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Evaluation of Strategic Planning Essay

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Updated: Jun 17th, 2021

Strategy is the course and level that an organization tends to pursue over a given time so that it can achieve competitive advantage over its competitors. Such organization has to use the available resources to meet the continuous market needs and even satisfy the expectations of its stakeholders.

According to Markides 2004, strategy means making difficult decisions on a few activities. A company must define the parameters under which they base their decisions. On the other hand, strategy can mean, moulding of available resources within a firm in a specified direction in order to achieve success (Mintzberg 1987, p. 68).

A clear image of the strategy must be revealed to ensure effectiveness of the strategy. Kathlene Eisenhart upholds that a strategy is a limited structure that outlines the path in which a firm will follow and expect to maintain in the future (Eisenhardt 1997).

The operation level involves activities that the firm should engage in when in the market. The course is the direction that the business ought to take in the long-term (Zitani 1985).

The resources are the skills, technocrats, finances, facilities, and assets that a firm requires in order to compete while those who have interests in the running of the business either directly or indirectly are the stakeholders. Stakeholders can be either internal or external.

Additionally, there are three levels of strategies namely: corporate, business-unit and operational strategy. Operational strategy involves the organization of each part of the business to deliver the business-unit and corporate levels. This level deals with people, internal and external resources amongst others.

The business-unit strategy, however, deals with the choice of products, customers’ needs, adventuring into new markets, and gaining competitive advantage over the competitors (The Strategic Planning Process 2010).

Lastly, corporate strategy is the essential level as it encompasses the overall business scope and even guides the business decision-making procedures.

On the other hand, strategic planning entails the attempt of defining or shaping the future. In addition, one has to develop a clear structure of the desired destination and expectation (Definition of strategic planning 2012). Therefore, an organization has to define its vision, goals, tactics, and objectives.

Businesses have to forecast into the future in order to remain relevant and successful in the future and present dynamic market. Moreover, these firms have to evaluate both their internal and external abilities that can enable them stay on track and achieve their targets.

As a result, this process calls for decision-making. Such decisions may change the entire management process of a company, alters the relations among stakeholders, organization’s strategic partners, competitive ability of the company, or radical changes in the government policies. Strategic planning quantifies the greatest asset a company should possess.

It dictates public sentiment concerning an organization alongside combining essentials of employment and administration. It also entails working with people by appreciating the difference in individual skills and capabilities to achieve the organizational goals.

For a company to attain recognition, it requires a functional system that allocates human resource astutely and economically considering relevant acquaintance, expertise, and aptitudes.

An effective human resource plan considers long-term goals of the company and implements strategies achievable within the given period. Strategy, therefore, involves effective and efficient use of resources thereby bringing a firm to its desired future (Stone 2011).

Decision-making is a significant activity that faces organizations in their daily operations. Notably, when so many issues that require decision-making prop up, the HRM’s efficiency is reduced; as a result, pressure develops. This situation leads to stressful life; it becomes dominant when the management postpones decision-making activities (Eisenhardt 1997).

In case a problem requires the attention of another department; the management should direct the issue to that department immediately.

This will help to avoid procrastination in decision-making. For organizations to ensure success in their operations, they must ensure that they employ rational decision-making procedures in formulating their strategies (Definition of strategic planning 2012).

In addition, businesses ought to be proactive and remain focussed on achieving their strategic objectives; therefore, the organizations must be open to learn new ideas to develop new knowledge.

Strategic planning entails environmental scanning and benchmarking, which involve internal and external collection of data that help to show trends, expectations, and future changes in the business field (Stone 2011).

Under the SWOT analysis, the internal analysis involves the strengths and weaknesses while the external analysis involves the opportunities and threats. On the internal perspective, the company analyzes the nature of their operations, financial managements, and personnel outputs.

On the external perspective, however, a firm studies its product reception in the market, economics factors both nationwide and globally and customers’ satisfaction. It terms of duration, environmental scanning can be initiated for a shot period, long period, or continuous review.

Business strategies should be focusing on the trends, relationships, and events in an organization. After the forecast, the company can come up with responses that can help in improving their position in the future.

Organizations, therefore, should adapt to their environment since environmental scanning is an essential mode of organizational learning. It involves a detailed analysis of the internal and external parameters that can affect the operations of a business.

In scanning, there is a deep analysis of the stakeholders’ views and expected behaviours. This makes it possible for organizations to lay out strategies and plans on how to handle the scenarios. Therefore, they become alert to deal with any unexpected changes in the internal and external environment (Conway 2009).

Businesses ought to perform the above function in order to have a clear roadmap of where they are headed. Presently, most firms include Information and Communication Technology in the environmental scanning process since it facilitates the whole process.

Strategic planning for future occurrences assists businesses in making decisions, which could have proved difficult to make at the time of the actual action. Environmental scanning and benchmarking provides a business with varied options and broad vision on how to deal with future challenges.

Another instance involves predetermination of customers’ possibilities of change in tastes and preferences in the future; it makes the firm avoid undergoing unnecessary costs but remains active in the market (Organizational Learning – Maintaining the Competitive Advantage n.d.). The strategy, therefore, upholds the trust and confidence of the customers and stakeholders to an organization thus increasing the lifespan of the firm.

The constant changing market trends demands personnel that are able to adopt changes at any instance. This culture of accepting new ideas as they come makes firms remain vibrant among their competitors.

Currently, organizations should ensure that they keep their employees updated on any occurrence that can have some impact on the running of their operations. A deep evaluation of a company’s strategy makes a company to identify its current position in the market; for instance, if it is losing its attractiveness among its competitors.

Therefore, employees should be trained to learn the art of sharing any information that they have, and they think can affect the business operations in any way (Sandie 2011). Undoubtedly, firms that continuously hold learning programs have a competitive advantage over other firms.

In addition, employees who constantly undergo through organizational learning process remain focused in achieving the firm’s strategic objectives given that they are reminded of the business goals at all times. The increased competition position in the global market assures firms of their survival in the constantly changing market.

Further, strategic planning enables firms to foresee the changes in the customers’ tastes and preferences thus altering their products to suit their needs.

Some of the parameters that firms must consider are the customers to target and those not to target, the types of products or services that they should offer the targeted customers and the procedure of achieving the set goals.

The firms can also increase their market share by offering products at a low price with a low cost of production, which are different from their competitors (Markides 2004, p. 6). This option helps to accommodate the low earning population who desire to consume the products but could not afford the high prices.

This forecasting, therefore, can instil confidence in the stakeholders hence increasing their investment values or bases in the firm. On the other front, the customers’ loyalty is increased as they feel assured of the future business existence through the strategic planning.

Another parameter that benefits a company is the ability of a strategy to be flexible to any environmental change. This parameter makes a strategy not to backfire in case of drastic market changes. Therefore, effective strategies identify the environment in advance and must be ready culturally to be embraced by the change.

Apart from the numerous benefits of strategic planning, there are also some limitations/weaknesses of SP. First, the mechanism cannot predict the future changes in the market conditions; for instance, there can be a drastic change in social issues or economics like unexpected terrorism and hurricanes.

This shows that the future cannot be predicted with certainty. Additionally, it becomes difficult to carry out business forecasting in an environment that is characterized with rapid changes. The second shortcoming of SP is the inability to focus on short-term goals/targets.

However, investors are interested on short-term results of a firm. In this manner, SP creates short-term losses so that it can create long term-value for the firm. This trend can lead to a low business liquidity thus resulting to insolvency. For example, Working Capital Management helps to avoid business bankruptcy.

Proper management of the working capital will enable the business to have sufficient capital so that it can pay its debts as they become due as it makes profit in the process (Bryson & Einsweiler 1988).

Strategic working capital policies should ensure that the firm will be able to be profitable even during a financial crisis. This calls for inclusion of both short and long-term goals in the SP process.

A deep focus on the future expectation on business operations can help improve the management of working capital. This may involve reducing production costs but still maintaining sales level. It may also entail examining future debts and expenditures in a well-planned balance of current assets and current liabilities (Strategic Planning n.d).

A thorough management of credit facilities like allowing discounts for prompt payments, establishing credit terms and standards alongside proper planning on cash management is realized through a properly managed working capital.

Moreover, SP discourages innovation and different alternatives. Such plans may inhibit changes thereby discouraging disrupting alternatives. Nevertheless, firms ought to tap and retain talents that are within their premises for their own benefit.

Firms that have well-coordinated Knowledge Management (KM) in their strategies avert scenarios of repeating past mistakes. KM provides organization with new ideas on how to navigate the dynamic market; therefore, increasing their response time during the tough financial times (Eisenhardt 1997).

The firms will also be able to predetermine the taste and preference trend of their customers in the future. This they can do by studying the past trends of product purchases and use them to forecast into the future. In this situation, the business will be able to produce only the correct volume of goods that will fit their customers thus preventing wastage and unnecessary expenses.

This will translate to more profit for the company; more profits imply continuous growth and expansion of services into the market. Noticeably, effective KM has immense returns to any business organization. In addition, SP disregards intuition/perceptions instead, regard already obtainable “hard” data. SP also assumes that all goals can be moulded into one single objective.

Organizations should be opportunistic planners in approaching strategic planning as this will increase their flexibility and openness in altering the SP process (Limitation in Strategic Planning n.d.).

Therefore, external forces will be handled effectively through opportunistic decision-making. Apart from flexibility, the management should encourage active participation of all departments during SP so that everyone can own the process. In addition, organizations should plan as facilitators.

Organizations should also inculcate environmental flexibility when designing strategies. This will enable the strategy to survive in case of market changes. In their approach, organizations should ensure that their SP’s stand the tests of time.


Bryson, J. M & Einsweiler, R. C 1988, Strategic planning threats and opportunities for planners, Planners Press: American Planning Association, Chicago.

Conway, M 2009, Environmental Scanning: Slideshare. Web.

, Strategic Planning to Improve Organizational Performance. Web.

Eisenhardt, K 1997, ‘Strategic Decisions and all that Jazz’, Business Strategy Review, vol. 8 no. 3, pp. 50 – 91.

Markides, C 2004, ‘What is strategy and how do you know if you have one?’, Business Strategy Review, vol. 15 no. 2, pp. 6 – 11.

Mintzberg, H 1987, ‘Crafting Strategy’, Harvard Business Review, vol. 7, pp. 66 – 75.

n.d., Management Study Guide – Free Training Guide for Students and Entrepreneurs. Web.

Sandie, B 2011, : aim. Web.

Stone, R. J 2011, Human Resource Management (7th ed.), John Wiley and Sons, Brisbane.

Strategic Planning n.d., Logical Framework Specialists. Web.

2010, QuickMBA: Strategy. Web.

Zitani, A. M 1985, Strategic planning in the public sector: prospects and limitations, Cornell University Publishers, New York.

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