission Statement

  • A mission statement explains why the company is in business, and what value it intends to provide its customers, its employees, its stakeholders and even society. The mission statement may not change from year to year. Though sometimes only a paragraph, it often requires lengthy discussion among the executives participating in the planning process, who may view the company and its objectives differently.

Analysis of current situation

  • In the analysis of where a company stands, these questions are commonly asked: Where are we now in relation to our long-range goals? What are our strengths and weaknesses versus our competitors? What are we doing well and where are we falling short?

    Current situation also includes the economic and industry environment and how these may impact the organization. A strategic plan for a company that is operating in a recession, or in an industry that is stagnant, would look much different than one for a company in a booming industry.

Vision for the future

  • The company's vision is is sometimes referred to as defining the ideal. Corporate executives try to imagine how the company could look three to five years in the future, assuming everything goes according to plan. What will the revenues be? Pretax income? Will we be seen as the leader in our industry?

    The difficult task for the management team is to come up with a vision that is both aggressive and realistic. It must challenge the capabilities of all members of the organization without being so optimistic that it could not possibly be realized.

    The strategic planning process then becomes a matter of bridging the gulf between the current situation and the ideal.

Goals or Objectives

  • The most important goals and objectives are usually set first, such as revenue growth for the next three to five years. But since reaching the larger goals is the result of achieving smaller, incremental goals, these must be carefully thought out as well. Goals are set for each division or department. It is critical that the top executives involve all the division or department heads in the process. Managers who are involved are more likely to endorse the strategic plan and work energetically toward its achievement.

Strategies and Tactics

  • Goals paint a picture of future success, but strategies and tactics are the specific steps that must be taken to achieve the goals. They are action oriented. Strategies say what the company intends to do, such as "enter educational market in 2010." Tactics are how the strategy will be implemented, "direct mail campaign to schools." Specific responsibility for their achievement is assigned to members of the management team, as well as a time line for each to be completed.

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References

  • Applied Strategic Planning: An Introduction; Timothy N. Nolan , Leonard D. Goodstein, Jeanette Goodstein; 2008
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