Business Planning and Strategy Management
In today’s highly competitive, global business environment, vision isn’t enough. What matters most is knowing how to execute on that vision to drive meaningful results.
In order to carve out a space in the marketplace and sustain a competitive edge, senior management need to ask, “Where do we play, and how do we win?” Being able to identify and determine the viability of strategic opportunities, and know where and when to make trade-offs, is key to long-term success.
To help SME’s and entrepreneurs shape the future of their companies, Nakum-Soft Company has developed Business Planning and Strategy Management Execution methodology designed to equip SME’s management teams and Startup Entrepreneurs with the skills they need to craft and implement differentiated, actionable strategic plans.
After looking at hundreds of small businesses and working on a number of them, I have seen certain patterns of conduct recur again and again that lead to eventual failure. If a company is in difficulty, it is almost always a management problem, scarcely ever bad luck.
When a company survives for many years but finally comes upon hard times, it usually means (a) that there is a valuable core of talent and expertise somewhere in the corporate structure yet (b) some persistent management inadequacies have gradually eroded its strengths and left it vulnerable to whatever adverse fortune it encounters.
In a moment, I shall get into those areas that cause management the most trouble, but first permit me to clarify one point. While this article focuses on the lessons I have learned about operating small manufacturing businesses, much of what I discuss is applicable to the practical problems faced by operating units of sizable companies.
In my judgment, there are three principal areas of weakness in small businesses that cause trouble, all of them management centered.
- Growth of sales is commonly seen as the solution to all problems. There is an unawareness that, except in the short run, there is no such thing as fixed overhead. Managers, trapped by the concept of marginal income accounting, bring out additional products, believing that their overhead will not be affected.
- Inadequate product-cost analysis blinds managers to the losses incurred by adding new products willy-nilly. Usually, there are one or more products or product lines that should be dropped.
- Gearing operations to the income statement, while ignoring the balance sheet, is all too common. Lack of concern with cash flow and the productivity of capital employed can be fatal. Managers tend to seek new funds instead of making better use of those they already have.
The Benefits of Strategic Management and Planning
Strategic management and strategic planning give an organization a direction to move in. Employees, managerial staff, and upper-level management will all be working together to achieve these goals. Through this focus, the company can ensure that their operations are as efficient and effective as possible. The decision-making process is further streamlined because the organization knows exactly what it is working towards and what it needs to accomplish these goals.
Not only are initiatives decided through the process of planning, but they are also privatized through the process of management. This aids the organization in resource and time management, by ensuring that the right priorities are tackled first. Once the plans have been successfully deployed, they will also be continually analyzed and modified. This gives the organization a structure through which they can constantly improve and investigate their operations.
Both short-term goals and long-term goals can be successfully managed through these strategies, keeping a business on task and creating metrics by which success can be rated. For organizations that are growing and developing, this is even more important; strategic management and planning will aid a business in avoiding over-extension and improving their results.
Through strategic management and planning, companies are able to improve upon every level of their business. But this type of strategy can be difficult to develop from the ground up. Strategy and Management Services, Inc. provides comprehensive strategy planning and management services, designed to improve upon the operations of any organizations. Contact SAMS today to learn more about integrating strategic management and planning into your business.