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The Impact of Strategic Planning in International Business

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    Strategic planning is a significnt tool in the strategic management of organizations and companies. This planning can be conducted annually by a company, and it is considered to be an important process where companies can organize their activities. Companies across the globe implementing this planning find themselves at a better position, in dealing with the dynamic market environment and having a competitive edge over their competitors.


    The concept of strategy has had numerous underpinnings in different fields and industries across the world, but over decades it became essential when it is integrated into the major process of organizational activities, in both profit and not-for-profit oriented enterprises. Strategic planning can be depicted to be a longitudinal study, where institutions identify changes that affect their performance over time, and consequently incorporate strategic tools in their competitive and dynamic market environment. It is crucial for organizations undertaking international business to understand, the practice and nature of employing strategic planning and its effect in the global market arena, and the possible correlations between their performance and efforts in business output. More so, organizations need to understand issues in international business, which they cannot control and simultaneously have a potential impact, on their business transactions, success and survival.

    Formal planning exerted by a company in the international scene can, have some positive aspects such as creating competitive advantages, positive control in regard to market forces, improve organizational performance and its overall effectiveness. Consequently, with the importance strategic planning generates, various international businesses and organizations have directed their attention towards the process of strategic planning, and the relationship in the firm’s efforts and the performance achieved, translating to a developed market economy for different countries across the globe.

    The aim of this study is to analyze the impact of strategic planning in international business relations, and what it entails for organizations to remain competitive in the global environment characterized by globalization and constant changes.

    The Impact of Strategic Planning in International Business

    The strategic planning process incorporates strategic management that seeks to align an organization’s activities with the immediate external environment. Strategic planning is central to the management techniques employed by an organization in dealing, with increased and constant changes in the market environment in aspects such as globalization, and hence firms stand to benefit through implementing strategic planning tools. Various studies conducted by different researchers have sought to examine, the correlation between planning and performance by a firm in business environment. The planning process refers to the inclusion of an organization’s mission statements, goals, internal resources and environmental information programs (Leung, 2005, p.358).

    In addition, characteristics in the planning process such as system maturity, commitment, importance, time horizon and comprehensiveness are crucial in the overall planning framework by the organization. Culture also plays a significant role in an organization’s strategic planning process, because cultural values or organizational culture shapes the acceptable company processes like decision making and planning. Constantly, planning processes have been observed to reflect upon the dominant aspects of a culture. Strategic planning is part of an organizations business strategy, which will often involve other factors such as evaluation, analysis, corporate culture, future thinking and strategic intents.

    As illustrated, corporate culture influences a company’s planning processes, as it influences decisions made by management and consequently determine, the ultimate performance of the firm in the international business environment. Corporate culture entails company ideals or beliefs, team work strategies, adaptability and flexibility, mission statements, change management, leadership and vision. Organizations must re-assess their corporate culture because it influences the, entire firm’s efforts towards the perceived performance in the competitive market environment. Culture influences individuals working in an organization through people interactions and relationships, like staff relations with clients or customers, stakeholder relationship, individual responses and attitudes towards work ethics, energy use, community involvement, absenteeism and consequently how the organization relates to its employees in regard to factors like professional development and training.

     All these factors influence an organization’s performance in the international environment, because when a company does not implement proper strategic plans it stands to lose, attributed to the risks encountered in the dynamic competitiveness in the international market, posed by different market players and aspects of globalization. It is essential for businesses or organizations’ to step back every so often, from daily running of business or  marketing programs to look at the bigger picture of the organization’s mission and overall accomplishment of defined goals, through effective strategic planning (Leung, 2005 p.362).

    Strategizing will encompass a broad spectrum of issues such as the services or products a company offers, the markets served, internal and environmental variables, research, production, finance coupled with myriad other organizational elements, which are essential in establishing a competitive footprint in the international business environment. Strategic planning oversees a company’s immediate circumstances, and looks into the future processes of clarifying the missions and goals of the business in a strategic perspective, compared to tactical position which looks at the short term prospects, or operational planning that focuses on the detailing of the work done. Basically for the organization to be competitive, a thorough analysis will be essential in understanding the objectives and strategies to be employed by the company, through marketing expertise in implementing abstract corporate strategy, making key marketing decisions towards addressing market niches and direct marketing tactics, with the mindset of a sound strategic marketing plan.

    As indicated, strategic planning involves analyzing future business performance, and simultaneously encompassing immediate external environment in the international, regional or local environment, in changes which affect the performance of the firm. A company will need to communicate its vision to all its staff members, to the goals and objectives set by the firm and the direction the company is taking. This will incorporate factors like market research in identifying consumer needs, developing relationships with customers, suppliers and stakeholders in the international environment (Leung, 2005 p.370).

    Hence, when the direction is identified marked with strategic planning, the next steps would be to analyze the market position of the business or organization, and further introduce and develop strategic goals set coupled with evaluation of the strategies laid down, through constant analysis and evaluation of results and feedback of the performance, of the strategies implemented. Analysis of an organization’s strategic plans in the international market environment would incorporate, analyzing the business strategy through crucial factors which include core competencies, required inputs, identifying core business processes, coupled with SWOT, PEST and Five-Force analysis.

    In this respect, the SWOT analysis will identify and evaluate existing organizational strengths, existing business weaknesses, the opportunities in which a business might expect with redefined objectives in the changing market environment, and further the threats which might impede the successful implementation of strategic plans, and future success of the organization. In addition, PEST analysis will evaluate the political factors such as international and national politics that affect development, and hence the overall performance of the business. Economic factors will identify main economic issues in the international or national scene affecting the organization, social factors evaluating developing social trends especially in consumer consumption and how it affects future planning processes, and technological changes brought about by globalization, where a business can use this tool in form a competitive advantage over competitors.

    Required inputs in the strategic plan will encompass the resources which will be essential, in carrying out the company strategy and this will impact on land opportunities which are important for development, obtaining both skilled and unskilled labor, and capital which will drive the necessary strategic processes. Five-Forces on other hand influences and shapes the market and industry, the company operates in and this entails barriers to entry of competitors, rivalry between firms, buyer power, threat of substitutes, and supplier power. These factors and models ultimately influence business operations of an organization in the international environment, and should be given priority and the necessary attention coupled with evaluation, that is significant in monitoring the progress of the various strategic plans implemented by the organization.


    Strategic planning ultimately affects how an organization conducts its business in local, national or international environment. Coupled with organizational culture or corporate values, strategic planning processes need to involve all the stakeholders who include suppliers, customers, shareholders and employees for the plans to take positive effect. The company’s vision and strategic plans must be communicated to all stakeholders, in order to adopt appropriate attitude, work ethics, business practices and functions compounded by encompassing analysis factors such as core competencies, SWOT or required inputs in implementing the company strategic plans.


    Leung, K. & Gibson, C. B. (2005). Culture and international business: Recent advances and their implications for future research. Journal of International Business Studies. Volume 36, Issue, 4 pp.357-378.


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