Strategic and Financial Planning

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Strategic and Financial Planning
“Plans are worthless, but planning is everything” (Eisenhower, 1957). Businesses that fail to plan are very likely to fail and at best will not recognize the full spectrum of profit avenues available to them. Strategic planning helps firms to define how they will make money in the future. Financial planning goes further into depth using the strategic plan as a baseline and helps firms determine their short-term and long-term budgets as well as the possible effectiveness of their plans. The innovative nature of business requires firms to plan out new initiatives to determine costs they will incur, possible profits from sales, and what kind of risk they will encounter.
Strategic Planning Initiative
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Initiative’s Affect on Sales
New initiatives will always have an effect on sales, such as the Nook with Barnes and Noble. Barnes and Noble has dropped the price on the legacy Nook Color and Nook tablet due to an extremely competitive market with both Amazon and Apple. The price cuts on the Nooks were intended to make them more competitive with the Amazon Kindle Fire. The Nook Color now costs $139, the 8GB Nook tablet costs $159, and the 16GB version costs $179. The new seven inch Nook HD will start at $199, and the nine inch Nook will cost $269.
Initiative Risks and the Future
In every line of business there are associated risks. For Barnes and Noble, risks associated initiatives can have some financial effects. The implications of these financial effects can be minimal if the proper steps are taken initially to avoid maximum effects. Some financial implications could include not having enough funding to complete the task at hand, unexpected expenses, or emergency scenarios. If Barnes and Noble were to ignore initiatives intermittently, their financial picture could have dramatic fluctuation, which could negatively impact the financial well-being. Other risks include Barnes and Noble losing out in market shares or customer base very quickly which would negatively impact Barnes and Noble’s capital. Also, Barnes and Noble should
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