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Glossary / Lexicon

What is corporate planning?

10/06/2023 | By: FDS

Corporate planning is a strategic process in which a company plans its goals, resources and activities to ensure long-term success. It includes a systematic assessment of the company's current situation, setting goals and developing strategies and plans to achieve these goals. Here are some of the main aspects of business planning:

Goal setting: Corporate planning begins with setting clear and measurable goals. These goals can be financial in nature, such as sales or profit targets, or non-financial in nature, such as increasing customer satisfaction or introducing new products.

Analysis of the current situation: Companies need to analyze their current situation, including their strengths, weaknesses, opportunities and threats (SWOT analysis). This helps set realistic goals and develop strategies that build on the company's current position.

Strategy development: Based on the analysis, the company develops strategies to achieve its goals. This may include introducing new products, expanding into new markets, cost-cutting measures or other strategic initiatives.

Operational Planning: Operational planning focuses on implementing strategic goals and plans at the business activity level. This includes allocating resources, setting budgets, determining responsibilities and schedules, and developing performance indicators to monitor progress.

Budgeting: An important part of business planning is the creation of a budget that determines the company's financial resources for planned activities and expenses. The budget serves as a guide for financial control and monitoring.

Control and monitoring: After implementing plans, it is crucial to monitor progress and ensure goals are met. When deviations occur, adjustments can be made to respond to changes in the business environment.

Long-term perspective: Business planning usually covers a long time horizon, often spanning several years. It enables the company to develop long-term visions and strategies to ensure sustainable growth and success.

Business planning is a dynamic process that is regularly reviewed and adjusted to respond to changes in the business environment and within the company itself. It plays a crucial role in aligning all company activities towards defined goals and in ensuring the long-term competitiveness and profitability of a company.

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