Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.
In order to determine the future direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue particular courses of action. Generally, strategic planning deals with at least one of three key questions:
The key components of strategic planning include an understanding of an entity's vision, mission, values and strategies. In the commercial world a vision statement or a mission statement may encapsulate the vision and mission.
Vision outlines what the organization wants to be, or how it wants the world in which it operates to be (an "idealised" view of the world).
Mission defines the fundamental purpose of an organization or an enterprise, succinctly describing why it exists and what it does to achieve its vision.
Strategy, narrowly defined, means "the art of the general".
Organizations sometimes summarize goals and objectives into a mission statement or a vision statement. Others begin with a vision and mission and use them to formulate goals and objectives. A newly emerging approach is to use a visual strategic plan such as is used within planning approaches based on outcomes theory. When using this approach, the first step is to build a visual outcomes model of the high-level outcomes being sought and all of the steps which it is believed are needed to get to them. The vision and mission are then just the top layers of the visual model.