What Are Strategic Plans in Business? - Definition & Examples

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  • 0:43 Example of Strategic Planning
  • 1:21 What Strategic Planning Is
  • 2:06 What Strategic Planning Is Not
  • 2:35 Goals, Strategies & Tactics
  • 3:25 Application
  • 3:56 Lesson Summary
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Lesson Transcript
Instructor: Shauna Kelley
Strategic planning is the process of outlining a long-term vision for a company. Learn about the role of strategic planning in business, see its application, and take a quiz on what you've learned.

Strategic Planning Defined

Companies plan every day. From how many employees a retail store might need on a given day to how a Fortune 500 company will invest its profits, Planning is one of the fundamental functions of business. The highest level of planning is developing a strategic plan. Strategic planning is one of the most important functions of a company's leaders. This is the process in which a company's leaders outline its future goals and detail the ways in which they will achieve these goals. Think of it this way: success in business is an on-going journey. A strategic plan is the road map for this journey, highlighting what is coming down the road next and suggesting routes for getting to your goal.

Example of Strategic Planning

Imagine you work for a company that develops software for storing and listening to music on a computer. Having this software was very important to your customers in 2001, and so you have continued to sell and support your product. If you were only planning for the day-to-day operations of your company and not what is occurring in your market, what would happen? Perhaps Apple would recognize that customers want access to all of their music, all of the time, and introduce the iPod. Virtually overnight, your computer-based product would become obsolete, and the company would be in very big trouble because you hadn't created a strategic plan.

What Strategic Planning Is

Each company has different methods of strategic planning. Commonly, a company's leadership assembles once a year to discuss their past successes and their future goals. From this discussion, an outline of what they want to achieve emerges. Sometimes, the strategic plan is extremely formal and hundreds of pages long, and other times, the plan will be informal and take only a few pages.

Regardless of format, however, a company's strategic plan is:

  • Informed about what is happening in their marketplace
  • Long-reaching, usually covering periods of anywhere from three to ten years in the future
  • Detailed, containing specific goals and strategies for meeting these goals
  • Fluid, with the ability to be adapted to new information or sudden changes in the marketplace or economy

What Strategic Planning Is Not

It is also critical to understand that a strategic plan is not:

  • A list of to-do items for a company. Strategic plans contain high-level goals and strategies, leaving the specific to-do items to departments or individual employees.
  • A lofty statement without a plan for implementation, such as 'we will be the best company in the world.'
  • A recap of the past. These plans acknowledge history but are always looking into the future.

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