Businesses that perform at a high efficiency are more than likely to have a strategic plan in place for the conduct of the business. A strategic plan makes for a road map to success, and this makes it easy to appreciate why businesses need to understand the importance of strategic planning.
A sound business strategy is often the result of the process of strategic planning. It helps in providing all the employees and stakeholders, a definite direction and can help to concentrate the focus of everybody involved in the business. A strategic plan must indicate the results that need to be achieved and must firmly establish the action that needs to be taken for achieving the desired goals.
Well defined goals, the objectives, and the right strategies can reduce the risk of a business failing and lead to a greater likelihood of success.