strategic business planning involves three variables

Essential Guide to the Strategic Planning Process

By Joe Weller | April 3, 2019 (updated March 26, 2024)

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In this article, you’ll learn the basics of the strategic planning process and how a strategic plan guides you to achieving your organizational goals. Plus, find expert insight on getting the most out of your strategic planning.

Included on this page, you'll discover the importance of strategic planning , the steps of the strategic planning process , and the basic sections to include in your strategic plan .

What Is Strategic Planning?

Strategic planning is an organizational activity that aims to achieve a group’s goals. The process helps define a company’s objectives and investigates both internal and external happenings that might influence the organizational path. Strategic planning also helps identify adjustments that you might need to make to reach your goal. Strategic planning became popular in the 1960s because it helped companies set priorities and goals, strengthen operations, and establish agreement among managers about outcomes and results.

Strategic planning can occur over multiple years, and the process can vary in length, as can the final plan itself. Ideally, strategic planning should result in a document, a presentation, or a report that sets out a blueprint for the company’s progress.

By setting priorities, companies help ensure employees are working toward common and defined goals. It also aids in defining the direction an enterprise is heading, efficiently using resources to achieve the organization’s goals and objectives. Based on the plan, managers can make decisions or allocate the resources necessary to pursue the strategy and minimize risks.

Strategic planning strengthens operations by getting input from people with differing opinions and building a consensus about the company’s direction. Along with focusing energy and resources, the strategic planning process allows people to develop a sense of ownership in the product they create.

“Strategic planning is not really one thing. It is really a set of concepts, procedures, tools, techniques, and practices that have to be adapted to specific contexts and purposes,” says Professor John M. Bryson, McKnight Presidential Professor of Planning and Public Affairs at the Hubert H. Humphrey School of Public Affairs, University of Minnesota and author of Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement . “Strategic planning is a prompt to foster strategic thinking, acting, and learning, and they all matter and they are all connected.”

What Strategic Planning Is Not

Strategic planning is not a to-do list for the short or long term — it is the basis of a business, its direction, and how it will get there.

“You have to think very strategically about strategic planning. It is more than just following steps,” Bryson explains. “You have to understand strategic planning is not some kind of magic solution to fixing issues. Don’t have unrealistic expectations.”

Strategic planning is also different from a business plan that focuses on a specific product, service, or program and short-term goals. Rather, strategic planning means looking at the big picture.

While they are related, it is important not to confuse strategic planning with strategic thinking, which is more about imagining and innovating in a way that helps a company. In contrast, strategic planning supports those thoughts and helps you figure out how to make them a reality.

Another part of strategic planning is tactical planning , which involves looking at short-term efforts to achieve longer-term goals.

Lastly, marketing plans are not the same as strategic plans. A marketing plan is more about introducing and delivering a service or product to the public instead of how to grow a business. For more about marketing plans and processes, read this article .

Strategic plans include information about finances, but they are different from financial planning , which involves different processes and people. Financial planning templates can help with that process.

Why Is Strategic Planning Important?

In today’s technological age, strategic plans provide businesses with a path forward. Strategic plans help companies thrive, not just survive — they provide a clear focus, which makes an organization more efficient and effective, thereby increasing productivity.

“You are not going to go very far if you don’t have a strategic plan. You need to be able to show where you are going,” says Stefan Hofmeyer, an experienced strategist and co-founder of Global PMI Partners . He lives in the startup-rich environment of northern California and says he often sees startups fail to get seed money because they do not have a strong plan for what they want to do and how they want to do it.

Getting team members on the same page (in both creating a strategic plan and executing the plan itself) can be beneficial for a company. Planners can find satisfaction in the process and unite around a common vision. In addition, you can build strong teams and bridge gaps between staff and management.

“You have to reach agreement about good ideas,” Bryson says. “A really good strategy has to meet a lot of criteria. It has to be technically workable, administratively feasible, politically acceptable, and legally, morally, and ethically defensible, and that is a pretty tough list.”

By discussing a company’s issues during the planning process, individuals can voice their opinions and provide information necessary to move the organization ahead — a form of problem solving as a group.

Strategic plans also provide a mechanism to measure success and progress toward goals, which keeps employees on the same page and helps them focus on the tasks at hand.

When Is the Time to Do Strategic Planning?

There is no perfect time to perform strategic planning. It depends entirely on the organization and the external environment that surrounds it. However, here are some suggestions about when to plan:

If your industry is changing rapidly

When an organization is launching

At the start of a new year or funding period

In preparation for a major new initiative

If regulations and laws in your industry are or will be changing

“It’s not like you do all of the thinking and planning, and then implement,” Bryson says. “A mistake people make is [believing] the thinking has to precede the acting and the learning.”

Even if you do not re-create the entire planning process often, it is important to periodically check your plan and make sure it is still working. If not, update it.

What Is the Strategic Planning Process?

Strategic planning is a process, and not an easy one. A key is to make sure you allow enough time to complete the process without rushing, but not take so much time that you lose momentum and focus. The process itself can be more important than the final document due to the information that comes out of the discussions with management, as well as lower-level workers.

“There is not one favorite or perfect planning process,” says Jim Stockmal, president of the Association for Strategic Planning (ASP). He explains that new techniques come out constantly, and consultants and experienced planners have their favorites. In an effort to standardize the practice and terms used in strategic planning, ASP has created two certification programs .

Level 1 is the Strategic Planning Professional (SPP) certification. It is designed for early- or mid-career planners who work in strategic planning. Level 2, the Strategic Management Professional (SMP) certification, is geared toward seasoned professionals or those who train others. Stockmal explains that ASP designed the certification programs to add structure to the otherwise amorphous profession.

The strategic planning process varies by the size of the organization and can be formal or informal, but there are constraints. For example, teams of all sizes and goals should build in many points along the way for feedback from key leaders — this helps the process stay on track.

Some elements of the process might have specific start and end points, while others are continuous. For example, there might not be one “aha” moment that suddenly makes things clear. Instead, a series of small moves could slowly shift the organization in the right direction.

“Don’t make it overly complex. Bring all of the stakeholders together for input and feedback,” Stockmal advises. “Always be doing a continuous environmental scan, and don’t be afraid to engage with stakeholders.”

Additionally, knowing your company culture is important. “You need to make it work for your organization,” he says.

There are many different ways to approach the strategic planning process. Below are three popular approaches:

Goals-Based Planning: This approach begins by looking at an organization’s mission and goals. From there, you work toward that mission, implement strategies necessary to achieve those goals, and assign roles and deadlines for reaching certain milestones.

Issues-Based Planning: In this approach, start by looking at issues the company is facing, then decide how to address them and what actions to take.

Organic Planning: This approach is more fluid and begins with defining mission and values, then outlining plans to achieve that vision while sticking to the values.

“The approach to strategic planning needs to be contingent upon the organization, its history, what it’s capable of doing, etc.,” Bryson explains. “There’s such a mistake to think there’s one approach.”

For more information on strategic planning, read about how to write a strategic plan and the different types of models you can use.

Who Participates in the Strategic Planning Process?

For work as crucial as strategic planning, it is necessary to get the right team together and include them from the beginning of the process. Try to include as many stakeholders as you can.

Below are suggestions on who to include:

Senior leadership

Strategic planners

Strategists

People who will be responsible for implementing the plan

People to identify gaps in the plan

Members of the board of directors

“There can be magic to strategic planning, but it’s not in any specific framework or anybody’s 10-step process,” Bryson explains. “The magic is getting key people together, getting them to focus on what’s important, and [getting] them to do something about it. That’s where the magic is.”

Hofmeyer recommends finding people within an organization who are not necessarily current leaders, but may be in the future. “Sometimes they just become obvious. Usually they show themselves to you, you don’t need to look for them. They’re motivated to participate,” he says. These future leaders are the ones who speak up at meetings or on other occasions, who put themselves out there even though it is not part of their job description.

At the beginning of the process, establish guidelines about who will be involved and what will be expected of them. Everyone involved must be willing to cooperate and collaborate. If there is a question about whether or not to include anyone, it is usually better to bring on extra people than to leave someone out, only to discover later they should have been a part of the process all along. Not everyone will be involved the entire time; people will come and go during different phases.

Often, an outside facilitator or consultant can be an asset to a strategic planning committee. It is sometimes difficult for managers and other employees to sit back and discuss what they need to accomplish as a company and how they need to do it without considering other factors. As objective observers, outside help can often offer insight that may escape insiders.

Hofmeyer says sometimes bosses have blinders on that keep them from seeing what is happening around them, which allows them to ignore potential conflicts. “People often have their own agendas of where they want to go, and if they are not aligned, it is difficult to build a strategic plan. An outsider perspective can really take you out of your bubble and tell you things you don’t necessarily want to hear [but should]. We get into a rhythm, and it’s really hard to step out of that, so bringing in outside people can help bring in new views and aspects of your business.”

An outside consultant can also help naysayers take the process more seriously because they know the company is investing money in the efforts, Hofmeyer adds.

No matter who is involved in the planning process, make sure at least one person serves as an administrator and documents all planning committee actions.

What Is in a Strategic Plan?

A strategic plan communicates goals and what it takes to achieve them. The plan sometimes begins with a high-level view, then becomes more specific. Since strategic plans are more guidebooks than rulebooks, they don’t have to be bureaucratic and rigid. There is no perfect plan; however, it needs to be realistic.

There are many sections in a strategic plan, and the length of the final document or presentation will vary. The names people use for the sections differ, but the general ideas behind them are similar: Simply make sure you and your team agree on the terms you will use and what each means.

One-Page Strategic Planning Template

“I’m a big fan of getting a strategy onto one sheet of paper. It’s a strategic plan in a nutshell, and it provides a clear line of sight,” Stockmal advises.

You can use the template below to consolidate all your strategic ideas into a succinct, one-page strategic plan. Doing so provides you with a high-level overview of your strategic initiatives that you can place on your website, distribute to stakeholders, and refer to internally. More extensive details about implementation, capacity, and other concerns can go into an expanded document.

Download One-Page Strategic Planning Template Excel | Word | Smartsheet

The most important part of the strategic plan is the executive summary, which contains the highlights of the plan. Although it appears at the beginning of the plan, it should be written last, after you have done all your research.

Of writing the executive summary, Stockmal says, “I find it much easier to extract and cut and edit than to do it first.”

For help with creating executive summaries, see these templates .

Other parts of a strategic plan can include the following:

Description: A description of the company or organization.

Vision Statement: A bold or inspirational statement about where you want your company to be in the future.

Mission Statement: In this section, describe what you do today, your audience, and your approach as you work toward your vision.

Core Values: In this section, list the beliefs and behaviors that will enable you to achieve your mission and, eventually, your vision.

Goals: Provide a few statements of how you will achieve your vision over the long term.

Objectives: Each long-term goal should have a few one-year objectives that advance the plan. Make objectives SMART (specific, measurable, achievable, and time-based) to get the most out of them.

Budget and Operating Plans: Highlight resources you will need and how you will implement them.

Monitoring and Evaluation: In this section, describe how you will check your progress and determine when you achieve your goals.

One of the first steps in creating a strategic plan is to perform both an internal and external analysis of the company’s environment. Internally, look at your company’s strengths and weaknesses, as well as the personal values of those who will implement your plan (managers, executives, board members). Externally, examine threats and opportunities within the industry and any broad societal expectations that might exist.

You can perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis to sum up where you are currently and what you should focus on to help you achieve your future goals. Strengths shows you what you do well, weaknesses point out obstacles that could keep you from achieving your objectives, opportunities highlight where you can grow, and threats pinpoint external factors that could be obstacles in your way.

You can find more information about performing a SWOT analysis and free templates in this article . Another analysis technique, STEEPLE (social, technological, economic, environmental, political, legal, and ethical), often accompanies a SWOT analysis.

Basics of Strategic Planning

How you navigate the strategic planning process will vary. Several tools and techniques are available, and your choice depends on your company’s leadership, culture, environment, and size, as well as the expertise of the planners.

All include similar sections in the final plan, but the ways of driving those results differ. Some tools are goals-based, while others are issues- or scenario-based. Some rely on a more organic or rigid process.

Hofmeyer summarizes what goes into strategic planning:

Understand the stakeholders and involve them from the beginning.

Agree on a vision.

Hold successful meetings and sessions.

Summarize and present the plan to stakeholders.

Identify and check metrics.

Make periodic adjustments.

Items That Go into Strategic Planning

Strategic planning contains inputs, activities, outputs, and outcomes. Inputs and activities are elements that are internal to the company, while outputs and outcomes are external.

Remember, there are many different names for the sections of strategic plans. The key is to agree what terms you will use and define them for everyone involved.

Inputs are important because it is impossible to know where you are going until you know what is around you where you are now.

Companies need to gather data from a variety of sources to get a clear look at the competitive environment and the opportunities and risks within that environment. You can think of it like a competitive intelligence program.

Data should come from the following sources:

Interviews with executives

A review of documents about the competition or market that are publicly available

Primary research by visiting or observing competitors

Studies of your industry

The values of key stakeholders

This information often goes into writing an organization’s vision and mission statements.

Activities are the meetings and other communications that need to happen during the strategic planning process to help everyone understand the competition that surrounds the organization.

It is important both to understand the competitive environment and your company’s response to it. This is where everyone looks at and responds to the data gathered from the inputs.

The strategic planning process produces outputs. Outputs can be as basic as the strategic planning document itself. The documentation and communications that describe your organization’s strategy, as well as financial statements and budgets, can also be outputs.

The implementation of the strategic plan produces outcomes (distinct from outputs). The outcomes determine the success or failure of the strategic plan by measuring how close they are to the goals and vision you outline in your plan.

It is important to understand there will be unplanned and unintended outcomes, too. How you learn from and adapt to these changes influence the success of the strategic plan.

During the planning process, decide how you will measure both the successes and failures of different parts of the strategic plan.

Sharing, Evaluating, and Monitoring the Progress of a Strategic Plan

After companies go through a lengthy strategic planning process, it is important that the plan does not sit and collect dust. Share, evaluate, and monitor the plan to assess how you are doing and make any necessary updates.

“[Some] leaders think that once they have their strategy, it’s up to someone else to execute it. That’s a mistake I see,” Stockmal says.

The process begins with distributing and communicating the plan. Decide who will get a copy of the plan and how those people will tell others about it. Will you have a meeting to kick off the implementation? How will you specify who will do what and when? Clearly communicate the roles people will have.

“Before you communicate the plan [to everyone], you need to have the commitment of stakeholders,” Hofmeyer recommends. Have the stakeholders be a part of announcing the plan to everyone — this keeps them accountable because workers will associate them with the strategy. “That applies pressure to the stakeholders to actually do the work.”

Once the team begins implementation, it’s necessary to have benchmarks to help measure your successes against the plan’s objectives. Sometimes, having smaller action plans within the larger plan can help keep the work on track.

During the planning process, you should have decided how you will measure success. Now, figure out how and when you will document progress. Keep an eye out for gaps between the vision and its implementation — a big gap could be a sign that you are deviating from the plan.

Tools are available to assist with tracking performance of strategic plans, including several types of software. “For some organizations, a spreadsheet is enough, but you are going to manually enter the data, so someone needs to be responsible for that,” Stockmal recommends.

Remember: strategic plans are not written in stone. Some deviation will be necessary, and when it happens, it’s important to understand why it occurred and how the change might impact the company's vision and goals.

Deviation from the plan does not mean failure, reminds Hofmeyer. Instead, understanding what transpired is the key. “Things happen, [and] you should always be on the lookout for that. I’m a firm believer in continuous improvement,” he says. Explain to stakeholders why a change is taking place. “There’s always a sense of re-evaluation, but do it methodically.”

Build in a schedule to review and amend the plan as necessary; this can help keep companies on track.

What Is Strategic Management?

Strategic planning is part of strategic management, and it involves the activities that make the strategic plan a reality. Essentially, strategic management is getting from the starting point to the goal effectively and efficiently using the ongoing activities and processes that a company takes on in order to keep in line with its mission, vision, and strategic plan.

“[Strategic management] closes the gap between the plan and executing the strategy,” Stockmal of ASP says. Strategic management is part of a larger planning process that includes budgeting, forecasting, capital allocation, and more.

There is no right or wrong way to do strategic management — only guidelines. The basic phases are preparing for strategic planning, creating the strategic plan, and implementing that plan.

No matter how you manage your plan, it’s key to allow the strategic plan to evolve and grow as necessary, due to both the internal and external factors.

“We get caught up in all of the day-to-day issues,” Stockmal explains, adding that people do not often leave enough time for implementing the plan and making progress. That’s what strategic management implores: doing things that are in the plan and not letting the plan sit on a shelf.

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8-Step Guide to Master Strategic Planning

Discover the art of defining a strategy, establishing strategic goals, and devising an actionable execution plan through our comprehensive 8-step guide to mastering strategic planning.

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Strategic planning is the process of setting the direction of a company to drive it toward growth. The process involves defining an organization’s strategy, turning it into goals, and outlining specific steps and actions to reach these goals. 

Strategic planning facilitates the coordination between developing and implementing the organization’s strategy. The process results in a well-defined and structured plan that guides and ensures your teams are working on projects that drive outcomes, not just outputs. 

In this article, you will learn how to create a winning plan following a step-by-step guide, what tools to use, and why strategic portfolio plans are crucial for an organization's success. 

What Is a Strategic Plan? 

A strategic plan is a document describing an organization’s strategy and directions on how to implement it. It usually includes an analysis of the business environment and actionable steps on how to achieve the set company goals. Strategic plans are developed several years ahead and are updated periodically.   

They are mapped out by senior management with the help of strategists who assist with in-depth industry or competitor analysis.  

What Is the Purpose of Strategic Planning?  

Strategic planning’s main function is to help in setting realistic company goals based on substantial analysis of the business domain. A strategic plan allows managers to narrow down key company attributes such as mission, vision, and values, as well as long-term goals, actionable plans, and benchmark metrics. The process of setting common goals and objectives requires strategic thinking where information is not only used to accumulate action steps but also to foresee its impact on the company in the future.  

Moreover, an effective plan informs about areas of improvement that can help people stay focused and on track. 

What Are the Benefits of Strategic Planning? 

Strategic planning benefits organizations by clarifying their development path and laying out measurable objectives for everyone to work toward. Below are the primary advantages of strategic planning.  

• Strategic planning allows cross-organizational alignment around a shared purpose.  
• Strategic planning encourages company-wide communication.  
• Strategic planning creates a stronger sense of accountability by setting common goals.  
• Strategic planning can improve teams’ engagement by promoting feedback exchange and sharing of ideas. 
• Strategic planning highlights organizational strengths and weaknesses. 
• Strategic planning helps companies identify challenges and potential opportunities.  
• Strategic planning results in improved understanding and effective allocation of capacity and resources. 

What Are the 8 Steps in Strategic Planning? 

Strategic planning’s life cycle goes through a number of stages where ideas, feedback, industry information, and market analysis are used as a basis for determining an organization’s direction. 

The process of creating a strategic plan can be summarized in the following steps: 

Step 1. Perform a Situation Analysis 

Situation analysis refers to the process of defining the present state of the organization, including strengths, weaknesses, opportunities, and threats. At this stage, you should gather and assess all existing information and use it to determine your position. Methods such as SWOT or PEST analysis are commonly used to clarify a company’s present state. 

Step 2. Define a Future State Vision 

Envisioning the future state of your organization should be incorporated into your vision. This future vision should include the state of your processes, communication, values, partnerships, reputation, growth, etc.  

Step 3. Set Strategic Goals  

Once your organization has its business strategy defined, the next move is to write out your strategic goals – high-level objectives that outline your company’s intention for what it wants to accomplish in the following years, typically 3 to 5 years. They should be broader, measurable, and concrete. 

Step 4. Develop Execution Objectives 

As soon as you have identified your strategic goals, then you can translate them into more manageable and specific long- and mid-term objectives. In this way, you ensure alignment between strategy and execution as well as plan their completion more accurately. To prioritize these objectives and break them down into actionable work items, you can use goal-setting techniques such as OKRs or SMART goals. The result of this stage should outline the actual steps toward achieving the set goals.  

Step 5. Incorporate Regular Review Checks 

Seek common agreement and mutual understanding of the strategic goals across your organization. Review meetings are an ideal way to gather feedback and come to an agreement regarding the goals to pursue on a company level and actionable steps on a team level. 

Remember that this phase is applicable during the entire strategy execution process. Your teams should be involved in regular discussions to track their work's progress and make necessary adjustments to ensure that the outcomes are in their best interest. 

Step 6. Define Metrics, Timelines and Responsibilities 

Establishing specific benchmark targets, setting up a timeline, and clearly defining responsibilities are crucial steps in strategic planning. The success of a plan execution will be determined by tracking the progress of the initiatives/projects. An effective approach is to measure and analyze your goals and performance every quarter, ensuring that your efforts are steadily progressing toward achieving the envisioned outcomes. 

To put this into practice, you can employ goal-setting methods such as the objectives and key results ( OKRs ) framework, where each goal is tied to at least 3 performance benchmark criteria (key results), making it easier to measure your progress. 

Step 7. Create a Strategic Map 

The stage refers to the actual writing of a strategic plan. By summarizing your goals, actionable plans, assigning responsibilities, and laying out a timeline, you’ll be able to encompass all the data and analysis captured so far. Using a strategy map diagram is an ideal way to document strategic goals and operational initiatives as well as to identify improvement opportunities. 

Step 8. Implement the Strategic Plan 

The implementation phase of strategic planning involves the process of communicating the plan documentation. You can use interconnected Kanban boards to map your business processes reflecting the strategic goals and objectives, assign responsibilities and create a timeline.  

It’s important to monitor and measure your performance on a quarterly or annual basis. To help you with this, periodically review important KPIs and track the progress of your actionable projects in real-time. You can also use strategy performance frameworks such as Balanced scorecards to track and monitor the execution of your strategy. 

What Is a Strategy Map? 

A strategy map is a visual representation of an organization’s strategy. The graphic itself shows all the strategic plans along with actionable steps in a meaningful way where items are interconnected. The purpose of a strategy map is to demonstrate how value is created.  

It also improves strategic alignment with the organizational goals, where everyone can see how they contribute to the high-level goals. A good strategy map encourages feedback so everyone agrees on what the actionable steps of the strategic plan are.  

What Makes Strategic Planning Successful?  

Success in strategic planning requires a concise structure of your goals and action plans.   A few key characteristics should be present when creating your strategic plan that can increase the success rate of the overall business strategy execution.  

Based on these characteristics, a successful strategic plan should be: 

• Owned by the senior managers : Senior management is responsible for recognizing the organization's present state and future vision and thus, forming the strategic plan. 
• Realistic : Strategic planning needs to be based on an in-depth analysis of internal factors and the external business environment. 
• Transparent : Strategic plans should be openly shared and communicated across team members as they are the actual drivers of the strategy execution.  
• Connected to specific action items : Create a healthy top-down and bottom-up link between strategy and day-to-day activities. When there is a strategy-to-execution alignment, teams are directly involved and contribute to the overall vision delivery, creating a sense of accountability. 
• Quantifiable : Identify observable measures to monitor and control the execution and evaluate its efficiency.   

When Should Strategic Planning Be Done? 

The best time to develop your strategic plan is once you've defined your strategic direction and set up some high-level goals. Remember that planning is a more granular process that defines more specific objectives to achieve. 

In the scenario where companies operate without a strategic plan in place, it’s never too late to develop one. Once you have developed your strategy, all your action plans and day-to-day activities will be synchronized with the set goals.   

If your company has a few years of exposure and you have developed a strategic plan in the past, it is important to review it on a yearly basis. Key insights, such as understanding what has or hasn’t worked in the past year or how the business environment has changed, will help you keep sustainable growth and will foster your relevancy on the market. 

Where Should Strategic Planning Be Used?  

Strategic planning relies heavily on input from across the entire organization. Senior management has to formulate the strategy itself, based on feedback collected from all teams, and then communicate the strategic plan with the organization’s departments. After that, each department creates its own specific projects and initiatives that support the strategic goals. 

For instance, the financial department provides key financial data and annual reports, technical teams can provide relevant information about the technical state and advise on new trends in the field, marketing teams gather information about the number of customers for a given period, etc.   

What Are the Most Common Mistakes in Strategic Planning? 

Strategic planning can be the key to your organization’s growth and success, but if not developed properly, it can turn into a waste of time and resources. Here’s a list of the most common mistakes in strategic planning:  

• Too many strategic goals.  
• Unrealistic strategic goals.  
• Lack of measures for success.  
• Lack of commitment and focus.  
• Poor communication.  

Strategic Planning Templates and Examples 

There’s a variety of strategic planning templates that you can apply to identify your objectives. Key factors in determining the most convenient approach are timelines you’d like to impose for the implementation of the plan, the complexity of your organizational structure, the level of communication, etc.  

Find three examples of strategic planning examples below.  

Example 1. To implement strategic planning using the Objectives and Key Results (OKRs) framework, you need to establish a set of objectives and specify up to 5 key results or tactics that outline how these objectives will be achieved. The objectives should be concrete and action-oriented while the key results should be realistic and measurable.  

To ensure that you set and achieve result-driven goals, you can follow the example of many companies and use OKR templates . This hub for visualizing the alignment between your organization’s strategic goals and work delivery helps to keep your eye on the progress of each goal. 

Example 2. Strategic planning using the Hoshin Planning approach is a 7-step process that connects strategic planning with execution. The actual steps are listed below:  

• Develop an organizational vision.  
• Define key objectives or mission.  
• Break down objectives into annual goals.  
• Distribute the annual goals across the organization.  
• Implement the goals.  
• Conduct monthly reviews to ensure proper plan execution.  
• Conduct annual reviews to verify the end results.  

Example 3. Besides using OKRs, Balanced Scorecard is another strategy management framework that can help you in the strategic planning process. The approach requires the definition of organizational objectives, measures to help to achieve the objectives and initiatives – the actionable steps to accomplishing your goals. 

What Is Strategic Portfolio Planning? 

Strategic planning on a portfolio level refers to coordinating and aligning multiple programs and projects within portfolios to support the execution of the organization’s top-level goals. The purpose of portfolio planning is to boost efficiency by devoting time and effort to the most important projects. 

Portfolio Planning Approaches 

For larger companies with various business units, it can be challenging to select the right objectives and prioritize the projects within portfolios , and allocate the resources accordingly. To handle this task, managers tend to use different portfolio planning approaches. Portfolio planning methods refer to analyzing a company’s portfolios to execute the ones with the highest priority at a time. 

The two most popular portfolio planning approaches are the Boston Consulting Group (BCG) matrix and the General Electric (GE) approach. Let’s take a closer look at each one. 

The Boston Consulting Group (BCG) Matrix    The Boston Consulting Group (BCG) matrix, also famous by its other name Growth Share matrix, is a portfolio management framework that helps companies to evaluate and decide how to prioritize their different portfolio initiatives.  

The two main factors that companies should consider before deciding where to invest are market growth and market share. By assessing their portfolios based on these two driving factors, executives can conclude where to focus their resources to generate the most value and cut costs. 

Referring to the image below, the matrix is in a table view split into four quadrants: question marks, stars, dog, and cash cows. 

Each quadrant tells us the following: 

• Question marks: Low market share and high market growth – products that require an increase in investments to prosper or eventually sell them.  
• Stars: High market share and high market growth – products with high potential. To maintain this trend, companies need to keep a high level of investment and distribution in the market. 
• Dogs: Low market share and low market growth – products that have no potential for success. They are considered a loss of money and resources, and good practice is to be discarded or repositioned. 
• Cash Cows: High market share and low market growth – products with no long-term future.  

The General Electric (GE) Approach  

The General Electric (GE) approach is another technique for portfolio planning. It helps companies decide how to allocate their resources and investment among their businesses. This approach is visualized as a matrix with two dimensions – industry attractiveness and company strength in the industry.

There are three possible exit scenarios for a company:  

• Invest (and grow): increase investments and grow market share. 
• Protect (and hold): hold investment or invest in a selective portfolio.
• Harvest (and divest): reduce or stop investments and slowly drop the business. 

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Strategic planning provides a roadmap that guides an organization's decisions, resource allocation, and actions toward achieving its long-term goals and staying adaptable in a dynamic environment. Aligning portfolios of projects and initiatives with the organization's strategic goals, regular monitoring, and continuous improvement are keys to maintaining a strategy that drives sustainable growth and long-term value for the organization. 

The foundation steps of every strategic planning process include: 

• Analyze the business's current environment. 
• Determine business future vision. 
• Define strategic goals. 
• Break down strategic goals into portfolios of projects and initiatives. 
• Conduct regular review meetings. 
• Define benchmark targets to track progress. 
• Write out the strategic plan. 
• Put your plan into action. 

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Product Marketing | PMI Agile | SAFe Agilist certified

Nick is passionate about product marketing and business development and is a subject matter expert at Businessmap. With expertise in OKRs, strategy execution, Agile, and Kanban, he continues to drive his interest in continuous improvement. Nick is a PMI Agile and SAFe Agilist certified practitioner.

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How to Measure Your Business Strategy's Success

• 04 Jan 2024

Measuring your business strategy’s success is vital to strategy execution .

Despite its importance, research by SurveyMonkey shows that only 35 percent of business owners set benchmarks or goals. Among those who set them, 90 percent consider themselves successful. Of those who don't, only 71 percent report the same.

If you want to achieve organizational objectives and avoid common strategic planning pitfalls , here’s why it’s important to evaluate your strategy.

Access your free e-book today.

Why Is It Important to Evaluate Your Strategy?

Evaluating your strategy can help your organization achieve its goals and objectives while highlighting necessary adjustments for long-term success.

Its benefits include:

• Ensuring organizational alignment
• Establishing accountability
• Optimizing operations

Assessing your business strategy is an ongoing process. To ensure it’s set up to succeed, you must evaluate it pre-, during, and post-implementation. Here’s how to do so.

How to Measure Your Strategy’s Success

1. revisit goals and objectives.

Every business strategy needs clearly defined performance goals. Without them, it can be difficult to identify harmful deviations, streamline the execution process, and recognize achievements.

After establishing goals and objectives, plan to revisit them during and after implementing your strategy. According to Harvard Business School Professor Robert Simons in the online course Strategy Execution , the best way to do so is by comparing them to critical performance variables —the factors you must achieve or implement to make your strategy succeed.

For example, if your company’s value comes from customer loyalty, one of your critical performance variables could be customer satisfaction. When customers no longer receive value from your products or services, that could impact your company’s bottom line.

The best way to verify critical performance variables is by analyzing them against your strategy map —a visual tool outlining the cause-and-effect relationships underpinning your strategy. Those variables should also receive high importance on your balanced scorecard , which translates your strategy into goals and objectives.

By taking these steps, you can identify performance measures worth reviewing.

2. Review Measures

Evaluating business performance requires measures —quantitative values you can scale and use for comparison—and they must tell the right story.

According to Strategy Execution , you should ask three questions when reviewing measures:

• Do they align with my strategy?
• Are they objective, complete, and responsive?
• Do they link to economic value?

For example, if you want to improve your company’s brand loyalty, metrics worth monitoring include the number of new customers, average purchases per customer, and the number of social media followers.

A balanced scorecard can provide a holistic view of your business performance measures—ensuring all your employees are on the same page.

“You can have the best strategy in the world,” Simons says in Strategy Execution . “But at the end of the day, what everyone pays attention to is what they're measured on. So, you need to be sure that measures throughout the business reflect your strategy, so that every employee will devote their efforts to implementing that strategy.”

3. Supervise Monitoring Systems

While balanced scorecards are powerful diagnostic control systems —formal information systems used to monitor organizational outcomes—they don’t provide visibility into all measures of success. That’s why you need additional systems to streamline strategic plans’ evaluation.

For example, you can use customer relationship management systems’ analytics tools to generate reports that align with business goals and objectives. To boost customer loyalty, you can automate reports on:

• Purchasing patterns
• Purchase frequency
• Customer survey scores

“But to ensure that these systems are effective, you need to invest considerable time and attention in their design,” Simons says in Strategy Execution . “You must not only spend time negotiating and setting goals—as we've discussed—you must also design measures for these goals and then align performance incentives.”

4. Talk to Employees

Employee feedback and buy-in are other useful tools for measuring success.

For example, creative software company Adobe is known for its loyal employee base. That was put to the test when the company shifted to a subscription-based model, launching Adobe Creative Cloud .

Company leaders briefed employees on strategic changes and how they provided value to customers. They also encouraged employees to contribute ideas and feedback throughout the transition. With minimal internal pushback and a boost in collaboration, Adobe knew its strategy would succeed and ensure relevance in a constantly evolving market.

“The best businesses motivate their employees to be creative, entrepreneurial, and willing to work with others to find customer solutions,” Simons says in Strategy Execution .

Related: How to Create a Culture of Strategy Execution

5. Reach Out to Customers

Customer feedback is a key measure of your strategy’s success. According to a recent report by Zendesk , 73 percent of business leaders believe customer service directly links with business performance—with 64 percent attributing customer service to positive business growth.

Feedback can also reflect how well initiatives align with customer needs and expectations when it comes to value creation , making it important to consistently seek out ways to monitor attitudes toward your company and its strategy.

In Strategy Execution , Tom Siebel, CEO of C3 AI, shares his thoughts on customer satisfaction when measuring success.

“Everything that's important to the business, we have a KPI and we measure it,” Siebel says. “And what could be more important than customer satisfaction?”

Unlike your company’s reputation, measuring customer satisfaction has a more personal touch in identifying what they love and how to capitalize on it.

“We do anonymous customer satisfaction surveys every quarter to see how we're measuring up to our customer expectations,” Siebel says in the course.

Your customer satisfaction measures should reflect your desired market position and focus on creating additional value. When customers are happy, profit margins tend to rise, highlighting why this should be the final step in measuring your strategy’s success.

Success Is within Reach

Measuring your strategy’s success is a continuous process that requires understanding your company’s goals and objectives.

By taking an online strategy course , you can develop strategy execution skills to measure performance effectively. Strategy Execution provides an interactive learning experience featuring organizational leaders who share their successes and failures to help you apply course concepts and excel in your career.

Want to learn how to measure your strategy’s success? Explore Strategy Execution —one of our online strategy courses —and download our free strategy e-book to begin your journey toward implementing strategy successfully.

About the Author

Strategic Planning

/ focus, four best practices for strategic planning.

By  Nicolas Kachaner ,  Kermit King , and  Sam Stewart

Strategic planning is one of the least-loved organizational processes. Executives at most companies criticize it as overly bureaucratic, insufficiently insightful, and ill suited for today’s rapidly changing markets. Some even argue that strategic planning is a relic that should be relegated to the past and that organizations seeking to prosper in turbulent times should instead invest in market intelligence and agility.

Although the diagnosis is largely right, the prescription is wrong.

More than ever, companies need to devote time to strategy. Nearly one-tenth of public companies disappear each year—a fourfold increase in mortality since 1965. And the life span of the average company has halved since 1970. (See “ Die Another Day: What Leaders Can Do About the Shrinking Life Expectancy of Corporations ,” BCG article, December 2015.) Faced with those odds, it doesn’t make sense to put all your chips on agility. Agility is great, but it’s more powerful when paired with preparedness. And achieving strategic preparedness takes a structured, organized thought process to identify and consider potential threats, disruptions, and opportunities—which is, for want of a better term, strategic planning.

In short, the problem isn’t strategic planning. It’s that most companies lack an effective strategic-planning process.

Although there is no one-size-fits-all approach to strategic planning, we have found that the companies that get the most benefit from their strategic-planning activities have four things in common:

• They explore strategy at distinct time horizons.
• They constantly reinvent and stimulate the strategic dialogue.
• They engage the broad organization.
• They invest in execution and monitoring.

Explore Strategy at Distinct Time Horizons

It is important to think about strategy at different time horizons. Each has different goals and requires different approaches, a different frequency, and the involvement of different people. Much of the frustration expressed about strategic-planning processes arises when companies try to address the long, medium, and short terms through a single, inflexible process. Leading companies often think of strategy at three time horizons (see Exhibit 1):

• The Long Term. The purpose of long-term strategic thinking should be to define, validate, or redefine the vision, mission, and direction of the company. It’s about projecting more than five years into the future. How might megatrends, including technology advances and demographic shifts, alter the business environment? What strategic risks and opportunities are revealed when considering future scenarios? Will the company’s traditional sources of advantage remain strong or be compromised? What new opportunities could arise and give the organization an opportunity to win? It’s the forum to challenge and redefine the boundaries of the market and the rules of the game. Philips’s decision to shift its focus from consumer electronics to the health care sector is an example of this kind of thinking. Looking forward, the company’s executives could see that an aging population and the fitness trend would provide strong tailwinds for a change in course toward the health care sector, while continuing commoditization would leave the traditional consumer electronics business at best becalmed. It was a vision for the future around which they could then align the organization for a multiyear journey. The long term is also a great perspective from which to consider how to project skills and brand into new domains. BIC a good example: it recognized that its capabilities positioned it to be not just a pen company but a broad-based disposable-device company, a realization that created the foundation for its move into lighters, shavers, and more.
• The Medium Term. The purpose of medium-term strategic planning should be to enumerate the steps necessary to realize the vision—typically over a three- to five-year period. The focus is on developing clear, actionable business plans that describe the multiyear strategic initiatives required to transform vision into value. Which customer and geographic segments should we prioritize? What is the innovation strategy and roadmap? Where will we likely need strategic partnerships and acquisitions? What new business models are required?
• The Short Term. The purpose of short-term strategic planning should be to challenge the current strategy, evaluate progress, and explore options to accelerate execution. Is execution above, at, or below plan—and why? Do the plan’s strategic assumptions remain valid? How should the company adapt to changes in the business environment? What are management’s best new ideas to strengthen or adjust the plan? What’s critical is to encourage creativity and real dialogue—and to avoid a budget-centric process that focuses mostly on the numbers. The best companies break the process into stages that progress from a review of the critical and emerging strategic issues toward a detailed plan for the year and beyond.

Clearly, long-term vision, medium-term strategy, and short-term plans need to be revisited with different frequencies—and those frequencies need to reflect the particulars of the sector. The key is to match the rhythm of the process to the “body clock” of the sector. For a sector like mining, a ten-year horizon for the long term could be just right. In a fast-moving tech sector, five years could be too long even for the long term.

Perspectives on Strategy and Value: Insights on creating sustainable value in an uncertain world.

Forums in which strategy can be discussed outside the rhythms of these three processes are also important; they can allow for real-time adjustments throughout the year. Increasingly, we see companies pursuing an approach we call “always-on strategy,” which typically takes the form of monthly strategy reviews by the executive committee. Some sessions may focus on a deep dive into a critical initiative, for example, whereas others may concentrate on exploring an emerging threat, a new competitor, or a disruptive business model.

Constantly Reinvent and Stimulate the Strategic Dialogue

With strategic planning—unlike sports or music—repetitive practice doesn’t make perfect.

The classic story goes as follows. A new chief strategy officer is appointed. He or she interviews the executive team and hears about the pain points in the process: too much work, not enough big ideas; too financially oriented, too inward looking. A new process is designed that calls for new analyses to describe the market, competitors, and external trends. In the first year, it is a big, painful effort. But it is also quite useful because the new analyses uncover new ideas and stimulate valuable dialogue. In the second year, the process is less painful, because most analyses can simply be adjustments of last year’s analysis—but, typically, it is also much less useful. The same inputs lead to similar conclusions. After a few years, the new process feels just as uncreative and bureaucratic as the old one.

Breaking out of this kind of cycle is challenging. Some companies have attempted to change the process every year, designing different exercises for managers. One year—to use a famous dot-com-era example from General Electric—it’s “destroy-your-business.com.” The next, it’s a search for underleveraged assets. The year after that, it’s a business-model-reinvention exercise. These can certainly be useful, but learning a new process each year adds a lot of overhead and repeating any exercise too soon is pointless.

A more sustainable solution is to follow the same process year to year but to refresh it with different questions each year. Such an approach breaks the compromise between process efficiency and fresh thinking. By focusing a standard process on new questions, the strategic dialogue will remain rich, because participants will have new analyses to consider and fundamentally different ideas to discuss. Of course, the success of this approach depends heavily on the quality of the questions. As noted management consultant and writer Peter Drucker once said, “The most common source of mistakes in management decisions is the emphasis on finding the right answer rather than the right question.”

Great strategists—and great business leaders—have to learn the “art of questioning.”

The right questions should be neither too broad (“How do we save the world?”) nor too narrow (“How do we price the next new product?”). Rather, they should help managers stretch their thinking beyond the current boundaries of their day-to-day activities. Good practices abound. One is to have the leadership team engage in a strategic workshop to articulate and prioritize—but not debate—the key questions that the company will have to answer in the next three to five years. Another good approach is to ask the leaders of the business units to identify the most important questions that the center should be asking them—being clear that the business unit leaders will be judged on the quality of the questions that they propose. It’s important to limit the number of questions to two or three per business unit or department.

Once the right questions are selected, the leadership team can let go, knowing that the teams are working on the right issues. The teams will design novel relevant analyses, amass new knowledge, and develop new recommendations. Question-driven strategic dialogue is inherently an iterative process—even when it occurs on an annual basis. One highly effective approach is known as the “W-shaped model,” and it begins with the center communicating the critical questions for the year to divisional and functional managers, who are charged to return with the answers, along with an update on progress against plan and a series of ideas—some bold and disruptive—for consideration. (See the left side of Exhibit 2.) After a constructive dialogue (shown at the middle of the W in the exhibit), the leadership team selects from among the options and sends management back to develop detailed plans, which are then discussed and approved in a second meeting.

It may take more than one cycle to address a question fully. The process can lead to refreshed long-term visions, adapted or new medium-term strategies, and decisive short-term actions.

Another emerging approach is to leverage big data and advanced analytics for systematic market intelligence, including information that is hidden in unstructured data or local languages. This allows companies to explore weak and emerging signals of opportunity and risk—such as subtle changes in customer or competitive behavior—in core markets as well as in peripheral or adjacent markets.

Engage the Broad Organization

As a general rule, organizations that engage a broad group of internal and external stakeholders in their strategy development efforts yield better results than organizations that leave strategy in the hands of a small, central team. When going broad, the strategy team still has a critical role as orchestrator. It should drive the process, set timelines, coach teams on methodology, ensure the sanctity of proprietary information, and generally facilitate and coax the dialogue toward an organizational consensus.

Going broad prevents groupthink. By involving people from different backgrounds, generations, and geographies, an organization is more likely to surface alternative ideas and perspectives. Some companies even engage outsiders, among them customers and suppliers, in the process. Nonexecutive directors—who are charged with bringing an outside perspective to evaluating and approving the company’s strategy—can play a powerful role too. However, the most common complaint we hear from nonexecutive directors (and boards in general) is that they are not sufficiently engaged in the strategy process to play a truly valuable governance role. One good practice is to include directors in the questioning phase and in specific conversations along the “W” process described above.

Leveraging a diverse group of stakeholders improves an organization’s strategic “peripheral vision.” The best strategists are adept at spotting both opportunities and risks early—which provides a valuable head start over rivals. Particularly in today’s turbulent competitive environments, a well-chosen extended strategy team can be a powerful early-warning system. It makes it easier to spot the emerging competitors, new business models, and changes to customers’ economics that could undermine the long-term vision or challenge key strategic assumptions.

Engaging stakeholders early also increases buy-in and smooths implementation. When key managers at multiple levels are involved in the strategy process, they are more aware of the strategy and they feel ownership of it. Even if their personal ideas aren’t adopted, they will feel heard, understand the rationale for the chosen strategy, and be prepared to support its execution.

Invest in Execution and Monitoring

Having a great strategic-planning process is only half the challenge. The other half—translating the strategy into results—can be even harder, particularly when the new strategy involves moves outside the core. (See the right side of Exhibit 2.)

An all-too-familiar story: A company spends productive time exploring exciting strategic options and making clear choices. A few months later, managers look back and realize that, despite best intentions, the pressure of day-to-day operations and organizational inertia have kept them from making measurable progress on the new strategy.

Investments in several areas can help avoid that fate. (For a glimpse of scenarios that require special consideration, see “Three Special Cases.”)

Three Special Cases

The best practices outlined in this report may need adjusting in certain special situations.

Matrix Organizations. Many companies have at least a three-dimensional matrix: for example, brands or product lines, geographies, and functions. Each needs to build a multiyear strategy, but how can the company ensure that the dots connect in the end? The cascading memo can help, but it’s often helpful to “linearize the matrix”—that is, to start with one dimension and use its output as input for the next dimension. One common order is product plans (with input from key countries), geography, and then function. Some iteration will inevitably be necessary, but in our experience linearizing simplifies the process.

Conglomerates. Multibusiness companies need, of course, to go through a thoughtful strategy development process for each business. But they also need to orchestrate a complementary thought process about the value each business adds to the overall corporation. This thought process needs to cover issues like the balance of the portfolio—and the synergies across the group, whether soft synergies such as training and talent sharing or hard ones like cross-selling and shared services.

Family Businesses. In many ways, family businesses are businesses like any other, but inevitably their strategic-planning process needs to include the family dimension. What are the goals and long-term aspirations of the family? And how can the business strategy best be harmonized with them? Generally, it is important to include key family shareholders in the planning process.

Clear and Engaging Communication to Foster Alignment. In most companies, if you ask ten managers one level below the executive committee to describe the company’s strategy in a couple of sentences, you get a set of responses that are not fully aligned. Move down the organization and the signal-to-noise ratio progressively degrades. It’s hard to overestimate the importance of clear communication that promotes the strategy with a common, proprietary vocabulary. One organization that adopted a strategy to increase its share of wallet with individual clients found a way to sidestep the risk of misalignment on strategy. Leadership memorialized the strategy with a simple chart that showed share of wallet on the y-axis and wallet size on the x-axis. Successful realization of the strategy would be tracked by upward movement on the chart over time. They called the strategy “go north.” The phrase became an important element of the company’s internal language—almost a rallying cry.

Beyond simple slogans, the classic cascading-memo exercise can also be quite powerful. It starts with the CEO sending to direct reports a one-page memo that summarizes the strategy. The memo charges them to write their own version for their team that expresses the strategy and what it means for their slice of the organization. The process continues downward. At each stage, the strategy group reviews the memos for clarity and consistency with the overall strategy. This approach not only helps managers get their heads around the new direction (the act of creating a written synthesis forces concentration and drives alignment) but also pinpoints areas of the organization where the strategy is not well understood—before that misalignment has a chance to affect performance.

High-Profile Strategic Initiatives to Build Traction. To ensure that the new strategy isn’t drowned out by day-to-day concerns, leading companies convert it into a set of manageable strategic initiatives that give the strategy both visibility and traction. Each initiative needs to be properly chartered, staffed, and resourced and given a clear timeline. The strategy department typically plays the role of process manager, providing support and keeping the team on course. Particularly for strategies that involve adjacent moves or new business models, initiatives may not have a natural organizational home. In these cases, it is essential to have a strong executive sponsor and clear funding sources. Sometimes, organizational independence is necessary as well. When the company’s dominant core model is potentially dissonant or even competitive with the new opportunity, the best way to drive a successful result is to insulate the new effort from the core, to give it time and space to find its footing. The company Nespresso was born this way. Once a small entrepreneurial project nurtured within Nestlé, Nespresso became a worldwide success—but only after it was set up as an independent unit.

It is important that initiative teams and the organization overall understand that these initiatives are priorities for the executive committee. Progress reviews and “pressure tests” should have a regular place in the executive committee’s monthly always-on strategic dialogues.

A Strategy Dashboard to Highlight Success Metrics. Another powerful way to encourage the organization to embrace the new strategy is to identify quantitative metrics and goals that can measure progress. (For example, when Procter & Gamble decided to embrace open innovation in 2003, the CEO set a target of 50% of innovations sourced from outside the company.) Complementing the organization’s financial and operational metrics, the strategy metrics should concentrate on new measures tied to the new strategy. And incentives for key players should be tied to these metrics and goals. Today’s new and intuitive digital tools make it possible to have a real-time and “clickable” view of critical strategic variables that drive performance against plan. At the same time, powerful analytics increasingly allow you to automate many first-level analyses. Optimizing human and machine roles enables companies to act more quickly and effectively in the face of changing market conditions.

At a time when technological progress is blurring industry boundaries, when globalization is expanding geographic horizons, and when new competitors are arising from emerging and adjacent markets, it is more important than ever to be prepared strategically, to be able to look sideways, and to have a sound strategy firmly coupled with a system to translate it into action.

Far too many strategic-planning processes fall short. They focus on analyzing the current market and current competitors, rather than searching for or anticipating disruptive new entrants or business models. They make work but don’t offer insight.

It doesn’t have to be that way. By emulating the four strategic-planning best practices, you can boost the ratio of insight to effort and align the organization around a strategy that is faithfully executed, constantly questioned, and regularly refreshed.

Managing Director & Senior Partner

Senior Advisor, Sr. Partner Emeritus

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A step-by-step guide to strategic planning (and what makes it unique)

Discover how strategic planning differs from other project management approaches and learn how to draft a strategy that benefits your organization.

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Capitalize on present opportunities and prepare for the future with strategic planning.

Whether you’re starting a new business or looking to revamp your company’s existing structures, a strategic plan is crucial for success. It complements existing documents, such as mission statements and individualized project plans, and considers future opportunities and potential setbacks.

With a strategic plan suited to your specific goals, you can chart a realistic, sustainable road map that acknowledges your current organizational challenges while unlocking future possibilities. Learn how strategic planning can benefit your organization and set you up for long-term success.

What is strategic planning?

Strategic planning is a continuous, systematic process for organizations to define their short- and long-term direction. It involves comprehensively assessing internal aspects, like employee development, budgets, and timelines, and external elements, such as market trends and competitors, to enable effective resource allocation so your organization can achieve business goals and scale effectively.

The strategic planning process is dynamic and requires adaptability to changing circumstances to establish a structured approach to decision-making and maintain team agility. At its core, strategic planning serves as a road map that steers an organization from its present state toward a well-defined future, ensuring sustainable growth.

The benefits of strategic planning

As a holistic road map, a strategic plan well suited to your organization can propel your productivity. Here are a few benefits that strategic planning brings:

• Creating a shared purpose. Strategic planning involves team members in setting the organization’s mission, vision, and values. This collaborative process ensures that every team member understands and connects with these fundamental principles — fostering a sense of shared purpose and direction.
• Proactive planning. The strategic planning process translates abstract ideas into actionable objectives. Setting specific, attainable goals and mapping out strategies to achieve them provides a clear blueprint for the future that’s guided by informed decision-making and deliberate goal-setting.
• Effective resource allocation. Strategic planning allocates resources such as finances, personnel, and technology based on their potential impact on business goals. This process assesses the resources required to achieve each objective and distributes them to maximize efficiency and effectiveness.
• Defining long-term and short-term goals. Strategic plans break down long-term, overarching goals into smaller, short-term objectives to create a step-by-step pathway to achieve the larger vision. This makes goals more manageable and actionable and enables regular monitoring and adjustment of these goals.
• SWOT analysis. Strategic planning provides a clear understanding of your organization’s current status, position in the market, and well-being through a SWOT (strengths, weaknesses, opportunities, threats) analysis. By evaluating both internal and external factors, this process helps identify areas where your organization excels, where it can improve, and external factors that could impact its success, ultimately helping you strategize for future growth and stability.
• Anticipating market trends. Strategic planning enables organizations to foresee and prepare for future changes by analyzing market data and trends. This proactive approach involves evaluating emerging trends, consumer behavior, and technological advancements to adapt strategies accordingly, ensuring you stay ahead of the curve.

How does a strategic plan differ from other project management and business tools?

When creating a long-term vision, a strategic plan becomes pivotal in steering your organization toward success. However, there are other project management tools and workflows with similar goals. Here’s how strategic plans differ from those processes.

Strategic plans vs. business plans

While a strategic plan outlines the organization’s long-term direction and actions to achieve overarching goals, a business plan focuses more on starting new ventures or restructuring existing ones. The strategic plan is broader in scope and encompasses long-term visions like market expansion, while the business plan might detail the steps to attract new customers and establish brand identity .

For example, a new brick-and-mortar sports apparel store might have a business plan for attracting new customers and establishing a brand identity, with a strategic plan that focuses on expanding into online sales to capture a broader audience over a three-year period.

Strategic plans vs. mission statements

A strategic plan outlines a comprehensive set of strategies to achieve organizational goals, while a mission or vision statement concisely communicates the organization’s core purpose. The mission statement sets the tone and direction, and the strategic plan lays out the specific initiatives, such as research and development investments and partnerships, to realize that vision.

Consider a mission statement for a security camera company — to create seamlessly integrated security systems that protect homes. Meanwhile, their strategic plan details initiatives such as product development, resource allocation, and personnel plans to achieve that mission statement.

Strategic plans vs. company objectives

Company objectives are specific, feasible, and measurable targets. In contrast, a strategic plan provides a broader blueprint for aligning resources and realizing those objectives. The strategic plan incorporates and supports various company objectives through detailed action plans and resource allocation.

For instance, an ecommerce platform aims to increase online sales by 15% in the first quarter. To achieve this, their marketing team creates a strategic plan prioritizing a digital marketing revamp, including optimizing the company website, driving organic traffic, and boosting search engine optimization (SEO).

Strategic plans vs. business cases

Unlike strategic plans, which broadly set the direction for multiple projects and initiatives aligned with a company’s long-term goals, business cases justify individual projects and focus on a specific initiative’s viability and benefits.

For example, a business case might focus on the financial feasibility and expected outcomes of introducing a new analytics feature in a software product. In contrast, the strategic plan of this software company might include goals such as becoming a leader in data-driven solutions, where the analytics function features prominently.

Strategic plans vs. project plans

Project plans are detailed documents that outline specific timelines, tasks, and budgets to complete a project. In contrast, strategic plans incorporate multiple project plans, ensuring they align with the broader goals and vision of the organization, and provide the context and framework for developing and implementing individual project plans.

For a web development team, a project plan could detail the steps for redesigning a client’s website, including milestones, resources, and deadlines. However, the strategic plan for this web development company might aim to become the go-to agency for innovative web solutions. Their strategic plan guides not just this single project but others in terms of technology adoption, client engagement strategies, and market positioning.

Discover how the right CMS can allow teams to efficiently scale rich, complex content – all without writing code.

The 5 essential steps to strategic planning

Now that you’re familiar with strategic plans’ benefits and use cases, here are five best practices to create one tailored for your organization.

1. Understand your position

Before drafting the actual plan, it’s essential to understand your position in the market. Conduct a SWOT analysis of your industry that focuses on current market trends, client needs, and the competitive landscape. This comprehensive understanding helps you grasp where your organization stands and what unique opportunities or challenges you might face so you can establish a solid foundation for future strategies.

2. Set clear goals and objectives

After understanding your market position, establish specific, attainable, and measurable objectives that align with your business’s mission and broader goals. Ensure these goals are relevant, time-bound, and fit within your organization’s resources and budget. Doing so effectively guides your efforts and provides a framework for measuring progress.

3. Define the organization-wide plan

After brainstorming broad long- and short-term goals, convert them into a cohesive strategy encompassing all departments. For example, if launching a new website design is your goal, involve developers, designers, and marketers in your planning process. Assess and use each team member’s strengths and encourage cross-departmental collaboration. This step ensures that your strategy is holistic and aligns every department toward common objectives.

4. Establish and meet KPIs

Implement key performance indicators (KPIs) relevant to your project. For a web development agency, these could include metrics such as website loading speed, user engagement rates, or client acquisition. You can also use data visualization tools , like Google Analytics, to gather insights and track objectives and key results.

This phase is where you translate strategy into action by allocating resources according to your pre-established goals and measure the progress against these KPIs.

5. Review and update

Strategic plans in business are flexible. As markets and consumer demands evolve, so must your approach. Regularly review your KPIs, collect customer feedback, study market trends and industry changes, and motivate your team to be flexible when necessary.

A continuous, iterative process ensures your organization remains responsive and aware of ever-changing conditions, allowing you to effectively anticipate new hurdles, improve existing frameworks, and leverage opportunities.

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4.16: Stages and Types of Strategy

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• Page ID 47639
• Lumen Learning

Learning Outcomes

• Explain the stages of strategy.
• Explain Porter’s general types of competitive strategies.
• Explain e-commerce strategy.

The previous sections have examined the role of strategy in management and looked at common frameworks for analyzing the external and internal environment of business organizations. But what are the specific steps in the strategic management process? How do managers decide what to do, when to do it, and make sure it is happening the way they want? This is what the strategic management process is all about.

The Strategic Management Process

The strategic management process consists of three, four, or five steps depending upon how the different stages are labeled and grouped. But all of the approaches include the same basic actions in the same order. A brief description of these steps follows:

• Strategic Objectives and Analysis. The first step is to define the vision, mission, and values statements of the organization. This is done in combination with the external analysis of the business environment (PESTEL) and internal analysis of the organization (SWOT). An organization’s statements may evolve as information is discovered that affects a company’s ability to operate in the external environment.
• Strategic Formulation. The information from PESTEL and SWOT analyses should be used to set clear and realistic goals and objectives based on the strengths and weaknesses of the company. Identify if the organization needs to find additional resources and how to obtain them. Formulate targeted plans to achieve the goals. Prioritize the tactics most important to achieving the objectives. Continue to scan the external environment for changes that would affect the chances of achieving the strategic goals.
• Strategic Implementation. Sometimes referred to as strategic execution , this stage is when the planning stops and the action begins. The best plans won’t make up for sloppy implementation. Everyone in the organization should be aware of his or her particular assignments, responsibilities and authority. Management should provide additional employee training to meet plan objectives during this stage, as well. It should also allocate resources, including funding. Success in this stage depends upon employees being given the tools needed to implement the plan and being motivated to make it work.
• Strategic Evaluation and Control. Because external and internal conditions are always changing, this stage is extremely important. Performance measurements (determined by the nature of the goal) will help determine if key milestones are being met. If actual results vary from the strategic plan, corrective actions will need to be taken. If necessary, reexamine the goals or the measurement criteria. If it becomes apparent that the strategy is not working according to plan, then new plans need to be formulated (see Step 2) or organizational structures adjusted. Personnel may need to be retrained or shifted to other duties. You may even have to repeat the strategic management process from the beginning, including the information and knowledge gained from this first attempt.

Practice Question

https://assessments.lumenlearning.co...essments/12184

Porter’s Competitive Strategies

The strategic management process described earlier can be successfully used for a wide number of business strategies. In practice, however, most organizations develop strategies that focus on the competition.

Besides studying the nature of industry profits in the Five Forces Theory, Michael Porter is also recognized for his work on four general types of competitive strategies. (More recently, a fifth strategy has been added.) Porter’s model describes two ways of achieving competitive advantage, either by differentiation or by cost. It also identifies two ways of targeting the market, by focusing on a particular market segment or appealing to the overall (broad) market. This approach results in four separate competitive strategies: overall differentiation, overall low cost, focused differentiation, and focused low cost. The fifth strategy combines elements of both low cost and differentiation. This is called the integrated approach.

PORTER’S COMPETITIVE STRATEGIES

Low Price Leadership Strategy

An organization seeking a low-cost strategy seeks to become a leader in providing low-cost products to its customers. The strategy is to produce (or purchase) comparable value goods or services at a lower cost than its competitors. The lower cost will attract the majority of customers and allow it to profit by the volume of goods sold. For this strategy to be successful, it requires that only one or two companies can be industry leaders in this position. For example, Walmart and Costco are leaders in the overall low-cost strategy . IKEA is a low-cost leader using a focused low-cost strategy , appealing to a particular segment of the overall market.

Differentiation Leadership Strategy

A strategy based on differentiation ( distinction ) calls for goods and services that offer unique features and that have high value for the target customer. The features must be perceived by the customer to be so much better than what the competition offers that they are worth an additional cost.

The differentiation may be based on the total number of features, quality of the features, customer service, or other criteria. Marketing campaigns are one way to differentiate a product and create a strong emotional attachment to it, supporting premium prices. Examples of companies in the overall market scope that pursue an overall differentiated strategy include Sony and Apple. They produce a large number of quality products that appeal to the wide technology consumer market. Businesses that sell luxury goods in any industry are employing a focused differentiation strategy . Prada, BMW, and Rolex are all companies whose strategy depends upon maintaining a loyal customer base convinced of the superior quality and uniqueness of their products—and who are also willing to pay a premium for the perceived quality value.

Integrated Strategy

In today’s highly competitive market, customers expect distinction and low cost. Some companies have responded by adopting an integrated strategy . Porter originally argued that this integrated, or “stuck in the middle,” strategy would fail, but other researchers showed real-world examples. Later, Porter modified his view. The organizations strive to provide more value than the average competitor but also focus on keeping costs low. Examples of integrated strategy firms include the automobile companies who manufacture a “luxury” brand, such as the Kia K900. Kia keeps costs down by using many components of its low-cost models but adds additional features comparable to luxury car producers. This approach is risky, because these products run the risk of being too expensive for the economy-driven customer but not having the prestige of the classic luxury brands.

https://assessments.lumenlearning.co...essments/12185

E-Business and E-Commerce

Businesses today need a strategy for competing with online “upstarts” who can underprice and steal customers . Companies that once thought they were immune to online competition have discovered that the Internet is biting into their profits. Warby-Parker is an online provider of eyeglasses that offers lenses at up to 70 percent off the price opticians charge. The customer only needs to choose frames, pick a lens, and enter the prescription. Returns are guaranteed. Even many routine medical procedures are being addressed digitally as patients meet online with doctors.

E-business can be defined as any business that takes place over digital processes using a computer network rather than in a physical location (“brick and mortar”). Organizations of all types, military and nonprofit, educational and governmental, use e-business strategies. The strategies are geared to three purposes:

• those related to decreasing production costs and increasing efficiency.
• those creating customer focus.
• those addressing internal management.

E-commerce is a more limited term than e-business. It refers specifically to exchanges or transactions that occur electronically. The younger the shopper, the more likely he or she is to conduct “business” using a smart phone. E-commerce strategies rely on the power of the Internet, both in the growing popularity of online purchasing and in shaping marketing strategies. About 8.5 percent of all retail sales were made online in 2016 and this figure is increasing rapidly every year. Many organizations have sales and marketing teams dedicated to devising strategies for capturing their share of the growing online market. Amazon clearly dominates e-commerce with a whopping 33 percent of all online purchases. Its e-commerce strategy is “simply” to make it as easy as possible for the customer to find, order, pay, receive, and return (if necessary) the goods that it buys from the giant corporation. It doesn’t wait for the customer to search out a product, but rather pushes products to the customer based on past purchases.

Retailers and manufacturers also use the aspects of the internet such as Twitter, Facebook, and other social media sites to predict trends as they are developing to get a jump on production. First to market can be a key competitive advantage, in part because of the short life span of many fads. Many of the strategies needed to succeed in e-commerce are very different from competing in a nondigital environment. To survive today, organizations need to be present in both environments.

https://assessments.lumenlearning.co...essments/12186

Contributors and Attributions

• Stages and Types of Strategy. Authored by : John/Lynn Bruton and Lumen Learning. License : CC BY: Attribution
• Strategic Management Process. Authored by : John Bruton and Lumen Learning. License : CC BY: Attribution
• Porter's Competitive Strategies. Authored by : John Bruton and Lumen Learning. License : CC BY: Attribution

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• Business strategy |
• 7 strategic planning models, plus 8 fra ...

7 strategic planning models, plus 8 frameworks to help you get started

Strategic planning is vital in defining where your business is going in the next three to five years. With the right strategic planning models and frameworks, you can uncover opportunities, identify risks, and create a strategic plan to fuel your organization’s success. We list the most popular models and frameworks and explain how you can combine them to create a strategic plan that fits your business.

A strategic plan is a great tool to help you hit your business goals . But sometimes, this tool needs to be updated to reflect new business priorities or changing market conditions. If you decide to use a model that already exists, you can benefit from a roadmap that’s already created. The model you choose can improve your knowledge of what works best in your organization, uncover unknown strengths and weaknesses, or help you find out how you can outpace your competitors.

In this article, we cover the most common strategic planning models and frameworks and explain when to use which one. Plus, get tips on how to apply them and which models and frameworks work well together. 

Strategic planning models vs. frameworks

First off: This is not a one-or-nothing scenario. You can use as many or as few strategic planning models and frameworks as you like. 

When your organization undergoes a strategic planning phase, you should first pick a model or two that you want to apply. This will provide you with a basic outline of the steps to take during the strategic planning process.

During that process, think of strategic planning frameworks as the tools in your toolbox. Many models suggest starting with a SWOT analysis or defining your vision and mission statements first. Depending on your goals, though, you may want to apply several different frameworks throughout the strategic planning process.

For example, if you’re applying a scenario-based strategic plan, you could start with a SWOT and PEST(LE) analysis to get a better overview of your current standing. If one of the weaknesses you identify has to do with your manufacturing process, you could apply the theory of constraints to improve bottlenecks and mitigate risks. 

Now that you know the difference between the two, learn more about the seven strategic planning models, as well as the eight most commonly used frameworks that go along with them.

1. Basic model

The basic strategic planning model is ideal for establishing your company’s vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

If it’s your first strategic planning session, the basic model is the way to go. Later on, you can embellish it with other models to adjust or rewrite your business strategy as needed. Let’s take a look at what kinds of businesses can benefit from this strategic planning model and how to apply it.

Small businesses or organizations

Companies with little to no strategic planning experience

Organizations with few resources 

Write your mission statement. Gather your planning team and have a brainstorming session. The more ideas you can collect early in this step, the more fun and rewarding the analysis phase will feel.

Identify your organization’s goals . Setting clear business goals will increase your team’s performance and positively impact their motivation.

Outline strategies that will help you reach your goals. Ask yourself what steps you have to take in order to reach these goals and break them down into long-term, mid-term, and short-term goals .

Create action plans to implement each of the strategies above. Action plans will keep teams motivated and your organization on target.

Monitor and revise the plan as you go . As with any strategic plan, it’s important to closely monitor if your company is implementing it successfully and how you can adjust it for a better outcome.

2. Issue-based model

Also called goal-based planning model, this is essentially an extension of the basic strategic planning model. It’s a bit more dynamic and very popular for companies that want to create a more comprehensive plan.

Organizations with basic strategic planning experience

Businesses that are looking for a more comprehensive plan

Conduct a SWOT analysis . Assess your organization’s strengths, weaknesses, opportunities, and threats with a SWOT analysis to get a better overview of what your strategic plan should focus on. We’ll give into how to conduct a SWOT analysis when we get into the strategic planning frameworks below.

Identify and prioritize major issues and/or goals. Based on your SWOT analysis, identify and prioritize what your strategic plan should focus on this time around.

Develop your main strategies that address these issues and/or goals. Aim to develop one overarching strategy that addresses your highest-priority goal and/or issue to keep this process as simple as possible.

Update or create a mission and vision statement . Make sure that your business’s statements align with your new or updated strategy. If you haven’t already, this is also a chance for you to define your organization’s values.

Create action plans. These will help you address your organization’s goals, resource needs, roles, and responsibilities. 

Develop a yearly operational plan document. This model works best if your business repeats the strategic plan implementation process on an annual basis, so use a yearly operational plan to capture your goals, progress, and opportunities for next time.

Allocate resources for your year-one operational plan. Whether you need funding or dedicated team members to implement your first strategic plan, now is the time to allocate all the resources you’ll need.

Monitor and revise the strategic plan. Record your lessons learned in the operational plan so you can revisit and improve it for the next strategic planning phase.

The issue-based plan can repeat on an annual basis (or less often once you resolve the issues). It’s important to update the plan every time it’s in action to ensure it’s still doing the best it can for your organization.

You don’t have to repeat the full process every year—rather, focus on what’s a priority during this run.

3. Alignment model

This model is also called strategic alignment model (SAM) and is one of the most popular strategic planning models. It helps you align your business and IT strategies with your organization’s strategic goals. 

You’ll have to consider four equally important, yet different perspectives when applying the alignment strategic planning model:

Strategy execution: The business strategy driving the model

Technology potential: The IT strategy supporting the business strategy

Competitive potential: Emerging IT capabilities that can create new products and services

Service level: Team members dedicated to creating the best IT system in the organization

Ideally, your strategy will check off all the criteria above—however, it’s more likely you’ll have to find a compromise. 

Here’s how to create a strategic plan using the alignment model and what kinds of companies can benefit from it.

Organizations that need to fine-tune their strategies

Businesses that want to uncover issues that prevent them from aligning with their mission

Companies that want to reassess objectives or correct problem areas that prevent them from growing

Outline your organization’s mission, programs, resources, and where support is needed. Before you can improve your statements and approaches, you need to define what exactly they are.

Identify what internal processes are working and which ones aren’t. Pinpoint which processes are causing problems, creating bottlenecks , or could otherwise use improving. Then prioritize which internal processes will have the biggest positive impact on your business.

Identify solutions. Work with the respective teams when you’re creating a new strategy to benefit from their experience and perspective on the current situation.

Update your strategic plan with the solutions. Update your strategic plan and monitor if implementing it is setting your business up for improvement or growth. If not, you may have to return to the drawing board and update your strategic plan with new solutions.

4. Scenario model

The scenario model works great if you combine it with other models like the basic or issue-based model. This model is particularly helpful if you need to consider external factors as well. These can be government regulations, technical, or demographic changes that may impact your business.

Organizations trying to identify strategic issues and goals caused by external factors

Identify external factors that influence your organization. For example, you should consider demographic, regulation, or environmental factors.

Review the worst case scenario the above factors could have on your organization. If you know what the worst case scenario for your business looks like, it’ll be much easier to prepare for it. Besides, it’ll take some of the pressure and surprise out of the mix, should a scenario similar to the one you create actually occur.

Identify and discuss two additional hypothetical organizational scenarios. On top of your worst case scenario, you’ll also want to define the best case and average case scenarios. Keep in mind that the worst case scenario from the previous step can often provoke strong motivation to change your organization for the better. However, discussing the other two will allow you to focus on the positive—the opportunities your business may have ahead.

Identify and suggest potential strategies or solutions. Everyone on the team should now brainstorm different ways your business could potentially respond to each of the three scenarios. Discuss the proposed strategies as a team afterward.

Uncover common considerations or strategies for your organization. There’s a good chance that your teammates come up with similar solutions. Decide which ones you like best as a team or create a new one together.

Identify the most likely scenario and the most reasonable strategy. Finally, examine which of the three scenarios is most likely to occur in the next three to five years and how your business should respond to potential changes.

5. Self-organizing model

Also called the organic planning model, the self-organizing model is a bit different from the linear approaches of the other models. You’ll have to be very patient with this method. 

This strategic planning model is all about focusing on the learning and growing process rather than achieving a specific goal. Since the organic model concentrates on continuous improvement , the process is never really over.

Large organizations that can afford to take their time

Businesses that prefer a more naturalistic, organic planning approach that revolves around common values, communication, and shared reflection

Companies that have a clear understanding of their vision

Define and communicate your organization’s cultural values . Your team can only think clearly and with solutions in mind when they have a clear understanding of your organization's values.

Communicate the planning group’s vision for the organization. Define and communicate the vision with everyone involved in the strategic planning process. This will align everyone’s ideas with your company’s vision.

Discuss what processes will help realize the organization’s vision on a regular basis. Meet every quarter to discuss strategies or tactics that will move your organization closer to realizing your vision.

6. Real-time model

This fluid model can help organizations that deal with rapid changes to their work environment. There are three levels of success in the real-time model: 

Organizational: At the organizational level, you’re forming strategies in response to opportunities or trends.

Programmatic: At the programmatic level, you have to decide how to respond to specific outcomes or environmental changes.

Operational: On the operational level, you will study internal systems, policies, and people to develop a strategy for your company.

Figuring out your competitive advantage can be difficult, but this is absolutely crucial to ensure success. Whether it’s a unique asset or strength your organization has or an outstanding execution of services or programs—it’s important that you can set yourself apart from others in the industry to succeed.

Companies that need to react quickly to changing environments

Businesses that are seeking new tools to help them align with their organizational strategy

Define your mission and vision statement. If you ever feel stuck formulating your company’s mission or vision statement, take a look at those of others. Maybe Asana’s vision statement sparks some inspiration.

Research, understand, and learn from competitor strategy and market trends. Pick a handful of competitors in your industry and find out how they’ve created success for themselves. How did they handle setbacks or challenges? What kinds of challenges did they even encounter? Are these common scenarios in the market? Learn from your competitors by finding out as much as you can about them.

Study external environments. At this point, you can combine the real-time model with the scenario model to find solutions to threats and opportunities outside of your control.

Conduct a SWOT analysis of your internal processes, systems, and resources. Besides the external factors your team has to consider, it’s also important to look at your company’s internal environment and how well you’re prepared for different scenarios.

Develop a strategy. Discuss the results of your SWOT analysis to develop a business strategy that builds toward organizational, programmatic, and operational success.

Rinse and repeat. Monitor how well the new strategy is working for your organization and repeat the planning process as needed to ensure you’re on top or, perhaps, ahead of the game. 

7. Inspirational model

This last strategic planning model is perfect to inspire and energize your team as they work toward your organization’s goals. It’s also a great way to introduce or reconnect your employees to your business strategy after a merger or acquisition.

Businesses with a dynamic and inspired start-up culture

Organizations looking for inspiration to reinvigorate the creative process

Companies looking for quick solutions and strategy shifts

Gather your team to discuss an inspirational vision for your organization. The more people you can gather for this process, the more input you will receive.

Brainstorm big, hairy audacious goals and ideas. Encouraging your team not to hold back with ideas that may seem ridiculous will do two things: for one, it will mitigate the fear of contributing bad ideas. But more importantly, it may lead to a genius idea or suggestion that your team wouldn’t have thought of if they felt like they had to think inside of the box.

Assess your organization’s resources. Find out if your company has the resources to implement your new ideas. If they don’t, you’ll have to either adjust your strategy or allocate more resources.

Develop a strategy balancing your resources and brainstorming ideas. Far-fetched ideas can grow into amazing opportunities but they can also bear great risk. Make sure to balance ideas with your strategic direction. 

Now, let’s dive into the most commonly used strategic frameworks.

8. SWOT analysis framework

One of the most popular strategic planning frameworks is the SWOT analysis . A SWOT analysis is a great first step in identifying areas of opportunity and risk—which can help you create a strategic plan that accounts for growth and prepares for threats.

SWOT stands for strengths, weaknesses, opportunities, and threats. Here’s an example:

9. OKRs framework

A big part of strategic planning is setting goals for your company. That’s where OKRs come into play. 

OKRs stand for objective and key results—this goal-setting framework helps your organization set and achieve goals. It provides a somewhat holistic approach that you can use to connect your team’s work to your organization’s big-picture goals.  When team members understand how their individual work contributes to the organization’s success, they tend to be more motivated and produce better results

10. Balanced scorecard (BSC) framework

The balanced scorecard is a popular strategic framework for businesses that want to take a more holistic approach rather than just focus on their financial performance. It was designed by David Norton and Robert Kaplan in the 1990s, it’s used by companies around the globe to: 

Communicate goals

Align their team’s daily work with their company’s strategy

Prioritize products, services, and projects

Monitor their progress toward their strategic goals

Your balanced scorecard will outline four main business perspectives:

Customers or clients , meaning their value, satisfaction, and/or retention

Financial , meaning your effectiveness in using resources and your financial performance

Internal process , meaning your business’s quality and efficiency

Organizational capacity , meaning your organizational culture, infrastructure and technology, and human resources

With the help of a strategy map, you can visualize and communicate how your company is creating value. A strategy map is a simple graphic that shows cause-and-effect connections between strategic objectives. 

The balanced scorecard framework is an amazing tool to use from outlining your mission, vision, and values all the way to implementing your strategic plan .

You can use an integration like Lucidchart to create strategy maps for your business in Asana.

11. Porter’s Five Forces framework

If you’re using the real-time strategic planning model, Porter’s Five Forces are a great framework to apply. You can use it to find out what your product’s or service’s competitive advantage is before entering the market.

Developed by Michael E. Porter , the framework outlines five forces you have to be aware of and monitor:

Threat of new industry entrants: Any new entry into the market results in increased pressure on prices and costs. 

Competition in the industry: The more competitors that exist, the more difficult it will be for you to create value in the market with your product or service.

Bargaining power of suppliers: Suppliers can wield more power if there are less alternatives for buyers or it’s expensive, time consuming, or difficult to switch to a different supplier.

Bargaining power of buyers: Buyers can wield more power if the same product or service is available elsewhere with little to no difference in quality.

Threat of substitutes: If another company already covers the market’s needs, you’ll have to create a better product or service or make it available for a lower price at the same quality in order to compete.

Remember, industry structures aren’t static. The more dynamic your strategic plan is, the better you’ll be able to compete in a market.

12. VRIO framework

The VRIO framework is another strategic planning tool designed to help you evaluate your competitive advantage. VRIO stands for value, rarity, imitability, and organization.

It’s a resource-based theory developed by Jay Barney. With this framework, you can study your firmed resources and find out whether or not your company can transform them into sustained competitive advantages. 

Firmed resources can be tangible (e.g., cash, tools, inventory, etc.) or intangible (e.g., copyrights, trademarks, organizational culture, etc.). Whether these resources will actually help your business once you enter the market depends on four qualities:

Valuable : Will this resource either increase your revenue or decrease your costs and thereby create value for your business?

Rare : Are the resources you’re using rare or can others use your resources as well and therefore easily provide the same product or service?

Inimitable : Are your resources either inimitable or non-substitutable? In other words, how unique and complex are your resources?

Organizational: Are you organized enough to use your resources in a way that captures their value, rarity, and inimitability?

It’s important that your resources check all the boxes above so you can ensure that you have sustained competitive advantage over others in the industry.

13. Theory of Constraints (TOC) framework

If the reason you’re currently in a strategic planning process is because you’re trying to mitigate risks or uncover issues that could hurt your business—this framework should be in your toolkit.

The theory of constraints (TOC) is a problem-solving framework that can help you identify limiting factors or bottlenecks preventing your organization from hitting OKRs or KPIs . 

Whether it’s a policy, market, or recourse constraint—you can apply the theory of constraints to solve potential problems, respond to issues, and empower your team to improve their work with the resources they have.

14. PEST/PESTLE analysis framework

The idea of the PEST analysis is similar to that of the SWOT analysis except that you’re focusing on external factors and solutions. It’s a great framework to combine with the scenario-based strategic planning model as it helps you define external factors connected to your business’s success.

PEST stands for political, economic, sociological, and technological factors. Depending on your business model, you may want to expand this framework to include legal and environmental factors as well (PESTLE). These are the most common factors you can include in a PESTLE analysis:

Political: Taxes, trade tariffs, conflicts

Economic: Interest and inflation rate, economic growth patterns, unemployment rate

Social: Demographics, education, media, health

Technological: Communication, information technology, research and development, patents

Legal: Regulatory bodies, environmental regulations, consumer protection

Environmental: Climate, geographical location, environmental offsets

15. Hoshin Kanri framework

Hoshin Kanri is a great tool to communicate and implement strategic goals. It’s a planning system that involves the entire organization in the strategic planning process. The term is Japanese and stands for “compass management” and is also known as policy management. 

This strategic planning framework is a top-down approach that starts with your leadership team defining long-term goals which are then aligned and communicated with every team member in the company. 

You should hold regular meetings to monitor progress and update the timeline to ensure that every teammate’s contributions are aligned with the overarching company goals.

Stick to your strategic goals

Whether you’re a small business just starting out or a nonprofit organization with decades of experience, strategic planning is a crucial step in your journey to success. 

If you’re looking for a tool that can help you and your team define, organize, and implement your strategic goals, Asana is here to help. Our goal-setting software allows you to connect all of your team members in one place, visualize progress, and stay on target.

Related resources

How Asana uses work management for organizational planning

How Asana uses work management to optimize resource planning

Solve your tech overload with an intelligent transformation

9 steps to craft a successful go-to-market (GTM) strategy

Planning, Business Models and Strategy

• First Online: 28 November 2019

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This chapter examines the relationship between the entrepreneur’s vision and the need for strategic planning. It recognises that flexibility is critical in the development of entrepreneurial ventures and that the planning process must be non-linear in nature if it is to be responsive to the opportunities that market or product innovation offer. While the discipline of formal business planning is highly important to the development of a successful venture, the plan is only a manifestation of the business case or model that underlies the venture. The chapter explores the nature of planning and strategy, business model design and offers both a theoretical and applied view of these areas.

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6.2 Planning

• What are the four types of planning?

Planning begins by anticipating potential problems or opportunities the organization may encounter. Managers then design strategies to solve current problems, prevent future problems, or take advantage of opportunities. These strategies serve as the foundation for goals, objectives, policies, and procedures. Put simply, planning is deciding what needs to be done to achieve organizational objectives, identifying when and how it will be done, and determining who should do it. Effective planning requires extensive information about the external business environment in which the firm competes, as well as its internal environment.

There are four basic types of planning: strategic, tactical, operational, and contingency. Most of us use these different types of planning in our own lives. Some plans are very broad and long term (more strategic in nature), such as planning to attend graduate school after earning a bachelor’s degree. Some plans are much more specific and short term (more operational in nature), such as planning to spend a few hours in the library this weekend. Your short-term plans support your long-term plans. If you study now, you have a better chance of achieving some future goal, such as getting a job interview or attending graduate school. Like you, organizations tailor their plans to meet the requirements of future situations or events. A summary of the four types of planning appears in Table 6.2 .

Strategic planning involves creating long-range (one to five years), broad goals for the organization and determining what resources will be needed to accomplish those goals. An evaluation of external environmental factors such as economic, technological, and social issues is critical to successful strategic planning. Strategic plans, such as the organization’s long-term mission, are formulated by top-level managers and put into action at lower levels in the organization. For example, when Mickey Drexler took over as CEO of J.Crew , the company was floundering and had been recently purchased by a private equity group. One of Drexler’s first moves was to change the strategic direction of the company by moving it out of the crowded trend-following retail segment, where it was competing with stores such as Gap , American Eagle , and Abercrombie and back into the preppie, luxury segment where it began. Rather than trying to sell abundant inventory to a mass market, J.Crew cultivated scarcity, making sure items sold out early rather than hit the sale rack later in the season. The company also limited the number of new stores it opened during a two-year span but planned to double the number of stores in the next five to six years. Drexler led the company through public offerings and back to private ownership before bringing on a new CEO in 2017. He remained chairman with ownership in the company. 4

Catching the Entrepreneurial Spirit

Changing strategy can change your opportunities.

Since 1949, Gordon Bernard, a printing company in Milford, Ohio, focused exclusively on printing fundraising calendars for a variety of clients, such as cities, schools, scout troops, and fire departments. The company’s approximately 4,000 clients nationwide, 10 percent of which have been with the company for over 50 years, generated $4 million in revenue in 2006. In order to better serve customers, company president Bob Sherman invested $650,000 in the purchase of a Xerox iGEN3 digital color press so that the company could produce in-house a part of its calendar product that had been outsourced. The high-tech press did more for the company than simply reduce costs, however.

The new press gave the company four-color printing capability for the first time in its history, and that led the management of Gordon Bernard to rethink the company’s strategy. The machine excels at short runs, which means that small batches of an item can be printed at a much lower cost than on a traditional press. The press also has the capability to customize every piece that rolls off the machine. For example, if a pet store wants to print 3,000 direct mail pieces, every single postcard can have a personalized greeting and text. Pieces targeted to bird owners can feature pictures of birds, whereas the dog owners’ brochure will contain dog pictures. Text and pictures can be personalized for owners of show dogs or overweight cats or iguanas.

Bob Sherman created a new division to oversee the implementation, training, marketing, and creative aspects of the new production process. The company even changed how it thinks of itself. No longer does Gordon Bernard consider itself a printing firm, but as a marketing services company with printing capabilities. That change in strategy prompted the company to seek more commercial work. For example, Gordon Bernard will help clients of its new services develop customer databases from their existing information and identify additional customer information they might want to collect. Even though calendar sales accounted for 97 percent of the firm’s revenues, that business is seasonal and leaves large amounts of unused capacity in the off-peak periods. Managers’ goals for the new division were to contribute 10 percent of total revenue within a couple years of purchase.

• What type of planning do you think Gordon Bernard is doing?
• Because Gordon Bernard’s strategy changed only after it purchased the iGEN3, does the shift constitute strategic planning? Why or why not?

Sources: GBC Fundraising Calendars, http://www.gordonbernard.com/, accessed September 15, 2017; Gordon Bernard Co Inc., https://www.manta.com, accessed September 15, 2017; Karen Bells, “Hot Off the Press; Milford Printer Spends Big to Fill New Niche,” Cincinnati Business Courier, July 15, 2005, pp. 17–18.

An organization’s mission is formalized in its mission statement , a document that states the purpose of the organization and its reason for existing. For example, Twitter ’s mission statement formalizes both concepts while staying within its self-imposed character limit; see Table 6.3 .

In all organizations, plans and goals at the tactical and operational levels should clearly support the organization’s mission statement.

Tactical planning begins the implementation of strategic plans. Tactical plans have a shorter (less than one year) time frame than strategic plans and more specific objectives designed to support the broader strategic goals. Tactical plans begin to address issues of coordinating and allocating resources to different parts of the organization.

Under Mickey Drexler, many new tactical plans were implemented to support J.Crew ’s new strategic direction. For example, he severely limited the number of stores opened each year, with only nine new openings in the first two years of his tenure (he closed seven). Instead, he invested the company’s resources in developing a product line that communicated J.Crew ’s new strategic direction. Drexler dumped trend-driven apparel because it did not meet the company’s new image. He even cut some million-dollar volume items. In their place, he created limited editions of a handful of garments that he thought would be popular, many of which fell into his new luxury strategy. For example, J.Crew now buys shoes directly from the same shoe manufacturers that produce footwear for designers such as Prada and Gucci . In general, J.Crew drastically tightened inventories, a move designed to keep reams of clothes from ending up on sale racks and to break its shoppers’ habit of waiting for discounts.

This part of the plan generated great results. Prior to Drexler’s change in strategy, half of J.Crew ’s clothing sold at a discount. After implementing tactical plans aimed to change that situation, only a small percentage does. The shift to limited editions and tighter inventory controls has not reduced the amount of new merchandise, however. On the contrary, Drexler created a J.Crew bridal collection, a jewelry line, and Crew Cuts, a line of kids’ clothing. The results of Drexler’s tactical plans were impressive. J.Crew saw same-store sales rise 17 percent in one year. 5

Operational planning creates specific standards, methods, policies, and procedures that are used in specific functional areas of the organization. Operational objectives are current, narrow, and resource focused. They are designed to help guide and control the implementation of tactical plans. In an industry where new versions of software have widely varying development cycles, Autodesk , maker of software tools for designers and engineers, implemented new operational plans that dramatically increased profits. Former CEO Carol Bartz shifted the company away from the erratic release schedule it had been keeping to regular, annual software releases. By releasing upgrades on a defined and predictable schedule, the company is able to use annual subscription pricing, which is more affordable for small and midsize companies. The new schedule keeps Autodesk customers on the most recent versions of popular software and has resulted in an overall increase in profitability. 6

The key to effective planning is anticipating future situations and events. Yet even the best-prepared organization must sometimes cope with unforeseen circumstances, such as a natural disaster, an act of terrorism, or a radical new technology. Therefore, many companies have developed contingency plans that identify alternative courses of action for very unusual or crisis situations. The contingency plan typically stipulates the chain of command, standard operating procedures, and communication channels the organization will use during an emergency.

An effective contingency plan can make or break a company. Consider the example of Marriott Hotels in Puerto Rico. Anticipating Hurricane Maria in 2017, workers at the San Juan Marriott had to shift from their regular duties to handling the needs of not only customers, but everyone who needed assistance in the wake of the hurricane that devastated the island. A contingency plan and training for events such as this were a key part of managing this crisis. 7 The company achieved its goal of being able to cater to guest and general needs due to planning and training while having a contingency plan in place. One guest commented on TripAdvisor , “Could not believe how friendly, helpful & responsive staff were even during height of hurricane. Special thanks to Eydie, Juan, Jock, Ashley and security Luis. They kept us safe & were exemplary. Will always stay at Marriott from now on.” 8 Within one month after Hurricane Maria hit, operations were back to normal at the San Juan Marriott . 9

Managing Change

Boeing takes off in new direction.

Boeing and Airbus have been locked in fierce competition for the world’s airplane business for decades. What characterized most of that time period was a focus on designing larger and larger airplanes. Since its development in the 1970s, Boeing revamped its pioneering B747 numerous times and at one time boasted over 1,300 of the jumbo jets in operation around the world. As part of this head-to-head competition for bragging rights to the largest jet in the air, Boeing was working on a 747X, a super-jumbo jet designed to hold 525 passengers. In what seemed to be an abrupt change of strategy, Boeing conceded the super-jumbo segment of the market to its rival and killed plans for the 747X. Instead of trying to create a plane with more seats, Boeing engineers began developing planes to fly fewer people at higher speeds. Then, as the rising price of jet fuel surpassed the airlines’ ability to easily absorb its increasing cost, Boeing again changed its strategy, this time focusing on developing jets that use less fuel. In the end, Boeing ’s strategy changed from plane capacity to jet efficiency.

The new strategy required new plans. Boeing managers identified gaps in Airbus ’s product line and immediately set out to develop planes to fill them. Boeing announced a new 787 “Dreamliner,” which boasted better fuel efficiency thanks to lightweight composite materials and next-generation engine design. Even though the 787 has less than half the seating of the Airbus A380, Boeing ’s Dreamliner is a hit in the market. Orders for the new plane have been stronger than anticipated, forcing Boeing to change its production plans to meet demand. The company decided to accelerate its planned 787 production rate buildup, rolling out a new jet every two days or so.

Airbus was not so lucky. The company spent so much time and energy on its super-jumbo that its A350 (the plane designed to compete with Boeing’s 787) suffered. The 787 uses 15 percent less fuel than the A350, can fly nonstop from Beijing to New York, and is one of the fastest-selling commercial planes ever.

The battle for airline supremacy continues to switch between the two global giants. In 2017, Boeing beat Airbus on commercial jet orders at the Paris Air Show and continues to push forward. A spokesperson has hinted at a hybrid fuselage for midrange planes, which could carry passengers farther at lower costs. If successful, Boeing will regain market share lost to the Airbus A321.

• What seems to be the difference in how Boeing and Airbus have approached planning?
• Do you think Airbus should change its strategic plans to meet Boeing’s or stick with its current plans? Explain.

Sources: Gillian Rich, “Why Boeing's Paris Air Show Orders Are ‘Staggering’,” http://www.investors.com, June 22, 2017; Jon Ostrower, “Boeing vs. Airbus: A New Winner Emerges at the Paris Air Show,” CNN, http://money.cnn.com, June 22, 2017; Gillian Rich, “’Hybrid’ Design for New Boeing Midrange Jet Could Hit This Sweet Spot,” http://www.investors.com, June 20, 2017; Alex Taylor, III, “Boeing Finally Has a Flight Plan,” Fortune , June 13, 2005, pp. 27–28; J. Lynn Lunsford and Rod Stone, “Boeing Net Falls, but Outlook Is Rosy,” The Wall Street Journal , July 28, 2005, p. A3; Carol Matlack and Stanley Holmes, “Why Airbus Is Losing Altitude,” Business Week , June 20, 2005, p. 20; J. Lynn Lunsford, “UPS to Buy 8 Boeing 747s, Lifting Jet’s Prospects,” The Wall Street Journal , September 18, 2005, p. A2; “Airbus to Launch A350 Jet in October,” Xinhua News Agency , September 14, 2005, online; “Boeing Plans Major Change,” Performance Materials , April 30, 2001, p. 5.

Concept Check

• What is the purpose of planning, and what is needed to do it effectively?
• Identify the unique characteristics of each type of planning.

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