It may seem an obvious statement to say that strategic planning is a process. Yet it is important to grasp that strategic planning is a series of sequential activities supported by monitoring, review and evaluation. Initially it requires a big picture perspective and an objective standpoint to look at the business in its entirety to chart a course for the future. It then requires a detailed focus to plot the interrelated actions that are required across the business to enact the strategic plan.
Being customer centric is about having an underlying commitment to placing the customer’s interest at the centre of every business decision. This requires a consideration of the most appropriate sales and service strategies to fulfil on that commitment. Retailers, both large and small benefit from paying close attention to how they develop and put in place their strategies as in modern retail, the success of their business may depend on it.
To learn how to steer your success as a team leader, the ARA Retail Institute runs multiple workshops on leadership and team culture. Join the ARA Retail Institute in their latest workshop on the foundations of retail buying.
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Strategic planning defined
Strategic planning is the process of planning the direction and strategic objectives of an organisation over a given period of time.
Strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide an organisation, business or other entity:
- What it is
- What it does
- Why it does it
Strategic planning requires broad information gathering, an in-depth exploration of alternatives and an emphasis on the future implications of present decisions. It can facilitate communication and participation, accommodate varied and divergent interests and values, and foster orderly decision-making and successful implementation (Bryson, John M. Strategic Planning for Public and Non-profit Organisations. San Francisco: Jossey-Bass, 1989, p. 5).
In essence, strategic planning seeks to provide a direction for the business to follow.
In simple terms answering the following can capture this:
- Where are we now?
- Where do we want to go?
- How do we get there?
Strategic planning offers business leaders the opportunity to improve clarity on what the business will and won’t do. When distilled to the customer facing level, effective strategic planning should prepare staff to make small scale decisions that reflect overall business directives without needing to refer to management.
Ideally strategic planning should define:
- What-
Immediate decisions that affect the business in the long term
- Why-
Sets the parameters of what can and should be accomplished
- How –
Integrated set of actions in the pursuit of competitive advantage
Retailers need to find the right collection of actions that provide the business with a targeted point of difference and a winning advantage over competitors. This is the domain of strategic planning.
Scope and direction
Through strategic planning, people within organisations can develop a better understanding of the business environment, including an awareness of current and potential capabilities and limitations of the business in which they work.
Strategic planning can be used to support all sizes of retail businesses from stand-alone specialist businesses to large national and international chains, and its benefits can be equally valuable to each.
The strategic planning process can be applied to corporate, operational, and people strategies and inform the development of action plans that flow out of them. It is best done holistically for the entire business as it is as much a philosophy of business as a tool for change.
Benefits to business
Operating a business without a plan is akin to driving without a map or GPS.
Businesses adopting a strategic planning approach to business find an increased ability to focus upon key measures of success. They include:
- A high rate of return on investment
- Developing a competitive offer
- Growing the business
- Doing it on a sustainable basis
Ultimately, each business’ strategic plan should help its leadership determine how to win their market by developing clarity on their current position, their intended direction and how to get there.
It helps them give attention to:
- Gross margin management and cost control
- Asset management and productivity
- Financial management and capitalisation
- Points of competitive advantage
- A changing marketplace
Importantly, strategic planning helps businesses understand the market they operate in, their competition and their customers.
This is essential for business sustainability, particularly in the retail context.
About ARA Retail Institute
ARA Retail Institute is Australia’s leading retail training provider for both accredited and non-accredited learning programs. For more information, please visit: www.retailinstitute.org.au
