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What is a Strategic Plan?

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Simply stated, a strategic plan is a road map or course of action for achieving desired results. It is typically laid out well in advance of the first steps of initial action. Strategic plans are designed to expand borders, deepen product lines or, in many cases, launch brand new ventures. Additionally, they are crafted to act as a guide book through the program. Whether that is an expansion or new product line, the strategic plan helps to keep the various departments centered on the goal and plans laid out before them.

Strategic plans are typically developed by committee. The process is often long and arduous spanning the course of many days or weeks to complete. In a typical strategic planning setting, it is common to find representation of all areas of the company, whether senior management or middle management. Often, high-level strategy consultants are brought in to help guide the discussions and research to ensure that plans are well thought out.

The strategic plan also plays a vital role in seeking funding. Investors, venture capitalists and shareholders consider the strategic plan (sometimes referred to as a business plan) fundamental to obtaining loans or extra capital. In today's world, very few loaning institutions will proceed without a well-written, thorough strategic plan in place. These same lending institutions will also take a close look at the planning committee and the management of the company, using the strategic plan as a guide for where to scrutinize.

For a strategic plan pushing a launch of a new semiconductor division, for example, the research and development and informational technology departments might be peppered with additional questions from bank officers or loan analysts seeking to determine the level of expertise within the organization.

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