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What is Corporate Strategic Planning?

Corporate Strategic Planning is a companywide approach at the business unit and corporate level for developing strategic plans to achieve a longer-term vision. The process includes defining the corporate strategic goals and intentions at the top and cascading them through each level of the organization. Many organizations confuse the annual budgeting process with corporate planning. Corporate strategic planning should come first and annual budgeting should be driven by the strategy, not by prior year’s budget spend.

Why is Corporate Strategy Important?

A corporate strategy can focus every employee and resource in a company on the same objectives, and it aims to use them all efficiently. It gives every employee a set of guidelines they can use in their everyday work to move toward certain targets, which promote the vision and mission of the company. Corporate level planning can also improve efficiency within the organization and help identify unseen bottlenecks or pain-points.

The corporate strategy gives leaders and employees ideas to use for the improvement of distinctive activities (processes and operations) that create a competitive advantage. The strategy can also help executives to protect the company from entering into costly or irrelevant opportunities. What are the steps involved in strategic corporate planning? Corporate strategic planning begins by clarifying the vision and mission of the organization and the space the business chooses to compete in. Clarifying the organizations position will help you develop and effective strategic planning framework.

1) Competitive Analysis

A competitive analysis needs to be conducted, to understand the trends that could impact the success of your strategy. Common factors that could be analyzed include political, legal, social, environmental, technological. There may be other factors you may want to consider that are relevant to your business and industry.

2) Strategic Goals & Priorities

Once you have completed a competitive analysis, the corporate leadership team will set the overarching strategic goals and priorities for the organization.

Once the strategic goals and priorities are finalized, each business unit needs to define its strategic goals and plans on how it can contribute to the overall direction of the enterprise. That includes not only what is to be accomplished, but how it will be accomplished including high level plans, budgets, human resources, etc.

3) Communication

Once business unit plans and directions have been set, the information needs to be communicated and shared with leadership inside the business unit so that priorities and plans can be aligned and integrated within a single budget.

What is Strategic Business Planning?

At the corporate level, an enterprise develops a portfolio of businesses they choose to compete in. This is a high-level analysis of a business’s competitive and core capabilities, and how each business contributes to the overarching corporate goals. Supported by the corporate strategic business planning process, these businesses are then set up, sponsored, and supported as business units at the operating level.

What Are The Types of Corporate Strategy?

When looking at the types of corporate strategy, it is important to consider a positioning grid that looks at the source of competitive advantage as well as the space where the business competes (markets, geography, size, etc).

Strategy 1: Low Cost Strategy

This type of strategy is one in which your source of advantage is simply competing on cost and being the low-cost provider. With this strategy an organization must exploit all sources of cost advantage. This includes things such as:

  • Economies of scale
  • Cost of inputs
  • Operations excellence to help drive down costs
  • This type of strategy requires an organization to compete more broadly (markets, geography, size)

Strategy 2: Differentiated Strategy

In a Differentiated Strategy, the focus is on competing by being unique or distinctively different in your industry. A differentiated strategy provides a product or service in more of a niche market where customers see the importance of offerings and are willing to pay a premium price. While this strategy still has a broad focus on how and where it competes (markets, geography, size), it serves its customers in a differentiated way. Differentiation can include factors such as:

  • Technical superiority
  • Customization
  • Products or services that are difficult to copy
  • Customer Service

Strategy 3: Segmented Strategy

A segmented strategy is one in which you have clearly differentiated yourself from the competition. The space in which you compete has a narrow focus. You serve a distinct group of customers with specialized needs. In this space, there are few product or service substitutes that can be offered and while you may not have the volume of customers, profit margins tend to be higher because of the lack of substitutes. and there are few substitutes for your offerings. It is important for every organization to understand where on a strategic position grid it currently sits and where it may want to be — adapted from Michael Porter

What Is the Difference Between Corporate Strategy and Business Strategy?

Corporate strategy, in contrast, involves the plans that a larger enterprise must form when it is composed of multiple smaller businesses or entities. For example a business unit may need to examine factors unique to the industry or competitive landscape that is fundamentally different than its corporate parent.

As a large enterprise, company, or private equity group takes on more acquisitions, it must work with its respective businesses to craft a business strategy and plan that is unique to them and drive competitive advantage through their products, services, and market positioning.

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The strategic planning process in 4 steps, to help you throughout our strategic planning framework, we have created a how-to guide on the basics of a strategic plan, which we will take you through step-by-step..

Free Strategic Planning Guide

What is Strategic Planning?

Strategic Planning is when organizations define a bold vision and create a plan with objectives and goals to reach that future. A great strategic plan defines where your organization is going, how you’ll win, who must do what, and how you’ll review and adapt your strategy development.

What

Overview of the Strategic Planning Process:

The strategic management process involves taking your organization on a journey from point A (where you are today) to point B (your vision of the future).

Part of that journey is the strategy built during strategic planning, and part of it is execution during the strategic management process. A good strategic plan dictates “how” you travel the selected road.

Effective execution ensures you are reviewing, refreshing, and recalibrating your strategy to reach your destination. The planning process should take no longer than 90 days. But, move at a pace that works best for you and your team and leverage this as a resource.

To kick this process off, we recommend 1-2 weeks (1-hour meeting with the Owner/CEO, Strategy Director, and Facilitator (if necessary) to discuss the information collected and direction for continued planning.)

Strategic Planning Guide and Process

Questions to Ask:

  • Who is on your Planning Team? What senior leadership members and key stakeholders are included? Checkout these links you need help finding a strategic planning consultant , someone to facilitate strategic planning , or expert AI strategy consulting .
  • Who will be the business process owner (Strategy Director) of planning in your organization?
  • Fast forward 12 months from now, what do you want to see differently in your organization as a result of your strategic plan and implementation?
  • Planning team members are informed of their roles and responsibilities.
  • A strategic planning schedule is established.
  • Existing planning information and secondary data collected.

Action Grid:

What

Step 1: Determine Organizational Readiness

Set up your plan for success – questions to ask:

  • Are the conditions and criteria for successful planning in place at the current time? Can certain pitfalls be avoided?
  • Is this the appropriate time for your organization to initiate a planning process? Yes or no? If no, where do you go from here?

Step 2: Develop Your Team & Schedule

Who is going to be on your planning team? You need to choose someone to oversee the strategy implementation (Chief Strategy Officer or Strategy Director) and strategic management of your plan? You need some of the key individuals and decision makers for this team. It should be a small group of approximately 12-15 people.

OnStrategy is the leader in strategic planning and performance management. Our cloud-based software and hands-on services closes the gap between strategy and execution. Learn more about OnStrategy here .

Step 3: Collect Current Data

All strategic plans are developed using the following information:

  • The last strategic plan, even if it is not current
  • Mission statement, vision statement, values statement
  • Past or current Business plan
  • Financial records for the last few years
  • Marketing plan
  • Other information, such as last year’s SWOT, sales figures and projections

Step 4: Review Collected Data

Review the data collected in the last action with your strategy director and facilitator.

  • What trends do you see?
  • Are there areas of obvious weakness or strengths?
  • Have you been following a plan or have you just been going along with the market?

Conclusion: A successful strategic plan must be adaptable to changing conditions. Organizations benefit from having a flexible plan that can evolve, as assumptions and goals may need adjustments. Preparing to adapt or restart the planning process is crucial, so we recommend updating actions quarterly and refreshing your plan annually.

Strategic Planning Pyramid

Strategic Planning Phase 1: Determine Your Strategic Position

Want more? Dive into the “ Evaluate Your Strategic Position ” How-To Guide.

Action Grid

Step 1: identify strategic issues.

Strategic issues are critical unknowns driving you to embark on a robust strategic planning process. These issues can be problems, opportunities, market shifts, or anything else that keeps you awake at night and begging for a solution or decision. The best strategic plans address your strategic issues head-on.

  • How will we grow, stabilize, or retrench in order to sustain our organization into the future?
  • How will we diversify our revenue to reduce our dependence on a major customer?
  • What must we do to improve our cost structure and stay competitive?
  • How and where must we innovate our products and services?

Step 2: Conduct an Environmental Scan

Conducting an environmental scan will help you understand your operating environment. An environmental scan is called a PEST analysis, an acronym for Political, Economic, Social, and Technological trends. Sometimes, it is helpful to include Ecological and Legal trends as well. All of these trends play a part in determining the overall business environment.

Step 3: Conduct a Competitive Analysis

The reason to do a competitive analysis is to assess the opportunities and threats that may occur from those organizations competing for the same business you are. You need to understand what your competitors are or aren’t offering your potential customers. Here are a few other key ways a competitive analysis fits into strategic planning:

  • To help you assess whether your competitive advantage is really an advantage.
  • To understand what your competitors’ current and future strategies are so you can plan accordingly.
  • To provide information that will help you evaluate your strategic decisions against what your competitors may or may not be doing.

Learn more on how to conduct a competitive analysis here .

Step 4: Identify Opportunities and Threats

Opportunities are situations that exist but must be acted on if the business is to benefit from them.

What do you want to capitalize on?

  • What new needs of customers could you meet?
  • What are the economic trends that benefit you?
  • What are the emerging political and social opportunities?
  • What niches have your competitors missed?

Threats refer to external conditions or barriers preventing a company from reaching its objectives.

What do you need to mitigate? What external driving force do you need to anticipate?

Questions to Answer:

  • What are the negative economic trends?
  • What are the negative political and social trends?
  • Where are competitors about to bite you?
  • Where are you vulnerable?

Step 5: Identify Strengths and Weaknesses

Strengths refer to what your company does well.

What do you want to build on?

  • What do you do well (in sales, marketing, operations, management)?
  • What are your core competencies?
  • What differentiates you from your competitors?
  • Why do your customers buy from you?

Weaknesses refer to any limitations a company faces in developing or implementing a strategy.

What do you need to shore up?

  • Where do you lack resources?
  • What can you do better?
  • Where are you losing money?
  • In what areas do your competitors have an edge?

Step 6: Customer Segments

What

Customer segmentation defines the different groups of people or organizations a company aims to reach or serve.

  • What needs or wants define your ideal customer?
  • What characteristics describe your typical customer?
  • Can you sort your customers into different profiles using their needs, wants and characteristics?
  • Can you reach this segment through clear communication channels?

Step 7: Develop Your SWOT

What

A SWOT analysis is a quick way of examining your organization by looking at the internal strengths and weaknesses in relation to the external opportunities and threats. Creating a SWOT analysis lets you see all the important factors affecting your organization together in one place.

It’s easy to read, easy to communicate, and easy to create. Take the Strengths, Weaknesses, Opportunities, and Threats you developed earlier, review, prioritize, and combine like terms. The SWOT analysis helps you ask and answer the following questions: “How do you….”

  • Build on your strengths
  • Shore up your weaknesses
  • Capitalize on your opportunities
  • Manage your threats

What

Strategic Planning Process Phase 2: Developing Strategy

Want More? Deep Dive Into the “Developing Your Strategy” How-To Guide.

Step 1: Develop Your Mission Statement

The mission statement describes an organization’s purpose or reason for existing.

What is our purpose? Why do we exist? What do we do?

  • What are your organization’s goals? What does your organization intend to accomplish?
  • Why do you work here? Why is it special to work here?
  • What would happen if we were not here?

Outcome: A short, concise, concrete statement that clearly defines the scope of the organization.

Step 2: discover your values.

Your values statement clarifies what your organization stands for, believes in and the behaviors you expect to see as a result. Check our the post on great what are core values and examples of core values .

How will we behave?

  • What are the key non-negotiables that are critical to the company’s success?
  • What guiding principles are core to how we operate in this organization?
  • What behaviors do you expect to see?
  • If the circumstances changed and penalized us for holding this core value, would we still keep it?

Outcome: Short list of 5-7 core values.

Step 3: casting your vision statement.

What

A Vision Statement defines your desired future state and directs where we are going as an organization.

Where are we going?

  • What will our organization look like 5–10 years from now?
  • What does success look like?
  • What are we aspiring to achieve?
  • What mountain are you climbing and why?

Outcome: A picture of the future.

Step 4: identify your competitive advantages.

How to Identify Competitive Advantages

A competitive advantage is a characteristic of an organization that allows it to meet its customer’s need(s) better than its competition can. It’s important to consider your competitive advantages when creating your competitive strategy.

What are we best at?

  • What are your unique strengths?
  • What are you best at in your market?
  • Do your customers still value what is being delivered? Ask them.
  • How do your value propositions stack up in the marketplace?

Outcome: A list of 2 or 3 items that honestly express the organization’s foundation for winning.

Step 5: crafting your organization-wide strategies.

What

Your competitive strategy is the general methods you intend to use to reach your vision. Regardless of the level, a strategy answers the question “how.”

How will we succeed?

  • Broad: market scope; a relatively wide market emphasis.
  • Narrow: limited to only one or few segments in the market
  • Does your competitive position focus on lowest total cost or product/service differentiation or both?

Outcome: Establish the general, umbrella methods you intend to use to reach your vision.

What

Phase 3: Strategic Plan Development

Want More? Deep Dive Into the “Build Your Plan” How-To Guide.

Strategic Planning Process Step 1: Use Your SWOT to Set Priorities

If your team wants to take the next step in the SWOT analysis, apply the TOWS Strategic Alternatives Matrix to your strategy map to help you think about the options you could pursue. To do this, match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:

TOWS Strategic Alternatives Matrix

Evaluate the options you’ve generated, and identify the ones that give the greatest benefit, and that best achieve the mission and vision of your organization. Add these to the other strategic options that you’re considering.

Step 2: Define Long-Term Strategic Objectives

Long-Term Strategic Objectives are long-term, broad, continuous statements that holistically address all areas of your organization. What must we focus on to achieve our vision? Check out examples of strategic objectives here. What are the “big rocks”?

Questions to ask:

  • What are our shareholders or stakeholders expectations for our financial performance or social outcomes?
  • To reach our outcomes, what value must we provide to our customers? What is our value proposition?
  • To provide value, what process must we excel at to deliver our products and services?
  • To drive our processes, what skills, capabilities and organizational structure must we have?

Outcome: Framework for your plan – no more than 6. You can use the balanced scorecard framework, OKRs, or whatever methodology works best for you. Just don’t exceed 6 long-term objectives.

Strategy Map

Step 3: Setting Organization-Wide Goals and Measures

What

Once you have formulated your strategic objectives, you should translate them into goals and measures that can be communicated to your strategic planning team (team of business leaders and/or team members).

You want to set goals that convert the strategic objectives into specific performance targets. Effective strategic goals clearly state what, when, how, and who, and they are specifically measurable. They should address what you must do in the short term (think 1-3 years) to achieve your strategic objectives.

Organization-wide goals are annual statements that are SMART – specific, measurable, attainable, responsible, and time-bound. These are outcome statements expressing a result to achieve the desired outcomes expected in the organization.

What is most important right now to reach our long-term objectives?

Outcome: clear outcomes for the current year..

Strategic Planning Outcomes Table

Step 4: Select KPIs

What

Key Performance Indicators (KPI) are the key measures that will have the most impact in moving your organization forward. We recommend you guide your organization with measures that matter. See examples of KPIs here.

How will we measure our success?

Outcome: 5-7 measures that help you keep the pulse on your performance. When selecting your Key Performance Indicators (KPIs), ask, “What are the key performance measures we need to track to monitor if we are achieving our goals?” These KPIs include the key goals you want to measure that will have the most impact on moving your organization forward.

Step 5: Cascade Your Strategies to Operations

NPS Step #5

To move from big ideas to action, creating action items and to-dos for short-term goals is crucial. This involves translating strategy from the organizational level to individuals. Functional area managers and contributors play a role in developing short-term goals to support the organization.

Before taking action, decide whether to create plans directly derived from the strategic plan or sync existing operational, business, or account plans with organizational goals. Avoid the pitfall of managing multiple sets of goals and actions, as this shifts from strategic planning to annual planning.

Questions to Ask

  • How are we going to get there at a functional level?
  • Who must do what by when to accomplish and drive the organizational goals?
  • What strategic questions still remain and need to be solved?

Department/functional goals, actions, measures and targets for the next 12-24 months

Step 6: Cascading Goals to Departments and Team Members

Now in your Departments / Teams, you need to create goals to support the organization-wide goals. These goals should still be SMART and are generally (short-term) something to be done in the next 12-18 months. Finally, you should develop an action plan for each goal.

Keep the acronym SMART in mind again when setting action items, and make sure they include start and end dates and have someone assigned their responsibility. Since these action items support your previously established goals, it may be helpful to consider action items your immediate plans on the way to achieving your (short-term) goals. In other words, identify all the actions that need to occur in the next 90 days and continue this same process every 90 days until the goal is achieved.

Examples of Cascading Goals:

What

Phase 4: Executing Strategy and Managing Performance

Want more? Dive Into the “Managing Performance” How-To Guide.

Step 1: Strategic Plan Implementation Schedule

Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals.

How will we use the plan as a management tool?

  • Communication Schedule: How and when will you roll-out your plan to your staff? How frequently will you send out updates?
  • Process Leader: Who is your strategy director?
  • Structure: What are the dates for your strategy reviews (we recommend at least quarterly)?
  • System & Reports: What are you expecting each staff member to come prepared with to those strategy review sessions?

Outcome: Syncing your plan into the “rhythm of your business.”

Once your resources are in place, you can set your implementation schedule. Use the following steps as your base implementation plan:

  • Establish your performance management and reward system.
  • Set up monthly and quarterly strategy meetings with established reporting procedures.
  • Set up annual strategic review dates including new assessments and a large group meeting for an annual plan review.

Now you’re ready to start plan roll-out. Below are sample implementation schedules, which double for a full strategic management process timeline.

Strategic Planning Calendar

Step 2: Tracking Goals & Actions

Monthly strategy meetings don’t need to take a lot of time – 30 to 60 minutes should suffice. But it is important that key team members report on their progress toward the goals they are responsible for – including reporting on metrics in the scorecard they have been assigned.

By using the measurements already established, it’s easy to make course corrections if necessary. You should also commit to reviewing your Key Performance Indicators (KPIs) during these regular meetings. Need help comparing strategic planning software ? Check out our guide.

Effective Strategic Planning: Your Bi-Annual Checklist

What

Never lose sight of the fact that strategic plans are guidelines, not rules. Every six months or so, you should evaluate your strategy execution and strategic plan implementation by asking these key questions:

  • Will your goals be achieved within the time frame of the plan? If not, why?
  • Should the deadlines be modified? (Before you modify deadlines, figure out why you’re behind schedule.)
  • Are your goals and action items still realistic?
  • Should the organization’s focus be changed to put more emphasis on achieving your goals?
  • Should your goals be changed? (Be careful about making these changes – know why efforts aren’t achieving the goals before changing the goals.)
  • What can be gathered from an adaptation to improve future planning activities?

Why Track Your Goals?

  • Ownership: Having a stake and responsibility in the plan makes you feel part of it and leads you to drive your goals forward.
  • Culture: Successful plans tie tracking and updating goals into organizational culture.
  • Implementation: If you don’t review and update your strategic goals, they are just good intentions
  • Accountability: Accountability and high visibility help drive change. This means that each measure, objective, data source and initiative must have an owner.
  • Empowerment: Changing goals from In Progress to Complete just feels good!

Step 3: Review & Adapt

Guidelines for your strategy review.

The most important part of this meeting is a 70/30 review. 30% is about reviewing performance, and 70% should be spent on making decisions to move the company’s strategy forward in the next quarter.

The best strategic planners spend about 60-90 minutes in the sessions. Holding meetings helps focus your goals on accomplishing top priorities and accelerating the organization’s growth. Although the meeting structure is relatively simple, it does require a high degree of discipline.

Strategy Review Session Questions:

Strategic planning frequently asked questions, read our frequently asked questions about strategic planning to learn how to build a great strategic plan..

Strategic planning is when organizations define a bold vision and create a plan with objectives and goals to reach that future. A great strategic plan defines where your organization is going, how you’ll win, who must do what, and how you’ll review and adapt your strategy..

Your strategic plan needs to include an assessment of your current state, a SWOT analysis, mission, vision, values, competitive advantages, growth strategy, growth enablers, a 3-year roadmap, and annual plan with strategic goals, OKRs, and KPIs.

A strategic planning process should take no longer than 90 days to complete from start to finish! Any longer could fatigue your organization and team.

There are four overarching phases to the strategic planning process that include: determining position, developing your strategy, building your plan, and managing performance. Each phase plays a unique but distinctly crucial role in the strategic planning process.

Prior to starting your strategic plan, you must go through this pre-planning process to determine your organization’s readiness by following these steps:

Ask yourself these questions: Are the conditions and criteria for successful planning in place now? Can we foresee any pitfalls that we can avoid? Is there an appropriate time for our organization to initiate this process?

Develop your team and schedule. Who will oversee the implementation as Chief Strategy Officer or Director? Do we have at least 12-15 other key individuals on our team?

Research and Collect Current Data. Find the following resources that your organization may have used in the past to assist you with your new plan: last strategic plan, mission, vision, and values statement, business plan, financial records, marketing plan, SWOT, sales figures, or projections.

Finally, review the data with your strategy director and facilitator and ask these questions: What trends do we see? Any obvious strengths or weaknesses? Have we been following a plan or just going along with the market?

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strategic planning and corporate planning

How to improve strategic planning

In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business. But at the end of this expensive and time-consuming process, many participants say they are frustrated by its lack of impact on either their own actions or the strategic direction of the company.

This sense of disappointment was captured in a recent McKinsey Quarterly survey of nearly 800 executives: just 45 percent of the respondents said they were satisfied with the strategic-planning process. 1 1. “ Improving strategic planning: A McKinsey Survey ,” The McKinsey Quarterly , Web exclusive, September 2006. The survey, conducted in late July and early August 2006, received 796 responses from a panel of executives from around the world. All panelists have mostly financial or strategic responsibilities and work in a wide range of industries for organizations with revenues of at least $500 million. Moreover, only 23 percent indicated that major strategic decisions were made within its confines. Given these results, managers might well be tempted to jettison the planning process altogether.

But for those working in the overwhelming majority of corporations, the annual planning process plays an essential role. In addition to formulating at least some elements of a company’s strategy, the process results in a budget, which establishes the resource allocation map for the coming 12 to 18 months; sets financial and operating targets, often used to determine compensation metrics and to provide guidance for financial markets; and aligns the management team on its strategic priorities. The operative question for chief executives is how to make the planning process more effective—not whether it is the sole mechanism used to design strategy. CEOs know that strategy is often formulated through ad hoc meetings or brand reviews, or as a result of decisions about mergers and acquisitions.

Our research shows that formal strategic-planning processes play an important role in improving overall satisfaction with strategy development. That role can be seen in the responses of the 79 percent of managers who claimed that the formal planning process played a significant role in developing strategies and were satisfied with the approach of their companies, compared with only 21 percent of the respondents who felt that the process did not play a significant role. Looked at another way, 51 percent of the respondents whose companies had no formal process were dissatisfied with their approach to the development of strategy, against only 20 percent of those at companies with a formal process.

So what can managers do to improve the process? There are many ways to conduct strategic planning, but determining the ideal method goes beyond the scope of this article. Instead we offer, from our research, five emergent ideas that executives can employ immediately to make existing processes run better. The changes we discuss here (such as a focus on important strategic issues or a connection to core-management processes) are the elements most linked with the satisfaction of employees and their perceptions of the significance of the process. These steps cannot guarantee that the right strategic decisions will be made or that strategy will be better executed, but by enhancing the planning process—and thus increasing satisfaction with the development of strategy—they will improve the odds for success.

Start with the issues

Ask CEOs what they think strategic planning should involve and they will talk about anticipating big challenges and spotting important trends. At many companies, however, this noble purpose has taken a backseat to rigid, data-driven processes dominated by the production of budgets and financial forecasts. If the calendar-based process is to play a more valuable role in a company’s overall strategy efforts, it must complement budgeting with a focus on strategic issues. In our experience, the first liberating change managers can make to improve the quality of the planning process is to begin it by deliberately and thoughtfully identifying and discussing the strategic issues that will have the greatest impact on future business performance.

Granted, an approach based on issues will not necessarily yield better strategic results. The music business, for instance, has discussed the threat posed by digital-file sharing for years without finding an effective way of dealing with the problem. But as a first step, identifying the key issues will ensure that management does not waste time and energy on less important topics.

We found a variety of practical ways in which companies can impose a fresh strategic perspective. For instance, the CEO of one large health care company asks the leaders of each business unit to imagine how a set of specific economic, social, and business trends will affect their businesses, as well as ways to capture the opportunities—or counter the threats—that these trends pose. Only after such an analysis and discussion do the leaders settle into the more typical planning exercises of financial forecasting and identifying strategic initiatives.

One consumer goods organization takes a more directed approach. The CEO, supported by the corporate-strategy function, compiles a list of three to six priorities for the coming year. Distributed to the managers responsible for functions, geographies, and brands, the list then becomes the basis for an offsite strategy-alignment meeting, where managers debate the implications of the priorities for their particular organizations. The corporate-strategy function summarizes the results, adds appropriate corporate targets, and shares them with the organization in the form of a strategy memo, which serves as the basis for more detailed strategic planning at the division and business-unit levels.

A packaged-goods company offers an even more tailored example. Every December the corporate senior-management team produces a list of ten strategic questions tailored to each of the three business units. The leaders of these businesses have six months to explore and debate the questions internally and to come up with answers. In June each unit convenes with the senior-management team in a one-day meeting to discuss proposed actions and reach decisions.

Some companies prefer to use a bottom-up rather than top-down process. We recently worked with a sales company to design a strategic-planning process that begins with in-depth interviews (involving all of the senior managers and selected corporate and business executives) to generate a list of the most important strategic issues facing the company. The senior-management team prioritizes the list and assigns managers to explore each issue and report back in four to six weeks. Such an approach can be especially valuable in companies where internal consensus building is an imperative.

Bring together the right people

An issues-based approach won’t do much good unless the most relevant people are involved in the debate. We found that survey respondents who were satisfied with the strategic-planning process rated it highly on dimensions such as including the most knowledgeable and influential participants, stimulating and challenging the participants’ thinking, and having honest, open discussions about difficult issues. In contrast, 27 percent of the dissatisfied respondents reported that their company’s strategic planning had not a single one of these virtues. Such results suggest that too many companies focus on the data-gathering and packaging elements of strategic planning and neglect the crucial interactive components.

Strategic conversations will have little impact if they involve only strategic planners from both the business unit and the corporate levels. One of our core beliefs is that those who carry out strategy should also develop it. The key strategy conversation should take place among corporate decision makers, business unit leaders, and people with expertise essential to the discussion. In addition to leading the corporate review, the CEO, aided by members of the executive team, should as a rule lead the strategy review for business units as well. The head of a business unit, supported by four to six people, should direct the discussion from its side of the table (see sidebar, "Things to ask in any business unit review").

Things to ask in any business unit review

Are major trends and changes in your business unit’s environment affecting your strategic plan? Specifically, what potential developments in customer demand, technology, or the regulatory environment could have enough impact on the industry to change the entire plan?

How and why is this plan different from last year’s?

What were your forecasts for market growth, sales, and profitability last year, two years ago, and three years ago? How right or wrong were they? What did the business unit learn from those experiences?

What would it take to double your business unit’s growth rate and profits? Where will growth come from: expansion or gains in market share?

If your business unit plans to take market share from competitors, how will it do so, and how will they respond? Are you counting on a strategic advantage or superior execution?

What are your business unit’s distinctive competitive strengths, and how does the plan build on them?

How different is the strategy from those of competitors, and why? Is that a good or a bad thing?

Beyond the immediate planning cycle, what are the key issues, risks, and opportunities that we should discuss today?

What would a private-equity owner do with this business?

How will the business unit monitor the execution of this strategy?

One pharmaceutical company invites business unit leaders to take part in the strategy reviews of their peers in other units. This approach can help build a better understanding of the entire company and, especially, of the issues that span business units. The risk is that such interactions might constrain the honesty and vigor of the dialogue and put executives at the focus of the discussion on the defensive.

Corporate senior-management teams can dedicate only a few hours or at most a few days to a business unit under review. So team members should spend this time in challenging yet collaborative discussions with business unit leaders rather than trying to absorb many facts during the review itself. To provide some context for the discussion, best-practice companies disseminate important operational and financial information to the corporate review team well in advance of such sessions. This reading material should also tee up the most important issues facing the business and outline the proposed strategy, ensuring that the review team is prepared with well-thought-out questions. In our experience, the right 10 pages provide ample fuel to fire a vigorous discussion, but more than 25 pages will likely douse the level of energy or engagement in the room.

Adapt planning cycles to the needs of each business

Managers are justifiably concerned about the resources and time required to implement an issues-based strategic-planning approach. One easy—yet rarely adopted—solution is to free business units from the need to conduct this rigorous process every single year. In all but the most volatile, high-velocity industries, it is hard to imagine that a major strategic redirection will be necessary every planning cycle. In fact, forcing businesses to undertake this exercise annually is distracting and may even be detrimental. Managers need to focus on executing the last plan’s major initiatives, many of which can take 18 to 36 months to implement fully.

Some companies alternate the business units that undergo the complete strategic-planning process (as opposed to abbreviated annual updates of the existing plan). One media company, for example, requires individual business units to undertake strategic planning only every two or three years. This cadence enables the corporate senior-management team and its strategy group to devote more energy to the business units that are “at bat.” More important, it frees the corporate-strategy group to work directly with the senior team on critical issues that affect the entire company—issues such as developing an integrated digitization strategy and addressing unforeseen changes in the fast-moving digital-media landscape.

Other companies use trigger mechanisms to decide which business units will undergo a full strategic-planning exercise in a given year. One industrial company assigns each business unit a color-coded grade—green, yellow, or red—based on the unit’s success in executing the existing strategic plan. “Code red,” for example, would slate a business unit for a strategy review. Although many of the metrics that determine the grade are financial, some may be operational to provide a more complete assessment of the unit’s performance.

Freeing business units from participating in the strategic-planning process every year raises a caveat, however. When important changes in the external environment occur, senior managers must be able to engage with business units that are not under review and make major strategic decisions on an ad hoc basis. For instance, a major merger in any industry would prompt competitors in it to revisit their strategies. Indeed, one advantage of a tailored planning cycle is that it builds slack into the strategic-review system, enabling management to address unforeseen but pressing strategic issues as they arise.

Implement a strategic-performance-management system

In the end, many companies fail to execute the chosen strategy. More than a quarter of our survey respondents said that their companies had plans but no execution path. Forty-five percent reported that planning processes failed to track the execution of strategic initiatives. All this suggests that putting in place a system to measure and monitor their progress can greatly enhance the impact of the planning process.

Most companies believe that their existing control systems and performance-management processes (including budgets and operating reviews) are the sole way to monitor progress on strategy. As a result, managers attempt to translate the decisions made during the planning process into budget targets or other financial goals. Although this practice is sensible and necessary, it is not enough. We estimate that a significant portion of the strategic decisions we recommend to companies can’t be tracked solely through financial targets. A company undertaking a major strategic initiative to enhance its innovation and product-development capabilities, for example, should measure a variety of input metrics, such as the quality of available talent and the number of ideas and projects at each stage in development, in addition to pure output metrics such as revenues from new-product sales. One information technology company, for instance, carefully tracks the number and skill levels of people posted to important strategic projects.

Strategic-performance-management systems, which should assign accountability for initiatives and make their progress more transparent, can take many forms. One industrial corporation tracks major strategic initiatives that will have the greatest impact, across a portfolio of a dozen businesses, on its financial and strategic goals. Transparency is achieved through regular reviews and the use of financial as well as nonfinancial metrics. The corporate-strategy team assumes responsibility for reviews (chaired by the CEO and involving the relevant business-unit leaders) that use an array of milestones and metrics to assess the top ten initiatives. One to expand operations in China and India, for example, would entail regular reviews of interim metrics such as the quality and number of local employees recruited and the pace at which alliances are formed with channel partners or suppliers. Each business unit, in turn, is accountable for adopting the same performance-management approach for its own, lower-tier top-ten list of initiatives.

When designed well, strategic-performance-management systems can give an early warning of problems with strategic initiatives, whereas financial targets alone at best provide lagging indicators. An effective system enables management to step in and correct, redirect, or even abandon an initiative that is failing to perform as expected. The strategy of a pharmaceutical company that embarked on a major expansion of its sales force to drive revenue growth, for example, presupposed that rapid growth in the number of sales representatives would lead to a corresponding increase in revenues. The company also recognized, however, that expansion was in turn contingent on several factors, including the ability to recruit and train the right people. It therefore put in place a regular review of the key strategic metrics against its actual performance to alert managers to any emerging problems.

Integrate human-resources systems into the strategic plan

Simply monitoring the execution of strategic initiatives is not sufficient: their successful implementation also depends on how managers are evaluated and compensated. Yet only 36 percent of the executives we surveyed said that their companies’ strategic-planning processes were integrated with HR processes. One way to create a more valuable strategic-planning process would be to tie the evaluation and compensation of managers to the progress of new initiatives.

Although the development of strategy is ostensibly a long-term endeavor, companies traditionally emphasize short-term, purely financial targets—such as annual revenue growth or improved margins—as the sole metrics to gauge the performance of managers and employees. This approach is gradually changing. Deferred-compensation models for boards, CEOs, and some senior managers are now widely used. What’s more, several companies have added longer-term performance targets to complement the short-term ones. A major pharmaceutical company, for example, recently revamped its managerial-compensation structure to include a basket of short-term financial and operating targets as well as longer-term, innovation-based growth targets.

Although these changes help persuade managers to adopt both short- and long-term approaches to the development of strategy, they don’t address the need to link evaluation and compensation to specific strategic initiatives. One way of doing so is to craft a mix of performance targets that more appropriately reflect a company’s strategy. For example, one North American services business that launched strategic initiatives to improve its customer retention and increase sales also adjusted the evaluation and compensation targets for its managers. Rather than measuring senior managers only by revenue and margin targets, as it had done before, it tied 20 percent of their compensation to achieving its retention and cross-selling goals. By introducing metrics for these specific initiatives and linking their success closely to bonus packages, the company motivated managers to make the strategy succeed.

An advantage of this approach is that it motivates managers to flag any problems early in the implementation of a strategic initiative (which determines the size of bonuses) so that the company can solve them. Otherwise, managers all too often sweep the debris of a failing strategy under the operating rug until the spring-cleaning ritual of next year’s annual planning process.

Some business leaders have found ways to give strategic planning a more valuable role in the formulation as well as the execution of strategy. Companies that emulate their methods might find satisfaction instead of frustration at the end of the annual process.

Renée Dye is a consultant in McKinsey’s Atlanta office, and Olivier Sibony is a director in the Paris office.

This article was first published in the Autumn 2007 issue of McKinsey on Finance . Visit McKinsey’s corporate finance site to view the full issue.

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The Ultimate Guide to Corporate Strategic Planning

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Corporate strategic planning is essential to businesses and one of the basics of a business plan. It allows you to proceed toward your objectives with direction and focus. However, setting strategic goals is more complex than writing them down during a board meeting. The process requires careful evaluation and analysis to garner the best business results. 

Corporate strategy includes all the steps in strategic planning that turn your high-level goals into actionable objectives, maintain and elevate your competitive position and provide quantifiable feedback to keep a flexible and workable strategic framework. 

In This Article

What Is Corporate Strategic Planning?

Objective setting, allocating resources, making strategic trade-offs, why is corporate strategic planning important, what is the difference between corporate strategy and business strategy.

  • Formulation
  • Implementation
  • Modification
  • Establish the Your Corporate Strategic Objectives
  • Develop Strategies for Achieving Goals
  • Implement Your Corporate Strategy
  • Monitor Your Strategic Plan’s Performance
  • Analyze the Plan’s Success

How AchieveIt Helps With Strategic Planning

Sharpen your corporate strategy with achieveit.

What Is Corporate Strategic Planning?

Corporate strategic planning is a branch of strategy that focuses on the organization. A corporate strategic plan manages a business’s objectives and overall direction, and the associated processes are critical to the organization’s strategic objectives.

The corporate strategic planning process includes defining companywide strategic goals from the top tiers of an organization and implementing them throughout every level. For many businesses, corporate strategic planning is the first step and strategic planning goals define annual budgeting and allocation of resources. 

Corporate strategic plans can be external, focusing on business objectives and the overarching direction for the organization, or internal, such as corporate diversity and inclusion strategic plan.

A corporate strategy — in terms of business planning basics — has four main components, each providing valuable insight through self-evaluation. The four elements of corporate strategic planning include the following:

The Four Elements of Corporate Strategic Planning

The Four Elements of Corporate Strategic Planning

Visioning involves creating a high-level direction for your business, including business plan basics like corporate values and vision and mission statements. Setting a vision for your company’s future is a robust tool in corporate leadership. In general, companies plan between three and five years ahead. 

Your vision and values will guide your daily operations and procedures, and involving key team members fosters engagement throughout the organization. 

Aligning your strategic objectives with the overarching vision for your business is the key to successful objective setting. Strategic objectives are the high-level goals of your business and describe what your team needs to do to fulfill its mission over the next three or five years.

The objective setting takes your qualitative goals into measurable objectives , which is critical to get your ideas into an actionable format. In the context of goal setting in an organization, the most effective strategic goals are specific, measurable, attainable, realistic and time-bound (SMART). Communication is also vital in the objective-setting phase. It ensures that team members are focused on priority tasks and operating in a unified manner, aiming towards furthering the company in the future.

With your objectives outlined, you now have a clear list of priorities to allocate human and capital resources. With a clear and actionable overview of your strategic goals, you can plan, manage and assign resources to facilitate reaching them. Determining how best to allocate resources to teams and business units is integral to your overall planning process. 

Also known as prioritization is one of the most challenging core elements of corporate strategy. Taking advantage of every opportunity may not be possible, and almost all business decisions contain an element of risk. Anyone who manages strategic plans and initiatives in an organization must consider all these factors to determine the optimal strategy when setting strategic goals. 

Businesses must balance risk and reward and pay close attention to risk management processes to maximize returns and minimize threats to operational procedures. 

Why Is Corporate Strategic Planning Important?

Strategic plans are more than just abstract ideas conceptualized in a board room. When actualized correctly, they power organizational alignment and allow teams to direct their efforts in the most productive places. Strategic planning communicates your mission and vision throughout your organization to effect strategic change at every level and prioritize your most important objectives in your daily operations. 

Strategic planning can highlight your shortcomings and biases and present new opportunities to streamline your operations. Then, you can track your goal process with actionable key performance indicators (KPIs) and align them with your business processes. 

Most importantly, a well-conceived strategic plan provides a competitive advantage in your industry, allowing you to anticipate competitors’ next moves and stay one step ahead. With actionable strategies in mind, your business can accomplish goals ahead of the competition and ensure you provide the best possible results for your customers. 

What Is the Difference Between Corporate Strategy and Business Strategy?

There is a marked difference between business-level strategy vs. corporate-level strategy. Corporate strategies operate at a higher level than business strategies and focus on growth and profits. A business strategy, on the other hand, focuses on competing in the marketplace. Organizations should develop their business strategies with their corporate strategy in mind. 

Stages of Corporate Strategic Planning

Stages of Corporate Strategic Planning

Like any successful strategic plan or initiative, teams must tackle corporate strategic planning in four stages. The four stages of corporate strategic planning include the following:

1. Formulation

For an actionable strategic plan, you must take the time to create a roadmap of your most profitable action to achieve your strategic objectives. In this phase, you and your team will set your strategic plan goals and explore the best means to achieve them. Consider conducting a SWOT analysis — strengths, weaknesses, opportunities and threats — for your business to reveal growth opportunities and areas within your operations that require attention. Consider looking into successful corporate strategic plan examples as part of your research. 

Before you start, ensure you have a purpose for formulating your strategy based on your core vision and mission. You’ll consider current events and trends as part of your SWOT analysis. Ensure you set actionable and measurable goals in the formulation phase of strategic goal setting and communicate them effectively throughout your organization. 

Often, organizational leaders formulate a corporate strategy. Every team member adds a different perspective to the process, so drawing on their input could illuminate and provide a more pronounced competitive edge for your business. 

2. Implementation

Implementation is the phase where your corporate strategies become corporate actions . Your team has designed and communicated your strategy, so that all members understand their roles and responsibilities. Setting up KPIs aligned with your strategic objectives is critical in the implementation phase, as it provides quantifiable feedback on positive impacts and information on opportunities for change. 

During implementation, your team must focus on details and day-to-day processes to implement quick changes. Corporate strategy is a fluid process that requires daily attention to succeed.

3. Evaluation

Evaluating the strategies you executed in the implementation phase provides you with valuable feedback on the efficacy of your corporate strategy. Some businesses  perform a gap analysis to identify the need for new products or additions in the gap between their current and desired future positions. 

At this stage of the process, your data is vital. An   integrated plan management software allows you to track resources, changes, schedules, and the quality of your corporate strategic initiatives. With actionable data on team members and projects, you can make changes and refine your corporate strategy.

4. Modification

In the modification phase, your team can correct and refine underperforming elements of your corporate strategy. You have identified your strongest areas, which your team could leverage to assist in further implementation in areas that need further attention. 

How to Create a Successful Corporate Strategic Plan

You and your team may be used to taking a reactive route where you only deal with problems as they arise. However, this can stifle your vision and make it difficult to see the big picture or prepare for obstacles along the way. By following the fundamentals of strategic planning, your company can gain a better understanding of common issues that complicate your short- and long-term goals and make you more proactive in resolving them.

A progressive approach is critical to corporate strategic planning success, so you can pay attention to each step and garner the best results. The five steps in the strategic management process include the following: 

Establish the Your Corporate Strategic Objectives

1. Establish the Your Corporate Strategic Objectives

Corporate strategic objectives must be clear, achievable and easy to communicate. Consider what business objectives your team needs to achieve and communicate these objectives throughout all levels of your organization. Foster collaboration, allow everyone in your organization to think strategically and offer suggestions for achieving your corporate strategic initiatives. 

Employees throughout your organization can provide valuable input to drive your objectives forward. Gather as many insights as possible and set your objectives with as much information as possible. At the end of this step, you should have a broad view of what your business wants to achieve and how the various teams can contribute. 

2. Develop Strategies for Achieving Goals

From your broad overview, you can now break your objectives into specific projects and courses of action within those projects. Include metrics and KPIs to quantify the success or failure of each. Establish objectives and key results (OKR) framework so each goal has quantifiable key results to measure the initiative’s success. 

Pay attention to your human resources during this critical step. Think outside the box, eliminate silos within your teams, and ensure every team member has roles and responsibilities aligned with their strengths. 

3. Implement Your Corporate Strategy

It’s time to take your strategic plan off the boardroom table and implement it into your business workflow . Making your corporate strategy successful requires focus and input from every team member. Ensure everyone in your organization can clearly see and understand their role within your strategy and how their actions move your plan forward. 

You can reply heavily on your OKR framework here for each individual to have a solid view of their roles. When team members see their impact on your overall strategy, they will be more engaged and productive in their efforts to achieve your objectives. Team engagement comes from management and managers should focus on managing outcomes, not people, for the best results. 

Partnering with an integrated planned management specialist is essential for maximizing employee productivity and engagement. Strategic planning software can give you a competitive edge. User-friendly interfaces, clearly defined goals, and change management will make implementation smoother, faster and easier for team members.

Monitor Your Strategic Plan's Performance

4. Monitor Your Strategic Plan’s Performance

Remember that your strategic plan is fluid and needs regular monitoring for your organization to maintain a competitive position. Again, use your valuable human resources and consult everyone who owns a strategic objective. Foster an environment where you can receive honest input on the strategic plan’s progress so your management doesn’t feel more comfortable concentrating their team’s efforts in weak areas. 

Ensure your plan is flexible enough to catch it early if your organization’s efforts go off course. If there’s an opportunity to produce better results, you can stay ahead of the competition and execute it immediately. Measuring your team’s performance with employee performance metrics is an excellent method of assessing where you’re achieving your outcomes and where you may need to rethink the allocation of resources. 

Consider organization performance reporting to analyze how your business performance compares with your goals and initiatives. You can assess your successes and make adjustments when necessary. 

5. Analyze the Plan’s Success

Analyzing the impact of your corporate strategy is vital to set a benchmark for what elements to continue with and change. It clearly shows areas to improve and strengthens your teams’ engagement and commitment to your strategic initiatives. Include team members from across your organization when you conduct your analysis and foster open and thorough communication so they can share their insights and experiences. 

Together, you can define your plan’s strengths and opportunities for improvement . Once you have gathered input from across your teams, your strategic team can apply this insight to your new strategic initiatives and amplify your successes. 

How AchieveIt Helps With Strategic Planning

Organizations that struggle to get their important initiatives from the boardroom into reality and keep their performance on track may falter with their objectives. With AchieveIt, your business can improve visibility, uniformity and accountability within your strategic planning process.

Our automated platform and strategic planning software enable your teams to connect, execute your goals and evaluate how your essential plans are performing. Integrated plan management solutions from AchieveIt can revitalize how your organization reaches for its goals with dashboards, reporting, updates and more strategic planning tools.

Some of the many ways AchieveIt can help you with your corporate strategy include the following:

  • Streamlining your corporate strategic execution:  Create alignment and organize your strategic initiatives with our process-focused software to integrate and execute corporate strategies. 
  • Using automated updates:  AchieveIt focuses on the end user, integrating process updates from different sources for a seamless automated update system. 
  • Consistent expert support and training:  AchieveIt conducts regular business reviews, so you can measure your return on investment (ROI) and access quantifiable data about how your corporate strategy aligns with your progress. Your strategic expert is there to provide feedback if needed, and on-site training allows for excellent change management, improved adoption rates and better team engagement. 
  • Data-driven insights and accessible results:  You can filter and create outcome-specific reports aligning with your corporate strategy with a holistic view of your strategic business progress to combine your data with applicable contexts. This actionable information gives you a clear picture of what works and what needs work. 

Sharpen Your Corporate Strategy With AchieveIt

Many businesses use outcomes-based corporate strategies to drive them towards goals, benefit their bottom line and motivate their teams. With AchieveIt, your organization can improve the execution of key plans and initiatives , increase visibility and improve accountability from a centralized, integrated plan management platform. 

Whether you have an existing corporate strategy, want an implementation partner, or like some help streamlining your corporate strategy, you can use AchieveIt’s two-pronged approach to strengthen your competitive position . The combination of our management software and an experienced consultant ensures your initiatives are correctly set up for effortless execution.

Schedule a demo today if you would like to learn more about AchieveIt strategic management software. Alternatively, take a self-guided tour and experience the magic of AchieveIt firsthand. Together we can connect, manage and execute key plans and initiatives with innovative corporate strategic plan management. 

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  • Strategic planning vs business planning: how they’re both key to success

Strategic planning vs business planning how they're both key to success

Any thriving hospitality business needs thorough planning to make sure it succeeds. If you’ve heard the terms business planning and strategic planning, you might think they’re interchangeable, but they’re actually two distinct things companies need at different times for continued success.

The biggest difference is that business plans are mostly used when you are starting to build a business so you can quickly and smoothly create your vision. Strategic planning is what existing companies use to grow and improve their businesses.

If you’re looking for a career in hospitality management, it’s important to know the difference between the two and how to use them to best effect. In this article, we’ll go over what strategic planning and business planning are and how they are important to running a successful hospitality business.

We’ll also look at how you can learn to harness different planning methods and get the skills needed to develop your career.

Business planning

A business plan is one of the first things a fledgling business will draft. Alternatively, it can be used to set business goals when launching a new product or service.

The business plan will usually look at short-term details and focus on how things should run for around a year or less. This will include looking at concepts such as:

  • What the business idea is
  • Short-term goals
  • Who your customers are
  • What your customers need
  • What investment or financing you will need to start your business
  • How you make revenue
  • What profitability to expect
  • How you can appeal to potential shareholders
  • What the short-term operational needs of the business are
  • What the company’s values are
  • What the budget is for different parts of the business

This means market analysis and research are vital when you are making a business plan.

What are the objectives of business planning?

The primary objective of a business plan is to have all the main details of your business worked out before you start. This will give you a roadmap to use when you launch your business or when you start offering a different product or service.

For example, if you wanted to become an event planner   and open your own event planning business, your plan might include how to get funds to rent an office and pay staff.

Strategic planning

strategic planning and corporate planning

A strategic plan is where you set out the company’s goals and define the steps you will need to take to reach those goals.

A strategic plan would include:

  • What current capabilities the company has
  • Making measurable goals
  • A full strategy for business growth
  • How the company’s values, mission and vision tie in with the services and products the company intends to offer
  • Who in the organization will handle certain roles
  • What the timeline is for reaching certain goals
  • A SWOT analysis, looking at the strengths, weaknesses, opportunities and threats in the company
  • Examining the external environment for factors that will affect your company using a PEST (political, economic, social and technological) analysis

A strategic plan can be a long-term blueprint. You might find you use basically the same strategic plan for several years.

What is the objective and strategy of planning?

The aim of a strategic plan is to provide a tool that allows you to improve your business, grow the company, streamline processes or make other changes for the health of your business. Strategy implementation and meeting strategic objectives should generally lead to growth.

What is the difference between business planning and strategic planning?

There are a few major differences between strategic planning and business planning, which are outlined below.

Scope and time frame

A strategic plan is usually long-term, typically covering at least two to five years. By contrast, a business plan usually covers a year or less, since this is roughly how long it usually takes for a business to become established.

A business plan focuses on starting a business in its early stages. A strategic plan is used to guide the company through later stages. Put simply, the business plan is about direction and vision, while the strategic plan focuses on operations and specific tactics for business growth.

Stakeholders

A strategic plan will be presented to stakeholders and employees to make sure everyone knows what is going on in the company. This will help reassure everyone with a stake or role in the business.

By comparison, a business plan will often be shown to investors or lenders to help show the business idea is worth funding.

Flexibility and adaptability

A strategic plan typically has more flexibility. This is because it is meant to be in place for a longer period of time and the company should already be established. There is more leeway for refining strategy evolution, while your business plan should remain stable.

Similarities between business planning and strategic planning

Both of these activities will require some of the same analytical components, such as market analysis, financial projections and setting objectives you can track. Of course, both also require you to be highly organized and focused to ensure your business model or strategy development is appropriate for your business.

When to use strategic planning vs business planning

strategic planning and corporate planning

As we’ve already mentioned, you’ll generally use a business plan when you’re setting up a business or moving in a new direction. This will dictate much of the day-to-day running of a business. You would use strategic planning when you want to work on growth and drive innovation.

Can a business plan be used for strategic planning?

No, a business plan and a strategic plan are two different concepts with specific goals. While a business plan outlines short or mid-term goals and steps to achieve them, a strategic plan focuses on a company’s mid to long-term mission and how to accomplish this.

If you want to prepare for success, you need to make sure you are using the right type of plan.

Integrating strategic planning and business planning

While the two plans are different, you may end up using them together to ensure optimal success. As with any type of management role, such as hotel management , strategic and business plan management requires effective communication between different departments.

This includes different strategy managers as well as strategic and operational teams. You also need to make sure that, when you are using either plan, you find the right balance between flexibility and strict adherence to the plan. With strategic planning, this means constant strategy evaluation to assess your tactics and success.

Can strategic planning and business planning be used simultaneously?

In many hospitality careers ,  you’ll want to juggle growth and new directions, so you could end up using both planning types. However, it’s most common for the two to be distinct. This is because you’ll generally be using a business plan only when you are starting a new venture.

What are the career prospects in strategic and business planning?

There are plenty of options for what you can do if you have skills in strategic planning and business planning. Almost every management role will require these planning skills, including how to write strategic planning documents and measure success.

If you want to work in the hospitality sector, you could look into hotel planning and other careers with a business management degree . These will enable you to grow and nurture a business, but there is also a lot of scope to start your own business. Great planning skills can give you a real competitive advantage.

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What skills do I need for a career in planning?

If you want to work in planning and management, you should work on various skills, such as:

  • Decision-making
  • Analytical skills
  • Risk assessment knowledge
  • Market analysis and forecasting
  • Team management
  • Communication, both written and verbal
  • Organization

What qualifications can help with a career in strategic planning or business planning?

If you want to work in hotel planning and management, the most common route is to get a hospitality degree from a well-respected hospitality school in Switzerland . This will help you get the skills and knowledge you need to properly plan businesses as well as handle the execution of these plans.

Business degrees also teach you many transferable skills, such as good communication with your strategy team or data analysis, that you can use in almost any role in hospitality. They can also reduce the need to work your way up through the hospitality industry.

How can hospitality school help with planning careers?

Attending hospitality school can help you learn skills dedicated to hospitality as well as more general management, business and planning skills. This includes everything from how to handle a team to specifics such as hotel revenue management strategies .

If you find a hospitality school offering professional hospitality internships , you’ll also get experience in managing hotels and hospitality venues, helping you leap ahead in your career.

Hospitality degrees to kickstart your career

Our international business course combines leading industry expertise with essential internships to provide an exceptional foundation for a thriving career in the hospitality industry.

strategic planning and corporate planning

Both strategic and business planning are vital to build and grow a business. While business planning focuses on setting up the business and handling investment, vision and overall goals, strategic planning concentrates on growing the business and processing operational efficiency and resource allocation on a longer-term basis.

If you want to learn how to develop a hotel business plan  or manage a hospitality venue, one of the best ways to get started is to study for a hospitality degree. This will give you hands-on experience of the strategic planning process or business management as well as the skills you need to succeed.

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  • 7 strategic planning models, plus 8 fra ...

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

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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.

[Inline illustration] Strategic planning models vs. frameworks (Infographic)

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.

[Inline illustration] The seven strategic planning models (Infographic)

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:

[Inline illustration] SWOT analysis (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:

[Inline illustration] Porter’s Five Forces framework (Infographic)

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.

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Corporate Planning vs. Strategic Planning

  • Entrepreneurship and Startup Insights

Corporate Planning vs. Strategic Planning

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Understanding the Difference: Corporate Planning vs. Strategic Planning

Have you ever wondered how organizations plan for their future? How they set goals, allocate resources, and make critical decisions to ensure success? Planning is a fundamental aspect of any business, and two commonly used approaches are corporate planning and strategic planning. While they may sound similar, these two concepts have distinct purposes and play different roles in shaping an organization’s direction. In this article, we will explore the key differences between corporate planning and strategic planning, helping you understand their significance and how they contribute to organizational success.

Corporate Planning: Steering the Ship

Corporate planning involves the process of defining an organization’s overall vision, mission, and goals. It focuses on the long-term objectives and the broad strategies required to achieve them. At its core, corporate planning is about setting a direction for the entire organization and aligning its various functions towards a common goal.

Think of corporate planning as steering a ship. The captain charts the course, determines the destination, and ensures that every crew member is working towards reaching that destination. Similarly, corporate planning sets the course for an organization by outlining its purpose, values, and goals. It sets the foundation upon which other planning activities, such as strategic planning, are built.

Corporate planning typically involves a top-down approach, where senior executives and leaders define the organization’s goals and develop strategies to achieve them. It considers both internal and external factors, such as market conditions, industry trends, and competitor analysis, to create a comprehensive plan for the future.

Features of Corporate Planning

Here are some key features of corporate planning:

  • Vision and Mission: Corporate planning establishes the organization’s vision and mission, defining its purpose and direction.
  • Long-Term Focus: It looks ahead and sets goals for the organization that span multiple years.
  • Top-Down Approach: Corporate planning is driven by senior leaders and executives.
  • Comprehensive Perspective: It considers both internal and external factors to develop a holistic plan.
  • High-Level Strategies: It outlines broad strategies to achieve organizational goals.

Strategic Planning: Navigating the Terrain

While corporate planning sets the direction, strategic planning focuses on how to navigate the terrain to reach the destination. It is concerned with the specific actions, initiatives, and tactics required to achieve the goals outlined in the corporate plan. Strategic planning is about making informed choices on where to focus resources and how to leverage strengths to gain a competitive advantage.

Imagine you are trekking through a dense forest. The strategic planning process is like mapping out the trail, identifying the most efficient route, and planning for potential obstacles. It involves analyzing the environment, understanding strengths and weaknesses, and formulating strategies to achieve specific objectives.

Strategic planning is often more detailed and granular compared to corporate planning. It takes into account the unique characteristics of different business units, products, or markets within an organization. While corporate planning sets the overall direction and goals, strategic planning tailors the approach to different areas of the organization.

Features of Strategic Planning

Let’s delve into the key features of strategic planning:

  • Goal Alignment: Strategic planning ensures that the goals set in the corporate plan are translated into actionable targets for different units or departments.
  • Short to Mid-Term Focus: It encompasses plans for a specific timeframe, usually ranging from one to five years.
  • Collaborative Approach: Strategic planning involves input from various levels and functions within the organization.
  • Specific Analysis: It examines internal and external factors at a more detailed level to inform strategy formulation.
  • Tactical Implementation: Strategic planning outlines the specific initiatives and tactics required to achieve objectives.

What Sets Them Apart?

Now that we have a clear understanding of corporate planning and strategic planning, let’s highlight the key differences between the two:

These distinctions make it clear that while corporate planning sets the strategic direction, strategic planning focuses on the practical steps needed to achieve the organization’s goals.

The Parallels and Synergy

Although corporate planning and strategic planning have different scopes and focuses, they are interrelated and work together to drive organizational success. Corporate planning provides the big picture framework and foundation that strategic planning builds upon. Without a clear corporate plan, strategic planning efforts may lack direction and coherence.

Think of a puzzle – the corporate plan provides the border pieces that define the overall shape and structure of the puzzle. Strategic planning then fills in the intricate details, connecting the individual pieces to complete the picture.

By aligning strategic plans with the broader corporate plan, organizations can ensure that their actions and initiatives are in line with their long-term goals. This alignment fosters synergy among different departments, business units, and functions, enabling a coordinated effort towards achieving overall success.

Benefits of Corporate Planning and Strategic Planning

Both corporate planning and strategic planning offer significant benefits to organizations. Let’s explore some of these advantages:

Corporate Planning Benefits:

  • Direction: Corporate planning provides a clear sense of direction for the organization, setting the stage for success.
  • Alignment: It helps align all stakeholders towards common goals, fostering a sense of unity and purpose.
  • Efficiency: By outlining long-term objectives, corporate planning enables efficient allocation of resources and efforts.
  • Adaptability: A well-defined corporate plan allows organizations to adapt to changing market conditions or industry trends.

Strategic Planning Benefits:

  • Focus: Strategic planning ensures that resources and efforts are channeled towards achieving specific objectives.
  • Competitive Advantage: It helps organizations leverage their strengths and identify opportunities to gain an edge over competitors.
  • Accountability: By setting measurable targets and milestones, strategic planning enhances accountability and performance.
  • Flexibility: Strategic plans can be adjusted or refined based on feedback and evaluation, enabling organizations to stay agile.

By recognizing and harnessing the benefits of both corporate planning and strategic planning, organizations can enhance their overall effectiveness and achieve sustainable growth.

Corporate planning and strategic planning are vital components of effective organizational management. While corporate planning focuses on setting the vision and long-term goals, strategic planning translates those goals into actionable plans and initiatives. Although they have different scopes and timeframes, these two planning approaches complement each other, working together to steer organizations towards success.

Remember, corporate planning acts as the captain, steering the ship and setting the course, while strategic planning is the navigator, charting the path and guiding the journey. By understanding the difference between these two planning approaches and leveraging their benefits, organizations can navigate the business landscape with confidence, adapt to changes, and thrive in an ever-evolving market.

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What is Strategic Planning? Definition, Importance, Model, Process and Examples

By Paul VanZandt

Published on: February 2, 2023

strategic planning

Table of Contents

What is Strategic Planning?

Strategic planning is defined as a pivotal organizational endeavor, meticulously charting the mission, goals, and objectives over a strategic timeframe, typically spanning 2-5 years. This comprehensive roadmap takes into meticulous consideration the current organizational landscape, navigating through the intricacies of prevailing legislation, the dynamic business environment, product portfolios, departmental dynamics, and the judicious allocation of budget resources. By weaving together these critical elements, a strategic plan becomes a guiding compass, steering the organization towards its vision with adaptability and foresight.

Strategic planning first entered business environments in the post-war period of the 1950s, and has been so effective that it is still widely used and applied across organizational spectrums, including non-profits.

While a strategic plan is the final outcome of the strategic planning process, here are the key factors and components that feed into creating this plan:

  • Profitability and balance sheet management

For any business, profitability and the adjacent balance sheet management is and always should be a key factor to be taken into consideration during strategic planning, depending on the size of the business. Both these factors are in fact co-dependent. For example, one of the key outcomes of a strategic plan is to set the revenue growth percentage to be achieved each year for, say, 3 years. This in turn will require an evaluation of the balance sheet, including any debt payments, dividend payout, shareholder expectations, etc.

Even if the business is a startup and is rich with investor cash to spend in acquiring customers in the short to medium term, it is still aspiring to be profitable and must lay out a larger strategic path to profitability.

  • SWOT analysis outcomes

Strength, weaknesses, opportunities, and threats – these are the outcomes and full terms of the abbreviated term, SWOT analysis. Strength refers to the business factors that indicate key factors that are contributing to the achievement of business outcomes. These may be factors related to sales, employee and talent retention, software stack, business efficiency, etc. Similarly, weakness refers to factors that are holding back the growth and achievement of business outcomes, such as poor margins, lack of company data management, employee attrition, etc.

Opportunity refers to areas in the business environment that the business can potentially explore. For example, one of the opportunities identified could be sales in a new market, implementing a better human resources management model, branching into new products and/ or services, etc.

  • Operations management

Operations management pertains to the cohesive movement of all moving and communicating parts to produce the company’s products or services. While creating a strategic business plan, management needs to take into account how each department and team will need to interact with each other to produce the results desired as outcomes in the strategic plan. This includes ensuring the right technology stack needed for each team including communication and collaboration technology needed for remote and on-premise task execution.

  • Human resource management

Strategic planning involves taking into account all aspects of HR and employee-related spending and policies. One of the key aspects of a strategic plan must be to ensure a harmonious work experience for employees such that it increases employee retention and helps build an environment that enhances employee productivity and workplace satisfaction.

Importance and Benefits of Strategic Planning

A strategic plan is more than just a business tool, it also plays a key role in defining operational, cultural, and workplace ethics. Here are some of the key aspects of the importance of strategic planning:

1. Provides a unified goal

A strategic plan is like a unified action plan for the whole company in order to achieve common outcomes. For example, a strategic plan to achieve a certain revenue growth each year requires sales, account management, product development, and marketing teams to work together to ensure a seamless lead pipeline, customer upsells and account retention, meet customer expectations, etc.

2. Adds to management transparency

Strategic planning is more than just for direct business growth, it also helps shine clarity to employees and shareholders as to what their mid-to-long-term objectives are and how their actions are derived from these larger goals. Such a plan must always be referenced for citation and justification for key business moves and decisions to make it apparently justified and based on logic and reason. This also encourages team leads and employees to in turn be more transparent with their team members and peers with their plans and goals.

One of the issues most dreaded by investors and employees alike is management that seems to make random decisions without any clear guidance on how they help meet requirements for the final business objectives or tackle the challenges of the day. A strategic plan helps build investor and employee confidence in the management and adds to building a culture of transparency in day-to-day business operations.

3. Identifies hidden strengths and weaknesses

Many strengths and weaknesses in a company may be contributing, yet hidden factors in the path to meeting or hindering the meeting of business goals. A strategic plan’s primary input is a SWOT analysis of the company, which is conducted by auditing the firm to recognize and list strengths and weaknesses within the company. These may be a competitive product, a better monetization model, a weak employee incentive policy, etc.

The important step here is the actual deep analysis and listing down of these strengths and weaknesses and how they can be leveraged or minimized.

4. Leads to better financial health

A company with a clear strategic plan is able to better plan expenses and set the right expectations on return on investment (ROI). It takes into account balance sheets, profitability, accounting and expense management, all of which contribute to better bookkeeping and financial health of the company.

5. Improves management-employee relations

Employees and teams work in silos when the management works in silos. But when a company shares a strategic plan with employees and lays out exactly how each team will be working towards contributing to this larger plan, it gives each team and its members a sense of belonging and importance within the larger company, In today’s environment of hybrid or remote work cultures, it is a key step to ensuring that the company remains cohesive and collaborative in getting work done and meeting final objectives.

Learn more: What is Tactical Planning?

Strategic Planning Models

Strategic planning inputs may require one of many of the following business analysis models:

  • SWOT analysis

SWOT analysis is the process and visual template for identifying and listing a company’s strengths, weaknesses, opportunities, and threats. These are cornerstone considerations for any leadership team and play a key role in the strategic planning process.

  • Business model canvas

A business model canvas is a process used to identify and represent existing business models of an enterprise and develop new models to better meet company goals and objectives. Like SWOT analysis, the business model canvas is also a standard business template.

  • PESTEL analysis

PESTEL is an abbreviation for political, economic, social, technological, environmental, and legal, and PESTEL analysis aims to identify the impact of these external factors on a business.

  • Cost-benefit analysis

A cost-benefit analysis is a method of evaluating an investment in the business based on the benefits it would bring to the table. This is a good method for ensuring a healthy financial balance sheet where spending and budgeting are carefully analyzed to ensure only those investments bring back reasonable ROI.

Most companies have 2 or more product/service streams or even 2 or more businesses. A BCG matrix is a visual process of managing an enterprise’s portfolio by prioritizing profitable companies with good market share and growth.

Strategic Planning Process: 6 Key Steps

An effective strategic planning process requires the following key steps:

1. Identify core business objectives

Strategic planning begins with first identifying your business objectives- what does it produce? What does it do better than the competition? What is the quality-profitability balance? These are examples of the questions that need to be asked to identify core business objectives. The strategic planning tools can be applied at any stage of the planning process to help answer these questions.

2. Identify the objectives of each department

Once the core business objective is ready, it needs to trickle down to an execution plan that involves each department. This in turn will result in breaking down of the core objectives into smaller objectives for the teams. This needs to be laid out with clarity and precision since the team leaders will further use this team goal to assign individual targets for members.

3. Identify potential roadblocks

Before formulating the final strategy, it is important to discuss it with relevant leaders in the company to ensure an error-free process that is achievable with minimal roadblocks. Of course, as the execution work begins, the management should be flexible enough to absorb unforeseen and small issues that are inevitable. The goal here is to avoid any big boulders which may cripple the strategy at a later stage, such as data security, pricing estimations, hiring new employees or expansion to new departments/ teams, investment in new product development, mergers and acquisition plans, etc.

4. Formulate the final strategy

Once the objectives and goals have been scanned for potential roadblocks and alterations/ safeguards have been accommodated, this is the first draft of the final strategic plan for the company. This strategy may be applicable for the foreseeable future or have a specific deadline, it should however be pulled up for revision annually. Small companies or startups who have much to learn on the way, need to keep an active eye on the larger strategy based on changing business realities.

5. Re-evaluate based on feedback

Before you iron out the processes and policies that will enable the execution of the new strategic plan of the company, it is important to hear back from your employees. This doesn’t have to be every single employee, especially if you have a large team, but to the extent possible. You may at first discuss the strategy with team leaders, who if needed, may take it further down the chain to their own team members and absorb their feedback. Complete agreement may not be possible, but it is important that both sides remain flexible while discussions are on but must be prepared to execute once the discussions are over.

6. Set or revise adjacent policies and processes

Now that the strategic plan for the business is complete and sealed, the leadership team needs to start the execution with necessary changes to the processes and policies as the need may be. This may need to include data management process changes, technology stack updates, issue escalation matrix, etc. In some cases, it may not require any change, and the right processes may already be in place with just a new direction based on the strategic plan.

Learn more: What is SWOT Analysis Framework?

What Makes an Effective Strategic Plan Example?

Crafting a good example of a strategic plan involves several key elements. Here’s a breakdown of what makes a strategic plan exemplary:

  • Clear Mission Statement: A strong strategic plan starts with a clear and concise mission statement that defines the organization’s purpose and the value it aims to provide.
  • SMART Objectives: The plan should include specific, measurable, achievable, relevant, and time-bound (SMART) objectives. This ensures that goals are well-defined and actionable.
  • Environmental Analysis: A good strategic plan conducts a thorough analysis of the internal and external environment, taking into account strengths, weaknesses, opportunities, and threats (SWOT). This provides a foundation for strategic decision-making.
  • Alignment with Vision: The plan should clearly articulate how each objective contributes to the overall vision of the organization. There should be a cohesive alignment between the strategic goals and the long-term vision.
  • Resource Allocation: Effective resource allocation is crucial. The plan should outline how financial, human, and other resources will be distributed to support the strategic goals.
  • Actionable Steps: Each objective should be broken down into actionable steps or initiatives. This helps in practical implementation and provides a roadmap for achieving the goals.
  • Monitoring and Evaluation: A good strategic plan includes mechanisms for ongoing monitoring and evaluation. Key performance indicators (KPIs) should be defined, and regular assessments should be conducted to track progress.
  • Flexibility and Adaptability: The plan should acknowledge the dynamic nature of business environments. Flexibility and adaptability are essential to adjust strategies in response to changes in the internal or external landscape.
  • Communication Strategy: A strategic plan should include a communication strategy to ensure that stakeholders are well-informed about the goals, progress, and any adjustments made to the plan.
  • Inclusivity: Involving key stakeholders in the strategic planning process fosters a sense of ownership and commitment. A good plan considers input from various departments, employees, and external partners.
  • Risk Management: Anticipating and addressing potential risks is a vital aspect of a strategic plan. Contingency plans should be in place to mitigate unforeseen challenges.
  • Continuous Improvement: A strategic plan should not be static. There should be a commitment to continuous improvement, with regular reviews and updates to ensure its relevance and effectiveness.

By incorporating these elements into your example of a strategic plan, you can demonstrate a comprehensive and thoughtful approach to organizational planning, which may resonate well with both practitioners and those seeking to understand the principles of strategic planning.

Strategic Planning Example

A strategic plan is a detailed document that outlines an organization’s goals, objectives, and the actions required to achieve them. While the specific details of a strategic plan will vary depending on the organization, its industry, and its unique circumstances, here’s an example of a strategic plan for a fictional company:

Company: Visionary Tech Solutions (VTS)

Mission Statement: “To empower businesses through innovative technology solutions, fostering growth and sustainability in an ever-evolving digital landscape.”

Strategic Goals: Presented below are ten strategic goals that serve as excellent examples to enhance the functionality of a company.

1. Market Leadership in Tech Solutions:

Objective: Capture a 20% increase in market share within the next three years.

Action Steps:

  • Launch two new cutting-edge products catering to emerging market demands.
  • Strengthen strategic partnerships with key industry players.
  • Implement aggressive marketing campaigns highlighting VTS’s technological prowess.

2. Operational Efficiency:

Objective: Improve operational efficiency by 15% over the next two years.

  • Streamline internal processes through the implementation of advanced project management tools.
  • Invest in employee training programs to enhance skills and productivity.
  • Conduct regular process audits for continuous improvement.

3. Customer-Centric Innovation:

Objective: Introduce at least three customer-centric innovations annually.

  • Establish a dedicated R&D team focused on anticipating and addressing customer needs.
  • Implement customer feedback loops to gather insights for product enhancements.
  • Launch a customer loyalty program to foster long-term relationships.

4. Global Expansion:

Objective: Expand operations to two new international markets within the next four years.

  • Conduct thorough market research to identify viable expansion opportunities.
  • Establish local partnerships to navigate regulatory and cultural nuances.
  • Develop customized marketing strategies tailored to each target market.

5. Resource Allocation:

Budget allocation:

  • 30% for research and development.
  • 25% for marketing and promotional activities.
  • 20% for employee training and development.
  • 15% for operational improvements.
  • 10% for international expansion initiatives.

6. Monitoring and Evaluation:

  • Quarterly performance reviews with key performance indicators (KPIs) tracked against predefined targets.
  • Annual comprehensive evaluation of the strategic plan’s effectiveness and adjustments as needed.

7. Communication Strategy:

  • Regular updates through internal newsletters, town hall meetings, and an interactive company intranet.
  • External communication through press releases, social media updates, and a dedicated section on the company website.

8. Risk Management:

  • Identification of potential risks such as technological disruptions, market fluctuations, and geopolitical challenges.
  • Development of contingency plans and regular risk assessments.

9. Inclusivity:

  • Cross-functional teams involved in the strategic planning process, ensuring diverse perspectives and expertise.

10. Continuous Improvement:

  • Commitment to regular reviews and updates to the strategic plan based on industry trends, technological advancements, and feedback from stakeholders.

This example of a strategic plan for Visionary Tech Solutions outlines a roadmap that integrates the company’s mission, strategic goals, resource allocation, monitoring mechanisms, and a commitment to adaptability and continuous improvement. Adjustments should be made as needed based on ongoing evaluations and changes in the business environment.

Learn more: What is Enterprise Planning?

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How to Set Strategic Planning Goals

Team setting strategic planning goals

  • 29 Oct 2020

In an ever-changing business world, it’s imperative to have strategic goals and a plan to guide organizational efforts. Yet, crafting strategic goals can be a daunting task. How do you decide which goals are vital to your company? Which ones are actionable and measurable? Which goals to prioritize?

To help you answer these questions, here’s a breakdown of what strategic planning is, what characterizes strategic goals, and how to select organizational goals to pursue.

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What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees, and ensure organizational goals are backed by data and sound reasoning.

Research in the Harvard Business Review cautions against getting locked into your strategic plan and forgetting that strategy involves inherent risk and discomfort. A good strategic plan evolves and shifts as opportunities and threats arise.

“Most people think of strategy as an event, but that’s not the way the world works,” says Harvard Business School Professor Clayton Christensen in the online course Disruptive Strategy . “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry."

Related: 5 Tips for Formulating a Successful Strategy

4 Characteristics of Strategic Goals

To craft a strategic plan for your organization, you first need to determine the goals you’re trying to reach. Strategic goals are an organization’s measurable objectives that are indicative of its long-term vision.

Here are four characteristics of strategic goals to keep in mind when setting them for your organization.

4 Characteristics of Strategic Goals

1. Purpose-Driven

The starting point for crafting strategic goals is asking yourself what your company’s purpose and values are . What are you striving for, and why is it important to set these objectives? Let the answers to these questions guide the development of your organization’s strategic goals.

“You don’t have to leave your values at the door when you come to work,” says HBS Professor Rebecca Henderson in the online course Sustainable Business Strategy .

Henderson, whose work focuses on reimagining capitalism for a just and sustainable world, also explains that leading with purpose can drive business performance.

“Adopting a purpose will not hurt your performance if you do it authentically and well,” Henderson says in a lecture streamed via Facebook Live . “If you’re able to link your purpose to the strategic vision of the company in a way that really gets people aligned and facing in the right direction, then you have the possibility of outperforming your competitors.”

Related: 5 Examples of Successful Sustainability Initiatives

2. Long-Term and Forward-Focused

While strategic goals are the long-term objectives of your organization, operational goals are the daily milestones that need to be reached to achieve them. When setting strategic goals, think of your company’s values and long-term vision, and ensure you’re not confusing strategic and operational goals.

For instance, your organization’s goal could be to create a new marketing strategy; however, this is an operational goal in service of a long-term vision. The strategic goal, in this case, could be breaking into a new market segment, to which the creation of a new marketing strategy would contribute.

Keep a forward-focused vision to ensure you’re setting challenging objectives that can have a lasting impact on your organization.

3. Actionable

Strong strategic goals are not only long-term and forward-focused—they’re actionable. If there aren’t operational goals that your team can complete to reach the strategic goal, your organization is better off spending time and resources elsewhere.

When formulating strategic goals, think about the operational goals that fall under them. Do they make up an action plan your team can take to achieve your organization’s objective? If so, the goal could be a worthwhile endeavor for your business.

4. Measurable

When crafting strategic goals, it’s important to define how progress and success will be measured.

According to the online course Strategy Execution , an effective tool you can use to create measurable goals is a balanced scorecard —a tool to help you track and measure non-financial variables.

“The balanced scorecard combines the traditional financial perspective with additional perspectives that focus on customers, internal business processes, and learning and development,” says HBS Professor Robert Simons in the online course Strategy Execution . “These additional perspectives help businesses measure all the activities essential to creating value.”

The four perspectives are:

  • Internal business processes
  • Learning and growth

Strategy Map and Balanced Scorecard

The most important element of a balanced scorecard is its alignment with your business strategy.

“Ask yourself,” Simons says, “‘If I picked up a scorecard and examined the measures on it, could I infer what the business's strategy was? If you've designed measures well, the answer should be yes.”

Related: A Manager’s Guide to Successful Strategy Implementation

Strategic Goal Examples

Whatever your business goals and objectives , they must have all four of the characteristics listed above.

For instance, the goal “become a household name” is valid but vague. Consider the intended timeframe to reach this goal and how you’ll operationally define “a household name.” The method of obtaining data must also be taken into account.

An appropriate revision to the original goal could be: “Increase brand recognition by 80 percent among surveyed Americans by 2030.” By setting a more specific goal, you can better equip your organization to reach it and ensure that employees and shareholders have a clear definition of success and how it will be measured.

If your organization is focused on becoming more sustainable and eco-conscious, you may need to assess your strategic goals. For example, you may have a goal of becoming a carbon neutral company, but without defining a realistic timeline and baseline for this initiative, the probability of failure is much higher.

A stronger goal might be: “Implement a comprehensive carbon neutrality strategy by 2030.” From there, you can determine the operational goals that will make this strategic goal possible.

No matter what goal you choose to pursue, it’s important to avoid those that lack clarity, detail, specific targets or timeframes, or clear parameters for success. Without these specific elements in place, you’ll have a difficult time making your goals actionable and measurable.

Prioritizing Strategic Goals

Once you’ve identified several strategic goals, determine which are worth pursuing. This can be a lengthy process, especially if other decision-makers have differing priorities and opinions.

To set the stage, ensure everyone is aware of the purpose behind each strategic goal. This calls back to Henderson’s point that employees’ alignment on purpose can set your organization up to outperform its competitors.

Calculate Anticipated ROI

Next, calculate the estimated return on investment (ROI) of the operational goals tied to each strategic objective. For example, if the strategic goal is “reach carbon-neutral status by 2030,” you need to break that down into actionable sub-tasks—such as “determine how much CO2 our company produces each year” and “craft a marketing and public relations strategy”—and calculate the expected cost and return for each.

Return on Investment equation: net profit divided by cost of investment multiplied by 100

The ROI formula is typically written as:

ROI = (Net Profit / Cost of Investment) x 100

In project management, the formula uses slightly different terms:

ROI = [(Financial Value - Project Cost) / Project Cost] x 100

An estimate can be a valuable piece of information when deciding which goals to pursue. Although not all strategic goals need to yield a high return on investment, it’s in your best interest to calculate each objective's anticipated ROI so you can compare them.

Consider Current Events

Finally, when deciding which strategic goal to prioritize, the importance of the present moment can’t be overlooked. What’s happening in the world that could impact the timeliness of each goal?

For example, the coronavirus (COVID-19) pandemic and the ever-intensifying climate change crisis have impacted many organizations’ strategic goals in 2020. Often, the goals that are timely and pressing are those that earn priority.

Which HBS Online Strategy Course is Right for You? | Download Your Free Flowchart

Learn to Plan Strategic Goals

As you set and prioritize strategic goals, remember that your strategy should always be evolving. As circumstances and challenges shift, so must your organizational strategy.

If you lead with purpose, a measurable and actionable vision, and an awareness of current events, you can set strategic goals worth striving for.

Do you want to learn more about strategic planning? Explore our online strategy courses and download our free flowchart to determine which is right for you and your goals.

This post was updated on November 16, 2023. It was originally published on October 29, 2020.

strategic planning and corporate planning

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Corporate Planning

Corporate planning is crucial to any professional’s or business’s success as it sets a vision for daily operations. With corporate planning, businesses prepare a detailed road map for all their activities. By understanding corporate planning, you can effectively lead and manage a business. This article delves into the nitty-gritty of corporate strategic planning, its varying types, and the stages involved in creating a comprehensive corporate plan.

Defining Corporate Planning

Corporate planning is a detail-oriented process aimed at helping businesses craft solid strategies to achieve their goals. Companies can thrive by mapping out a clear direction, making informed decisions, identifying obstacles, and efficiently allocating resources to support business activities. 

The corporate planning process also helps align teams with a shared mission and overcome challenges to achieve established objectives. It is an ongoing, dynamic, and continuous process that continually adapts to shifting business dynamics throughout the lifespan of a company.

Advantages and Disadvantages

Corporate planning consists of extensive future-oriented preparations that provide businesses with a better approach to handling various situations. 

However, like everything, there are advantages and disadvantages to the continuous corporate planning process that need to be considered. Below, let’s explore the advantages and disadvantages of corporate planning in detail:

Advantages:

Reduces Uncertainty: Running a business comes with constant uncertainties and risks . An excellent corporate plan goes beyond merely setting objectives. It helps the company by forecasting the value of risks in the future, thereby minimizing the risk of uncertainty and unplanned contingencies.

Unity: Corporate planning helps the employees understand their roles more explicitly. Employees who know what’s expected of them are less likely to engage in conflicts, leading to higher levels of unity within the organization.

Aids Growth: With employee cooperation and constant development of processes within the company’s scope, corporate strategy, and plan objectives are easier to implement, resulting in a higher success rate.

strategic planning and corporate planning

Disadvantages:

Rigidity: Following a strict set of rules as part of a plan can create an inflexible environment that can lower employees’ morale, which can ultimately interfere with productivity.

Time: Corporate planning can take quite some time before the company begins to see results. The process involves collecting data, devising a plan, implementing, monitoring, and evaluating.

Ambiguity: Although corporate planning provides a reference point for business decisions, it is based on predictions of a mutable future. As a result, the plan may only sometimes be foolproof, and unexpected situations can occur, leaving businesses caught off-guard.

The Different Types of Corporate Planning

Corporate planning is a vital aspect of any business, and it involves a variety of planning types, including:

Strategic Planning:

Strategic planning is a crucial process that requires closely examining a company’s missions, strengths, and weaknesses. Its goal is to define the company’s current status, determine where it wants to go, and how it can get there. Although strategic planning and corporate planning share some overlapping areas, corporate planning has a broader scope.

It is particularly useful in functional planning and guiding complex organizations with various subsidiaries and businesses. The corporate plan also includes the same critical components as the strategic plan, focusing on the broader company and any related services used by the departments, such as marketing and human resources. Corporate planning also considers tools for achieving individual business steps such as countering challenges, employee training, and objectives.

Tactical Planning: 

Tactical planning is the subsequent step businesses take after formulating a strategic plan. Tactical planning involves defining goals and determining the necessary steps and actions required to achieve them. With it, you can subdivide the strategic plan into smaller objectives and goals. It is a short-term planning process and strategy that can aid in working towards medium or long-term goals.

Operational Planning:

Operational planning is a specific, detailed plan that outlines the business activities’ day-to-day workings for a specific period, generally lasting more than a year. It specifies employees’ and managers’ daily responsibilities and tasks and the workflow. Operational planning is useful in allocating the available financial, physical, and human resources to reach short-term strategic objectives that support an organization’s growth.

Contingency Planning:

Contingency planning is the process of developing strategies that help businesses respond effectively to unexpected disruptive events. It is intended to ensure that the practices return to standard operating procedures after a disturbance or natural disaster. Contingency planning is an effective tool for handling both adverse and positive events, such as an unexpected financial boost that can impact the organization’s operations.

By incorporating these types of business planning, businesses can ensure success in the short term and achieve long-term growth.

Examples of Corporate Planning :

Audacity Corporation, a renowned studio, and live performance microphones manufacturer, wanted to ensure that their range of microphones for streamers and gamers were market leaders by the end of the financial year. 

Their CEO, Brendon, decided to study their competitors’ practices and strategies to achieve this target. They discovered that most of their competitors produced these microphones in-house, and their costs of raw materials were high.

To counter this, Audacity collaborated with companies in China and Taiwan to obtain raw materials at reduced prices and trained their employees to assemble the products more efficiently. As a result, their streaming and gaming microphones became the top-selling product in the market, with 20% more sales than their nearest competitor.

ExxonMobil, one of the largest oil and gas companies operating internationally, announced its corporate plans in 2022. One of their declarations was the plan to increase investments in emission reduction solutions. 

They have decided to invest $17 billion by 2027 in this domain to achieve this objective. This investment will enable them to gain a competitive advantage over their contemporaries in the market and help them tackle climate change and carbon emissions in the long run.

The Benefits of Corporate Planning

Providing clear objectives.

Not only does corporate planning provide a sense of direction for professionals within an organization and corporate management, but it also ensures that every action taken has a purpose. Executing tasks with a clear plan can help achieve business objectives efficiently.

Formulating Better Strategies

In the context of business, a strategy is an approach taken to achieve a specific goal or objective. For example, if the objective is to make a product the category leader in sales revenue by the year 2023, a potential strategy could be to persuade buyers that the product is superior to other options on the market by investing in large advertising campaigns. Corporate planning is integral to helping an organization create operational plans and execute strategies in a logical and methodical manner, easing the decision-making process.

Increasing Communication

Corporate planning allows group participation in scenario planning, improving communication between employees and employers. Active involvement ensures that tasks are executed efficiently, and everyone remains on the same page.

Allocating Resources Efficiently

In the context of business, a strategy is an approach taken to achieve a specific goal or objective. For example, if the objective is to make a product the category leader in sales revenue by the year 2023, a potential strategy could be to persuade buyers that the product is superior to other options on the market by investing in large advertising campaigns. Corporate planning is integral to helping an organization create and execute strategies in a logical and methodical manner, easing the decision-making process.

Communicating Brand Messaging

A well-defined corporate plan can help communicate a brand’s message to key stakeholders like shareholders, investors, creditors, customers, and employees. By aligning mission and vision statements, core values are clearly established, helping to convey the brand message cohesively.

By implementing corporate planning, organizations can enjoy these benefits and ultimately operate with enhanced efficiency and productivity.

strategic planning and corporate planning

The Six Stages of Corporate Planning

Start with a vision and mission statement.

A vision statement showcases future expectations for a company, such as a goal to offer innovative mobility solutions on a global scale.

On the other hand, a mission statement outlines the organization’s purpose, including target audience, product offerings, and distinguishing factors from competitors. For instance, our company is dedicated to facilitating low-interest healthcare loans to those with poor credit, specifically for low-income households.

Establish Clear-Cut Goals and Objectives

Although people sometimes use the terms interchangeably, goals and objectives have significant distinctions. Fundamentally, a goal defines the aspiration of a company or business over a specific period, while an objective is a measurable and actionable step that propels you toward your goal.

While general goals may suffice for organizations, departments need detailed and specific ones to achieve targets. 

For example, a business objective to boost profits would require more specific departmental goals, such as, “We will generate an additional $8,000 in revenue by November 15.” You can create a shared future vision by setting company goals and objectives. This allows everyone to work together towards common goals, making their daily activities more purposeful.

Identify your Organization’s Strengths and Weaknesses

Once you’ve established your business goals and objectives, analyzing the organization’s strengths and weaknesses is a good idea. The most commonly adopted approach for this is the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis.

To perform a SWOT analysis, list the characteristics corresponding to each category. Based on this evaluation, you can capitalize on the strengths identified and leverage your opportunities to counter or neutralize the weaknesses and potential threats to the organization. 

This kind of analysis will enable you to determine any potential challenges impeding the business goals and help you develop strategies to overcome them. In summary, incorporating a SWOT analysis into your business strategy is an effective way to better understand the organization’s internal and external environment, helping you achieve business growth and success.

Consider Short-term and Long-term Goals

Short-term goals are ones you can achieve in the near future, usually between six months and two years. Long-term goals require more time, usually three to five years. By integrating these two types of goals, you can achieve your goals with ease.

Implement the Plan

After clearly understanding your goals, the next step is to proceed with the plan’s implementation. At this stage, an action plan is usually created with specific responsibilities and an expected timeline for achieving each objective. Regular meetings should be set up to monitor this plan effectively to review progress on the action plans and key performance indicators (KPIs). It’s important to note that during implementation, setbacks or challenges may arise, which is why regular check-ins are necessary. These reviews also allow for recognizing successes and making any necessary corrections.

Evaluate Performance

After implementing all plans, the subsequent critical step involves evaluating their performance. Its purpose is to align your overall expectations with the actual contributions of your plans. Evaluating plan performance is necessary because it helps you measure progress and surface possible areas of weakness. Therefore, to ensure continual improvement towards your goals and maximize impact, evaluating implemented plans’ outcomes is a must.

Corporate Planning Tips :

Share your plan broadly.

For a corporate plan to succeed, the entire company’s involvement is crucial. It’s essential to guarantee that every team member is given access to the business plan and encouraged to participate. Additionally, sharing the plan with board members and department leaders can ensure accountability and commitment and help maintain a clear pathway to achieve the plan’s objectives.

Divide Yearly Plans into Quarters

To simplify a plan, break it down into manageable priorities with deadlines. You can assess the plan’s progress more easily by increasing the frequency of check-ins. If you encounter a challenge, you can make necessary changes to the quarterly plans to keep yourself on track.

Utilize Action Plans

Action plans keep you motivated and on target toward achieving your goals. They help you complete short-term goals in a reasonable amount of time, keeping you moving toward your final objective.

Hold Regular Meetings

Regular check-ins to revise your goals and key performance indicators (KPIs) are crucial. Make necessary adjustments to your corporate plan, find solutions, and achieve your KPIs promptly and efficiently.

To learn more about corporate planning, corporate visions, and more, contact Strategy Capstone !

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How Fast Should Your Company Really Grow?

  • Gary P. Pisano

strategic planning and corporate planning

Growth—in revenues and profits—is the yardstick by which the competitive fitness and health of organizations is measured. Consistent profitable growth is thus a near universal goal for leaders—and an elusive one.

To achieve that goal, companies need a growth strategy that encompasses three related sets of decisions: how fast to grow, where to seek new sources of demand, and how to develop the financial, human, and organizational capabilities needed to grow. This article offers a framework for examining the critical interdependencies of those decisions in the context of a company’s overall business strategy, its capabilities and culture, and external market dynamics.

Why leaders should take a strategic perspective

Idea in Brief

The problem.

Sustained profitable growth is a nearly universal corporate goal, but it is an elusive one. Empirical research suggests that when inflation is taken into account, most companies barely grow at all.

While external factors play a role, most companies’ growth problems are self-inflicted: Too many firms approach growth in a highly reactive, opportunistic manner.

The Solution

To grow profitably over the long term, companies need a strategy that addresses three key decisions: how fast to grow (rate of growth); where to seek new sources of demand (direction of growth); and how to amass the resources needed to grow (method of growth).

Perhaps no issue attracts more senior leadership attention than growth does. And for good reason. Growth—in revenues and profits—is the yardstick by which we tend to measure the competitive fitness and health of companies and determine the quality and compensation of its management. Analysts, investors, and boards pepper CEOs about growth prospects to get insight into stock prices. Employees are attracted to faster-growing companies because they offer better opportunities for advancement, higher pay, and greater job security. Suppliers prefer faster-growing customers because working with them improves their own growth prospects. Given the choice, most companies and their stakeholders would choose faster growth over slower growth.

Five elements can move you beyond episodic success.

  • Gary P. Pisano is the Harry E. Figgie Jr. Professor of Business Administration at Harvard Business School and the author of Creative Construction: The DNA of Sustained Innovation (PublicAffairs, 2019).

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Strategic Financial Management: Functions, Planning & Analysis - Essential Practices for Business Owners

Strategic Financial Management

Running a business is not easy. As a business owner, you know the challenges associated with financial management and the importance of financial risk management. Money management is the foundation of any business growth and without proper planning, it's hard to sustain the business. To help you ace your business growth and manage your finances, Amazon Business is breaking down the essential practices you need to implement as a business owner. Register with Amazon Business to grow your business 10x times! Let's dive in!

What is Financial Management?

financial management

Financial management is the strategic management of an organization's financial resources, involving planning, organizing, controlling, and directing activities. The role of financial management involves setting financial goals, creating comprehensive plans, making investment decisions, managing working capital, mitigating risks, analyzing financial performance, and ensuring compliance. The ultimate goal of financial management is to maximize the value of financial resources, achieve financial objectives, increase profitability, and create sustainable value for the firm and its stakeholders.

Importance of Financial Management

What's the importance of financial management, you ask? Let's take a look:

importance of financial management

1.    Resource Allocation

Proper financial management allows for the efficient allocation of financial resources, ensuring that funds are directed toward the most productive and value-generating areas. The importance of financial management lies in the fact that it helps optimize the use of available capital and maximize returns. This is one of the most important role of financial management.

2.    Investment Decision-Making

Financial management is vital in making informed investment decisions. The importance of financial management lies in evaluating different investment options, assessing their potential risks and returns, and selecting the most suitable investments that align with the organization's goals. Investment decisions is one of the crucial role of financial management.

3.    Risk Management

Financial management helps identify and overcome financial risks affecting the organization's stability and profitability. Financial risk management ensures your business is ready and will not crumble in unprecedented circumstances. Accumulating a contingency fund is an important role of financial management to mitigate business risks.

4.    Stakeholder Confidence

Sound financial management practices instill confidence and trust among stakeholders, including investors, lenders, and shareholders. Transparent financial reporting, accurate financial statements, and prudent financial management enhance the credibility and reputation of an organization.

5.    Compliance and Governance

Financial management ensures that a company complies with legal and regulatory requirements for financial reporting and transparency. It promotes good governance practices, including internal controls, audits, and ethical financial conduct.

Goals of Financial Management

Here are the top goals of financial management:

goals of financial management

1. Wealth Enhancement

Financial management is your ally in building a treasure trove of wealth. It helps you construct a solid financial foundation that grows and multiplies over time. Some may even argue wealth enhancement is the purpose of financial management. You can accumulate and enhance your wealth through innovative investment finance strategies, prudent risk management, and side business ideas .

2. Cash Flow Optimization

Financial management will help with maintaining healthy cash flows. It helps to ensure a steady income stream and efficient expense management. You can minimize cash crunches and seize growth opportunities by monitoring and fine-tuning your cash flow cycles. Read about business expansion strategies and wholesale business ideas in India for additional cash flow.

3. Capital Structure Optimization

Strategic financial management will help you design the ideal debt and equity financing. You can maximize the return for stakeholders by analyzing the cost of capital, evaluating the risk-return tradeoff, and determining the optimal capital structure. Optimizing the capital structure is yet another purpose of financial management.

4. Liquidity Management

Financial management focuses on maintaining adequate liquidity to meet short-term obligations. It will help your capital work effectively and maintain emergency funds' access. This way, you can navigate cash flow fluctuations and ensure liquidity when needed. This is one of the most important goals of financial management.

5. Stakeholder Value Creation

Strategic financial management also creates value for stakeholders. It will promote finance strategies that generate sustainable returns, offering attractive dividends or capital appreciation. Moreover, it will also help you maintain transparent communication to foster trust and loyalty among your stakeholders.

Different Types of Financial Management

types of financial management

1. Corporate Financial Management

It is one of the popular types of financial management that focuses on managing the financial resources and activities of a corporation or business entity. Moreover, it also involves making financial decisions to maximize shareholder value, such as capital budgeting, financial analysis, investment decisions, and business financial planning. Strategic corporate finance planning is integral here.

2. Personal Financial Management

Personal financial management covers the types of financial management based on managing an individual's finances. It focuses on achieving personal financial goals, building wealth, and securing a sound financial future. This includes the following:

●   Budgeting

●   Saving

●   Investing

●   Debt management

●   Retirement planning

●   Tax planning

3. Public Financial Management

Public financial management signifies the types of financial management practices that governments and public institutions employ. The objective is to ensure efficient and transparent use of public funds while meeting public service needs. This includes the following:

●   Revenue management

●   Expenditure control

●   Financial reporting

●   Fiscal planning

4. Financial Risk Management

Financial risk management focuses on identifying, assessing, and mitigating financial risks individuals or organizations face. It covers the following:

●   Managing risks related to market fluctuations

●   Credit

●   Liquidity

●   Operational issues

●   Other potential threats

Some companies rely on business process outsourcing to tackle risk or spread it.  

5. Investment Management

Investment management involves the professional management of investment portfolios on behalf of individuals or institutions. It covers:

●   Analyzing investment options

●   Making investment decisions

●   Monitoring and adjusting portfolios to achieve specific financial goals

6. International Financial Management

This type deals with managing financial activities in a global context. It covers aspects such as:

●   Foreign exchange management

●   International investments

●   Cross-border transactions

●   Managing risks associated with international operations

7. Nonprofit Financial Management

Nonprofit financial management focuses on managing the finances of nonprofit organizations and ensuring the effective utilization of resources to support their missions. It includes the following:

●   Fundraising

●   Grant management

●   Compliance with regulations

Strategic Financial Management

1. why do you need strategic financial management.

Strategic financial management is important for businesses as it offers protection against unforeseen circumstances by helping you chart a good course of action for your finances. It helps manage finances in a balanced and optimized way for all resources. You can create wealth, profit, goodwill and grow your company . Therefore, strategic financial planning is important.    

2. Importance of Strategic Financial Management in Today's Businesses  

If you're running a business, the following reasons are why you need strategic business financial planning for your business today!

a.   Adaptability

In a rapidly changing business landscape, strategic financial management helps businesses adapt to new business opportunities and challenges. Companies can effectively allocate resources by aligning financial decisions with the overall strategy. Moreover, companies can make informed investment choices and adjust financial plans. This is an important aspect of strategic financial planning that lets you invest in ventures like starting an e-commerce business in India .

b.  Competitive Advantage

Strategic financial management provides a competitive edge by optimizing businesses' financial resources. It helps companies to identify cost-saving measures and investment opportunities and pinpoint areas for growth. By strategically managing finances, businesses can outperform competitors and seize market opportunities. Another advantage of strategic business financial planning.

c.   Decision-Making Support

Strategic financial management provides valuable insights and analysis to support informed decision-making. With the help of strategic financial planning, businesses can evaluate the financial implications of different options while assessing their feasibility and weighing potential risks and rewards. This empowers decision-makers to make sound financial choices aligned with the business strategy. Strategic corporate finance planning is important.

3.    Features of Strategic Financial Management

Here are the features of strategic financial management:

Strategic financial management involves developing a comprehensive financial plan that aligns with the organization's strategic goals. It includes setting financial objectives, creating strategies, and developing a roadmap for achieving financial targets. Planning also helps businesses anticipate future financial needs, allocate resources effectively, and identify growth opportunities.

Budgeting estimates and allocates funds to different organizational activities, departments, or projects. It serves as a financial roadmap that outlines expected revenues, expenses, and investments over a specific period, typically for a year. The importance of financial planning stresses how budgeting helps businesses plan and control their finances effectively, making it an essential tool for achieving financial goals and driving strategic initiatives.

  • Managing & Assessing Risk

Strategic financial management involves identifying and managing financial risks that may impact the organization's objectives. Financial risk management involves identifying threats, evaluating their impact on the organization, and implementing strategies to mitigate or manage those risks effectively. It is an essential aspect of financial management as it helps safeguard the organization's financial health and ensures its ability to withstand unexpected events. Risk management is very crucial to financial planning.

  • Establishing Standard Operating Procedures (SOPs)

Standard Operating Procedures (SOPs) are documented guidelines that outline the specific steps and protocols to be followed for various financial activities within an organization. They provide a standardized framework for business planning processes and ensure consistency, efficiency, and accuracy in financial operations. The importance of financial planning also lies in establishing standard operating procedures.

4.    Benefits of Strategic Financial Management

A. financial performance evaluation.

One of the biggest advantages of strategic financial management is that it enables businesses to evaluate their financial performance effectively. It involves setting key performance indicators (KPIs) to assess business growth. It also involves monitoring financial metrics and conducting regular performance reviews. This helps identify areas of strength, areas for improvement, and opportunities to optimize financial outcomes.

b. Investor Relations and Capital Market Access

Another notable advantage of strategic financial management is that it enhances investor relations and facilitates access to capital markets. Businesses can attract investor interest and support by effectively communicating the organization's financial performance, growth prospects and strategic initiatives. This opens up opportunities for equity financing, debt financing, and partnerships that can fuel business growth.

c. Business Continuity and Resilience

Strategic financial management contributes to business continuity and resilience. Businesses can better withstand economic downturns and market volatility alongside unexpected disruptions by establishing contingency plans, conducting stress tests, and maintaining adequate financial reserves. This enhances their ability to navigate challenging times and ensures long-term sustainability.

What is Financial Planning and Analysis (FP&A)?

Financial Planning and Analysis (FP&A) is a key factor in an organization involving financial data analysis, forecasting, and planning to support strategic decision-making. It provides insights into the organization's financial performance. It also identifies trends and facilitates informed financial planning.   

Understanding the flow of Financial Planning and Analysis

A.  data gathering.

The FP&A process begins with gathering relevant financial data from various sources, including financial statements, transactional records, market data, and operational metrics. This data serves as the foundation for analysis and planning activities.

b.  Performance Monitoring

FP&A teams continuously monitor and track actual financial performance against the forecasts and budgets. It involves tracking and evaluating the actual financial performance of an organization against predetermined goals, budgets, and projections. It allows businesses to assess their financial health, identify improvement areas, and take corrective actions if needed.

c.  Scenario Analysis and What-If Modeling

FP&A professionals conduct scenario analysis and what-if modeling to assess the potential impact of different scenarios on the organization's financial position. Scenario analysis involves evaluating multiple possible future scenarios and their potential effects on key financial metrics. This technique helps businesses anticipate and plan for different outcomes, allowing them to be better prepared for potential risks and opportunities. By considering various scenarios, businesses can develop contingency plans and make informed decisions that align with their strategic objectives.

Why is it important for Businesses to Plan the Finances?

plan finances

✔ Planning & Budgeting

Financial planning allows businesses to set clear financial goals and develop a roadmap. It involves creating a budget that outlines expected revenues, expenses, and investments. By aligning financial resources with strategic objectives, businesses can prioritize spending, allocate resources effectively, and make informed financial decisions.

✔ Forecasting the Cash Flow

Cash flow forecasting helps businesses anticipate and manage their liquidity needs. Companies can identify potential cash shortages or surpluses by analyzing historical cash flow patterns and future projections. A great financial planning advice would be to plan for necessary financing, manage working capital effectively, and ensure the funds availability to meet operational and investment requirements.

✔ Scenario Planning

Businesses face uncertainties and risks in the market. Scenario planning involves evaluating potential scenarios and their financial impact on the business. By considering different possibilities and their likelihood, businesses can develop contingency plans and make proactive adjustments to mitigate risks, seize opportunities, and maintain financial stability.

✔ Cost Management and Profit

Financial planning helps businesses manage costs and maximize profitability. Businesses can optimize their operations, improve efficiency, and increase their bottom line by analyzing cost structures, identifying cost drivers, and implementing cost control measures. Effective financial planning enables businesses to allocate resources efficiently, invest in value-added activities, and achieve sustainable profitability.

✔ Operational Planning

Financial planning supports operational decision-making by providing financial insights and guidelines. It helps businesses determine optimal production levels, staffing requirements, inventory management, and capacity utilization. By aligning operational plans with financial objectives, businesses can enhance operational efficiency, minimize waste, and improve overall performance.

✔ Tax Reporting

Planning finances includes ensuring compliance with tax regulations and optimizing tax obligations. By accurately forecasting and planning for tax liabilities, businesses can minimize tax risks, take advantage of available tax incentives, and avoid penalties. Effective tax planning contributes to overall financial health and helps businesses optimize their tax position.

✔ Analysis of Finances

Financial planning enables businesses to analyze their financial performance and identify strengths, weaknesses, and areas for improvement. Businesses can evaluate profitability, liquidity, solvency, and other key financial indicators by conducting financial analysis. This analysis provides insights into the business's financial health and supports data-driven decision-making.

✔ Financial Reports

Financial planning involves preparing accurate and timely financial reports. This involves income statements, balance sheets, and cash flow statements. These reports provide a good view of the organization's financial position, performance, and cash flow. They are crucial for internal management, external stakeholders, and regulatory compliance.         

How can Amazon Business Help in Financial Management for Your Business?       

●   cost savings.

Amazon Business will help you save big by providing a platform to conduct all your business operations. Buy and sell without having to worry about anything!

●   Smooth Procurement

Amazon Business will help streamline your procurement processes, ensuring you procure goods and services at optimal prices and terms. We can assist you in implementing the right finance strategies for your business. With a platform serving millions of customers, Amazon Business allows you to take your business to the next level with GST benefits, doorstep delivery and more!

●   Tracking and Planning of Business Expenses

With our robust systems for tracking and managing your business expenses, Amazon Business helps with expense tracking tools, establishing expense policies and controls, and more! You can now make informed decisions and plan your budget effectively.

●   Tax Benefits

Amazon Business will help identify available tax benefits, credits, and incentives that your business may be eligible for. With GST benefits, you can take your business expansion to the next level!

Register with Amazon Business today and reap its business exclusive benefits.

Financial planning is the backbone for the growth of any business or individual. Financial planning is a must if you wish to grow your business and personal life monetarily. We hope you've got the insights you need to plan your company's and personal finances.

What is the scope of strategic management?

The scope of strategic management encompasses formulating, implementing, and evaluating long-term finance strategies to achieve organizational goals. It involves analyzing internal and external factors, setting objectives, making strategic decisions, and managing resources effectively.

What are the six elements of financial management?

The six elements of financial management are:

●   Financial Planning

●   Cash Flow Management

●   Risk Management

●   Financial Analysis and Reporting

●   Capital Structure Management

What are the things to consider in strategic financial management?

When considering strategic financial management, key factors to consider include:

●   Setting clear financial goals aligned with the overall business strategy.

●   Assessing the necessary financial resources to achieve those goals.

●   Evaluating and managing financial risks.

●   Making informed investment decisions.

●   Optimizing the capital structure and managing financing options.

●   Monitoring and evaluating financial performance.

What is a strategic management model?

A strategic management model is a framework or process to guide strategic management activities. It typically includes environmental analysis, strategy formulation, implementation, and evaluation.

What is the aim of strategic financial management?

Strategic financial management aims to optimize an organization's financial resources in alignment with its strategic objectives. It involves making financial decisions that support long-term value creation, maximize profitability, ensure financial stability, and enhance shareholder wealth.

What is the formula for ratio analysis?

Ratio analysis involves calculating various financial ratios to assess a company's performance and financial health. The specific formulas depend on the type of ratio being calculated. Examples of commonly used ratios include:

●   Current Ratio: Current Assets / Current Liabilities

●   Return on Investment (ROI): (Net Profit / Total Investment) x 100

●   Debt-to-Equity Ratio: Total Debt / Total Equity

When do we require strategic financial management?

Strategic financial management is mainly required when an organization must make critical financial decisions with long-term implications. It is imperative during growth, expansion, mergers and acquisitions, significant investments, financial restructuring, or when navigating challenging economic conditions.

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  1. Strategic Planning

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COMMENTS

  1. What is strategic planning? A 5-step guide

    Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization's mission and goals, conduct competitive assessments, and identify company goals and objectives.

  2. Strategic Planning Tools: What, Why, How, Template

    Strategic planning maps the initiatives and investments required to achieve long‑⁠term strategic objectives. Here's how to do it well. Download Your Guide to Strategic Planning Success Turn your strategic plans into reality with an exclusive template and actionable insights. Work Email

  3. What is Corporate Strategic Planning?

    Corporate Strategic Planning is a companywide approach at the business unit and corporate level for developing strategic plans to achieve a longer-term vision. The process includes defining the corporate strategic goals and intentions at the top and cascading them through each level of the organization.

  4. Strategic planning

    Fast Heat: How Korea Won the Microwave War. Strategic planning Magazine Article. Ira C. Magaziner. Mark Patinkin. On my first visit to Samsung's Suwon complex, the headquarters of the company ...

  5. What is corporate planning?

    Corporate strategic planning uses similar exercises (such as the SWOT analysis) to arrive at broad operating principles and strategic actions to carry out the business plan. The Importance of Corporate Planning Your corporate plan may seem less important than the broader vision set out in the business plan.

  6. Why Is Strategic Planning Important?

    Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization's goals, and ensure those goals are backed by data and sound reasoning.

  7. Strategic Planning Should Be a Strategic Exercise

    Strategic planning is how the company designs that system, which is very different from an operational action plan in that it is never a static to-do list but constantly evolves as strategy makers ...

  8. The Strategic Planning Process in 4 Steps

    Estimated Duration. Determine organizational readiness. Owner/CEO, Strategy Director. Readiness assessment. Establish your planning team and schedule. Owner/CEO, Strategy Leader. Kick-Off Meeting: 1 hr. Collect and review information to help make the upcoming strategic decisions. Planning Team and Executive Team.

  9. A practical guide to jumpstart strategic planning

    (PDF-439 KB) This episode of the Inside the Strategy Room podcast features excerpts from an address that McKinsey senior partner Chris Bradley gave at our recent Global Business Leaders Forum. He discusses the eight practical shifts that executive teams can make to move their strategy into high gear. This is an edited transcript.

  10. How to improve strategic planning

    In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business.

  11. Strategic Planning

    The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains relevant in modern business.

  12. What is Strategic Planning? Definition and Steps

    Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so that the organization can reach its stated vision.

  13. The Ultimate Guide to Corporate Strategic Planning

    Corporate strategy includes all the steps in strategic planning that turn your high-level goals into actionable objectives, maintain and elevate your competitive position and provide quantifiable feedback to keep a flexible and workable strategic framework. In This Article What Is Corporate Strategic Planning?

  14. Corporate Planning

    Corporate planning is the process through which companies draw a map of their plan of action that enables their growth in quantifiable terms. It is typically carried out through the top-level management of the company. It is a medium-term goal that acts as the basis for macro-level planning, called strategic planning.

  15. Does Strategic Planning Improve Organizational Performance? A Meta

    Strategic planning (SP) is one of the more popular management approaches in contemporary organizations, and it is consistently ranked among the five most popular managerial approaches worldwide (Rigby and Bilodeau 2013; Wolf and Floyd 2017).Typically operationalized as an approach to strategy formulation, SP includes elements such as analysis of the organization's mandate, mission, and values ...

  16. Strategic planning vs business planning: how they're both key to

    - Strategic planning vs business planning: how they're both key to success HOSPITALITY UNCOVERED 1 August 2023 Strategic planning vs business planning: how they're both key to success Any thriving hospitality business needs thorough planning to make sure it succeeds.

  17. Who's Responsible for Strategic Planning?

    Leaders and board members execute strategic planning by tying it to their organization's vision. Managers, individual contributors, and stakeholders also play pivotal roles in decision-making as businesses strive to increase employee engagement. This process is referred to as "Hoshin Kanri," a strategic deployment method that helps ensure ...

  18. 7 Strategic Planning Models and 8 Frameworks To Start [2023] • Asana

    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.

  19. Corporate Planning vs. Strategic Planning

    While corporate planning sets the direction, strategic planning focuses on how to navigate the terrain to reach the destination. It is concerned with the specific actions, initiatives, and tactics required to achieve the goals outlined in the corporate plan.

  20. Demystifying Strategic Planning: Process and Benefits

    In short, strategic planning is the process of breaking up the company mission statement into achievable goals for the organization to work towards. We will explain in more detail what strategic planning is and how to understand the process, define strategic objectives and goals, conduct a SWOT analysis, create an action plan, roadmap, and more.

  21. What is Strategic Planning? Definition, Importance, Model, Process and

    A strategic plan is more than just a business tool, it also plays a key role in defining operational, cultural, and workplace ethics. Here are some of the key aspects of the importance of strategic planning: 1. Provides a unified goal . A strategic plan is like a unified action plan for the whole company in order to achieve common outcomes.

  22. How to Set Strategic Planning Goals

    Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees, and ensure organizational goals are backed by data and sound reasoning.

  23. Corporate Planning vs. Strategic Planning

    The Key Distinctions To fully grasp the difference between corporate planning and strategic planning, let's dive deeper into their distinguishing characteristics: Scope: Corporate planning takes a broader perspective, encompassing the entire organization, its various departments, and functions.

  24. Corporate Planning: Blueprint to Triumph- Strategy Capstone

    Strategic Planning: Strategic planning is a crucial process that requires closely examining a company's missions, strengths, and weaknesses. Its goal is to define the company's current status, determine where it wants to go, and how it can get there. Although strategic planning and corporate planning share some overlapping areas, corporate ...

  25. How Fast Should Your Company Really Grow?

    How Fast Should Your Company Really Grow? 02. Create a System to Grow Consistently. 03. How to Succeed in an Era of Volatility. Summary. Growth—in revenues and profits—is the yardstick by ...

  26. 30 Emerging Technologies That Will Guide Your Business Decisions

    3 things to tell your peers. 1. The trends and technologies featured in the Gartner Emerging Tech Impact Radar fall into four key themes and help product leaders gain a competitive edge. 2. Use the impact radar to guide your investment and strategic planning around disruptive technologies. 3.

  27. The Top Three Problems Keeping Business Leaders Up At Night

    DEI Strategic Planning. Strategic planning used to be done in three-to-five-year time horizons. Nowadays, with perpetual uncertainty, plans are more likely to be one to two years.

  28. Strategic Financial Management: Functions, Planning ...

    Strategic corporate finance planning is integral here. 2. Personal Financial Management. Personal financial management covers the types of financial management based on managing an individual's finances. It focuses on achieving personal financial goals, building wealth, and securing a sound financial future. This includes the following: