Strategic Planning Models
Strategic Planning Models
Reasons Business Fail
Business failure is tied most directly to little to no strategic thinking and strategic management. The top reasons that business fail include:
- Not focused on true passions, talent and where there are viable economic opportunities
- Poor management. This ties in with reason one. Good leaders are focused on products and services that align deeply with their passions and talents.
- Poor planning
- Insufficient capital
- Poor location
- Not thinking to the future
- Over expansion
Following a strategic process is not enough. Doing it well is vital to success.
Which Strategic Planning Model?
There is not one right or even one best strategic planning model. In fact, every organization may want to have their own model that best fits its own personality. However, there are lessons learned and best practices that we should be familiar as we determine the best model for an organization.
Let us start by looking at a generic strategic planning process - see below. We'll describe briefly what the different steps mean - so that you have a basic framework for looking at the pros and cons of alternatives. Some of these models apply to business, some to business and non-profits, and others can be applied to all organizations.
Let's start by looking at a generic strategic planning process - see below. We'll describe briefly what the different steps mean - so that you have a basic framework for looking at the pros and cons of alternatives. Some of these models apply to business, some to business and non-profits, and others can be applied to all organizations.
Understand Your Target Customer
Customers are at the top of the list for a reason. Customer analysis helps you to understand in depth what it takes to win the loyalty of your existing customers or your target customers. By nature we are too optimistic about what it takes for customers to actually pull out the credit card and make a purchase. The challenge does not stop here. The next question is how do you provide such value that the customer becomes excited about what you do, becomes loyal, and naturally becomes a strong advocate for products and/or services.
Assess Your Competitors
Competitive analysis is an assessment of the strengths and weaknesses of your present and potential competitors. Most firms do not conduct competitor analysis thoroughly and systematically enough. Most make decisions based on assumptions, impressions, guesses, and intuition based on partial information. This type of analysis leads to costly failures.
Conduct Market Analysis
Market analysis helps you to assess the opportunities that exist within a market and to understand realistically the strengths and weaknesses of your organization to succeed within the market. Market analysis includes looking at the size of the market, trends, growth opportunities, costs, profitability, and distribution channels.
Scan the Environment
Conduct a PESTEL analysis:
- Political factors: areas to focus on include taxes, trade restrictions, labor laws, environmental laws, political direction
- Economic factors: includes GDP, inflation, interest rates, exchange rates and other macro and micro economic factors
- Social factors: includes social trends, population growth rate, age distribution, career expectations, etc.
- Technology factors: includes equipment, information technology, R&D.
- Environmental factors: includes weather and climate
- Legal factors: include health, safety, employment, discrimination, consumer and antitrust laws.
Find the Trends
The purpose of trend analysis is to try and guess the future, as it relates to your organization, so that you appropriate invest and optimize your efforts to meet customer needs now and in the future. Developing new trends is admirable and difficult. Apple is a trend setter but understands and intelligently builds upon general trends. Understanding and moving with trends improves the probability of success.
The first step is in trend analysis is to identify which factors are potentially most relevant and impactful to your organization. Trend analysis involves collecting information and attempting to spot a pattern in the information. Trend analysis often is focused on business, technology, economic, demographic and social patterns. Trends analysis is used identify opportunities as well as to see potential problems.
Summaries from Future Prediction Reports
To access the National Intelligence Council future trends report visit - click here.
To learn more about Future Studies - click here.
Assess Your Strengths and Weaknesses
Objectively identify what your strengths and weakness are. In determining your strengths, use Jim Collins' sweat-spot model. Ask yourself the following questions:
- Noble Passions: What are you deeply passionate about where you can make a meaningful difference?
- Talent: What you can be the best in the world?
Identify Opportunities and Threats
- Opportunities are external factors that can benefit your organization
- Threats are the external factors that can damage your organization
Define Your Vision and Values
- Vision: A vision statement is a picture of what you want your company to become. It is the framework for all of your plans and decisions
- Values: A value statement articulates the cherished beliefs and behaviors of the organization
Define Your Target Audience and Value
- Customers: Those customers that you plan to focus your time and attention on
- Value Proposition: The compelling value you plan to provide your customers
Define Your Products and Services
Define those products and services that best meet your value proposition and that align with your competencies
Define the Work Needed to Move Forward
- Define what projects you will focus on. Projects are temporary endeavors to ultimately achieve the goals of your organizations. Projects are generally focused on developing or improving products and services, or to improve operations
- Review your operations. Operations are those ongoing recurring processes designed to provide the products, services and internal support needed to achieve your organization’s vision, value proposition and goals
Determine How You Will Evaluate Yourself
- Goals: The desired results of your efforts
- Key Result Areas: Those areas where your organization needs to focus to achieve your vision, value proposition, and goals
- Measures: Those key results areas to assess whether or not you are moving in the right to achieve your goals
- Current Performance: An accurate snapshot of how your organization is doing in relation to your goals and key result areas