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Why No Enterprise Should Be Without A Formal Business Strategy

By Cassie Nickerson


Every enterprise, big or small, faces constant change. Fashions change at an astounding pace, new products are developed and introduced almost daily and technology is advancing so fast that few people can keep up. Yet, if enterprises do not keep pace with new needs, demands and products, they will grow stagnant and eventually simply cease to exist. With a proper business strategy it is possible to keep up to date, to anticipate change and to take advantage of those changes in good time.

Big companies that consist of various trading units are in danger of working against themselves if they do not have specific plans in place. These plans must make sure that each unit works in cohesion with the other units that form part of the company. If there are no strategic plans in place, the various units can actually work against each other, causing the mother company harm.

It is not only large corporations that need strategic plans. Every organization, even non profit organizations need to have strategic goals. The organization or enterprise exists for a specific reason and to achieve specific objectives. Without a plan it is unlikely that these objectives will ever be achieved. A strategic plan is therefore a practical document that is designed to guide the organization towards the achievements of its goals.

There are numerous factors that need to be taken into consideration when developing a strategic plan. External environments that have a decided influence upon the organization needs to be studied. These environments should include the technological, international financial, political and social environments. It is then necessary to list the ways in which developments in each environment can have an impact, positive or negative, on the organization.

The inner workings of the company must also be analyzed. It is necessary to identify threats to the company and to recognize distinct opportunities. Plans must be made to avert threats and opportunities need to be exploited as best possible. It is furthermore necessary to identify the weaknesses of the company and its particular strengths. Plans can then be made to build on the strong points and to eliminate the weak ones.

The development of a strategic plan is a complex business and can hardly ever be done by a single person. Most corporations therefore hire external experts. Independent experts are less likely to be biased, threatened or subjective. It remains important, however, to be actively involved in the process because those inside the company have a better idea of where the organization wishes to go.

Because the world keeps changing there are always new factors that have to be made part of the strategic plan. A strategic plan can therefore never be completed. It is an ongoing process that can only be valuable if it stays in pace with the world at large. Enterprises must therefore be vigilant for any change in the micro and macro environments. Some corporations have experts focusing solely on this function.

Without a long term plan no business can hope to show consistent growth. It is necessary to identify those changes, trends and developments that will impact upon the business. Predicting the future accurately is impossible. Yet it remains possible to keep track of developments and to make provision for anticipated changes.




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