Strategic Plans and Operating Plans
Budgeting is most useful when it is integrated with a company’s strategy. Strategy specifies
how an organization matches its own capabilities with the opportunities in the marketplace
to accomplish its objectives. In developing successful strategies, managers
consider questions such as the following:
What are our objectives?
How do we create value for our customers while distinguishing ourselves from our
competitors?
Are the markets for our products local, regional, national, or global? What trends affect
our markets? How are we affected by the economy, our industry, and our competitors?
What organizational and financial structures serve us best?
What are the risks and opportunities of alternative strategies, and what are our contingency
plans if our preferred plan fails?