Long‐Range Planning: The Need for Strategic Skills

Today's “long‐range planning” efforts most often take three to five years as the nominal long‐range horizon. Unfortunately, most plans in reality look no further than one to three years, and the financial projections which constitute the major portions of many plans have no validity after more than one or two years. Plans emphasize current products and strategic business units (SBUs) and sort them into three categories: “grow,” “hold,” and “harvest.” The firm attempts to gain market share in the “grow” products or SBUs, and attempts to maintain market share for those labeled “hold.” Yet, for the products or SBUs under the harvest category, the firm gives up market share to gain cash to finance the “grow” businesses. A company's long‐range future, however, does not necessarily correlate with the three‐to‐five‐year outlook of such products and SBUs.