In order to achieve success in any business venture, strategic planning is necessary because, without a plan, the chances of failing are high in entrepreneurial ventures. In this regard, developing a plan ensures that entrepreneurs or organizations consider the various options available for improving their performance and select the best alternative that can meet the defined objectives (Calvin, 2002).
On the other hand, strategic planning ensures that organizations make wise entrepreneurial or business decisions because, through a strategic plan, organizations can identify a good and bad idea for the business. It also allows organizations to develop a clear vision and mission regarding what they want to achieve in the long run. In addition, having a strategic plan for reorganizing a business helps in the development of a differentiation strategy and provides an advantage over competitors in the same business.
When developing a strategic plan for reorganizing a business, it is important for the entrepreneur or the management of an organization to carry out a SWOT analysis of their business. This is because the SWOT analysis helps in terms of evaluating the strengths, weaknesses, opportunities, and threats that are involved in a business venture. When a business entity or an organization is developing a strategic plan, SWOT analysis can provide direction in terms of the action that a business or an organization can take.It also helps businesses or organizations to engage in various activities that include exploring different avenues for implementing new initiatives for the business. Further, SWOT analysis allows businesses to make decisions concerning execution strategies necessary for a new policy.