FIN 370
May 14, 2013
Strategic Initiative Paper
Lowes is a home improvement retailer that is looking to implement new technology that will give its customers more convenience and better customer service. The way that Lowes will be able to expand and implement this idea is through planning. The two planning methods that we are discussing are strategic planning and financial planning. Strategic and financial planning are two forms of planning that have different objectives, but are similar in some ways in regards to a long-term plan that will take the appropriate actions in order to achieve the company’s goal.
Strategic planning in a business is use in a business plan to make projections and defining the businesses goals and ideas. It is how a company plans to make its money for the future by also address the business strength and weaknesses. Within the company’s strategic plans key components to understand about the firm are their vision, mission, values and strategies. “Strategic planning serves as a guide to the preparation of a long and or short term financial plans” (Titman, Keown, & Martin, 2011, p. 564). A short term financial plan can consist of one year or less with lots of detailed information of the firm’s expected money. The financial planning process includes working out operating expenses and limiting the business’s exposure to unexpected business risks. A long term financial plan will consist of three to five years and will have projected amounts of the company’s income for each of the years.
The relationship between strategic and financial planning in a business means that the business needs to understand that both strategic and financial planning work together. Strategic planning has to take into consideration the available funds and the practicality of the company’s projects (Cantoria, 2011). Financial planning is meant to help put the strategic planning into action. The strategic planning holds all the...
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