Impact of Strategic Planning on Profit Performance:

Impact of Strategic Planning on Profit Performance:

                HarvardBusiness Review published an article on their web page which is processed and worked out by Marketing Science Institute in which the impacts of strategic planning on profit performance is explained with their PIMS Model-Profit Impact of Marketed Strategy.

Today I choose this topic to explain the profits, strategic Planning and their relationship over workplace performance. The Business is not a single entity it is a combination of different objective oriented activities which provide a baseline to the business management, leadership and owners to make an effective remarkable growth in the market and achieve a handsome amount of profit form their strategic projects which are planned very efficiently.

But for making a direct relationship between the strategic planning and performance to watch the impacts of this relationship we need to understand the Profit. That’s the reason the question is that What means by profit? What is the Strategic Planning? What is the relationship between them and What are the impacts that improve the performance of profit with efficient strategic planning?

According to the Business Dictionary web page Profit define as “ The Surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an enterprise. Profit reflected reduction in liabilities, increase in assets, and/or increase in owners’ equity. It furnishes resources for investing in future operations and its absence may result in the extinction of a company. An indicator of comparative  performance, however, it is less valuable than return on investment (ROI) also called earnings, gain or income.”

Strategic Planning can understand and define as the controlling mechanism for guiding the implementation of the strategy. It is an organizational process which is define as a process which is followed by the organization to achieve its goals through making a direction or path way towards the achievement of goals and objectives.

After understanding the profit and strategic planning now we can think about those impacts which can make the impact over profit and performance. According to the study of  Marketing Science Institute and the PIMS Model.

The Business Organization use ROIor Return Over Investment to measure their profit and make a view about performance. That’s the reason we need to focus over those areas and points through which we make a determination about profit or they know as profit determinants. As per PIMS model there are 37 distinct factors which can impact over profit performance. But Market Share of a business and its investment share or influence are the two key factor which are more discuss oriented. Otherwise the Company own internal planning factors like it, capacity, technology, board of directors decisions and customers demand and supply are the factors which can make the impacts over performance and profit and all that due to their strategic planning.

Harvard Business Review also did workout over this topic in 1974. But the new and latest reviews and study over this topic helps us more to understands the impacts of strategic planning over profit and performance.