The key benefits of using strategic plans and their accompanying Discounted Cash Flow (DCF) financial plans are:
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They look at the environment in which the firm operates in over the long term taking into account the impact of macro changes in the environment and industry and the internal environment of the firm;
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They re-evaluate the long term strategic position of the firm;
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They account and make adjustments to the cash flows of the firm adjusting them for risk, opportunity costs and the time value of money;
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This allows the firm to make intelligent decisions on which project(s) and selected processes are likely to maximise wealth. Alternatively firms quickly realise that a project that is critical to its survival may not provide a return that creates wealth, prompting managers to reengineer their approach until they do;
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They eventually provide a measure of the value of the firm. The value of a firm is the sum of the strategic plans of all its projects and the terminal value of the firm (See earnings based valuations below)
