There are two types of planning that firms normally engage in with a view to increasing profits and maximizing the value of the stakeholders. One is strategic planning which is long range in nature and deals with the overall direction of the firm, anticipating significant developments and changes that will have a major impact on the firm and industry. On the other hand, operational planning is a blueprint detailing where the firm wants to be at some future point in time and what resources are needed to get it there. Operational plans begin with operational objectives that define where the firm wants to be at the end of the planning period. The operational plan includes a marketing plan, a production plan, a human resource plan, and a financial plan (Brigham and Ehrhardt, 2014) . The marketing plan lays out the resources needed to meet operational objectives and may include such specific details like advertising strategy, marketing promotions, channels of distributions, and sales territories. The production plan consists of facilities like plant refurbishments and expansions, supplier arrangements, inventory control, etc. The human resource plan deals with the personnel aspects of the organization. The financial plan specifies the resources that are needed to fulfill the objectives of the business.
Discuss the significance of the following maxim with particular reference to financial planning: "If you don't plan, you are planning to fail". Cite relevant examples to illustrate your point.