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Strategic Planning and Budgets

What is a Vision Statement?

  • A Vision Statement describes what the company wants to become in the long run.
  • It is aspirational and meant to guide strategic direction.

Example:

“Asian Paints aims to become one of the top five decorative coatings companies world-wide by leveraging its expertise in higher growth emerging markets. Simultaneously, the company intends to build long-term value in the industrial coatings business through alliances with established global partners.”

  • Key takeaway: Asian Paints envisions global market leadership in decorative coatings.

What is a Mission Statement?

  • The Mission Statement explains how the company plans to achieve its vision.
  • It provides direction and is more actionable than a vision.

Long-Range Planning

  • The next step after vision and mission.
  • Typically spans 5–10 years.
  • Involves setting quantitative targets (e.g., sales, market share).
  • Helps translate abstract vision into concrete goals.
  • Often approved at the Board level.

Government Example:

India’s Five-Year Plans worked on a similar principle — based on the government’s five-year term.

What is a Budget?

  • The final stage of the planning process.
  • A budget is a short-term plan of action (usually for 1 year).
  • Every department creates budgets aligned with long-range plans.
  • Budgets show commitment to planned activities.

Example:

If a company wants to grow 40% annually for 3 years:

  • Marketing, production, HR, and finance must all align their budgets to support this growth.

Union Government Budget

  • Presented every February.
  • Lays out planned activities and resource allocation by each ministry for the year.
  • Reflects national planning priorities.

🔗 Connecting the Dots

Vision ➝ Mission ➝ Long-Range Plan ➝ Budget
  • Vision: What we want to become
  • Mission: How we get there
  • Long-Range Plan: 5–10 year targets to achieve the vision
  • Budget: 1-year detailed action plan

Why All This Planning Matters

  • Though vision statements are just a few lines, companies invest time and resources into crafting them.
  • Similarly, budget preparation takes 2–3 months, as it’s crucial for aligning day-to-day operations with long-term goals.
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