Why Is it Important to Continuously Update a Strategic Plan?

by Leigh Richards; Updated September 26, 2017
Business meeting around table

Companies that are able to embrace change by recognizing the opportunities it presents, and incorporating those opportunities into their strategic planning efforts, can find business success. It's important to be constantly reviewing the internal and external factors that impact a business, and modifying strategic plans to accommodate those factors. Change can impact strategic plans from a variety of perspectives.

Changing Consumer Demands

Changes in consumer demand can impact a company's strategies significantly. Consider the impact of streaming video on companies like Blockbuster, or the advent of mobile phones on AT&T. Companies must continually update their strategic plans to recognize and accommodate these types of changes. By evaluating internal sales data, as well as industry statistics and consumer buying trends, companies can be alert to early warning signs of shifts in demand that may impact their strategic planning efforts.

New Competitive Forces

Few companies are alone in their fields for any length of time. Once one organization discovers the next great thing, others are certain to follow. Even entrenched companies with strong brand equity can be subject to the impact of competitive forces. Because the competitive environment is constantly changing, companies must adapt to these changes by modifying their strategic plans to reflect shifts in their own strategies — to introduce new products, modify existing products, or change marketing strategies.

External Economic Factors

As many companies have discovered during downturns and recoveries, economic factors can have a significant impact on consumer buying trends. A rapid rise in layoffs and a tight hiring climate mean less disposable income, which can negatively impact industries like travel and entertainment — but may have a positive effect on other industries, as consumers stay closer to home and increase their purchases of home-based products and improvement items. Economic factors can represent both threats and opportunities to organizations. Companies must be continually alert to these external impacts, and adjust their strategic plans accordingly.

Changing Workforce

The demographics of an organization's workforce change continually, and are impacted by voluntary and involuntary terminations, retirements and the need for new skills to address new legal, regulatory and technological requirements. A company's strategic plan will be impacted, and will need to be updated to address these changes — whether it be through new hiring practices, additional internal training, or restructuring activities. Technology may also impact the number and types of employees needed to perform certain activities, and may lead to reductions in force or redistribution of staff.

Resources

  • Erica Olsen, "Strategic Planning for Dummies," 2006
  • Robert W. Bradford and Brian Tarcy, "Simplified Strategic Planning," 2000

About the Author

Leigh Richards has been a writer since 1980. Her work has been published in "Entrepreneur," "Complete Woman" and "Toastmaster," among many other trade and professional publications. She has a Bachelor of Arts in psychology from the University of Wisconsin and a Master of Arts in organizational management from the University of Phoenix.

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