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How Size Affects Strategic Business Planning

By Peter Smith

Strategic planning in business is a matter of aligning a company’s mission, vision, and goals with proven strategies that will guarantee that company achieves what it sets out to do. While the fundamental concepts of strategic business planning apply equally to businesses of all sizes and scopes, company size has a profound impact on how strategic planning is implemented.

At the core of strategic planning are both internal and external factors. Internal factors are those the company largely has control over. They include things such as human resource management, technology and infrastructure, outbound logistics, marketing, branding, and the procurement of assets and inventories.

External factors are significantly more broad and less open to company control. These include things like market response, market competition, the availability of skilled labour, the regulatory environment, and general economic conditions. The advantage of size in terms of external factors is one of being able to better adapt to those things a company cannot control.

Strategic Business Planning for Large Companies

Strategic business planning for large companies focuses more on the internal factors than the external. Why? Because the largest companies owe much of their growth to expansion beyond their immediate markets. Consider a global corporation as one example. They are global because they are active in markets all over the world.

Assume a North American company is looking to establish operations here in the UK. That organisation’s strategic business planning would have to account for external factors relating to our markets, regulations, and economics. But more importantly, strategic planning means implementing those key strategies that will keep the company’s internal structure intact while still adapting to localisation. Planning must keep the company’s UK operations focused on the same mission, vision, and values even in the midst of local economics and regulations that can be very different from North America.

Strategic Business Planning for Smaller Companies

The opposite end of the spectrum is strategic business planning for smaller companies. Their focus will be more on external factors and less on the internal. The reason is simple: successfully establishing internal strategies eventually leads to the need for finding strategies to effectively deal with external factors in order to grow and expand outward.

Strategic planning in business is all about implementing the strategies that will ultimately be key to growth. A small business already successful in its local area likely has a good handle on the internal factors already. Expanding therefore requires companies to look beyond local markets and constraints. This requires adopting new strategies better equipped to handle the external factors that are not as easy to control.

Company size definitely affects strategic business planning at nearly every level. For smaller companies, more attention needs to be devoted to external factors that may otherwise inhibit growth. Larger companies shift their focus from external factors to those internal things that need to remain intact during global expansion. On both ends of the strategic planning scale, the economies of scale dictate the kinds of strategies a company will implement.

By Peter Smith.

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