Every company needs a plan if it wants to survive and thrive. There exist a multitude of plans but they all are boiled down to two: long-term planning a.k.a. strategic and short-term a.k.a. operative. A strategic plan can embrace everything in-between years and decades. (Or, if you’re in Japan, up to hundreds of years). Opposite to it, short-term planning can be anything from weeks to a year.
We’re looking below at what is a strategic plan and how it is important. Also, we’re exploring a multitude of existing strategic plans and explaining them.
What is strategic planning?
Strategic planning definition is as such: this is an approach of how you see the work and development of your organization in the future given the realistic planning landscape. The long-term plan can incorporate anything that you want to improve, implement, or change, for instance, improve your market share or become more innovative/technological.
When you think of categories of planning, they can be financial, customer-related, operational, IT, or managerial processes in your company. So, basically, it is about setting a global goal or several and planning your way of getting there. By doing that, you will plan actions to be made, resources to be used, measures to understand how you achieve the plan, and tools that you will be using.
Why is strategic planning important? Because it allows shaping, establishing, and achieving global goals of the company through defined steps within given time and resources, by providing the company’s employees a general vision of where the company is going, giving them a clear and comprehensible roadmap of getting there.
Below, we are looking at 7 examples a.k.a. approaches of strategic planning.
Strategic management process approaches
This is the simplest and one of the most widespread approaches to planning, which can even be made in an Excel spreadsheet or other famous tools such as PowerPoint or Google Sheets. It is about defining high-level objectives, ways of reaching them (also called measures), and initiatives, which are the key programs that are to be undertaken to reach the objectives. In a table, it could start with global goals, which you further split into narrower ones, to which steps and resources are further assigned. The same as in the rest of the models provided below, all low-level steps should be planned in a time schedule to make a plan realistic and measurable.
It is more about the creation of a high-level vision of your company’s strategy, not getting into many details. Basically, it is a visualization of goals and subgoals inside of those goals. Super simplified, you’d take a balanced scorecard and only leave there two highest levels of goals, getting rid of the rest, to get a Strategy map. The Strategy map’s advantage is that it is clear and simple to show to your stakeholders and employees and it is possible to interpret it by the heads of departments so they make their own planning within given directions.
This is, basically, a much more solid approach to forming global goals, as you analyze your company’s Strengths, Weaknesses, Opportunities, and Threats. After the analysis is over, you define where you go by improving in the fields of Strengths and Opportunities and eliminating/decreasing Weaknesses and Threats. This approach is good for long-existing companies, which would like to know what’s happening inside of them and how that can be improved. Usually, a result of SWOT-based work is the optimization of the company’s HR structure, IT landscape, improvement of processes, and increasing efficiency along with decreasing costs (if everything’s done correctly and with a proper desire through professional process and project management).
It is also an acronym, like SWOT, and deciphered as a group of 4 factors impacting the company in everyday work: Political, Economic, Social, Technological. This approach is good for large companies working on nationwide or international levels, which is able to shape the structure of the company’s activities. It would be good to combine the work based on PEST analysis with SWOT to launch a really effective process of reorganization work.
It is about taking only a part of a SWOT model, particularly, Weaknesses and looking at them to understand Threats to eliminate them in the future. This model is helpful for companies looking for ways of quick improvement if they are afraid of ineffectiveness/gaps that are supposed to exist or known to exist. Simply put, it is about “making sure that the ship won’t sink”, when a SWOT model is better for prosperous companies, which are not sinking at the moment.
Blue Ocean Strategy.
In our days of high competition nearly everywhere, this strategy is increasingly hard to use. It is applied when a company enters a new market or creates one, where competition does not exist or is in an embryo state. Thus, when a company presents a product to the market, it is not (well) aware of its price and development opportunities, whether there would be any demand for a product at all, and what is the customer’s portrait. When a company finds these, it can further improve in a certain direction by utilizing the gathered data, as well as other companies would enter this market to create competition when they follow the leader.
V = value = what is the value of your product and how could you improve that by internal processes of your company (including risk neutralization and opportunity seizure)?
R = rarity = how rare is your product on the market?
I = imitability = is it easy to imitate your product and what it would take from other companies to do so?
O = organization = how well is your company organized to produce the product, improve it, and fight with imitability?
This allows doing improvements based on the product you make and the market position it takes.