Strategic planning that includes business strategy is the integrative part of financial planning of every serious company. Nowadays practice shows that two main approaches: 1) hard formalized approach and 2) flexible not determined one.
Flexible approach allows to adapt elements of the plan to changeable conditions of the market. At the same time the use of hard scheme of strategic plan also can be valuable in some market’s circumstances, especially if the company only begins its business and requires some stability.
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While working out the strategic plan it is recommended to use the following rules:
1. Rules of the aims and tasks. Aims in strategic planning mean the result which should be got in intended period of time. Task in strategic planning means the management decision directed on the achievement of the company’s goals. The basic role of strategic plan is in motivation of aims and tasks whish establish the more important tendencies if the company’s work.
2. Rules of business strategy. They should strengthen relations between the company and environment and should define what kinds of goods it will produce, what technology will be used, where production will be sailed and how to achieve the advantages in comparison with competitors. All these are included in business plan, marketing plan and financial projections.
3. Rules of organized conception. They establish relations and procedures inside the firm.
4. Rules of the basic operative skills. Company will use them in its everyday activity.
The process of strategic planning is the closed cycle with direct (from strategy development to definition of operative goals up to realization and control) and reverse (from account of results of realization to reformulation of the plans) connections.
Development of the strategic plan goes through several stages and occurs in the following sequence:
1. Analysis of the management sphere. Company carries out the research of external and internal spheres of activity. This stage is also called diagnostic one. All strong and weak sides of company’s activity are studied here.
2. Formulation of business aims. The guideposts of company’s activity are put here: mission and general goals.
3. Strategic analysis.
4. Process of economical calculating.
5. Working out the program of actions and composition of the work schedule.
6. Forming of the budget.
7. Monitoring and correction of the plan.
Naturally only time will show the safety of developed strategy and just due diligence also can.
Illustrative business plan samples
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