Definition
Strategic plan
A strategic plan is a document that summarizes how a company plans to operate and grow over the next three to five years. It describes the business opportunities the company will pursue and how it will do so, presenting the decisions made by management in three areas:
- Strategic goals—the financial and non-financial targets and expected results for the coming years
- Strategic scope—the products and services that will be offered, to who and where
- Key success factors—the important elements required for the company to achieve its goals
Strategic plans are important because they:
- Set the overall direction for the company, allowing all employees to work toward common goals
- Drive priority setting, resource allocation, capability development and budgeting activities
- Shape all communications with internal and external stakeholders
- Form the basis for marketing, operations, IT and human resources plans for the coming years
- Guide management decisions as new opportunities and threats emerge
The content of a strategic plan is usually derived from an assessment of a company’s strengths, weaknesses, opportunities and threats (SWOT analysis).
More about strategic plans
Strategic plans must be clear, direct and easy to understand. A typical strategic plan includes:
- An executive summary
- A one- to two-page overview of market opportunities and threats
- A one- to two-page overview of the company’s strengths and weaknesses
- A listing of strategic goals
- An explanation of the strategic scope
- A description of the key success factors
- A set of priority initiatives for addressing immediate opportunities and risks
- Expectations for all employees, including a call to action
- An appendix containing the more detailed findings and implications of the SWOT analysis