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Strategic Planning Problems

By Edited Nov 13, 2013 1 0

Although strategic planning is the key for any company to be successful, there are many strategic planning problems that are likely to be experienced by inexperienced organisations. The reality is that the decisions taken today will affect the running of the company in the short and long term; this is why a good corporate plan should coincide with the vision or a company, not only with the short-term objectives of growing and profitability – sustainability should always come as a priority over profit; however, they are closely linked.


Why a strategic planning fails

    1. Strategies are normally taken considering short-term success – the article Business Plan and Strategic Planning outlines the importance of this key element (exact balance of short, medium and long-term strategies).


      2. Not considering external stakeholders – knowing future demands and trends is normally overlooked by many organisations, and this is only achieved by studying and analysing what the public wants and predict changes in their circumstances (a luxury product might not perform well during a financial crisis). It is estimated that the management level should spend around half of their working time looking at external issues and the competition performance.

      3. Go into too many details – although careful consideration should be taken when drawing the strategic plan; it is important to avoid going into too many details; remember that your plan is for the next three to five years; therefore the bigger picture is the key rather than specific details; also, review of the plan when needed is important; for example, if you business is selling tablets computers such as the iPad or Blackberry, you should consider future trends in technology and what people wants.


        4. Not considering scarce resources – depending on the sector you work in; it might be that some of the key parts to develop your products might be at risk, this could be due to lack of raw material or very few providers; if one of these two fail, your company might also fail with them – the organisation needs to look for second and even third alternatives just in case something goes wrong; it is important not o rely too much in one provider; this will also help you to achieve lower costs due to the increase competition.


        5. Lack of a good financial plan marketing strategy - the use of marketing strategies to increase profit maximisation is one of the reasons why so many companies fail; the article explains “The importance of a financial plan depends on the type of ‘plan’ produced as it could include budgets; forecast, investment plans and in the accounting world the three more important are the balance sheet, profit and loss account and the cash flow statement. Any investment opportunity will demand to produce a single document with all the information needed to make a decision; in simple words a financial plan is the CV of any organization and will prove how solvent and focus on the long-term running and welfare of the organization as a whole”


          6. Although strategic planning is important, a business should consider the time and money invested in order to create the corporate plan; in many cases, depending on the size of the organisation, a full time person with experience in the finance/accountancy world is required to keep good control of the actuals vs. budget.


          7. Increase in bureaucracy and looking at the company based on the plan – the external environment might change and the plan should change with it.



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