A strategic plan is a “big picture” roadmap that businesses develop and use to keep executives, senior managers and front-line personnel focused on the company’s vision of success, growth objectives and metrics for measuring progress.
Unlike a business plan — a step-by-step proposal for launching an enterprise — a strategic plan reflects leadership’s view of where they want the company to be at a fixed point in the future. It’s not unusual for a business to revisit its strategic plan every three to five years to adjust for new product launches and changes in economic, competitive and regulatory landscapes.
A key benefit to developing an effective long-range plan is mitigating risks associated with growth, such as insufficient capital or funding to meet increasing costs, unanticipated competition, decreased efficiency as the workforce expands and human resources challenges.
The Alternative Board (TAB), a strategic planning consultant, recommends executives focus on five areas when developing their companies’ long-range plans:
- Focus and direction
- Operational efficiency
- Competitive environment
- Employee morale
- Stability and longevity
“Operating without a strategic plan is like sitting in the passenger seat of your own business,” TAB says, adding: “Eventually … you helplessly watch as it swerves aimlessly or, worse, crashes and burns.”
In a Master of Business Administration (MBA) program, business professionals can learn about strategic planning and how to apply these concepts to benefit their organizations.
Short-Term Planning and Long-Range Strategy
A short-term project-management strategy, for instance, begins by setting metrics for success, including mile markers to ensure work is on the timeline to meet its end date. Strict time management is critical to short-term strategy success, whereas planning for long-range success is less constrained.
Projects also operate on short-term budgets, putting extraordinary pressure on planners to assemble the right talent into a team that manages resources and assets most efficiently.
Overall, a long-run business plan comprises short-term strategies leaders initiate to keep the company on track to meet its long-range operational efficiencies, productivity, budget, marketing and innovation goals.
How Do Companies Tailor Strategic Plans to Long-Term Objectives?
SmartBiz identifies seven types of business strategies and explains when and why each should be used depending on needs and objectives. Those strategy models include:
- Structuralist strategies concentrate on structuring business operations around existing market conditions and using externally established processes. For example, a business might follow vendors’ practices to acquire materials instead of innovating their own.
- Differentiation strategies enable businesses with a unique, first-to-market offering to set the standard for the customer experience. Companies that set their products or services apart from the competition have a significant advantage in customer acquisition, retention and loyalty.
- Cost leadership is a strategy that enables businesses with highly efficient internal and sourcing processes to reduce the prices of their goods or services. While not recession-proof, cost-leadership companies appeal to budget-minded customers, giving a better-than-average chance of surviving economic downturns.
“Strategy decisions will guide your business in the direction you’re working towards. With so many ways to go, it’s important to keep your vision top of mind,” according to the small-business lender.
How Do Business Professionals Prepare for Strategy Leadership Roles?
The online MBA program offered by Northern Kentucky University (NKU) allows students to enrich a general MBA core curriculum with industry-specific studies that prepare them for key executive and senior management roles.
Core courses that immerse students in strategic planning include:
- Strategies for High Performing Organizations introduces methods for analyzing, deploying and evaluating enterprise strategy comprising financing, human resources, R&D, marketing, distribution and customer service operations.
- Intro to Info Systems in Organizations studies the networks and processes that manage the collection, organization, analysis and distribution of data, the backbone of all business operations, decision-making and resource management.
Courses related to strategic planning in the MBA stacks include:
- Marketing Strategy explains how to build, maintain and grow market positions. (Marketing stack)
- Strategic Sourcing highlights how to improve supply chain efficiency and sustainability. The course provides an overview of strategic sourcing concepts, techniques and relevant strategies supporting global supply chain optimization. (Global Supply Chain Management stack)
- Strategic Planning in Health Services explores how successful strategic and marketing planning evaluates community desires to meet their needs. (Health Care Administration stack)
- Planning and Managing a Project for Success emphasizes team building, motivation and ethics. (Project Management stack)
Students who complete NKU’s online MBA program will learn how to apply strategic plans to suit their needs and help their businesses thrive.
Learn more about NKU’s online MBA program.
