A strategic plan is the company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive edge. The essence of strategic planning is to ask that where does the company stand currently and where does it see the company in the future but a strategic plan helps devise the plan of how to get there accordingly.
It is the responsibility of the manager to formulate specific human resources and other resources plus strategies to take the company from where it is now to where the company aspires to be. A strategy is a course of action like Ford’s strategies regarding closing plants or terminating employees are an apt example.
A strategy is the present and future direction of the organization and it covers certain aspects such as assessing the organization’s internal competencies and capabilities, assessing environmental threats and opportunities, deciding the scope of the organization’s activities, creating and communicating a strategic vision, managing the process of change in an organization.
A strategy forms the basis for the analysis of a firm’s relationship with its environment specifically in achieving competitive advantage through distinctive competencies and also unique relationships (Kay, 1993).