In every business, there is a tendency for the general managers totake initiatives on behalf of the owners to enhance the current performance ofthe establishment by utilizing the resources available. This is calledstrategic management. The process includes the specification of theorganization's mission and vision and its objectives. This also includesprocesses for development in the form of projects and programs to achieve theset objectives and then utilize the resources to put the plans into action andmeet the goals. Strategic management plays a vital role in the success of yourbusiness if used properly and like any other processes; it has a chance tofail.
The first reason why a strategic management fails is the failure toovercome organization hurdles. These can be classified as cognitive,motivational, resource and political hurdles. Even if the general managers hasa good intention and are motivated to bring your business up, if they lack theskills to do so then there is a chance that their proposed plans contain a lotof loopholes. The same goes for a group of skilled managers who simply lack themotivation to help. But even if there is a group of skilled and highlymotivated individuals but lack the budget or resources to put the plans into actions,then nothing will be achieved. Influence of politics can also contribute to abusiness plans failure.
Another reason why a business plan fails is the management's failureto understand its customers. They should learn the reason why the customers buytheir products. Is it really important in their lifestyle? Is there a credibledata to back up all these and confirm a precise conclusion on how to bestmarket the products to the target customers. The products should always bebeneficial to the consumers, otherwise there is no use buying it.
Failure to predict market and environmental changes and how it reactsto stimuli is also a possible reason why a business plan fails. The managementshould always be aware of how the competition is faring and if it's possible tocompete with the prices. Government intervention should also be considered andhow it could impact the marketing status of the goods.
Overconfidence with the current resources can also lead to businessplan failure. Careful assessment of the staff, their skills, the equipment andcurrent processes should be done to assure their capability of adapting to newstrategies. Also, failure to adapt to new employment and managerial practicescan severe relationships between the management and its staff and this canaffect a business plan's success rate. This could lead to lack of coordinationand commitment among members of the team.
These are only a few of the reasons why a business plan fails. A chainis only as strong as its weakest link and this applies to business as well.Address the internal weaknesses first and create a strong team to bring thebusiness a leap forward.