## Strategic Planning

### Definition

Strategic planning is a process of determining organisational strategy. It:

Gives direction to the organisation
Involves making decisions and allocating resources to pursue strategy
Serves as the formal blueprint for the future course of an organisation

Strategic plans are made by senior management for the entire organisation after considering internal strengths/weaknesses against external opportunities/threats (SWOT lens).

### Three Key Questions Strategic Planning Addresses

#	Question
1	What are we doing?
2	For whom do we do it?
3	How to improve and excel?

### Characteristics of Strategic Planning

1. Shapes the organisation and its resources

2. Assesses the impact of environmental variables

3. Takes a holistic view of the organisation

4. Develops overall objectives and strategies

5. Concerned with long-term success of the organisation

6. Is a senior management responsibility

### Strategic Planning vs. Operational Planning

Dimension	Strategic Planning	Operational Planning
Focus	Future direction and resource acquisition	Current deployment of resources
Approach	Develops strategy	Develops tactics
Time horizon	Long-term	Short-term
Projection	New future possibilities	Projects current operations forward
Responsibility	Senior management	Functional managers

Worked example

### Example 1

Q (PYQ May 2023): Strategic planning is an important constituent of strategic management. Explain the meaning of strategic planning and outline its characteristics.

Answer:

Strategic planning is a process of determining organisational strategy. It gives direction to the organisation and involves making decisions and allocating resources to pursue the strategy — it is the formal blueprint of the future course of an organisation.

Strategic plans are made by senior management for the entire organisation after taking into account the organisation's strengths and weaknesses in light of opportunities and threats in the external environment.

Strategic planning deals with three key questions: (1) What are we doing? (2) For whom do we do it? (3) How to improve and excel?

Characteristics:

1. Strategic planning shapes the organisation and its resources.

2. Strategic planning assesses the impact of environmental variables.

3. Strategic planning takes a holistic view of the organisation.

4. Strategic planning develops overall objectives and strategies.

5. Strategic planning is concerned with the long-term success of the organisation.

6. Strategic planning is a senior management responsibility.

⚠️ Common exam mistakes

Confusing strategic planning with operational planning — strategic planning sets direction (long-term, senior management), while operational planning deploys existing resources (short-term, functional managers).
Stating that strategic planning only deals with the future without mentioning resource allocation — both direction-setting AND resource allocation are central.
Saying strategic plans are made by functional managers — they are always a senior management responsibility.
Listing characteristics without explaining WHY each is a characteristic — exam answers score higher when the logic is briefly stated.

Reference:

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Strategic Planning – Meaning, Characteristics and Comparison with Operational Planning

Worked example

⚠️ Common exam mistakes