Strategy can be perceived as a plan of actions that is formulated to attain a particular goal. In many organisations, strategic planning aids in achieving many objectives. Strategy is viewed as a form of attaining a position of advantage over rivalries. In the business environment, there is always uncertainty about the future but strategy is based on a set of options. In organisations, strategic planning is also considered significant because it facilitates growth and success. It is the primary goal of majority of the organisations to realise growth especially within the competitive market. The managers outline plans to take action in order to improve the productivity of an organisation. Still, strategic plans provide companies with the equipment to follow up the growth of the organisation. These strategies also develop a budget and prepare future changes within the market. Therefore, businesses develop plans that also cater for their long-term objectives. Strategic planning involves various elements that can be employed to attract funding and manage firm objectives. Commonly, firms require sufficient funds to cater for short-term and long-term objectives. It is clear that these organisations require resources that facilitate growth and success. Currently, information technology has highly embraced within the organisations. These organisations develop strategic plans in order to develop and implement technology. These strategic plans have elements that facilitate the expansion of technology in the company (Tracy, 2000 p 1112).
Get a price quote
Business strategies are developed by the companies that have already defined their objectives. These companies should also perform an intense research in order to understand the market trends. Companies develop and implement strategies that aid in overcoming the competitive market. As stated earlier, organisations should perform an intense research on the industry trends in order to learn about the market requirements. Commonly, organisations seek to attract consumers in order to sustain their effectiveness. Their primary goal is to avoid economic stagnancy. Majority of these organisations strive at achieving economic growth and accomplishment. It is clear that strategic planning illustrates the current situation of the organisation and the direction it is anticipated to pursue. Basically, strategic plan for a business braces the objectives of an organisation with the demands of the competitive market. It defines the organisation’s goals and exploits these goals to take advantage of business opportunities. Every company has strengths and weaknesses, thus it is important to analyse them in order to meet the industry demands. Developing a strategic plan involves intense research and consideration of numerous entities in the organisation. The organisation should initially perform a research on the market place (Allison & Kaye, 2005 pp. 456-458). It should understand the demands of the industry and come up with a plan that would aid in handling them. The market is experiencing innovative products and services daily, thus the companies should be highly dynamic. Strategic plan is significant since it enables an organisation to focus on a particular position within the market place. It focuses on a market that enhances the effectiveness of sales, customer management and advertising. Organisations strive at building their names within the market to attract and sustain their customers. These organisations require a strategic plan that highly caters for the needs of the customers. Therefore, these organisations should regularly perform research concerning their customers` needs. Based on the numerous changes within the market, the customers` preferences keep evolving (Gaggl & Grunig, 2011, p 90).
Struggling with your essay?
Ask professionals to help you?
Moreover, organisations get to learn about the gaps in the industry and take advantage of them for business purposes. Strategic plan within the organisation plays a major role in aiding the organisations offer improved and more targeted services to the customers. Satisfying the customers` needs is one the main objectives of the organisations. High competition among the organisations occurs in the attraction of consumers. Strategic plan requires wide-ranging research on the market place, competitors, and the industry trends. The organisations need to understand the elements of the market in order develop plans of taking its position. Still, there are many competitors within the market that a particular organisation should recognize. The organisation should perform an intense analysis of the competitors in order to understand their strengths and weaknesses. The organisation should get to understand the cause of the effectiveness of the competitors’ production. Strategic plan involves various elements of a traditional plan like marketing analysis, financial statements, and executive summary. The development of a strategic plan is vital because it provides specific direction of achieving the organisation goals. Strategic plan should be there to create the direction that the company should take in handling a particular situation. In an instance, a strategic plan would attempt to recognize a certain target market that is suitable for the organisation. The strategic plan will narrow it down to a controllable size and develop a strategy for gaining the customers. The primary goal of organisations when identifying a market place is acquiring the attention of the localconsumers. It strives at dominating the market place by attracting majority of the consumers (Smith, 2011, pp. 896-897). The organisation should also get to understand whether its products are highly required within a particular location. Organisations should target markets that have a high demand for their products. Strategic planning is significant because it provides rational decisions that direct the organisation appropriately. Through strategic planning, the organisations get to identify target markets that are convenient for their business transactions. Studying the market needs commonly involves understanding the customers` demands. Developing strategic plan within an organisation is significant because it illustrates the achievement of organisation`s milestones. There are numerous long-term objectives that all organisations strive to achieve. These objectives are achieved through rational planning that illustrates various methods of completion. Strategic planning offers organized techniques of achieving the organisation goals. Majority of the executive managers within an organisation make effort in understanding the company and eventually become experts within the industry. Rational planning when developing a strategy enables the executives to comprehend the current position of the company and the direction it is headed. During rational planning, the executives scrutinise the past performance of the organisation and develop strategy to develop changes that improve the growth of the company (Burkhart & Reuss, 2000 p. 990).
Strategic plan is perceived as a tool that keeps an organisation on the appropriate track. Every organisation strives at keeping track in order to achieve economic growth and success. Moreover, strategic plan aids the organisation in achieving its financial objectives. Organisations develop strategic plans that aid them in maximizing their profits. Companies experience financial loses that cause detrimental effects to the productivity. Companies create financial objectives that they strive at achieving in order to sustain their economic effectiveness. Strategic plan helps the executive members organise the allocation of resources within the organisation. These organisations should invest on resources and scrutinise the return rate. Through strategic planning, executives make decisions on the resources required within the organisations and ways of maximising the return rate. Majority of the small businesses fail to develop strategic plans because they feel that they are only required by large organisations (Lipman, 2008, p. 678). Rational planning is also vital for small businesses because they require strategies that facilitate growth and success. Small businesses should highly depend on strategic plan in order to develop into large companies. These small businesses also require attracting and sustaining their customers. They need rational planning that would develop a strategy of identifying target market and gaining adequate customers. Therefore, strategic planning is as important to small businesses as it is to the huge companies. It is clear that rational planning helps the executives within the organisation make significant decisions. Systematic rational thinking gives the executives an opportunity to make decisions that solve challenges and other vital issues facing the organisation. Organisations have proved that strategic planning facilitates improved performance that lasts for numerous years. Commonly, strategic planning is employed by the organisations to cater for transactions that are expected to improve the future effectiveness. In other words, strategic planning is highly efficient for developing and implementing long-term goals (Duncan, 2000. p78).
Certain organisations have proven through tough experience that rational planning in pursuit of strategies is vital for the elevation of productivity. It is important that the executives understand the direction of the company in order to make effective changes. In order to inhibit stagnation, organisations need to track the progress through strategic planning. Generally, organisations require numerous processes and transactions in order to improve their performance but rational planning is highly significant. Rational planning caters for the organisation of all the transaction within the organisation. In organisations, performance builds value for the initial beneficiaries. Clearly, the working team of the organisation also benefits from its credible performance (Daniell, 2005, p 567). Rational planning boosts the employees` concentration on value creation and they cease focusing on building self interest. Strategic planning enables the employees work together efficiently for the company`s growth and success. It is clear that rational planning among the organisation demands certain procedures. Rational planning should be well documented and precisely communicated in order to avoid any omission. Initially, there should be intense cooperation and commitment among people that are affected by the plan. The executives and other supporting managers within the organisation are highly needed for the planning and implementation of the strategic plan. The executive leader of the company should control the governing body, which in turn engages the other groups within the organisation. An organisation holds a hierarchical form of leadership and all employees are affected by the strategic planning. Therefore, there should be great cooperation among people working within an organisation in the implementation of strategic plans. Still, organisations should create long-term rational objectives for advanced performance of the company. Set objectives demonstrate the purpose of the company. It should be clear what the privilege the company seeks to offer the working group (Harvard business school press. 2006, p 456).
Formal rational planning requires evaluation of the major strategic factors. It is important to shortlist the main strategic issues and the invention of alternative strategies. During rational planning, comprehensive strategies that cater for all the significant factors within the organisation should be developed. The developed strategies should not exploit all the resources in the organisation. The alternative strategies that are invented develop and improve the adaptability of an organisation. Therefore, these alternatives should be thoroughly examined to determine their effectiveness. The company may experience environmental changes that will demand efficient alternative strategies. Still, rational planning involves evaluation and deciding on the strategies. Competitive rational planning employs systematic ways of analysing various strategies. These strategies are evaluated to guarantee that they avoid contravening any constraints. These strategies should complement the structure of the organisation appropriately. The executives should gauge the strategic alternatives against the objectives. Therefore, the chief strategic matters should be intensely addressed during rational planning. The major strategies are designed according to the major decisions made. The executives should follow up with the execution of the strategies against the long-term goals. In order to execute the strategic plan, developed during rational planning, the company needs a system in place for carrying out the plans during implementation. Formal reporting at particular intervals is very significant. It is important to facilitate the corrective action through the monitoring system that should address similar objectives as those considered important by the rational planning system. Commonly, there is disengagement amid the strategic plan and its actual management. These strategic plans should be implemented according to the description of the rational planning process. The strategic planning process should be intensely performed by following the essential procedures to ensure that the executives make rational decisions. The the company`s performance also depends on the decisions that are made by the high rank individuals. The decisions made determine the company`s direction. In pursuit of effective strategies, the executives should engage rational planning. It is obvious that strategic plans are highly required for the performance of the organisation. As stated earlier, strategic plans provide the executives with an opportunity to make rational decisions that facilitate the growth of the company (Hawkey, 2002, p 987).
Generally, developing business strategies through rational planning is considered a pragmatic method that organisations employ to make rational decisions for the future. Clearly, rational planning enables the executives make informed decisions and choices which are made after thorough analysis. These decisions develop future directions and priorities that benefit the organisations. Through rational planning, organisations are able to allocate minimum resources, upgrade operations, and track the results. There are numerous transactions within the company that demand the organised resources allocation. These transactions should be intensely monitored to evaluate the consequences of the actions. Business transactions within an organisation should be highly authentic to avoid financial crises. In an instance, the cases of embezzlement in the organisations contribute to bankruptcy. The rational planning process develops a mutual understanding of the organisation’s overall purpose and direction. It is important when the executives realise the current situation of an organisation in order to make modifications. The employees also get to understand the importance of their contribution towards the organisation. They facilitate the growth and success of the organisation through their roles. The precision of purpose augments the organisation’s capability to recognise and focus the transactions that are significant. Strategic plans solely cater for the factors that vital for the development of the organisation. Therefore, organisations should be concerned with business transactions that effectively contribute to their performance. Rational planning also improves the strategic skills among the employees. Strategic skills are highly significant among the employees because they handle issues appropriately in the organisation. Organisations are faced with challenges when introduced to environmental changes. The employees should have skills that enable them to handle environmental changes. These skills boost creativity among the employees. The employees should be in a position to solve crises professionally and tactically in the organisation (Webster, 2011, p 980).
Commonly, employees experience challenges that emanate from their colleagues and the business transactions. It is important to learn ways of strategically solving conflicting matters within the organisation to avoid predicaments. Rational planning allows the companies to assess and develop their values, mission, and vision statements. These companies create strategies based on the market, competition, and macro-environment evaluation. Rational planning illustrates the organisation’s plan towards competition. Organisations develop various ways of handling the competition in the market. The strategy should develop and sustain a competitive advantage in the market. Clearly, the organisations seek for business opportunities that they exploit to maximise on profits. Still, strategies demonstrate the organisation’s market and capacity. Organisations should develop strategies and implement them in order to establish a business framework that outlines the goals, measures, activities, and key objectives. Intense analysis of strategic plans of an organisation in a participatory way contributes to insights from all the stages and optimises implementation. Basically, it is significant to accomplish each stage that is required in a rational planning. During rational planning, the organisation gets the opportunity to analyse the external setting. The external environment also involves competitors, technology, labor markets, and supplier markets that have a significant impact on the performance of the organisations. Commonly, external evaluation focuses on consumers. The executive leaders should develop customer strategy and should consider the environmental modifications (Microsave, 2012, p. 345).
Organisations compete amongst themselves for the popularity of their products among the consumers. Still, the organisations scrutinise the changes that occur in the market and implement strategies in order to adapt. It is also important to perform an evaluation of the internal environment. The structure of the organisation contributes greatly to the direction of the organisation. The efficiency of the employees when performing transactions within the organisation facilitates the growth and success of the organisation. The rational planning process also involves steps such as setting company objectives, creating strategies, and developing techniques for controlling and monitoring activities within the organisations. Initially, effective rational planning should initiate with an authentic and reasonable assessment of the current position of the organisation. The evaluation of the position of the organisation should be honest in order to get effective alternative strategies. The executives of the organisation should solely strive at attaining the growth of the company and the privileges it offers to the working team. In the situational analysis, there are various rational planning tools and techniques which aid in formulating the entire analysis. Situational analysis in an organisation is vital because it helps in identifying the opportunities to track. There are numerous opportunities within the market and the organisations seek them out for advantageous purposes. The situational analysis also facilitates the auditing of the internal resources within the organisation. It provides a chance for the performance of SWOT analysis that illustrates the strengths, weaknesses, opportunities, and threats within an organisation. SWOT analysis illustrates the strengths of the organisation that boost its performance. It also illustrates the various methods of resolving its weaknesses and the threats. The SWOT analysis describes the exploitation of business opportunities by the organisations. Therefore, rational planning involves numerous transactions in order to facilitate the growth of the organisation. As stated earlier, rational planning is significant for development of effective strategies. Executives should depend on rational planning when making decisions that affect the productivity of an organisation. Following the establishment of the current position of an organisation, the executives should be concerned with the next step that determines its future (Fahey & Narayman, 2003. p789).
There are certain business analysis procedures that are employed in strategic planning such as STEER analysis, PEST analysis, and SWOT analysis. As stated earlier, rational planning is basically performing an evaluation on the performance an organisation. Organisations encounter changes within the environment that affect their effectiveness. The executives should perform an analysis in order to understand the effects of environmental changes to the organisation. The executive leaders of the organisations are expected to develop strategic skills of managing the environmental changes. The successful and maintainable transformational attempts demand that the leaders should be in a position to manage changes. In order to manage changes, the executive leaders should initially understand the ways of developing a compelling vision that inspires other people within the organisation. Enthusiasm among the employees and other managers within the organisation require motivation in order to work efficiently. Employees derive inspiration from their executive leaders who should regularly reward their efforts. It is also important that the executive leaders sustain a healthy communication with the stakeholders. The leaders should learn to understand the stakeholders and communicate with them consistently. They should have strategic skills that enable them handle the resistance that arises due to changes that occur within the organisation. In organisations, there are varying ranks of support that are developed due to changes. Clearly, people in the organisations embrace changes differently because there are those who resist and those who accept them. Generally, strategic planning is very significant to the business environment. Rational planning offers decisions that create objectives and ways of achieving them. The key goal of rational planning is to elevate specificity in business transactions. When formulating a strategic plan the organisations should develop it in a manner that is simply adaptable into action plans. Commonly, strategic plans deal with high level schemes and overarching goals. The rational strategies are not translated into the daily activities that would be needed to attain the plan. The strategic plans are incorporated in the activities that facilitate the achievement of long-term objectives. There are numerous theories concerning the origin of rational planning within organisations, such as the development of mission statement. The mission statement illustrates future position that the executives would want to take in the organisation. The mission statement offers a structure for the rational planning process. The SWOT analysis is a technique that is also integrated with the rational planning theories. As stated earlier, the SWOT analysis enables the executive leaders understand the strengths, weaknesses, opportunities, and threats within the organisation. The organisations maximise their efforts on the strengths and invent ways of handling the weaknesses. These factors have a significant effect on the strategic plans of an organisation (Kleiner, 2009, p. 78).
Moreover, the PEST analysis evaluates the economic, political, social, and technological factors that affect the organisations. These analyses are also incorporated in the strategic planning theories. Primarily, rational planning begins as a conceptual vision that is established in the upper echelons of a company. The strategy that emanates through rational planning is dispersed for implementation by the managers. Strategies within an organisation are executed through the establishment of particular policies and procedures formulated to meet the goals formed by the executive leaders. The executive leaders employ the strategies to realise the goals of the organisation because they are rational. The SMART goal technique encourages the executive leaders to create goals which are inherently strategic, measurable, pertinent and rationally achievable the organisation’s mission. The organisation should develop a time line for the implementation of these goals. Developing strategies within an organisation depends on the intensity of the rational planning. Rational planning should involve extreme research that should contain a wide range of information regarding important issues in the company. Rational planning offers an organisation the opportunity to define its strategy for achieving its goals. Therefore, strategies require rational planning to facilitate effectiveness within the organisation (Scott, 2011. p 456).