In every business, there is a tendency for the general managers to take initiatives on behalf of the owners to enhance the current performance of the establishment by utilizing the resources available. This is called strategic management. The process includes the specification of the organization's mission and vision and its objectives. This also includes processes for development in the form of projects and programs to achieve the set objectives and then utilize the resources to put the plans into action and meet the goals. Strategic management plays a vital role in the success of your business if used properly and like any other processes; it has a chance to fail.
The first reason why a strategic management fails is the failure to overcome organization hurdles. These can be classified as cognitive, motivational, resource and political hurdles. Even if the general managers has a good intention and are motivated to bring your business up, if they lack the skills to do so then there is a chance that their proposed plans contain a lot of loopholes. The same goes for a group of skilled managers who simply lack the motivation to help. But even if there is a group of skilled and highly motivated 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 a business plans failure.
Another reason why a business plan fails is the management's failure to understand its customers. They should learn the reason why the customers buy their products. Is it really important in their lifestyle? Is there a credible data to back up all these and confirm a precise conclusion on how to best market the products to the target customers. The products should always be beneficial to the consumers, otherwise there is no use buying it.
Failure to predict market and environmental changes and how it reacts to stimuli is also a possible reason why a business plan fails. The management should always be aware of how the competition is faring and if it's possible to compete with the prices. Government intervention should also be considered and how it could impact the marketing status of the goods.
Overconfidence with the current resources can also lead to business plan failure. Careful assessment of the staff, their skills, the equipment and current processes should be done to assure their capability of adapting to new strategies. Also, failure to adapt to new employment and managerial practices can severe relationships between the management and its staff and this can affect a business plan's success rate. This could lead to lack of coordination and commitment among members of the team.
These are only a few of the reasons why a business plan fails. A chain is 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 the business a leap forward.