Advantages and disadvantages of strategic planning

This detailed article explores the key advantages and disadvantages of strategic planning. When done correctly, strategic planning can help organisations make the most of their resources, create a sense of direction, and remain competitive. However, it has several drawbacks as well.

What is strategic planning?

According to Cote (2020) strategic planning is the ongoing organisational process of using available knowledge to document a business’s intended direction. 

It is a process used by organisations to plan for the future and set long-term goals. It involves analysing the current situation of the business, forecasting potential changes, and creating plans to achieve desired outcomes.

While strategic planning has a number of advantages, it in fact has some disadvantages too.  However, advantages usually outweigh disadvantages and therefore, many organisations spend a considerable amount of time and money in strategic planning.

List of the advantages of strategic planning

Sense of direction

Strategic planning helps to create a sense of direction and focus. It helps to ensure that everyone in the organisation is working towards the same goals, and that their efforts are being directed towards the most important tasks. This can help to improve employee morale.

Risk management

No business is without risks. Therefore, organisations need to have some mechanisms in place to identify these risks. One of the most important advantages of strategic planning is that it helps organisations identify and manage risks.

Strategic planning forces managers to think. It can encourage creativity and initiative by tapping the ideas of the management team (BPP Learning Media, 2010). It may include both top-down and bottom-up approaches to engage employees in the strategic planning process.

Clarification of aims and objectives

Aims and objectives may sometimes need clarity. Strategic planning clarifies aims and objectives of an organisation. It requires planners to define what they would like to achieve.

Identifying resistance to change

Managers entrusted with strategic planning need to inform the whole organisation of the aims and objectives, strategic changes, future plans etc. This dissemination of information helps them identify resistance to change and take remedial actions as necessary.


Organisations consist of different departments and carry out a number of tasks. Consequently, they need collaboration and cooperation across the spectrum.  

However, managers in finance, marketing, operations, HRM etc. often compete rather than collaborate. So, what is the solution? The solution is strategic planning as it facilitates collaboration among the managers.

Allocation of resources

Organisations need to allocate resources e.g. people, money, land, and time to implement strategic plans. Moving people from one team to another or moving the facilities from one country to another may be necessary sometimes. This allocation of resources help organisations identifies right resources for right place which is a key to the success of strategic planning.

List of the disadvantages of strategic planning

Vulnerable to outside influences

Strategic plans often fail due to outside influences such as changes in the economic environment, competitor actions and/or technological change. Macro-environmental factors may sometimes change extremely rapidly which may frustrate any strategic plans.

Costly and time-consuming

If organisations carry out strategic planning thoroughly, it becomes a costly, rigid, and time-consuming process. It may sometimes take five or more years to implement a strategic plan. Consequently, benefits of strategic planning may not be immediately visible.

Organizations must dedicate resources to analyse the current situation, forecast changes, and create plans to respond to them. This can be difficult for smaller organisations, especially if they lack the resources or expertise needed to develop a comprehensive plan.

Strategic planning is a very complex process. It involves addressing several things: hence the complexity.  

Lack of success

According to several studies cited in Olson (2022) 60-90% of strategic plans never fully launch. When implemented, some of them fail as well.

Components of a good strategic plan

Creating a successful strategic plan requires careful consideration and a thorough understanding of the organisation and its goals. Here are some of the key components of a good strategic plan:

Mission statement

A mission statement should clearly articulate the organisation’s purpose and goals.

Aims and objectives

Clear aims and objectives. Objectives should follow the SMART criteria i.e. Specific, Measurable, Achievable, Realistic, and Time-bound.

Strategies should be developed to achieve the aims and the objectives. They should be designed to take advantage of the organisation’s strengths and address its weaknesses.

Action plans

Action plans should be developed to ensure that the strategies are implemented in a timely manner. They should include a timeline, a budget, and a list of tasks to be completed.

Strategic plans should be evaluated regularly to ensure that they are still relevant and are achieving the desired results.

Strategic planning tools

There are a number of tools available to help organisations with their strategic planning. Here are some of the most popular ones:

SWOT Analysis

A SWOT analysis is a tool used to assess an organisation’s Strengths, Weaknesses, Opportunities, and Threats.

Gap Analysis

A Gap analysis is a tool used to assess the gap between an organisation’s current state and its desired state. It can help organisations identify areas for improvement and develop strategies to bridge the gap.

PESTEL Analysis

A PESTEL analysis helps organisations identify different macro-environmental factors that can impact on their plans and operations.

Summary of the advantages and disadvantages of strategic planning

Strategic planning is a valuable tool for managing a business. It involves looking at the big picture, allowing organisations to identify opportunities for growth and create plans to capitalise on them.

By leveraging strategic planning, organisations can ensure that they are well-positioned for long-term success. However, as discussed above, strategic planning has several drawbacks that they need to be aware of.

We hope the article on the ‘Advantages and disadvantages of strategic planning’ has been helpful. Please share the article link on social media to support our work. You may also like:

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Last update: 03 January 2023


BPP Learning Media (2010) Business Essentials: Business Strategy, 2 nd edition, London: BPP Learning Media Ltd

Cote, C. (2020) What is strategic planning, available at: https://online.hbs.edu/blog/post/why-is-strategic-planning-important (accessed 02 January 2023)

Olson, A. (2022) 4 common reasons strategies fail, available at: https://hbr.org/2022/06/4-common-reasons-strategies-fail (accessed 03 January 2023)

Photo credit:www.newera4nonprofits.com

Author: joe david.

Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.

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18 Advantages and Disadvantages of Strategic Planning

Strategic planning is a process that involves defining an organization’s goals, developing strategies to achieve those goals, and allocating resources to implement those strategies. 

It is a comprehensive and systematic approach that helps organizations achieve competitive advantage and adapt to changing environments.

Advantages and Disadvantages of Strategic Planning

  • Redaction Team
  • September 28, 2023
  • Business Planning , Entrepreneurship

Advantages of Strategic Planning

  • Clear Direction : Strategic planning provides a clear sense of direction for an organization, helping leaders and employees understand where the organization is headed and what it aims to achieve.
  • Alignment : It aligns the efforts of employees and departments toward common goals, fostering a shared vision and purpose within the organization.
  • Prioritization : Strategic planning helps organizations prioritize initiatives and allocate resources effectively to focus on high-impact activities.
  • Adaptability : While it sets long-term objectives, strategic plans are often flexible and adaptable, allowing organizations to adjust to changing circumstances and seize opportunities.
  • Resource Management : It assists in the efficient allocation of resources, including finances, time, and personnel, to support the organization's strategic goals.
  • Performance Measurement : Strategic plans often include key performance indicators (KPIs) that enable organizations to track progress and assess the success of their strategies.
  • Enhanced Decision-Making : Having a strategic plan in place can guide decision-making processes and reduce uncertainty by providing a framework for evaluating options.
  • Communication : It facilitates effective communication both internally and externally, ensuring that stakeholders, employees, and partners are aware of the organization's objectives.

Disadvantages of Strategic Planning

  • Time-Consuming : The strategic planning process can be time-consuming, requiring significant input from leaders and employees, which can divert resources from day-to-day operations.
  • Costly : Developing and implementing a strategic plan can be expensive, especially when consultants or specialized software are involved.
  • Rigidity : Overly rigid strategic plans can hinder an organization's ability to respond quickly to unexpected challenges or opportunities.
  • Resistance to Change : Employees may resist changes that are part of the strategic plan, leading to internal conflicts and morale issues.
  • Complexity : Strategic planning can become overly complex, making it difficult for employees at all levels of the organization to understand and execute.
  • Uncertainty : The future is inherently uncertain, and strategic plans may not always account for unforeseen events or market shifts.
  • Limited Focus : In some cases, strategic planning may lead to a narrow focus on achieving specific goals, potentially overlooking broader organizational or societal responsibilities.
  • Implementation Challenges : Developing a strategic plan is only the first step; ensuring successful implementation can be challenging, and many strategies fail due to poor execution.
  • Lack of Accountability : Without clear accountability and monitoring mechanisms, strategic plans may not be effectively executed, leading to unmet goals.
  • Overemphasis on Process : Some organizations become overly focused on the process of strategic planning rather than the outcomes, leading to bureaucratic and time-consuming procedures.

One of the main advantages of strategic planning is that it helps organizations set clear goals and objectives. By having a well-defined strategic plan, organizations can align their resources and efforts towards a common purpose. This clarity of purpose allows employees to understand their roles and responsibilities, which leads to increased motivation and productivity.

Strategic planning also helps organizations identify and leverage their strengths. By conducting a thorough analysis of the internal environment, organizations can identify their core competencies and unique capabilities. This information can then be used to develop strategies that capitalize on these strengths and give the organization a competitive advantage.

Another advantage of strategic planning is that it helps organizations anticipate and adapt to changes in the external environment. By conducting a thorough analysis of the market, industry trends, and competition, organizations can identify potential threats and opportunities. This early identification allows organizations to proactively respond to changes and stay ahead of the competition.

Strategic planning also provides a framework for resource allocation. By setting priorities and making informed decisions about resource allocation, organizations can use their limited resources effectively. This ensures that resources are allocated to the most important and strategic initiatives, maximizing the organization’s impact and return on investment.

In addition, strategic planning helps organizations align their internal processes and functions. By involving different stakeholders and departments in the planning process, organizations can create a shared understanding and commitment to the strategic goals. This alignment improves coordination and collaboration, leading to increased efficiency and effectiveness.

Furthermore, strategic planning provides a basis for evaluating performance and progress. By setting clear goals and key performance indicators, organizations can track their progress and make necessary adjustments along the way. This monitoring and evaluation process allows organizations to learn from their experiences and continuously improve their performance.

Despite its many advantages, strategic planning also has some drawbacks that organizations should be aware of. One of the main disadvantages is the complexity of the process. Strategic planning requires a significant amount of time, effort, and expertise. It involves analyzing large amounts of data, conducting market research, and engaging stakeholders. This complexity can make the planning process challenging and resource-intensive for organizations.

Another disadvantage of strategic planning is the resistance to change it may encounter. Implementing a strategic plan often involves making significant changes to the organization’s structure, processes, and culture. This can create resistance among employees who may be reluctant to change and may fear the unknown. Overcoming this resistance requires effective change management strategies and strong leadership.

Moreover, strategic planning may not always guarantee success. While a good strategic plan provides a roadmap for the organization’s future, its implementation is not always straightforward. External factors, such as changes in the market or unexpected competition, can affect the business and its ability to achieve its strategic goals. Internal factors, such as lack of resources or poor execution, can also hinder the successful implementation of the plan.

Lastly, strategic planning can sometimes overlook the importance of human resources. While strategic plans focus on organizational strategies and objectives, they may not pay enough attention to the people who will execute those strategies. It is essential for organizations to consider the capabilities, skills, and motivation of their employees when developing and implementing strategic plans.

Conclusion of Advantages and Disadvantages of Strategic Management Planning

In conclusion, strategic planning has both advantages and disadvantages for organizations. It helps set clear goals, leverage strengths, adapt to changes, allocate resources effectively, and align internal processes. However, it is a complex process that requires time, effort, and expertise. It may face resistance to change and does not guarantee success. Therefore, organizations should carefully consider these factors when deciding to engage in strategic planning.

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What Are Some Disadvantages of Strategic Management?

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Strategic management involves long-term plans and objectives that allow a company to leverage capabilities, increase opportunities, and achieve competitive advantage. Although there are many advantages to strategic management, such as reducing the resistance to change and promoting collaboration, there are also disadvantages. The strategic management process is complex, time consuming, and difficult to implement; it requires skillful planning in order to avoid pitfalls.

A Complex Process

Strategic management involves continuous assessments of critical components, such as external and internal environments, short-term and long-term objectives, organizational structure, and strategic control. These components are interrelated, so a change in one component may affect other areas.

For example, in an economic downturn, a company may need to reduce its workforce. The external factor, which is the poor economy, changes the internal environment, which is the number of people employed. Then, a company may need to review objectives and make necessary adjustments. All of these factors ultimately influence a company’s management, leadership and structural systems, which have a bearing on decision-making.

Time Consuming

Managers spend a great deal of time preparing, researching and communicating the strategic management process, which may impede day-to-day operations and negatively impact the business. For example, managers may overlook daily issues needing resolution, and inadvertently cause a decrease in employee productivity and short-term sales. When issues are not resolved in a timely manner, higher employee turnover can result. This could force a company to redirect critical resources, putting strategic management initiatives on a sidetrack.

Difficult to Implement

The implementation process requires a clearly communicated plan, implemented in a way that requires full attention, active participation, and accountability of not only company leaders, but also of all members across the organization. Managers must continuously develop and improve synergies among employees to ensure buy-in and to garner support for the company’s objectives and mission. There are instances where this can become particularly challenging. For example, if a manager was involved in the strategic formulation process, but not equally involved in the implementation process, he in turn may not feel accountable for decisions made.

Requires Skillful Planning

Although strategic plans help reduce uncertainty in meeting long-term objectives, the planning process itself provides opportunities for missteps. An organization needs to anticipate the future, which involves various degrees of change as well as risks. In order to avoid pitfalls, managers need to have the right skill sets to plan the strategy and mitigate risk factors. For example, managers should monitor as well as develop business contingency plans to address possible future changes in the external environment, such as market conditions, competitive forces, and economic factors that may negatively affect the business.

  • McGraw-Hill Higher Education: Part One -- Overview of Strategic Management
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Kelley Katsanos has worked in business roles involving marketing analysis and competitive intelligence. She earned a Master of Science in information management from Arizona State University. Katsanos also holds a bachelor’s degree in Business with an emphasis in marketing. Her interests include technology, marketing strategy and business process improvement.

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Uses and Misuses of Strategic Planning

  • Daniel H. Gray

It has become fashionable to attack formal strategic planning as a source of corporate America’s competitive ills. Recent management best-sellers and the business press are vocal in criticizing companies for adhering to excessively rational planning systems that are time-consuming to complete, divorced from reality, and worst of all, conducive to a dangerous, short-term financial orientation […]

Some writers on management today claim that strategic planning is on the wane—or at least on the defensive. Is yet another management fad about to fade away? Are we seeing still another example that shows the folly of trying to manage in “too rational” a way? Consider all those companies that have spent so much money on strategic planning yet still have problems. And look at all those impressive plans that fall apart during implementation.

formal strategic planning disadvantages

  • DG Mr. Gray is president and chief executive officer of Gray-Judson, Inc., a consulting firm based in Boston that specializes in strategic management.

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Module 3: Planning and Mission

Pros and cons of planning, learning outcomes.

  • Explain benefits of planning.
  • Explain the drawbacks of planning.

Notebook planner

Achieving business goals starts with planning.

Planning is the process of setting goals and defining the actions required to achieve the goals.

Planning begins with goals. Goals are derived from the vision and mission statements, but these statements describe what the organization wants to achieve, not necessarily what it can achieve. The organization is affected both by conditions in its external environment—competitors, laws, availability of resources, etc.—and its internal conditions—the skills and experience of its workforce, its equipment and resources, and the abilities of its management. These conditions are examined through a process called a SWOT analysis. (SWOT will be discussed in greater detail in another module.) Together, the vision and mission statements and the results of the situation analysis determine the goals of the organization. This idea is illustrated by the figure that follows.

The words “Values,” “Vision,” and “Mission” are in a box. The words “Situation Analysis” are in another box. Both these boxes have arrows pointing from them to a third box, which has the word “Goals” in it.

Using the mission, vision, and values of a company, along with situation analysis, can help the company set goals.

The rest of the planning process outlines how the goals are to be met. This includes determining what resources will be needed and how they can be obtained, defining tasks that need to be done, creating a schedule for completing the tasks, and providing milestones to indicate progress toward meeting goals. The planning process will be discussed in more detail in the following section.

Benefits of Planning

In today’s chaotic environment, planning more than a few months in advance may seem futile. Progress, however, is rarely made through random activity. Planning does provide benefits that facilitate progress even when faced with uncertainty and a constantly changing environment. Some of the benefits include the following:

  • Planning provides a guide for action. Plans can direct everyone’s actions toward desired outcomes. When actions are coordinated and focused on specific outcomes they are much more effective.
  • Planning improves resource utilization. Resources are always scarce in organizations, and managers need to make sure the resources they have are used effectively. Planning helps managers determine where resources are most needed so they can be allocated where they will provide the most benefit.
  • Plans provide motivation and commitment. People are not motivated when they do not have clear goals and do not know what is expected of them. Planning reduces uncertainty and indicates what everyone is expected to accomplish. People are more likely to work toward a goal they know and understand.
  • Plans set performance standards. Planning defines desired outcomes as well as mileposts to define progress. These provide a standard for assessing when things are progressing and when they need correction.
  • Planning allows flexibility. Through the goal-setting process, managers identify key resources in the organization as well as critical factors outside the organization that need to be monitored. When changes occur, managers are more likely to detect them and know how to deploy resources to respond.

Practice Question

Drawbacks to planning.

Planning provides clear benefits to organizations, but planning can also harm organizations if is not implemented properly. The following are some drawbacks to planning that can occur:

  • Planning prevents action. Managers can become so focused on planning and trying to plan for every eventuality that they never get around to implementing the plans. This is called “death by planning.” Planning does little good if it does not lead to the other functions.
  • Planning leads to complacency. Having a good plan can lead managers to believe they know where the organization is going and how it will get there. This may cause them to fail to monitor the progress of the plan or to detect changes in the environment. As we discussed earlier, planning is not a one-time process. Plans must be continually adjusted as they are implemented.
  • Plans prevent flexibility. Although good plans can lead to flexibility, the opposite can also occur. Mid- and lower-level managers may feel that they must follow a plan even when their experience shows it is not working. Instead of reporting problems to upper managers so changes can be made, they will continue to devote time and resources to ineffective actions.
  • Plans inhibit creativity. Related to what was said earlier, people in the organization may feel they must carry out the activities defined in the plan. If they feel they will be judged by how well they complete planned tasks, then creativity, initiative, and experimentation will be inhibited. Success often comes from innovation as well as planning, and plans must not prevent creativity in the organization.

Goals and plans do not have to be formal documents. In small organizations, they may exist only in the minds of the manager. But research and experience have shown that planning brings clear advantages to an organization, whether through formal procedures or informal intuition. However, when plans become the object instead of a means to an objective, they can have negative consequences for the organization. For example, General Motors missed the opportunity to become the first American automaker to produce an electric car because it was committed to its plan rather than its goals. GM had EV-1 prototypes designed and produced in the 1990s and literally destroyed the cars rather than sell them.


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The pitfalls of strategic planning (and how to overcome them)

Reading time: about 7 min

Think about the planning that goes into a cross-country trip. While it's exciting to see where the road takes you, even the most spontaneous travelers have a destination and expected travel timetable in mind. 

So it goes with strategic planning. Whether your horizon for strategic planning is next month, next quarter, or next year, it's essential to define the actions today, next month, and next quarter to impact your desired destination and outcomes. 

"I find that many folks confuse strategic planning with tactical execution," says Mark Kelly, CEO of NewEdge Growth. "Too often, we get consumed with what we're going to do tomorrow, that we never raise our head above the trees to see if we're headed in the right direction.”

Let's take a look at some of the most common challenges and pitfalls of strategic planning — and how you can avoid and overcome them. 

Common challenges of strategic planning

There are four main challenges when it comes to strategic planning: lack of ownership, poor communication, lack of alignment, and slow adoption. It’s important to understand what’s at the core of these planning challenges before we dive into solutions.

Lack of ownership 

An effective strategy requires cross-departmental and cross-functional feedback from across the organization. However, to avoid creating a disjointed strategic plan, someone still needs to own the final compilation, documentation, and execution of the strategy. 

Kathleen Booth, VP of Marketing at clean.io, notes that one of the biggest disadvantages of strategic planning is lack of ownership and follow through, and that achieving the goals that are defined during the strategic planning process requires clear focus and a commitment to priorities. “In my experience, this is best achieved through an OKR (objectives and key results) framework where each objective and key results has an individual owner responsible for ensuring follow through,” says Booth. 

Poor communication  

Lack of alignment.

Even the most well-executed strategic plan won't be useful without strategic alignment. Yet a staggering 40% of executive leaders say their enterprise accountability and leadership are not aligned on strategy execution, according to the 2020 Gartner Execution Gap Survey. And this lack of representation from across the organization is one of the primary planning challenges.

As Charlotte Laing, Head of Marketing at Metrikus and AirRated, explains, "There must be input from all parts of the organization, at all levels, so that you can understand the landscape, the challenges, and the direction that makes the most sense.”

Slow adoption 

Let's say you've avoided every pitfall to this point and achieved buy-in on a rock-solid strategic plan for your organization. What happens if no one puts it into motion? 

Fast-growing companies often face near-constant changes to tasks, roles, teams, and strategies—with innovation at the forefront of it all. All too often, this translates into strategic plans that have taken weeks to finesse becoming obsolete soon after their inception. If your teams are slow to adopt the plan, it will quickly become outdated and irrelevant to everyday processes and priorities. 

Ways to avoid strategic planning problems 

Don’t worry. While there are definitely challenges to strategic planning, there are also plenty of solutions to those issues. Here are a few for you to try at your own organization.

Build and simplify business strategies visually 

There are many ways to build, visualize, and evangelize your business strategy. Some leaders swear by tools like GOST (Goals, Objectives, Strategies, Tactics) to create a structured strategic plan:

  • Goals: What goals are you trying to achieve? A strategic plan without goals will only result in spinning wheels.
  • Objectives: It's important to align clear objectives to your goals, and those objectives should be SMART (Specific, Measurable, Attainable, Relevant, Timebound).
  • Strategies: Set by the departments. For each objective, identify three methods to reach those objectives.
  • Tactics: Set collaboratively by the department and individual groups and the strategy owner. For each strategy, set three tactics to execute during the timeframe. "This gives you a direct line of sight to how you impact the outcomes of the business and allows you to track your progress throughout the year," said Kelly.

Create a living, breathing strategy document 

Effective execution doesn't necessarily mean rigid execution. The "perfect" strategy document is a flexible one that can evolve. 

As you execute your strategy, market conditions might change, or some new information might inform one part of your strategic approach, but this doesn't mean your strategy needs to be abandoned. "When something comes up that alters your strategy, alter your plan," says Laing. "Don't hang on to sunk costs because it was perfect before: recognize that the equation has changed and move forward."

Use resources with scaling in mind

Speaking of flexibility, a strategic plan that can scale with company growth should be the goal of every forward-thinking business leader. In fact, according to Gartner, organizations that are able to successfully unlock capacity to execute new growth strategies increase profitability by 77% . As you build your strategic plan, consider how you'll use resources as you scale. Hopefully, your strategic plan results in growth and scale, but without starting with the goal of scale in mind, it's tougher to move a strategic plan past the pilot phase. 

Design and conduct training effectively

Strategy shifts can cause disruption and discord, or they can infuse new energy into your business. To ensure the latter happens, be sure to schedule education and training sessions to ensure your team and your new strategic direction are set up for success. Designing and conducting training sessions is a lot of work but will help avoid endless rounds of revisits to your company strategy. 

Don't rush it—use data and analysis to build a solid plan 

Strategic planning needs to incorporate data that instills confidence—a plan based on intuition alone can lead to wrong decisions. During times of uncertainty like COVID-19, data is harder to leverage as many older baselines are not relevant. The solution is to test data quickly and let the data guide the decisions you make regarding your target market and priorities. 

"A common pitfall is relying on older data that's not adjusted for a new reality. Past intuition is great, but data needs to help lead the discussion and decision," said Alon Waks, CMO, Advisor, and Consultant of Flywheel Consulting. "We're all writing a new playbook."

Collaborate and communicate 

Throughout the strategic planning process , make sure everyone's on the same page. Your team should be included in every strategic decision, no matter how small—and that doesn't mean just communicating the change, either. Set up a 30-minute call or meeting to discuss the proposed change and develop a new plan together. Hold it in a breakout room, assign a moderator, and record the session for those who can't attend in-person. "Not only will you end up with a team which is more on board with the strategy, but usually you'll make a better decision, too," says Laing. 

Effective collaboration and communication during the strategic planning process also ensure greater buy-in once the strategic plan is finalized and published. "Folks will feel they had a voice in where the company is headed," says Kelly.

Follow up and review after executing a strategy

No strategic plan is ever final. As you execute against your plan, it's important to review the results, iterate, and optimize. But don't jump the gun: Establish clear KPIs aligned to your company goals, and then set a realistic expectation of when you expect to see results. And make sure to budget time for reactive tasks. This way, you can act on new ideas and also clearly see when priorities need reshuffling.

Strategic planning is no easy task, and that's why it's so easy to fall into these common pitfalls of planning. However, with the right tools and a bit of forethought and strategic planning, you can beat the odds and execute strategic plans and shape your organization's future.

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Formal Strategic Planning in highly uncertain and dynamic environments

Essay, 2014, 9 pages, grade: a, franz-joseph reisner (author).

Abstract or Introduction

This essay will critically evaluate whether formal strategic planning is no longer an applicable approach for corporate decision-making in today's highly uncertain and dynamic business environment. In recent decades company leaders have been quite successful maneuvering their organisations through daily business and a number of economic crises by the means of formal strategic planning. Arguably, it offers several benefits on the one side, but also drawbacks on the other side. The first part of this essay will focus on the nature of formal strategic planning and its key characteristics as well as potential advantages and disadvantages. The second part will then evaluate why the formal planning approach may be perceived as not comprehensive enough in today's highly uncertain and dynamic environment, yet show how it may still be able to make crucial contributions towards sound, efficient and comprehensive corporate decision-making.

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Title: Formal Strategic Planning in highly uncertain and dynamic environments

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  • J Oncol Pract
  • v.5(3); 2009 May

Strategic Planning: Why It Makes a Difference, and How to Do It

Short abstract.

Take action before problems reach crisis level. Strategic planning provides the structure to make day-to-day decisions that follow a larger vision, creates a direction for your practice, and maximizes your options for influencing your environment.

In oncology practice, where dramatic changes in reimbursement, technology, and the marketplace are just a few of the driving forces, “the future,” as Yogi Berra once said, “ain't what it used to be.” You may not be able to control the future, but strategic planning can create a direction for your practice and maximize your options for influencing your environment. Without it, your group will likely take action only to address immediate problems—a kind of crisis management approach. Strategic planning gives a practice the structure to make day-to-day decisions that follow a larger vision. This article presents the principles of strategic planning and outlines processes that your practice can adapt for short- or long-term planning. Strategic decision making is needed now more than ever for success in oncology practice.

A strategic plan is a tool that moves your practice toward a goal you have set. However, the definition of a strategic plan differs among different people, according to management consultant Teri Guidi, MBA. Guidi, chief executive officer of Oncology Management Consulting in Philadelphia, Pennsylvania, points out that although there is “no wrong idea” of what a strategic plan encompasses, people often do have misconceptions about it. “Some expect a strategic plan to be precise—it's not. Some think that it will take you forward forever—it won't. The biggest mistake people make is already having the end result in mind when they start.”

Of all the compelling reasons for your group to engage in strategic planning, perhaps the most critical is the speed at which forces in your environment are changing. “Physicians who try to keep practicing as they have in the last five years will be at a disadvantage,” says Dawn Holcombe, MBA, president of DGH Consulting in South Windsor, Connecticut. “The world swirling around oncologists is changing, and things they may not even know about will affect their practice.”

Engaging in the process of strategic planning has benefits in addition to the plan that comes out of it. For starters, having everyone in the same room fosters collegiality and creates a milieu in which you can focus on the direction of your practice, away from patient care and other duties. In addition, the process promotes the open and creative exchange of ideas, including putting disagreements on the table and working out effective solutions.

Short- and Long-Term Planning

Establishing the direction of your practice and identifying overarching goals provide the foundation for strategic planning, whether short or long term. In the field of health care today, a long-term plan will likely address no more than the next 3 years. After the strategic course is determined in the initial planning session, the group should meet at least annually. During these sessions, the partners should revisit the practice goals, update the environmental assessment with new data, and identify strategies needed to address issues that will arise within the next 12 months. For example, as the retirement of one or more partners approaches, a succession plan may need to be developed (as described in related article on page 136). Meanwhile, growth in patient volume may call for recruitment strategies for both physicians and midlevel providers.

Should You Use a Consultant?

Although use of an outside facilitator entails expense, turning to a strategic planning professional has a number of advantages that can contribute greatly to success, especially if you are undertaking strategic planning for the first time. A professional has done this before—many times—and thus can direct the process efficiently. He or she knows how to collect and analyze diverse information—opinions, practice data, and market reports, for example—and present it in a concise way, thereby saving you and your administrator many hours of work. As a moderator, a consultant knows how to keep a group moving forward, prevent it from getting bogged down in side issues, and objectively help participants resolve disagreements and develop effective solutions.

Perhaps the biggest value added by a consultant is guidance in assessing your environment. A well-qualified strategic planning consultant should have a thorough and current knowledge of national trends in medicine as well as detailed knowledge about oncology practice. Regarding your community, although your group naturally knows the local marketplace well, an outsider can provide a fresh and objective perspective; in fact, the familiarity of physicians with the local scene may create blind spots. Similarly, in assessing the strengths and limitations of a group, a consultant can contribute objectivity and should be able to provide national benchmarks for objective comparison.

In choosing a consultant, look for an individual or firm that will contribute valuable knowledge about national reimbursement, patient care, and business initiatives and trends affecting oncology practice. Many management consultant firms offer strategic planning services, but you will be best served by a consultant who has worked with physician practices and has significant recent experience with oncology practice.

Scheduling a Strategic Planning Session: Who, When, and Where

Just as there is no one way to define strategic planning, there is no single way of doing it. Examples and guidelines are presented here that you may draw on to implement a process that makes sense for your practice.

The decision makers of the practice should be the ones who conduct strategic planning. If your practice is so large that including all partners could make a meeting unwieldy, it might make sense to have a smaller group, such as the executive board, do the planning. In addition to shareholders, you may want physician associates and key managers to participate. Inclusion of individuals who are not partners, at least for some parts of the meeting, may also have advantages. This can foster buy-in to the strategic direction, thereby contributing to the success of the resulting action plan. The oncology group at the Toledo Clinic, a large multispecialty center in Toledo, Ohio, found it beneficial to include the executive director of the clinic. By participating, the director gained valuable insight into the special administrative and practice needs of oncology.

Setting aside at least one day for strategic planning is recommended, especially if this is the first time your group has undertaken it. Distribute an agenda ahead of time, and use a moderator to keep the meeting on track. The location should be comfortable and private. The participants must be able to focus solely on strategic planning, without interruption, so arrange to have patient-related calls covered. Members of the Toledo Clinic used a consultant to guide them through strategic planning, and the consultant facilitated a one-day retreat at a country club. The meeting began around 9 am , after physician rounds, and the nurse practitioners of the group provided patient coverage. Other oncology groups may have conference space available in their office. A half-day meeting can be adequate for groups that have been doing strategic planning for many years.

Starting Point: Mission and Values

Developing a mission statement for your practice—a statement of its basic purpose—is the first step of strategic planning and provides the foundation for the entire process. You may think that putting your mission in writing is a bureaucratic waste of time, but in fact, determining how to articulate your mission is a productive experience. It sets the stage for later prioritization, and the process compels the shareholders to reflect on and express the purpose of the practice. Is providing high-quality care to patients with cancer your entire mission? What about research? Does your practice have a mission to serve the community through education? Answering questions such as these helps spell out the core mission of the group.

Once you succinctly define the mission of your organization, you should develop value statements expressing your core beliefs regarding issues such as patient care, interaction with the community, and how members of the practice work together. In the framework of a traditional strategic plan, the mission statement is concisely expressed in not more than one or two sentences, with value statements articulated separately. However, some organizations combine the mission and values into a narrative of one or more paragraphs. The format used is inconsequential; most important is that your group express the enduring elements of your practice, which will form the foundation on which the practice direction and strategies are expounded.

For a practice that is hospital based or part of a larger organization, the mission and values of the group should be consistent with those of the larger organization. Your group may want to state its own distinct mission or simply adopt that of the larger organization, as did the group of nine oncologists affiliated with the Toledo Clinic. “In practices like ours, which are within a larger organization, it's important to support the larger organization's mission,” says Peggy Barton, group manager. “It could lead to confusion if the broad organization and the practice are going in different directions.”

Vision: Where Do You Want to Go?

With the mission and values defined, the next step for the group is determining what kind of practice you want in the future. Again, the words of Yogi Berra apply: “If you don't know where you're going, you'll wind up somewhere else.” A vision statement—whether just a few words or a longer document—creates the desired image of the future state of your practice. Do you want to be recognized for treatment of a certain type of cancer? Is your vision to be the leader in clinical research in your state? Do you want to grow larger and have a network of practice sites? The vision of the group must complement your practice environment, so you may find that your review of internal and external information (described in SWOT Analysis) leads you to revise your vision statement to some extent as you continue planning strategically.

The vision statement for your group should be painted in broad strokes, not in detail, and it should represent the end point, not the strategy for achieving it. For example, your vision may be to provide multidisciplinary services to your community, but your vision statement would not include a specific strategy, such as merging with a certain radiology group or recruiting two physicians. When developing a vision statement, an atmosphere of openness should prevail to encourage creativity and thinking beyond current boundaries.

As in all stages of strategic planning, disagreements may surface. “Different opinions about the direction of a practice are very healthy,” says Guidi. “The ideas might be in conflict, but getting them out on the table helps [you] to see what is really important.”

Barton agrees. “One purpose of the strategic planning meeting was to get everyone in the room at the same time to identify where we agree and disagree and to reach compromise. The process encouraged input from everyone, and the group made some important decisions that have helped them over the past year.”

SWOT Analysis

The SWOT analysis—an assessment of the strengths, weaknesses, opportunities, and threats of your practice—is a staple of strategic planning. This analysis uses a mix of quantitative and qualitative information, most of which should be gathered and analyzed before the planning meeting. The process for gathering information and performing a SWOT analysis varies greatly, and there is no single correct method. The size of the group, the frequency of strategic planning meetings, and how fast changes are taking place both nationally and locally are all significant factors affecting the process.

Internal Assessment: Strengths and Weaknesses

In identifying internal strengths and weaknesses, include hard data such as the number of new consults, cost of drugs per full-time-equivalent physician, and financial reports. It is useful to benchmark aspects of the quality and efficiency of the practice against data on other oncology practices (Sources for Benchmarking Data provides references for locating this information).

If possible, investigate the perceptions of individuals outside the practice—patients, hospital administrators, and referring physicians, for example. A consultant naturally has an advantage in gathering candid assessments from such individuals, unless an anonymous survey is used. How others view the practice can be critical to performing an accurate SWOT analysis, as demonstrated in an experience reported by consultant Guidi. In one practice that had rather long wait times, the physicians believed that the patients did not mind, because “they know that when it's their turn, they'll get just as much attention as the patient before.” But the patients interviewed by Guidi cited long wait times as a top complaint and said they would mention it to others considering the practice for treatment.

Gather qualitative information and opinions from physicians and staff. What do they see as the top issues facing the practice, and what do they consider to be the strengths and weaknesses of the practice? These perspectives can be provided during the meeting, but it is useful to collect information ahead of time, so a larger group can be polled, and anonymity can be assured. Holcombe distributes a questionnaire to solicit information from each physician and also interviews key individuals. Her summary is then reviewed and discussed during the strategic planning retreat.

Sources for Benchmarking Data

  • ASCO Quality Oncology Practice Initiative (QOPI). http://qopi.asco.org
  • Medical Group Management Association: Performance and practices of successful medical groups. www.mgma.com/surveys or call 877-275-6462
  • American College of Physicians: Practice management check up: Examining the business health of your practice. www.acponline.org/pmc/new_checkup.htm
  • Akscin J, Barr TR, Towle EL: Benchmarking practice operations: Results from a survey of office-based oncology practices. J Oncol Pract 3:9-12, 2007
  • Akscin J, Barr TR, Towle EL: Key practice indicators in office-based oncology practices: 2007 report on 2006 data. J Oncol Pract 3:200-203, 2007
  • Barr TR, Towle EL, Jordan W: The 2007 National Practice Benchmark: Results of a national survey of oncology practices. J Oncol Pract 4:178-183, 2008

Oncology Associates in Cedar Rapids, Iowa, uses its face-to-face planning meeting to share personal perspectives about the practice. The group is small—currently five oncologists—and has been doing strategic planning for many years. SWOT data for analysis is gathered ahead of time, but at the beginning of the meeting, each physician discusses how he feels about his own practice, including his workload, his satisfaction with the schedule, and other aspects of practice. “With everyone in the room, they all hear each other's perspective, which helps later on when we are talking about the practice as a whole and making decisions about issues such as expanding services or recruiting a new provider,” says Carole Dzingle, practice manager.

A third method is used at the Mark H. Zangmeister Center in Columbus, Ohio. The executive board of the 16-oncologist practice holds an annual strategic planning session. Glenn Balasky, executive director, obtains input from six or seven staff managers and works with the managing partner to complete a SWOT analysis that is presented at the meeting.

External Assessment: Opportunities and Threats

Data about the marketplace of the practice, such as demographics, economic trends, referral patterns, and competition, should be analyzed in light of whether they represent threats or opportunities. In addition to the local picture, the broader environment, including the regional health care system and approaching changes in reimbursement and regulation, should also be assessed. Although the physicians and staff in some groups stay abreast of local, regional, and national trends, a consultant knowledgeable about oncology market forces is often needed to provide an analysis of the environment. The Toledo Clinic found the report on the national picture prepared by the consultant significantly helpful.

Some groups work to keep up with trends on their own through active involvement in state and national oncology societies. The physicians of Oncology Associates are active in ASCO as well as in the Iowa Oncology Society, and the staff managers are involved with organizations such as the Association of Community Cancer Centers and the Medical Group Management Association. Physicians and staff leaders at the Zangmeister Center are involved with the Community Oncology Alliance and other oncology organizations at both national and state levels, and each staff manager actively participates in a professional organization. Monitoring the environment takes energy and commitment, but it produces advantages, according to Balasky. “It pays off in the raw market intelligence we get, and we stay in touch continually rather than having a once-a-year report.”

Developing Strategies

Once a clear picture of the practice and its environment has been established, the group should develop strategic options for moving the practice from its current status toward the desired future position. Be alert to the pitfalls of discussing operational issues and trying to decide on tactics instead of identifying strategies. For example, a strategic decision may be to go forward with implementing an electronic medical record system, but the strategic planning meeting is not the place to discuss available systems, preferred data fields, or training required. Managing these kinds of details will be the responsibility of individuals assigned in the action plan.

In some cases, the SWOT analysis can reveal weaknesses that call for implementing one or more strategic priorities before pursuing others. Practices sometimes realize they need to create the infrastructure necessary to reach their goals. For example, they may not have systems in place to provide data that will be needed to remain competitive.

In other cases, the group may come up with many strategies that need to be prioritized during the meeting or at a subsequent meeting. To narrow down big lists, Guidi describes two approaches that work well when groups meet more than once. One mechanism she uses is to put all the strategies in writing after the first meeting; she then asks individuals via e-mail to score the importance, difficulty, and cost of each strategy on a scale of one to five. In another approach, after one or two brainstorming sessions, Guidi boils down the information to three or four overarching goals for additional discussion by the group. Guidi finds that several short strategic planning sessions are often more productive than is a full- or half-day retreat, and in the end, the shorter sessions call for about the same total hours of physician time.

More Information About Strategic Planning

  • Soper WD: The meeting you won't want to miss: Annual strategic planning. www.aafp.org/fpm/20010200/28them.html
  • Holcombe D: Strategic planning and retreats for practices. www.dghconsulting.net/images/holcombe_strategic_planning_0908.pdf
  • McNamara C: Strategic planning (in nonprofit or for-profit organizations). www.managementhelp.org/plan_dec/str_plan/str_plan.htm

Action Plan

The outcome of developing strategies should be the prioritization of a few (ie, two to five) achievable strategies and creation of related action plans. Many strategic plans have faltered or failed because they were too ambitious or too complex. Do not try to take advantage of every opportunity or address every limitation identified in your SWOT analysis. Some goals may be important but can be scheduled for implementation in a year or two. By having an annual strategic planning meeting to update your plan, these goals will stay in sight and can be addressed successfully.

Create an action plan to address each strategic priority within the next 12 months. Spell out steps to be taken, who will have the lead responsibility, and the milestones that will show progress. For example, a strategy of adding midlevel providers might have a work plan with dates and assignments for finalizing a position description, creating a compensation package, recruiting, hiring, and conducting orientation. A strategy of building a new facility or merging with another practice will ultimately involve complex actions, but initially, the work plan might specify only the steps involved in finding and retaining a consultant to present a business plan by a certain date. Make sure the action plan is in a format that can and will be used by those with responsibility for implementation.

Communicate the strategic goals and action plan to all clinical and administrative staff. Everyone in the practice should know the goals and clearly understand his or her role in implementing strategies to achieve them. Effective communication and cultivation of a team culture are especially important if your strategic planning results in changes or begins moving the practice in a new direction.

Keep in mind that a strategic plan does not have to involve a lot of paperwork or a big report. The mission, values, and vision of the practice should be documented, and the group should revisit them at the beginning of subsequent strategic planning meetings to validate them or make revisions if appropriate. A summary of the SWOT analysis should be included, but this may be brief, with the data that went into it provided as appendices or even stored elsewhere while remaining easily available for updating. The action plan must be available for tracking progress. Your strategic plan must be a living document—a roadmap that guides what happens in your practice on a day-to-day basis—not a report that sits on a shelf.

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  • What is strategic planning? 5 steps and ...

What is strategic planning? 5 steps and processes

Julia Martins contributor headshot

A strategic plan helps you define and share the direction your company will take in the next three to five years. It includes your company’s vision and mission statements, goals, and the actions you’ll take to achieve those goals. In this article we describe how a strategic plan compares to other project and business tools, plus four steps to create a successful strategic plan for your company.

Strategic planning is when business leaders map out their vision for the organization’s growth and how they’re going to get there. Strategic plans inform your organization’s decisions, growth, and goals. So if you work for a small company or startup, you could likely benefit from creating a strategic plan. When you have a clear sense of where your organization is going, you’re able to ensure your teams are working on projects that make the most impact. 

The strategic planning process doesn’t just help you identify where you need to go—during the process, you’ll also create a document you can share with employees and stakeholders so they stay informed. In this article, we’ll walk you through how to get started developing a strategic plan.

What is a strategic plan?

A strategic plan is a tool to define your organization’s goals and what actions you will take to achieve them. Typically, a strategic plan will include your company’s vision and mission statements, your long-term goals (as well as short-term, yearly objectives), and an action plan of the steps you’re going to take to move in the right direction. 

[inline illustration] Strategic plan elements (infographic)

Your strategic plan document should include: 

Your company’s mission statement

Your company’s goals

A plan of action to achieve those goals

Your approach to achieving your goals

The tactics you’ll use to meet your goals

An effective strategic plan can give your organization clarity and focus. This level of clarity isn’t always a given—according to our research, only 16% of knowledge workers say their company is effective at setting and communicating company goals. By investing time into strategy formulation, you can build out a three- to five-year vision for the future of your company. This strategy will then inform your yearly and quarterly company goals. 

Do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics. Here’s how a strategic plan compares to other project management and business tools.

Strategic plan vs. business plan

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, consider creating a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

Key takeaway: A business plan works for new businesses or large organizational overhauls. Strategic plans are better for established businesses. 

Strategic plan vs. mission and vision statements

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

As a result, you should already have your mission and vision statements drafted before you create a strategic plan. Ideally, this is something you created during the business planning phase or shortly after your company started. If you don’t have a mission or vision statement, take some time to create those now. A mission statement states your company’s purpose and it addresses what problem your organization is trying to solve. A vision statement states, in very broad strokes, how you’re going to get there. 

Simply put: 

A mission statement summarizes your company’s purpose

A vision statement broadly explains how you’ll reach your company’s purpose

A strategic plan should include your mission and vision statements, but it should also be more specific than that. Your mission and vision statements could, theoretically, remain the same throughout your company’s entire lifespan. A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

Key takeaway: A strategic plan draws inspiration from your mission and vision statements. 

Strategic plan vs. company objectives

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

Key takeaway: Company objectives are broad, evergreen goals, while a strategic plan is a specific plan of action. 

Strategic plan vs. business case

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

Key takeaway: A business case tackles one initiative or investment, while a strategic plan maps out years of overall growth for your company. 

Strategic plan vs. project plan

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

A project plan has seven parts: 

Success metrics

Stakeholders and roles

Scope and budget

Milestones and deliverables

Timeline and schedule

Communication plan

Key takeaway: You may build project plans to map out parts of your strategic plan. 

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed. That being said, if your organization moves quickly, consider creating one every two to three years instead. Small businesses may need to create strategic plans more often, as their needs change. 

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What are the 5 steps in strategic planning?

The strategic planning process should be run by a small team of key stakeholders who will be in charge of building your strategic plan. 

Your group of strategic planners, sometimes called the management committee, should be a small team of five to 10 key stakeholders and decision-makers for the company. They won’t be the only people involved—but they will be the people driving the work. 

Once you’ve established your management committee, you can get to work on the strategic planning process. 

[inline illustration] The road to strategic planning (infographic)

Step 1: Determine where you are

Before you can get started with strategy development and define where you’re going, you first need to define where you are. To do this, your management committee should collect a variety of information from additional stakeholders—like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future

Customer insights to understand what your customers want from your company—like product improvements or additional services

Employee feedback that needs to be addressed—whether in the product, business practices, or company culture

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 


What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 


What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your goals and objectives

This is where the magic happens. To develop your strategy, take into account your current position, which is where you are now. Then, draw inspiration from your original business documents—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” This can help you figure out exactly which path you need to take. 

During this phase of the planning process, take inspiration from important company documents to ensure your strategic plan is moving your company in the right direction like:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose

Your vision statement, to clarify how your strategic plan fits into your long-term vision

Your company values, to guide you towards what matters most towards your company

Your competitive advantages, to understand what unique benefit you offer to the market

Your long-term goals, to track where you want to be in five or 10 years

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in

Step 3: Develop your plan

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Your plan will take your position and strategy into account to define your organization-wide plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your strategic plan should be created as the quarters and years go on.

As you build your strategic plan, you should define:

Your company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs for that first year. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Execute your plan

After all that buildup, it’s time to put your plan into action. New strategy execution involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Map your processes with key performance indicators, which will gauge the success of your plan. KPIs will establish which parts of your plan you want achieved in what time frame. 

A few tips to make sure your plan will be executed without a hitch: 

Align tasks with job descriptions to make sure people are equipped to get their jobs done

Communicate clearly to your entire organization throughout the implementation process 

Fully commit to your plan 

Step 5: Revise and restructure as needed

At this point, you should have created and implemented your new strategic framework. The final step of the planning process is to monitor and manage your plan.

Share your strategic plan —this isn’t a document to hide away. Make sure your team (especially senior leadership) has access to it so they can understand how their work contributes to company priorities and your overall strategic plan. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management tool .

Update your plan regularly (quarterly and annually). Make sure you’re using your strategic plan to inform your shorter-term goals. Your strategic plan also isn’t set in stone. You’ll likely need to update the plan if your company decides to change directions or make new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan to ensure you’re building your organization in the best direction possible for the next few years.

Keep in mind that your plan won’t last forever—even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

The benefits of strategic planning

Strategic planning can help with goal-setting by allowing you to explain how your company will move towards your mission and vision statements in the next three to five years. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Align everyone around a shared purpose

Proactively set objectives to help you get where you want to go

Define long-term goals, and then set shorter-term goals to support them

Assess your current situation and any opportunities—or threats

Help your business be more durable because you’re thinking long-term

Increase motivation and engagement

Sticking to the strategic plan

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

With clear priorities, team members can focus on the initiatives that are making the biggest impact for the company—and they’ll likely be more engaged while doing so.

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Why Is Strategic Planning Important?

Above view of team creating a strategic plan

  • 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

Here’s a look at what strategic planning is and how it can benefit your organization.

Access your free e-book today.

What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

  • The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
  • Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
  • Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

Which HBS Online Strategy Course is Right for You? | Download Your Free Flowchart

Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

formal strategic planning disadvantages

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Formal strategic planning in organisations has been defined as encompassing the ‘vision, mission, objectives, action plans and measures to achieve competitive advantage and outperform rivals’ concerning the ‘long term direction’ of the firm, ‘choosing activities to deliver a unique mix of value, and ‘theories about how to gain competitive advantage’. Frery suggested strategy was the nexus of ‘how it adds value, how it employs imitation and how it defines its perimeters.’

Whichever view you subscribe to, strategic planning has gained importance as it not only seeks to chart the performance and direction of the company, but to help develop, plan, implement and evaluate strategic thinking, thereby guiding the longer-term direction and by implication, success of the organisation.

Martin (2014) argues that on the contrary, strategic planning is about cutting off options which when supported by complex spreadsheets, planning schedules and targets simply reduces the ‘discomfort’ experienced by management.

He breaks this process of getting ‘comfortable’ into three elements:

  • creating mission and vision statements
  • generating a list of initiatives in pursuit of the goals and
  • converting these plans into formulaic financial forecasts for budgeting and performance metrics.

In this understanding, strategy is somewhat confused with planning, the process is more concerned with the economics of ‘affordability’ and making plans fit existing resources than questioning assumptions and organising for and examining the other path options available. In fact, this planning-performance relationship is badly understood, and is automatically assumed to provide ‘economic value’.

I will therefore explore the formal strategic planning process and make conclusions as to whether a simplified process avoids all the ‘traps’ detailed in this article.

  • Risk & Opportunity Identification – strategic planning aids the process of risk identification and to better understand and manage for these possibilities and identify new areas of opportunity, which can then be escalated up the management chain on merit to attract funding and top management support.
  • Improved Control – planning allows for management to create targets (both financial and temporal) leading to better control, prioritisation and exploitation of scarce resources and capabilities. It can also inform policy decisions on risk again prioritising expenditure.
  • Consistency – strategic planning offers a consistent baseline from which to measure planning success and allow goal harmonisation, in the short, medium and longer term. Companies may need to make financially hard decisions today, for the future benefit of the company tomorrow.
  • Clarification of Objectives / Shared Vision – it forces executives to agree on a strategic vision for the business within specific time frames, and create a road map to achieve this vision, supported with considered financial forecasts / budgets that allow the business to better fund the vision, communicate the benefits (and costs) with stakeholders and allow measurement of achievements against objectives.
  • Decision Making – Strategic planning forces management into making hard decisions about the future of the company, and different ways to exploit scarce resource-based capabilities and VRIO capabilities (Wernerfelt 1984, Barney 1991). This gains executive support, project commitment and allows for improved teamwork, as management push ahead in a clear strategic direction.
  • Management Direction – once a strategic plan is agreed, the strategy can be communicated, can be used to support changes in corporate culture and improve staff morale and commitment. The ‘One Microsoft’ strategy is a good example of how Satya Nadella implemented a new corporate strategy, breaking down divisional silos and improving cross functional innovation at the world’s largest software business, whilst simultaneously changing the corporate culture. This facilitated their strategic expansion into lucrative new markets such as cloud computing, hardware, gaming and services.
  • Stakeholder Management – better informs the various stakeholders – financial, suppliers, employees, pressure groups, governments of the company’s strategic directions, ambitions, and plans.
  • Stimulates Change – possibly the most important element of strategic planning process is that it stimulates the discussion of change; it faces the future, attempts to anticipate disruptive technologies, forecasts new possible scenarios and futures, strives to understand competitors and their strategic limitations and opportunities, to better understand markets / segments attractiveness and comprehend the possible macro environmental trends and events that rule over these.

However, companies know to their detriment, that understanding strategic opportunities is not the same as committing to and exploiting the right strategic options. Kodak, Blockbuster, Nokia, Blackberry are notable examples of companies, that were following complex formal planning processes, investing in R&D and market opportunities, but were unable or unwilling to change, were supplicant to customers whims, or unable to anticipate the market changes and disruptions needed to succeed which brings us to disadvantages.


  • Time-consuming and Complex – planning is often drawn out, complex, expensive and lacks accountability. It is also rarely fully acted upon as corporate planners challenge executives to adopt ideas that might impact their current performance and related executive bonuses. Plans can also take many years to enact, and the value cannot be clearly envisioned at the outset, e.g. Tesla electric car ambitions. Managers might hide behind this, rewriting the history of the process.
  • Difficult in rapidly changing markets – planning can ‘break down’ in dynamic markets (Eisenhardt and Martin 2000), especially fast paced / high technology environments. It is argued that following ‘emergent’ strategies is often used as an excuse for not setting out in ‘bold’ new strategic directions.
  • Corporate straight-jacket – if a plan is set in concrete, it soon becomes financially biased and can become an impediment to flexibility and agile decision making. Corporate executives become committed to ideas that they wish to drive through, even if logic suggests the plan is not responding. Short-termism might creep into planning and force disastrous or illegal decision-making e.g. WorldCom and Parmalat scandals.
  • Unplanned for opportunities missed – emergent strategies and opportunities might be overlooked as organisations overly focus on ‘today’s’ competition, rather than the new competition. By example, record companies focussed on file sharing sites (Napster etc) and supporting CD sales, rather than identifying the possibilities of file streaming as subsequently exploited by Spotify.
  • Lacks flexibility – strategic planning is inflexible and hampers the organisation’s ability to change direction mid-season. Planning is normally built around a formal annual budgeting process and plans built into concrete a long time in advance of the period to which the plans relate. They become established norms and hard to change.
  • Bureaucratic and Formulaic – building on the last point, formal strategic planning can lead to a lack of initiative, due to excessive formalisation of the process, thereby hindering interim creativity and initiative in management.

The pros and cons of formal planning are therefore complex and varied. However, the context, size and nature of industry are important factors to recognise in how planning should best be conducted. In reality many industries experience long product life cycles, low level incremental innovation, minimal macro environmental change, low profits and market dynamics that ebb and flow with relatively low-level changes in competitor power. In such circumstances, planning, budgeting investments and initiatives within a formalised process, that can be monitored, communicated and measured makes absolute sense.

However, in more dynamic and fast paced markets it is equally sensible to employ strategic management that are able to constantly reflect upon and monitor the real-time market changes and challenges that are evident or even envisioned, and under this context the formal process is not agile and flexible enough to meet the organisational needs.

In the same way that innovative businesses are ambidextrously shielded from the corporate HQ to remove and temper corporate restrictions to innovativeness, through processes such as ‘structural separation’ (Tushman et.al, 1996) or contextual separation’ (Birkinshaw et.al, 2004), an argument exists for employing planning frameworks that do the same. Ongoing mature businesses would benefit from structured and formalised processes. More radical new ideas, possibly disruptive, should be tested, run through scenario planning frameworks by strategists and analysts shielded away from central management bias until the timing is right to introduce fully formed plans to top management.

Finally, small companies should not maintain such a rigid approach as large multinationals. One of the few benefits of their scale is their agility, their entrepreneurial flexibility and this should not be dampened by overly complex planning processes depleting scarce management time.

In conclusion, the nature of the firm, their markets, the competition and the macro environment need to be considered in deciding what form of strategic planning best suits the target organisation.

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What are the strength of formal strategic planning? What are the weaknesses?. Management

  • What are the strength of formal strategic planning? What are the weaknesses?
  • 2019-08-26 15:51:00

Formal strategic planning ensures consistency between the strategies of corporate, business and functional managers and it also provides a sense of direction for the company. Furthermore, formal strategic planning may challenge the prevailing status quo in the company. Formal planning also forces the management to design the organizational culture and structure as well as control mechanisms which otherwise, may be left off. Additionally, formal planning enables the company to evaluate the progress made towards the achievement of specific goals.

One of the most important weaknesses is the fact that businesses are operating in a highly uncertain, complex and ambiguous environment. Consequently, the formal strategic plans are very likely to be negatively affected by unforeseen conditions. Rapid changes in the industry/national/world dynamics require flexible approach and quick adjustments that are profoundly impossible in the formal strategic planning. Moreover, the formal strategic planning if often criticized for not involving the lower-level managers (business and functional managers) sufficiently. In fact, the formal strategy planning is usually a duty of top corporate managers who are not deeply involved in the every-day actives of the company. In addition, the formal strategy planning does not account for serendipitous discoveries and events that may result in missed lucrative opportunities. Last but not least, the formal strategic planning is performed by people who are fallible beings affected by cognitive biases.

Formal Planning’s Strengths and Weakness Report

Introduction, the human element, change from conventional paradigm, spirit of learning, unpredictable project environment, exclusion of lower level managers’ potential.

Many organizations today spend a fortune in formal planning. In various contexts, organisations and researchers have had conflicting opinions on formal planning, with a faction affirming that it improves the overall profitability of a company (in addition to spurring project growth) while others note that it is not crucial at all in the realization of organizational goals (Mintzberg 1994, p. 150).

Before sides are taken in the evaluation of the importance of formal planning, it is crucial to analyze what does it primarily encompasses.

In the words of Armstrong (1982) “Formal strategic planning calls for an explicit process for determining the firm’s long-range objectives, procedures for generating and evaluating alternative strategies, and a system for monitoring the results of the plan when implemented” (p. 4).

Formal planning when analyzed in this context involves a clear articulation of project goals, visions, roles, location, time frames (and the likes), in a developed document or semi document outlining the steps to be followed in the implementation of a given project.

Usually, formal planning has been consistently analyzed alongside informal planning (a paradigm which erodes the importance of having formal plans in the first place), and many researchers have been divided between the merits and demerits of the two.

Informal planning permanently outlines all managerial elements that generally fail to be institutionalized in formal documents and most cases; it receives less exposure because of formal planning out shadows its usefulness since it is much visible and more clearly articulated (Johnson 2009, p. 66).

From this point of view, it is correct to dispute the emphasis created on formal planning because it is usually overrated at the expense of informal learning. These factors withstanding, this study advances the fact that formal education will not provide the intended outcome at a given point in time.

Conventionally, formal planning has been based on the “process” element as opposed to the “human” element. This is a wrong basis because the success of a process is generally based on the input of the workers involved.

Moreover, humans invent “processes,” and therefore the success of a process depends on the humans involved. Scientists such as Taylor (cited in Campbell 2001, p. 99) have openly noted that one of the reasons why essential projects fail to attain their set out goals is because management focuses typically too much on the theoretical component of project success and fail to note the practical part of the same.

The theoretical component usually is facilitated or emphasized by the formal planning process. Conversely, the informal planning process tends to focus more on the practical aspect of project operations, and this is the essential element needed for the realization of project success.

From the number of large projects failing by the day, it is clear that most organizations fail to recognize the critical role humans play in the overall realization of organizational goals and the long-term global sustainability of business or project productivity. Campbell (2001, p. 100) also explains that in today’s fast-paced world, it is the human element of organizational processes that are going to sustain and catalyze the growth and success of organizations in the 21 st century.

For a long time, formal planning has been the conventional paradigm in project operations and management. Today, research studies tend to affirm the notion that a shift from this paradigm is likely to translate to positive results for organizations, in the sense that, an emphasis on informal planning is expected to improve project performance (Campbell 2001, p. 100).

It is clear from recent research studies that formal planning has a precise articulation of roles and responsibilities that tend to be monotonous and less effective in the long run (Campbell 2001, p. 100). When this system is changed, research affirms that new skills and an improved sense of accountability will be realized (Hales 1993, p. 108).

What new research tends to portray is that a shift from conventional practices is likely to impose a new system to measure employee contribution, which will, in turn, increase the level of motivation and ultimately increase the performance of employees in the long run.

Formal planning is also quite monotonous with regards to the structure of control in the organization because it advances a cutout structure of authority where lower-level employees are subordinates to their bosses.

This system is deemed to be less effective than a random and flexible structure where there are no clear distinctions of authority because if such arrangements are abolished; all employees are made equal members of teams and work groups (encompassing peers from inside or outside of the organization). This new paradigm is likely to instill a new spirit of cooperation in the organization and create a hybrid system of performance which is supported and coordinated by all members of the organization.

Formal planning essentially amounts to months or even years of endless planning to come up with specific projections; maybe encompassing financial cash flows, human capital projections, inventory requirements, and the likes. However, all these estimations and years of endless planning may go to waste if the project follows a different course from that envisioned in the formal plan.

From this basis, critics have advanced the fact that experience is the best teacher and formal planning goes against this spirit (Campbell 2001, p. 102). They also promote the fact that continuous learning and experience is the key to project success and formal planning fails to merge with this spirit as well.

In this regard, there is a growing body of research advancing the fact that formal planning does not make much difference to project performance when compared to projects started without formal plans (Campbell 2001, p. 102).

Comparisons have also been made to businesses as is evidenced of Babson College which did a study, evaluating specific business parameters such as annual revenue, employee numbers net incomes (and the likes), and found out that there was no significant difference in the above parameters, when comparing businesses which started with formal plans and those which didn’t (Wall Street, 2010, p. 9).

They, therefore, recommend that unless a business intends to seek to start up capital from a financial institution (say a bank) they do not need to come up with a formal business plan (Wall Street, 2010, p. 9).

Many critics of formal planning have consistently questioned the need for formal planning if the business environment is increasingly unpredictable. They, therefore, advance the fact that formal planning in the determination of future project productivity is mostly fruitless if the future is variable in the first place (Smit 2007, p. 113).

Some formal plans may, therefore, render some projects utterly useless because they may fail to consider the unpredictable nature of future project environment. For instance, Smit (2007, p. 113) notes that it is quite challenging to apply formal planning to tourism projects in Africa because of the political uncertainty of the continent.

He refers to the war uncertainty in Congo and the lack of petrol in Zimbabwe which makes formal planning an impossible process because these uncertainties are mostly unforeseeable in the long run and short run. Smit (2007) further affirms that “Setting oneself on a predetermined course in unknown waters is the perfect way to sail straight into an iceberg” (p. 114).

It is, therefore, crucial for project managers to acknowledge the level of uncertainty, complexity, and ambiguity of the project environment because these elements have a very unpredictable and immense impact on the overall outcome of the project. In this context, it is correct to note that even the most carefully thought out formal plans are not immune to being rendered useless by random and unpredictable changes in the project environment.

When this type of unpredictable and unprecedented changes are evident, project managers are supposed to be on toes by being able to effectively and promptly adjust to changes in the project environment by altering their project strategies to suit the new situations.

This kind of flexibility mostly lacks in formal planning because formal planning is very rigid and involves clearly articulated project steps; regardless of the nature of the project environment. This is likely to lead to high levels of project productivity; an element which may be easily brushed off at the initial stages of formal planning processes.

Hill (2008, p. 11) makes reference to this situation by citing Microsoft’s Chief executive officer, Bill Gates’ dramatic change of strategy, prompted by the 1994 – 1995 unprecedented emergence of the world wide web (www) where he dramatically changed the company’s strategy to deal with the new operations environment effectively. It later ultimately turned out as the antidote for Microsoft to deal with the latest changes in the information technology environment).

Critics of formal planning processes say that such a dramatic change of strategy was not possible if Bill Gates operated under a formal planning process because, under the paradigm, Bill gate’s new strategy could not be accommodated within that specific period (Hill 2008, p. 11).

This is true because usually under formal planning processes, the formal plan can only be reviewed annually, and before such a time reaches, the overall project strategies cannot be changed (Hill 2008, p. 11).

Many critics of the formal planning process have pointed out the fact that many formal plans emphasize a lot on the input of top-level managers and rarely factor in the potential lower-level managers can bring into project operations (Hill 2008, p. 11).

New research studies point out that formal planning can probably plunge project operations processes into low levels of productivity because lower-level managers have a profound degree of influence over the overall realization of project productivity (Bass 2008, p. 315).

For instance, Robert Bulgelman of Stanford University cited in (Hill 2008, p. 11) gives an example where Intel’s CEO, Andy Grove, together with his top-level management team, devised a strategy to enter the DRAM memory chip market (a move which was to plunge the company into financial problems because of the unreliability of the market) but was talked out of it when lower level managers discouraged the top-level management team and the company’s CEO out of the move (thereby saving the company millions of dollars in investments which were to be lost in the venture).

Instead, they advised the company to venture into the market of RISCH-based microprocessors; a move which saw the company soar into high levels of profitability. This move also saw Microsoft Company move its strategies to be of conformance to internet innovation (Hill 2008, p. 11).

From this analysis, formal planning, therefore, makes many project managers rigid to the input of lower-level managers (a move which may potentially be fatal for the company as can be evidenced in the Intel case study analysis) and project managers need to change tact to avert such eventualities.

This study notes that formal planning can potentially render projects utterly useless if they are followed to the latter. This study sources its strengths and arguments from the fact that the project environment today is very unpredictable and requires a lot of flexibility by project managers to attain optimum levels of project success.

Formal planning’s most significant weakness comes from its high level of rigidity and its high emphasis on top level management’s decisions (and more so, the CEO’s); an attribute which is potentially dangerous for project operations. From this point of view, it is correct to note that formal planning will not always provide the outcomes required at a given moment in time.

Bass, B. (2008) The Bass Handbook Of Leadership: Theory, Research, And Managerial Applications. New York, Simon, and Schuster.

Campbell, S. (2001). New Developments In Reengineering Organizations. Management Research News , 24(3), 99–103.

Hales, C. (1993) Managing Through Organisation: The Management Process, Forms Of Organisation, And the Work of Managers . London, Taylor & Francis.

Hill, C. (2008) Essentials of Strategic Management . London, Cengage Learning.

Johnson, P. (2009) Fundamentals of Collection Development and Management . New York, ALA Editions.

Mintzberg, H. (1994) The Rise and Fall of Strategic Planning: Reconceiving Roles For Planning, Plans, Planners. New York, Free Press.

Smit, P. (2007). Management Principles: A Contemporary Edition for Africa . London, Juta and Company Ltd.

Wall Street. (2010) Do Start-Ups Really Need Formal Business Plans? [Online] Web.

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IvyPanda. (2020, January 10). Formal Planning's Strengths and Weakness. https://ivypanda.com/essays/formal-planning/

"Formal Planning's Strengths and Weakness." IvyPanda , 10 Jan. 2020, ivypanda.com/essays/formal-planning/.

IvyPanda . (2020) 'Formal Planning's Strengths and Weakness'. 10 January.

IvyPanda . 2020. "Formal Planning's Strengths and Weakness." January 10, 2020. https://ivypanda.com/essays/formal-planning/.

1. IvyPanda . "Formal Planning's Strengths and Weakness." January 10, 2020. https://ivypanda.com/essays/formal-planning/.


IvyPanda . "Formal Planning's Strengths and Weakness." January 10, 2020. https://ivypanda.com/essays/formal-planning/.

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What is the disadvantages of strategic planning?

Table of Contents

  • 1 What is the disadvantages of strategic planning?
  • 2 What is the formal strategic planning process?
  • 3 What is the formal planning?
  • 4 What are the disadvantages of formal planning?
  • 5 What are the benefits and limitations of strategic planning?
  • 6 What are the advantages and disadvantages of Strategic Management?
  • 7 How long does it take to implement a strategic plan?

Strategic plans often fail due to outside influences such as changes in the economic environment, competitor actions and/or technological change (BPP Learning Media, 2010). Macro-environmental factors may sometimes change extremely rapidly which may frustrate any strategic plans.

What is the formal strategic planning process?

It can be argued that a formal strategic planning process is a deliberate means to include factors and techniques in a systematic way to achieve specified tasks. In essence, it involves the establishment of a clear goal and the necessary processes to achieve it (Armstrong, 1982).

What are the advantages of strategic planning *?

Here are the top 5 benefits of strategic planning:

  • It allows organizations to be proactive rather than reactive.
  • It sets up a sense of direction.
  • It increases operational efficiency.
  • It helps to increase market share and profitability.
  • It can make a business more durable.

What are the weaknesses of formal strategic planning?

One of the most important weaknesses is the fact that businesses are operating in a highly uncertain, complex and ambiguous environment. Consequently, the formal strategic plans are very likely to be negatively affected by unforeseen conditions.

What is the formal planning?

Formal Planning: Planning is formal when it is reduced to writing. When the numbers of actions are large it is good to have a formal plan since it will help adequate control. Formal planning is aims to determine and objectives of planning. It is the action that determine in advance what should be done.

What are the disadvantages of formal planning?

Disadvantages of Planning

  • Rigidity. Planning has tendency to make administration inflexible.
  • Misdirected Planning. Planning may be used to serve individual interests rather than the interest of the enterprise.
  • Time consuming.
  • Probability in planning.
  • False sense of security.

Which of the following is a disadvantage of planning?

A drawback of planning is that it: fails to provide direction to managerial activities. causes detachment, which leads planners to plan for things they do not understand. discourages employees to put in additional efforts when following a plan.

What are the strengths of formal strategic planning?

The strengths of formal strategic planning are that it brings everybody in the company on one platform. It provides a goal and everybody works to achieve that goal. It creates focus in the efforts towards specific short term and long term goals. For recruiting new employees, it acts as a litmus.

What are the benefits and limitations of strategic planning?

What are the advantages and disadvantages of strategic management.

Why is strategic planning important in an organization?

How does strategic planning relate to human resource management?

How long does it take to implement a strategic plan?

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What Are the Advantages of Strategic Planning?

Posted at mar 31, 2020 3:43:00 pm by that agency | share " data-content="     ">share.

The most difficult position a business can find itself in is just keeping up day-to-day. The constant flood of tasks, emails, and urgent demands can leave you feeling like you're barely treading water, struggling just to stay afloat. Amid this relentless tide, long-term planning often takes a backseat, a casualty of the endless to-do list. This neglect of strategic thinking can torpedo your business's future prospects, and it's precisely why understanding the advantages of strategic planning is paramount.

Many businesses have a plan in place, but it often gathers dust on a shelf, brought out only once a year for a cursory glance. This practice ultimately leads to stagnation, where the business merely maintains its current state rather than progressing. So, what are the benefits of strategic planning that can help you break free from this cycle of stagnation and steer your business toward growth and success? This blog will explore just that.

Benefits and advantages of strategic planning | THAT Agency of Palm Beach County

The Power of Strategic Planning

Strategic planning is an organizational process that involves defining an organization's direction and making decisions on allocating its resources to pursue this direction. When it comes to digital marketing and web development, this approach has several clear advantages:

Clear Goal Alignment

Strategic planning ensures that everyone in your organization, from the CEO to the interns, is on the same page. It aligns your team around a common set of goals, making it easier to work towards a shared vision. In the world of digital marketing, where rapid shifts and ever-evolving trends are the norm, this alignment is crucial. It fosters a sense of unity among team members, enabling them to act cohesively and adapt swiftly to the fast-changing landscape. This harmony in vision and action is what can mean the difference between seizing an emerging online opportunity or missing out altogether.

Resource Optimization

One of the key aspects of strategic planning is resource allocation. By carefully distributing your budget, time, and personnel, you maximize the efficiency of your digital marketing efforts.

For instance, allocating your budget to high-impact advertising campaigns that align with your strategic goals can yield significant returns on investment. This judicious allocation of resources doesn't just optimize your efforts; it can lead to cost savings as well. By pinpointing where your resources are best invested, you reduce wastage and improve the overall outcome of your digital marketing endeavors.

Risk Mitigation

The digital marketing landscape is notorious for its uncertainties. Algorithms change, consumer behavior evolves, and unforeseen market shifts can occur. This is where strategic planning shines. It helps you anticipate potential challenges and devise contingency plans.

When you've already identified and prepared for these challenges, you can react swiftly to market shifts and minimize the impact of unexpected obstacles. In essence, strategic planning is your insurance policy against the unpredictable twists and turns of the digital realm.

Competitive Advantage

Understanding your competition is vital in the digital realm. Strategic planning involves competitive analysis, allowing you to identify gaps and opportunities in your market. Armed with this knowledge, you can position your brand to outperform competitors and seize market share.

For instance, if your analysis reveals an untapped niche in the market, your strategic plan can guide you in tailoring your digital marketing efforts to cater specifically to this segment, giving you a competitive edge. It's this competitive advantage that sets you apart and allows you to flourish in a crowded online space.

Measurable Progress

Strategic planning includes setting Key Performance Indicators (KPIs) that enable you to measure your progress. This data-driven approach lets you track the success of your digital marketing campaigns and make informed adjustments as needed.

For instance, if one of your KPIs is to increase website traffic by 25% over six months, you can continuously monitor this metric. If, after three months, you're falling short of the target, your strategic plan empowers you to make data-backed adjustments. This adaptability and fine-tuning of your strategy based on measurable progress are invaluable in ensuring your digital marketing campaigns stay on track.

Adaptation to Market Changes

Digital landscapes change rapidly, and what works today might not work tomorrow. A strategic plan is not set in stone; it's a living document that can be adjusted in response to market dynamics. If an algorithm update or a sudden shift in user behavior affects your digital marketing strategy, your strategic plan allows for quick adjustments. This flexibility ensures that your marketing efforts remain relevant and effective, allowing you to navigate the ever-changing digital waters with ease.

Improved Decision-Making

Strategic planning encourages data-driven decision-making. By relying on analytics and insights, you can make informed choices about which marketing strategies to pursue and which to discard. For instance, if data reveals that a particular advertising channel consistently yields a high return on investment while another lags behind, you can confidently allocate more resources to the former. This ability to base decisions on hard data enhances the efficiency and effectiveness of your digital marketing campaigns.

Enhanced Communication

Efficient communication is a linchpin of any successful project. Strategic planning promotes clear and consistent communication among team members, leading to smoother workflows and better outcomes. When everyone in your team understands the strategic objectives, there's a reduced chance of miscommunication or misunderstandings. This enhanced communication streamlines the execution of your digital marketing strategies, ensuring that everyone works towards the same goals, and the results speak for themselves.

Strategic Planning Examples

To illustrate the practical application of strategic planning, let's consider a couple of examples:

Apple Inc. - Product Diversification and Brand Building

Apple Inc. provides a stellar example of how strategic planning can transform a company. In the late 1990s, Apple was facing dire financial straits. Its product line was limited, and its market share was dwindling. In a bold move, Steve Jobs returned as the company's CEO and initiated a strategic plan that would reshape the tech giant's destiny.

Apple focused on diversifying its product range and strengthening its brand image. They introduced innovative products like the iPod, iPhone, and iPad, accompanied by a clear branding strategy emphasizing simplicity and elegance. By aligning the company's vision with these products, Apple made a remarkable turnaround.

Their strategic planning not only boosted sales but also solidified Apple's position as a technology and design leader, turning it into one of the most valuable companies globally.

Netflix - Digital Transformation and Content Strategy

Netflix is another prime example of the power of strategic planning in the digital age. The company, originally a DVD rental service, recognized the changing landscape of the entertainment industry.

They adopted a visionary strategic plan that centered on digital transformation and content creation. This move paved the way for their subscription-based streaming service. Netflix invested heavily in creating original content, taking a calculated risk that would redefine the entertainment industry.

This strategic shift paid off magnificently, with Netflix now boasting millions of subscribers worldwide and an impressive library of award-winning shows and movies. Their strategic planning transformed a traditional DVD rental company into a digital entertainment powerhouse, setting a benchmark for adaptability in the modern business world.

You Future Starts with Today

The advantages of strategic planning in the digital marketing and web development world are undeniable. It aligns your team, optimizes your resources, mitigates risks, and empowers you to gain a competitive edge. By setting clear goals, making data-driven decisions, and adapting to market changes, you can drive your digital marketing efforts to success.

If you're ready to take your digital marketing strategy to the next level, contact THAT Agency today. We specialize in providing a range of services related to digital marketing, web design, and development, and we can help you create and implement a strategic plan that will lead you to your online goals.

In a rapidly changing digital world, strategic planning is your compass, guiding you to success. Embrace it, and watch your digital marketing endeavors flourish.

This blog was last revised and updated in September 2023 to reflect the latest industry trends, knowledge, and changes.

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formal strategic planning disadvantages

What are the strengths of formal strategic planning? What are its weaknesses?

  • Strategic Management: Theory & Cases: An Integrated Approach. 13th Edition · Hill/Schilling. ISBN:9780357033845

Solution by a verified expert


The strategic planning process is a management activity that involves decision-makers and top-level managers. This process requires accurate data and information that will provide the participants of the strategic planning process a business intelligence that will help them generate the appropriate strategies to be implemented.   With the right information, organizations will be able to position themselves better against competition and other external forces. It will allow them to react in a timely manner and execute responsive strategies in order to achieve their strategic and financial objectives.

Sample Response

Strategic planning may be a tedious process, but it has advantages and disadvantages.  The advantages of formal strategic planning include the following:

knowing how to strategically position the organization in the industry understanding when and how to react in a competitive environment assessing the appropriate strategies that will help the organization in creating a unique competitive advantage.

  The disadvantages of formal strategic planning are:

the data that the organization obtained in assessing the internal and external environment may not be accurate, resulting in the inappropriate formulation of strategies. current events may be happening at a rate faster than the actual strategic planning process, which can make the organization's information obsolete.

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formal strategic planning disadvantages

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