What Is Strategic Planning and Why Is It Important?

1.  What is strategic planning and why is it important?

Hill & Jones (2010) refer strategic planning to the institutionalization of a comprehensive process in order to determine in which direction a company should develop (or a certain part of the company). Specifically, a company will choose from different success potentials and undertaken actions as well as allocated resources.

As a management system, strategic planning supports the management in the development of strategies. Thereby, it usually serves as an instrument of strategic management to coordinate the strategic development plans of different departments. The focus is on the balance between the normative requirements of the management (business goals, performance expectations, strategic priorities, etc.) and the development plans of the business to ensure consistency. In doing so, it is critical to match the expected changes in the social-economic environment of the company. This adjustment is required in order to make decisions for the allocation of resources that can also be of interest for the entire company and its planned future development.

With respect to the second part of the first learning goal “why is it important”, it is imperative to state that strategic planning is essential to determine the company’s targets/goals that should be met in a certain time period. Furthermore, business strategies are developed by the management that will provide the framework for the entire company with the definition of a mission, values, vision, and goals.

Application: In order to stay competitive, companies that work in the animation sector such as Brown Bag Films have to adapt these “trends and wants” and therefore also focus on products that require new technology. Correspondingly, media convergence and globalization represent an important past within the animation sector. The example of Brown Bag Films shows how globalization can result in an extension of a business. Therefore BBF extended their field of operations and are also located within the USA.

BIBLIOGRAPHY

• Hill, C.W., & Jones, G.R. (2010). Strategic Management. An Integrated Approach. Mason, USA: South-Western Cengage Learning.
• Slevin, J. (2012). Strategic Management in the Media. Leeuwarden, Friesland, Netherlands: Stenden University.

2.  Why is strategic planning especially in the media industry important?

In regard to the Media & Entertainment Industry, strategic planning is crucial in order to focus on internal drivers of profitability. Consequently, the company's facilities with its specific resources and skills are seen as the primary source of competitive advantage (Hill & Jones, 2010).

According to Küng (2008) the media landscape is characterized by a fast changing, fast growing and highly competitive environment. Therefore strategies might have to be adapted more often and the strategic managers have to be more flexible and up to date than in other industries. The question thereby is how a company can use its given resources in order to position themselves in a unique way.  This could be achieved by skills that are located at a certain business level, but also at the corporate level. As a result, companies focus on what they are very good in (the core competencies).