Importance of strategic Planning

Importance of strategic excogitationningThe following report is on the Importance of Planning and the main differences between in operation(p) and Strategic Planning. The writer has discussed the relevance of Planning from the point of view of a handicraft along with the two main types of projectning, working(a) planning and Strategic planning. He has also thrown some light on the difference between Operational and Strategic planning.The writer has referred and drawn ideas from online materials, articles, journals, and text books and would like to thank the authors and publishers and all the experts whose ideas works have helped me with this report. Special gratitude ex goded to Mr. Dele Amusan, Lecturer, College of Technology London, for guiding students with the topics and also to Dr. Leslie Roberts, Lecturer, College of Technology London, for the assistance she provided regarding referencing. newsManagement is effective utilisation of available resources, which includes huma n resources, finances and as embeds for the attainment of a particular objective. Management consists of five main steps or in other words functions Planning, Organising, Staffing, Directing and Controlling. (Higgins, 1994)Planning harmonise to the writer cannister be called the primary function of management as it is the foremost step to be taken in management. Planning as J. Higgins says is continuous course of achieve of developing tasks and objectives and determining the course for their attainment. (Higgins, 1994)Planning is the preparation of a series of carry through steps to realize a particular objective or purpose. Effective planning enables the attainment of the goal in a much shorter time period. (Dudiy, 2002)Time-management.com comp ars a plan to a map. They say that the progress towards the goal is guidely visible when following a plan. (Dudiy, 2002) Business PlanBusiness plan is an indispensable barb for developing ones product line.(Kotelnikov, 2003) A Busine ss Plan is any arrangement or preparation that allows a cable to look ahead, assign available possessions like property and assets and also prepare the business to face difficult situations and opportunities.Tim Berry says that A simple start-up plan includes asummary,mission statement, keys to success, market analysis, and break-even analysis. Such a business plan provides a clear idea about the business and its remote environment. It tells if it is worth money and time to go ahead with the business or not but this agreeable of a plan is not quite sufficient to actually rank the business (Berry, 2009). As Fred Adler quotes The seeds of every companys demise are contained in its business plan. (Adler, 1987)The external environment plays a major role in every businesses success or failure. An entrepreneur no matter how good or experienced impart still have a hard time succeeding in a business within an adverse environment. For example, A restaurant near the urban center dump c an hardly hope to succeed same would be the case of a designer boutique if opened in a village. hence it is advisable to study the external environment before investing in a business. The main objective of every entrepreneur or a business is to formulate profit. For this the satisfaction of the customers is a necessity. A good business plan can help in identifying the factors affecting the business and can tell if the business can succeed or fail. Such a plan can also help in then recognising the solutions to existing problems. It helps the entrepreneur to have a brief idea of what can be done, how he can do it and where he should do it. (Siyavula Uploader, 2009) Business Plans themselves are categorised into two major types Operational Business Plan, and Strategic Business Plan.Operational PlanThe Operational plan might sound mundane but it is an indispensable element for your business plan. It forms the staple fibre foundation of a business plan and answers the elementary quest ions such as the type of product or service provided and by whom, the daily activities of the business, who the suppliers, dealers or vendors are and how they are used, what the labour requirements are and also details regarding the types and sources of raw materials used. This kind of a plan educates the reader how the business is taken to consumer, that is, how the customers get access to the products or services provided by the company. (Bissaillion, 2005)Imagine if a person was to start a business. In his Operational plan he would have to include at least the following details.* A general outline of the daily operations, timings, and working days.* The location of the business, its value and weight.* The required equipments, its worth and the financial arrangements to buy them.* List of possessions, property and resources and its worth.* How and from where you impart get the resources or raw materials required.* Details regarding production of goods or services provided, explai ning the time taken, facing potential problems etc.* Estimate on product or service pricing.(Ward, 2009)It is important for an Operational plan to contain the above given data, but in certain cases depending upon the type of business more data by chance required or sometimes some data provided above could be insignificant considering the business planned for.Strategic PlanA Strategic business plan is generalised and usually a five year plan focusing on long-term goals and objectives of the company. (Berry, 2008)A companys growth depends upon the quality of the strategic plan and its effective usage. It maximises the growth potential for the business with a rational view of the time to come. The purpose of a strategic plan is to look ahead of your daily activities assessing the future of the company and establishing your priorities. (www.businesslink.gov.uk, 2009)For making a good Strategic plan one must have a clear idea of three chief fundamental principle of his business The pr esent status of the business, Future position of the business, and How to get there. (www.businesslink.gov.uk, 2009)* Assessing the current status of the business requires a good understanding of the business in a whole. How it operates, the kind of market it is in and its profitability.* Where you want to take your business is basically your objective. It involves establishing your goal but it must be realistic because the plan should be achievable. A strategic plan is made not just to work for it is made with an aim to achieve it in the considered period of time. So it is important that the plan is set high and yet practical.* The method of getting there involves understanding the working of the business. Understanding the processes helps in making the right decisions and changes, and thereby, modify the working of the business according to the plan and the set goal.Differences between Operational and Strategic PlanningA strategic plan must never be confused with an operational pl an. A strategic plan is ever made for a long period of time, commonly three to five years and sometimes even up to ten or twenty years in case of some companies, where as an operational plan is never that long. Strategic plans always have a clear concept and vision and most importantly a clear idea of the direction it should progress in. On the other hand an operational plan does not require these because of its short term of implication, but it has to be tactical and immediately executable. Since the Operational plan has a short term of action its effects can be seen in the business and therefore it is possible to evaluate it. (www.planware.org, 2004)ConclusionPlanning plays an important role in all the facets of life. Without proper planning it is unsufferable for a business to grow or even succeed for that matter. Even the best plan cannot be effective without proper implementation and therefore it should always contain the methods for executing the plan for realization of the desired objectives and succeeding in the business. The two major types of planning are Operational planning and Strategic planning. Operational planning deals with mainly the daily activities of the business and helps in achieving short term goals. Strategic planning on the other hand aims for goals on the long run and emphasises on the future of the company.ReferencesAdler, F. 1987, Read This Box, Save $5,000,000, Inc. Magazine, Online, Available from uniform resource locator http//www.inc.com//magazine/19870201/8146.html, Accessed 26 November, 2009Berry, T. 2008, Different Types of Plans for Businesses, Online, Available from URL http//articles.bplans.com/growing-a-business/different-types-of-plans-for-businesses/82, Accessed 24 November, 2009Berry, T. 2009, What is a Business Plan?, Online, Available from URL http//articles.bplans.co.uk/writing-a-business-plan/what-is-a-business-plan/384, Accessed 24 November, 2009Bissaillion, B. 2005, How You Going To Run Your Business, Busines s Operational Plan, Online, Available from URL http//www.business-plans-guide.com/operational-plan.html, Accessed 25 November, 2009Dudiy, S. 2002, What is planning and why you need to plan,Online, Available from URL http//www.time-management-guide.com/planning.html, Accessed 26 November, 2009Higgins, J. 1994,The Management Challenge,Second edition, Macmillan.Kotelnikov, V. 2003, Business Plan,Online, Available from URL http//www.1000ventures.com/business_guide/bp_main.html, Accessed 25 November, 2009Siyavula Uploader, 2009, The business concept, Online, Available from URL http//cnx.org/content/m22589/1.1/, Accessed 23 November, 2009Strategic Planning, 2009, Online, available from URL http//www.businesslink.gov.uk/bdotg/action/layer?=enr.s=scr.l1=1074404796r.lc=enr.l3=1079687477r.l2=1074446322topicId=1079687477r.i=1079693661r.t=RESOURCES, Accessed 26 November, 2009Ward, S. 2009, The Operating Plan Section Of The Business Plan, Writing The Business Plan Section 7, Online, Available fr om URL http//sbinfocanada.about.com/cs/businessplans/a/bizplanoperplan_2.htm, Accessed 24 November, 2009Introduction to Strategic Planning, Business Planning Papers Developing a Strategic Plan, Online, 2004, from URL http//www.planware.org/strategicplan.htm, Accessed 26 November, 2009