Strategic Business Planning Definition

Every organization needs a plan, and it is the manager's role to be both the plan's creator and strategist. Managers must constantly evaluate the needs of their customers, as well as conducting some form of strategic planning in order to fulfill those needs.

Planning

You create goals and strategies during the planning process. In "Contemporary Management," Gareth R. Jones and Jennifer M. George define planning as "identifying and selecting appropriate goals and courses of action." Strategy is defined as a "cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals." Specific strategies are used to help attain goals.

Three steps of planning exist. First, you must determine the organization's mission and goals. You do this by defining the business and establishing major milestones. Secondly, you formulate a strategy. You analyze the current situation and develop strategies that correspond to it. Thirdly, you implement the strategy. You allocate resources and responsibilities to achieve those strategies.

Mission Statement

A mission statement occurs during the initial planning stage of determining the organization's mission and goals. A mission statement shows how an organization is unique and important to employees and customers. Furthermore, it distinguishes and differentiates the organization from competitors. A mission statement is brief. According to Forbes.com, Volvo has a mission statement of 130 words.

Reasons for Planning

Planning gives an organization a sense of direction and purpose. Planning is a useful way of getting managers to participate in decision making about the appropriate goals and strategies for an organization. By allowing managers to contribute to the planning process, they are more likely to accept it. A plan also helps align people at various levels to reach an organizational goal. It can be used as a way to control managers and other employees.

Levels of Planning

There are three hierarchical levels in planning: upper-level, middle-level and lower-level management. Upper-level planning takes into account the mission, overall strategy and organizational structure. Business-level planning focuses on a division's goals, strategy and structure. Functional-level planning pursues goals that help the overall business-level goals.

SWOT Analysis

SWOT analysis is a popular strategic planning tool managers use. It evaluates strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internal to the organizations. Opportunities and threats are external conditions. To conduct a SWOT analysis, create a list pertaining to your organization beneath each of the four points.

References

• Contemporary Management; Gareth R. Jones and Jennifer M. George; 2008
• Forbes.com: "Mission Statement" Words

Resources

• Mind Tools: SWOT Analysis
• Mind Tools: Mission and Vision Statement