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What is Strategic Analysis? 8 Best Strategic Analysis Tools + Examples

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A huge part of developing a strategic plan is a reliable, in-depth strategic analysis. An organization is separated into internal and external environments. Both components should be scrutinized to identify factors influencing organizations and guiding decision-making.

In this article, we'll cover:

What Is Strategic Analysis?

Types of strategic analysis, benefits of strategic analysis for strategy formulation, strategic analysis example - walmart, how to do a strategic analysis: key components, strategic analysis tools, how to choose the right strategic analysis tool, the next step: from analysis to action with cascade 🚀.

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Strategic analysis is the process of researching and analyzing an organization along with the business environment in which it operates to formulate an effective strategy. This process of strategy analysis usually includes defining the internal and external environments, evaluating identified data, and utilizing strategic analysis tools.

By conducting strategic analysis, companies can gain valuable insights into what's working well and what areas need improvement. These valuable insights become key inputs for the strategic planning process , helping businesses make well-informed decisions to thrive and grow.

When it comes to strategic analysis, businesses employ different approaches to gain insights into their inner workings and the external factors influencing their operations.

Let's explore two key types of strategic analysis:

Internal strategic analysis

The focus of internal strategic analysis is on diving deep into the organization's core. It involves a careful examination of the company's strengths, weaknesses, resources, and competencies. By conducting a thorough assessment of these aspects, businesses can pinpoint areas of competitive advantage, identify potential bottlenecks, and uncover opportunities for improvement.

This introspective analysis acts as a mirror , reflecting the organization's current standing, and provides valuable insights to shape the path that will ultimately lead to achieving its mission statement.

External strategic analysis

On the other hand, external strategic analysis zooms out to consider the broader business environment. This entails conducting market analysis, trend research, and understanding customer behaviors, regulatory changes, technological advancements, and competitive forces. By understanding these external dynamics, organizations can anticipate potential threats and uncover opportunities that can significantly impact their strategic decision-making.

The external strategic analysis acts as a window , offering a view of the ever-changing business landscape.

The analysis phase sets “the stage” for your strategy formulation.

The strategic analysis informs the activities you undertake in strategic formulation and allows you to make informed decisions. This phase not only sets the stage for the development of effective business planning but also plays a crucial role in accurately framing the challenges to be addressed.

These are some benefits of strategic analysis for strategy formulation:

  • Holistic View : Gain a comprehensive understanding of internal capabilities, the external landscape, and potential opportunities and threats.
  • Accurate Challenge Framing : Identify and define core challenges accurately, shaping the strategy development process. ‍
  • Proactive Adaptation : Anticipate potential bottlenecks and areas for improvement, fostering proactive adaptability. ‍
  • Leveraging Strengths : Develop strategies that maximize organizational strengths for a competitive advantage.

At the very least, the right framing can improve your understanding of your competitors and, at its best, revolutionize an industry. For example, everybody thought that the early success of Walmart was due to Sam Walton breaking the conventional wisdom:

“A full-line discount store needs a population base of at least 100,000.”

But that’s not true.

Sam Walton didn’t break that rule, he redefined the idea of the “store,” replacing it with that of a “network of stores.” That led to reframing conventional wisdom, developing a coherent strategy, and revolutionizing an industry.

📚 Check out our #StrategyStudy: How Walmart Became The Retailer Of The People

how to do a strategic analysis graphic

Strategy is not a linear process.

Strategy is an iterative process where strategic planning and execution interact with each other constantly.

First, you plan your strategy, and then you implement it and constantly monitor it. Tracking the progress of your initiatives and KPIs (key performance indicators) allows you to identify what's working and what needs to change. This feedback loop guides you to reassess and readjust your strategic plan before proceeding to implementation again. This iterative approach ensures adaptability and enhances the strategy's effectiveness in achieving your goals.

Strategic planning includes the strategic analysis process.

The content of your strategic analysis varies, depending on the strategy level at which you're completing the strategic analysis.

For example, a team involved in undertaking a strategic analysis for a corporation with multiple businesses will focus on different things compared to a team within a department of an organization.

But no matter the team or organization's nature, whether it's a supply chain company aiming to enhance its operations or a marketing team at a retail company fine-tuning its marketing strategy, conducting a strategic analysis built on key components establishes a strong foundation for well-informed and effective decision-making.

The key components of strategic analysis are:

Define the strategy level for the analysis

  • Complete an internal analysis
  • Complete an external analysis

Unify perspectives & communicate insights

strategic analysis key components example

Strategy comes in different levels depending on where you are in an organization and your organization's size.

You may be creating a strategy to guide the direction of an entire organization with multiple businesses, or you may be creating a strategy for your marketing team. As such, the process will differ for each level as there are different objectives and needs.

The three strategy levels are:

  • Corporate Strategy
  • Business Strategy
  • Functional Strategy

👉🏻If you're not sure which strategy level you're completing your strategy analysis for, read this article explaining each of the strategy levels .

Conduct an internal analysis

As we mentioned earlier, an internal analysis looks inwards at the organization and assesses the elements that make up the internal environment. Performing an internal analysis allows you to identify the strengths and weaknesses of your organization.

Let's take a look at the steps involved in completing an internal analysis:

1. Assessment of tools to use

First, you need to decide what tool or framework you will use to conduct the analysis.

You can use many tools to assist you during an internal analysis. We delve into that a bit later in the article, but to give you an idea, for now, Gap Analysis , Strategy Evaluation , McKinsey 7S Model , and VRIO are all great analysis techniques that can be used to gain a clear picture of your internal environment.

2. Research and collect information

Now it’s time to move into research . Once you've selected the tool (or tools) you will use, you will start researching and collecting data.

The framework you use should give you some structure around what information and data you should look at and how to draw conclusions.

3. Analyze information

The third step is to process the collected information. After the data research and collection stage, you'll need to start analyzing the data and information you've gathered.

How will the data and information you've gathered have an impact on your business or a potential impact on your business? Looking at different scenarios will help you pull out possible impacts.

4. Communicate key findings

The final step of an internal analysis is sharing your conclusions . What is the value of your analysis’ conclusions if nobody knows about them?

You should be communicating your findings to the rest of the team involved in the analysis and go even further. Share relevant information with the rest of your people to demonstrate that you trust them and offer context to your decisions.

Once the internal analysis is complete , the organization should have a clear idea of where they're excelling, where they're doing OK, and where current deficits and gaps lie.

The analysis provides your leadership team with valuable insights to capitalize on strengths and opportunities effectively. It also empowers them to devise strategies that address potential threats and counteract identified weaknesses.

Beginning strategy formulation after this analysis will ensure your strategic plan has been crafted to take advantage of strengths and opportunities and offset or improve weaknesses & threats. This way, the strategic management process remains focused on the identified priorities, enabling a well-informed and proactive approach to achieving your organizational goals.

You can then be confident that you're funneling your resources, time, and focus effectively and efficiently.

Conduct an external analysis

As we stated before, the other type of strategic analysis is the external analysis which looks at an organization's environment and how those environmental factors currently impact or could impact the organization.

A key difference between the external and the internal factors lies in the organization's level of control.

Internally, the organization wields complete control and can actively influence these factors. On the other hand, external components lie beyond the organization's direct control, and the focus is on scanning and reacting to the environment rather than influencing it.

External factors of the organization include the industry the organization competes in, the political and legal landscape the organization operates in, and the communities they operate in.

The steps for conducting an external analysis are much the same as an internal analysis:

  • Assessment of tools to use
  • Research and collect information
  • Analyze information
  • Communicate key findings

You'll want to use a tool such as SWOT analysis , PESTLE analysis , or Porter's Five Forces to help you add some structure to your analysis. We’ll dive into the tools in more detail further down this article!

Chances are, you didn't tackle the entire analysis alone. Different team members likely took responsibility for specific parts, such as the internal gap analysis or external environmental scan. Each member contributed valuable insights, forming a mosaic of information.

To ensure a comprehensive understanding, gather feedback from all team members involved. Collate all the data and share the complete picture with relevant stakeholders across your organization.

Much like strategy, this information is useless if not shared with everyone.

Remember : There is no such thing as overcommunication.

If you have to keep only one rule of communication, it’s that one. Acting on the insights and discoveries distilled from the analysis is what gives them value. Communicating those findings with your employees and all relevant (internal and external) stakeholders enables acting on them.

Setting up a central location where everyone can access the data should be your first step, but it shouldn't end there. Organize a meeting to go through all the key findings and ensure everyone is on the same page regarding the organization's environment.

There are a number of strategic analysis tools at your disposal. We'll show you 8 of the best strategic analysis tools out there.

strategic management tools infographic for strategy analysisy

The 8 best strategic analysis tools:

Gap analysis, vrio analysis, four corners analysis, value chain analysis.

  • SWOT Analysis

Strategy Evaluation

Porter's five forces, pestel analysis.

Note: Analytical tools rely on historical data and prior situations to infer future assumptions. With this in mind, caution should always be used when making assumptions based on your strategic analysis findings.

The Gap Analysis is a great internal analysis tool that helps you identify the gaps in your organization, impeding your progress towards your objectives and vision.

The analysis gives you a process for comparing your organization's current state to its desired future state to draw out the current gaps, which you can then create a series of actions that will bridge the identified gap.

The gap analysis approach to strategic planning is one of the best ways to start thinking about your goals in a structured and meaningful way and focuses on improving a specific process.

👉 Grab your free Gap Analysis template to streamline the process!

Download the gap analysis template.  Utilize our free gap analysis template to kickstart your strategic analysis! Download Now

The VRIO Analysis is an internal analysis tool for evaluating your resources.

It identifies organizational resources that may potentially create sustainable competitive advantages for the organization. This analysis framework gives you a process for categorizing the resources in your organization based on whether they hold certain traits: Valuable, Rare, Inimitable, and Organized.

The framework then encourages you to begin thinking about moving those resources to the “next step'' to ultimately develop those resources into competitive advantages.

👉 Grab your free VRIO strategy template that will help you to develop and execute a strategy based on your VRIO analysis.

The Four Corners Analysis framework is another internal analysis tool that focuses on your organization's core competencies.

However, what differentiates this tool from the others is its long-term focus. To clarify, most of the other tools evaluate the current state of an entity, but the Four Corners Analysis assesses the company’s future strategy, which is more precise because it makes the corporation one step ahead of its competitors.

By using the Four Corners, you will know your competitors’ motivation and their current strategies powered by their capabilities. This analysis will aid you in formulating the company’s trend or predictive course of action.

Similar to VRIO, the Value Chain Analysis is a great tool to identify and help establish a competitive advantage for your organization.

The Value Chain framework achieves this by examining the range of activities in the business to understand the value each brings to the final product or service.

The concept of this strategy tool is that each activity should directly or indirectly add value to the final product or service. If you are operating efficiently, you should be able to charge more than the total cost of adding that value.

A SWOT analysis is a simple yet ridiculously effective way of conducting a strategic analysis.

It covers both the internal and external perspectives of a business.

When using SWOT, one thing to keep in mind is the importance of using specific and verifiable statements. Otherwise, you won’t be able to use that information to inform strategic decisions.

👉 Grab your free SWOT Analysis template to streamline the process!

Generally, every company will have a previous strategy that needs to be taken into consideration during a strategic analysis.

Unless you're a brand new start-up, there will be some form of strategy in the company, whether explicit or implicit. This is where a strategy evaluation comes into play.

The previous strategy shouldn't be disregarded or abandoned, even if you feel like it wasn't the right direction or course of action. Analyzing why a certain direction or course of action was decided upon will inform your choice of direction.

A Strategic Evaluation looks into the strategy previously or currently implemented throughout the organization and identifies what went well, what didn't go so well, what should not have been there, and what could be improved upon.

👉To learn more about this analysis technique, read our detailed guide on how to conduct a comprehensive Strategy Evaluation .

Complementing an internal analysis should always be an analysis of the external environment, and Porter's Five Forces is a great tool to help you achieve this.

Porter's Five Forces framework performs an external scan and helps you get a picture of the current market your organization is playing in by answering questions such as:

  • Why does my industry look the way it does today?
  • What forces beyond competition shape my industry?
  • How can I find a position among my competitors that ensures profitability?
  • What strategies can I implement to make this position challenging for them to replicate?

With the answer to the above questions, you'll be able to start drafting a strategy to ensure your organization can find a profitable position in the industry.

👉 Grab your free Porter’s 5 Forces template to implement this framework!

We might sound repetitive, but external analysis tools are critical to your strategic analysis.

The environment your organization operates in will heavily impact your organization's success. PESTEL analysis is one of the best external analysis tools you can use due to its broad nature.

The name PESTEL is an acronym for the elements that make up the framework:

  • Technological
  • Environmental

Basically, the premise of the analysis is to scan each of the elements above to understand the current status and how they can potentially impact your industry and, thus, your organization.

PESTEL gives you extra focus on certain elements that may have a wide-ranging impact, and a birds-eye view of the macro-environmental factors.

There are as many ways to do strategy as there are organizations. So not every tool is appropriate for every organization.

These 8 tools are our top picks for giving you a helping hand through your strategic analysis. They're by no means the whole spectrum. There are many other frameworks and tools out there that could be useful and provide value to your process.

Choose the tools that fit best with your approach to doing strategy. Don’t limit yourself to one tool if it doesn’t make sense, don’t be afraid to combine them, mix and match! And, be faithful to each framework but always as long as it fits your organization’s needs.

Completing the strategic analysis phase is a crucial milestone, but it's only the beginning of a successful journey. Now comes the vital task of formulating a plan and ensuring its effective execution. This is where Cascade comes into play, offering a powerful solution to drive your strategy forward.

Cascade is your ultimate partner in strategy execution. With its user-friendly interface and robust features, it empowers you to translate the strategic insights distilled from your strategic analysis into actionable plans.

Some key features include:

  • Planner : Seamlessly build out your objectives, initiatives, and key performance indicators (KPIs) while aligning them with the organization's goals. Break down the complexity from high-level initiative to executable outcomes. ‍
  • Alignment Map : Visualize how different organizational plans work together and how your corporate strategy breaks down into operational and functional plans.

alignment map in cascade strategy execution platorm

  • ‍ Metrics & Measures : Connect your business data directly to your core initiatives in Cascade for clear data-driven alignment. ‍

metrics library in cascade strategy execution platform

  • Integrations : Consolidate your business systems underneath a unified roof. Import context in real-time by leveraging Cascade’s native, third-party connector (Zapier/PA), and custom integrations. ‍
  • Dashboards & Reports : Stay informed about your strategy's performance at every stage with Cascade's real-time tracking and progress monitoring, and share it with your stakeholders, suppliers, and contractors.

Experience the power of Cascade today! Sign up today for a free forever plan or book a guided 1:1 tour with one of our Cascade in-house strategy execution experts.

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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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Strategic Analysis: Definition, Types, and Benefits

  • February 25, 2022

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When it comes to business planning, strategic analysis plays a crucial role to guide decision-making. Your organization operates in both internal and external environments and is influenced by both these environments. 

Analysis of the organization helps leaders and executives decide the business’s goals and priorities. The process provides a solid ground upon which leaders establish their business plan. 

In this article, we will explore the two types and the benefits of strategic market analysis. First, let’s start with the definition.

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What is strategic analysis?

Strategic analysis refers to an evaluation of an organization’s work environment. This work environment generally defines how the organization operates its business. It helps to determine the mood functioning of the organization and whether the goals and objectives set by the organization can be met.

Many experts advise conducting it in an organization from time to time.  It can help uncover the areas that need changes and enhancements. 

Why is strategic analysis important?

Most of the ever-growing organizations implemented strategic planning through various phases of their business. The analysis is a part of business planning that has a systematic strategy and appropriate resource investment and can help you reach your goal as an organization.

One of the main characteristics is that it makes you consider your competitors and helps you evaluate your business strategies to keep you on top of the race.

It is important because it highlights the internal and external factors that influence the organization. By evaluating the organization, you can formulate and implement strategies.  

The analysis is a part of strategic planning along with strategy formulation. The analysis sets the stage for you to formulate strategies and make decisions. 

What are the types of strategic analysis?

There is no defined method to evaluate the organization’s work environment. However, multiple methods can help you collect the data you need to analyze and prepare the stage for strategy formulation. 

We have discussed two of the most popular analysis method – SWOT & PESTLE. Each approach offers something unique and adds value to your strategy planning. Let’s take a look at two approaches. 

1. Internal strategic analysis

As the name suggests, internal analysis is conducted when an organization needs to look inside itself and define its positive and negative performances, which can be further improved with proper resource investments. Doing so will enhance the company’s image in the market. 

The internal analysis focuses mainly on the organization’s performance by evaluating the potential organization to reach its goals. 

The most famous and commonly used internal strategic analysis technique is the SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. This technique checks the full factors inside an organization or its projects and determines how things may suffer.

SWOT analysis:

  • Strengths – strengths of an organization are the positive areas that help it to grow consistently. These areas in an organization need to be protected and carried forward through all the changes.
  • Weaknesses – where there are strengths, there are also weaknesses. These are the areas of an organization that need to be fixed so that they can benefit the company while giving it a competitive edge over its competitors.
  • Threats – there are various factors that affect an organization, but they are mostly predictable too. With a proper risk management strategy, threats like competitors’ better performance do not affect the organization’s performance.
  • Opportunities – discover the opportunities an organization has to grow towards its success. Identify external opportunities and make sure you use them to the fullest.

2. External strategic analysis

Once the internal analysis is completed and the organization is foolproof from the inside, it is time to evaluate the external factors that might interrupt the organization’s growth. 

External analysis to be accurate, one needs to know how the market works and how customers are affected by certain marketing strategies, products, and services that the competitors present out there.

PESTLE analysis:

PESTLE analysis is the commonly used external analysis technique. It stands for political, economic, social, legal, and environmental analysis, which determines the factors that affect the environment based on external strategic analysis.

It is a model that helps you to:

  • Point out these factors that an organization cannot control, like political changes or environmental changes.
  • Determine how each issue can impact the organization’s growth.
  • Identify the issues to the organization.
  • Measure the probability of that issue happening.

Now that we have described the two types of analysis you can conduct, let’s examine the advantages and disadvantages of conducting analysis. 

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What are the advantages of strategic analysis?

Strategy planning is an iterative process. It does not end when you implement the plans you have devised. Once you analyze and scrutinize what’s influencing the organization and formulate strategies. You will need to implement them and go back to evaluating and planning. 

The process is ongoing, however, it contributes to the growth of the business and the health of the organization. 

We have listed some of the benefits of analysis:

  • It helps you to determine the internal positive areas in an organization that actively helps set it to grow. 
  • It also indicates that these positive areas should be protected and run consistently for the organization to be leading on the right part to success.
  • Strategic analysis drives out internal and external strengths and weaknesses that affect the organization’s growth.
  • It helps you identify the organization’s internal aspects that add to its business advancements and use them as competitive advantages over your competitors.

What are the disadvantages of strategic analysis?

As we have established that analysis is an ongoing process, it can be considered a benefit and a disadvantage. We have found two cons of strategic market analysis that you should learn about. 

  • It helps you get too many creative ideas but does not tell you exactly which one to choose.
  • It can sometimes be very time-consuming, affecting other efficient innovations like developing a new product or service at an organizational level.

Wrapping up;

This sums up the importance of strategic analysis in strategy planning for business growth. Analyzing the organization’s internal and external environment can ensure that your business is moving in the right direction and all the actions align with the goals.

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Why Is Strategic Planning Important?

Above view of team creating a strategic plan

  • 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

Here’s a look at what strategic planning is and how it can benefit your organization.

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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 on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “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.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

  • The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
  • Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
  • Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

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Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

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

By Paul VanZandt

Published on: February 2, 2023

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Table of Contents

What is Strategic Planning?

Importance and benefits of strategic planning, strategic planning models, strategic planning process: 6 key steps, what makes an effective strategic plan example, strategic planning example.

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.

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 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.

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?

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.

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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Mastering strategic analysis of scenarios + 3 essential tools

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Utilizing strategic analysis and scenario building in planning

Strategic scenario analysis is a straightforward process , making it accessible to companies of all sizes and industries as a key component of their strategic planning.

Developing strategic scenarios encompasses shared factors that apply generally, while individual companies analyze their internal and external environment, including competitors.

Organizational scenario analysis enhances the accuracy of strategic planning by deeply examining the corporate landscape.

This leads to the creation or adaptation of new strategies or action plans, minimizing risks and maximizing opportunities for the company’s success.

You may also be interested:

Strategic planning examples for use in business for each step of the process

Main tools for scenario analysis in strategic planning

To conduct a scenario study, various factors must be taken into account, including the concept of economic landscapes, competitive environment, and the use of tools for internal and external scenario assessment. Without these, creating a comprehensive strategic and critical analysis of a company becomes challenging.

In this context, we have selected some tools that will greatly assist in organizational scenario planning:

  • competitive analysis;
  • internal and external environment analysis.

Let’s explore these strategic planning tools for projecting organizational scenarios.

Porter: Competitive Analysis

Studying competitors during strategic planning is essential.

This tool, devised by professor Michael Porter from Harvard, is one of the most renowned when conducting a company’s strategic analysis.

It encompasses the renown 5 competitive forces:

1- Rivalry among competitors

Understanding other companies in your segment is crucial. Rivalry among competitors tends to be higher when more companies are present in the market and when the differentiation of their offerings is lower.

Uncover the strengths and weaknesses, positive and negative aspects of each company, understand the target audience and discover how to meet their needs better than competitors.

2- Supplier bargaining power

The more suppliers you have, the lower the possibility of them dictating prices and delivery times. Remember, they also supply your competitors, who may try to dominate some of them with exclusive contracts.

3- Threat of substitute products

These are products that do not belong to the same category as yours but meet the same needs as your customers. A famous example is the case of butter and margarine. Discover the characteristics and benefits of your products that differentiate them positively from substitutes.

4- Threat of new entrants

What are the entry barriers that can prevent the emergence of new competitors in your market? High installation investments, patents, government regulations, established brands and complex technologies usually inhibit new competitors’ entry.

5- Customer bargaining power

Ultimately, customers define the characteristics, positioning and price of your products. The more competitors and product similarity, the greater their bargaining power. Differentiation is the way to try to control this scenario.

Read also: Understand your market by doing Porter’s Five Forces analysis!

PESTEL risk analysis

PESTEL analysis is used for scenario study and focuses entirely on the external environment.

PESTEL’s name comes from the initials of different types of scenarios that strategic planning requires to be analyzed.

Strategic scenarios in PESTEL analysis:

  • Technological
  • Environmental

For each of these points, a scenario analysis must be conducted for the business plan, defining opportunities and threats (which are also used in SWOT analysis ).

For example, when examining economic scenarios, could list factors such as:

  • Opportunity: Lower interest rates and a decrease in the dollar will ease financing and importing production inputs.
  • Threat: An increase in a specific tax rate will lead to a significant rise in production expenses.

Check out an example of scenario analysis for a company, based on the PESTEL model:

Topics for studying organizational scenarios

  • Strong changes: in government or ministerial resignations, wars, reforms and new laws.
  • Greater uncertainties: inflation, deflation, higher unemployment, decrease or increase in consumption, rise or fall in interest rates, strikes, exchange rate fluctuations.
  • Major ambiguities: high unemployment and increased consumption due to low savings interest rates or stockpiling.
  • Optimal statistical data: considered optimal because of the credibility of the information source.
  • Questionable statistical data: not suitable for strategic planning decisions due to the low credibility of the source.
  • Serious cost increase: import or export fees, scarcity because of high demand, challenging labor market.
  • Severe raw material shortages: crop failure, scarcity caused by ecological or production reasons, restricted imports due to regulations.
  • Strong state interventions: new fiscal or tax laws, bans on sales or production.
  • Strong social interventions: strikes, pressures from ethical, religious, labor, and environmental protection groups.
  • Serious technological deficiencies: technology still unknown, very expensive or not available in the country. Need to hire foreigners.
  • Significant changes in consumption levels: as a result of trends, consumption will decrease or increase.

One fundamental point that cannot be overlooked in scenario building for strategic planning is the social and behavioral impacts that the advent of new technologies , such as the internet and cloud computing is causing.

The study of the so-called generations X, Y ( Millennials ), and Z is a mandatory part of any scenario analysis and risk identification.

SWOT: Internal and External Scenario Analysis Tool

Analyzing the internal and external environment of organizations is commonly done using the SWOT matrix. In fact, this is the most renowned and also one of the most fundamental tools for strategic evaluation of a company.

The use of SWOT in strategic planning aims to identify a company’s strengths and weaknesses (internal environment) and opportunities and threats (external environment).

Let’s dive deeper into the purpose of SWOT analysis when defining these two environments

Internal environment: strengths and weaknesses

Everything you can control within your company makes up the strengths and weaknesses of your internal environment.

For instance, a company with a strong market reputation, innovation, state-of-the-art facilities and highly engaged employees can list these characteristics as strengths.

Conversely, a company facing distribution challenges, low market share, high financial resource costs and limited economies of scale would identify these points as weaknesses that need to be addressed.

External environment: opportunities and threats

Natural forces, economic policies, social and behavioral changes are among some of the external factors your company has no control over. These factors can represent opportunities or threats to your business and serve as an excellent starting point for your scenario analysis.

As we previously discussed, one of the most comprehensive and systematic ways to conduct an external scenario planning is by using the PESTEL analysis, which can be expanded with other specific factors relevant to your industry.

Integrating Strengths and Weaknesses with Opportunities and Threats:

This is where the SWOT analysis in strategic planning comes into play.

Using it, you must determine:

  • Which strengths can leverage opportunities?
  • Which strengths can defend you from threats?
  • Which weaknesses can exacerbate threats?
  • Which weaknesses can hinder opportunities?

Based on these strategic scenarios, you should define action plans to strengthen your weaknesses or use your strengths effectively to make the most of opportunities and defend against threats adequately.

Learn more: Strategic Management in companies and its relevance

After considering all these explanations, strategic planning tools, and scenario construction definitions, you may find this activity clearer now.

If you want to make this task even easier and more efficient, use a strategic planning software like STRATWs One , and do all of this with the help of technology, based on real data and with ease of collaboration among teams.

This system transforms your management methodology into processes. This way, it becomes easier to establish and monitor KPIs to analyze the performance of your strategy, ensuring better results for your company .

Another advantage of this software is the simplicity it brings to management. Instead of having a bunch of spreadsheets and charts, you can concentrate everything in one place, making it easier to access and gain insights to improve your strategy.

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9 Strategic Planning Models and Tools for the Customer-Focused Business

Meredith Hart

Published: July 11, 2023

strategic plan abstract visual of hands holding a tablet with a plan on it and chess pieces to the right.

As the economist and business strategy guru, Michael Porter, says, “The essence of strategy is choosing what not to do.”

With strategic planning, businesses identify their strengths and weaknesses, choose what not to do, and determine which opportunities should be pursued. In sales operations, having a clearly defined strategy will help your organization plan for the future, set viable goals, and achieve them.

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So, how do you get started with strategic planning? You‘ll begin with strategic planning models and tools. Let’s take a look at nine of the most prominent ones here.

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Strategic planning models.

Strategic planning is used to set up long-term goals and priorities for an organization. A strategic plan is a written document that outlines these goals.

Don't confuse strategic planning and tactical planning . Strategic planning is focused on long-term goals, while tactical planning is focused on the short-term.

Here are a few strategic planning models you can use to get started.

1. The Balanced Scorecard

The Balanced Scorecard is one of the most prominent strategic planning models, tailored to give managers a comprehensive overview of their companies' operations on tight timelines. It considers both financial and operational metrics to provide valuable context about how a business has performed previously, is currently performing, and is likely to perform in the future.

The model plays on these concerns: time, quality, performance/service, and cost. The sum of those components amount to four specific reference points for goal-setting and performance measurement:

  • Customer: How customers view your business
  • Internal Process: How you can improve your internal processes
  • Organizational Capacity: How your business can grow, adapt, and improve
  • Financial: The potential profitability of your business

Those four categories can inform goals that are more thoughtful and focused while surfacing the most appropriate metrics with which you can use to track them. But the elements you choose to pursue and measure are ultimately up to you. As there's no definitive list, they will vary from organization to organization.

That being said, there‘s a universally applicable technique you can use when leveraging the model—creating a scorecard. This is a document that keeps track of your goals and how you apply them. Here’s an example of what a scorecard might look like:

Strategic Planning Model Balanced Scorecard

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The Balanced Scorecard is ideal for businesses looking to break up higher-level goals into more specific, measurable objectives. If you're interested in translating your big-picture ambitions into actionable projects, consider looking into it.

Example of the Balanced Scorecard

Let‘s imagine a B2B SaaS company that sells a construction management solution. It’s been running into trouble from virtually all angles. It‘s struggling with customer retention and, in turn, is hemorrhaging revenue. The company’s sales reps are working with very few qualified leads and the organization's tech stack is limiting growth and innovation.

The business decides to leverage a Balanced Scorecard approach to remedy its various issues. In this case, the full strategic plan—developed according to this model—might look like this:

  • The company sets a broad financial goal of boosting revenue by 10% year over year.
  • To help get there, it aims to improve its customer retention rate by 5% annually by investing in a more robust customer service infrastructure.
  • Internally, leadership looks to improve the company's lead generation figures by 20% year over year by revamping its onboarding process for its pre-sales team.
  • Finally, the business decides to move on from its legacy tech stack in favor of a virtualized operating system, making for at least 50% faster software delivery for consistent improvements to its product.

The elements listed above address key flaws in the company‘s customer perception, internal processes, financial situation, and organizational capacity. Every improvement the business is hoping to make involves a concrete goal with clearly outlined metrics and definitive figures to gauge each one’s success. Taken together, the organization's plan abides by the Balanced Scorecard model.

2. Objectives and Key Results

As its name implies, the OKR strategic planning model revolves around translating broader organizational goals into objectives and tracking their key results. The framework rests on identifying three to five attainable objectives and three to five results that should stem from each of them. Once you have those in place, you plan tactical initiatives around those results.

After you‘ve figured out those reference points, you determine the most appropriate metrics for measuring their success. And once you’ve carried out the projects informed by those ideal results, you gauge their success by giving a score on a scale from 0 to 1 or 0%-100%.

For instance, your goal might be developing relationships with 100 new targets or named accounts in a specific region. If you only were able to develop 95, you would have a score of .95 or 95%. Here's an example of what an OKR model might look like:

Strategic Planning Model Objectives and Key Results

It's recommended that you structure your targets to land at a score of around 70% — taking some strain off workers while offering them a definitive ideal outcome. The OKR model is relatively straightforward and near-universally applicable. If your business is interested in a way to work towards firmly established, readily visible standards this model could work for you.

Example of the Objectives and Key Results

Let's consider a hypothetical company that makes educational curriculum and schedule planning for higher-education institutions. The company decides it would like to expand its presence in the community college system in California, something that constitutes an objective.

But what will it take to accomplish that? And how will the company know if it's successful? Well, in this instance, leadership within the business would get there by establishing three to five results they would like to see. Those could be:

  • Generating qualified leads from 30 institutions
  • Conducting demos at 10 colleges
  • Closing deals at 5 campuses

Those results would lead to initiatives like setting standards for lead qualification and training reps at the top of the funnel on how to use them appropriately, revamping sales messaging for discovery calls, and conducting research to better tailor the demo process to the needs of community colleges.

Leveraging this model generally entails repeating that process between two and four more times, ultimately leading to a sizable crop of thorough, actionable, ambitious, measurable, realistic plans.

3. Theory of Change (TOC)

The Theory of Change (TOC) model revolves around organizations establishing long-term goals and essentially “working backward” to accomplish them. When leveraging the strategy, you start by setting a larger, big-picture goal.

Then, you identify the intermediate-term adjustments and plans you need to make to achieve your desired outcome. Finally, you work down a level and plan the various short-term changes you need to make to realize the intermediate ones. More specifically, you need to take these strides:

  • Identify your long-term goals.
  • Backward map the preconditions necessary to achieve your goal, and explain why they're necessary.
  • Identify your basic assumptions about the situation.
  • Determine the interventions your initiative will fulfill to achieve your goals.
  • Come up with indicators to evaluate the performance of your initiative.
  • Write an explanation of the logic behind your initiative.

Here's another visualization of what that looks like.

Strategic Planning Model Theory of Change

This planning model works best for organizations interested in taking on endeavors like building a team, planning an initiative, or developing an action plan. It's distinct from other models in its ability to help you differentiate between desired and actual outcomes. It also makes stakeholders more actively involved in the planning process by making them model exactly what they want out of a project.

It relies on more pointed detail than similar models. Stakeholders generally need to lay out several specifics, including information related to the company's target population, how success will be identified, and a definitive timeline for every action and intervention planned. Again, virtually any organization — be it public, corporate, nonprofit, or anything else — can get a lot out of this strategy model.

Example of the Theory of Change

For the sake of this example, imagine a business that makes HR Payroll Software , but hasn‘t been doing too well as of late. Leadership at the company feels directionless. They think it’s time to buckle down and put some firm plans in motion, but right now, they have some big picture outcomes in mind for the company without a feel for how they're going to get done.

In this case, the business might benefit from leveraging the Theory of Change model. Let‘s say its ultimate goal is to expand its market share. Leadership would then consider the preconditions that would ultimately lead to that goal and why they’re relevant.

For instance, one of those preconditions might be tapping into a new customer base without alienating its current one. The company could make an assumption like, “We currently cater to mid-size businesses almost exclusively, and we lack the resources to expand up-market to enterprise-level prospects. We need to find a way to more effectively appeal to small businesses.”

Now, the company can start looking into the specific initiatives it can take to remedy its overarching problem. Let's say it only sells its product at a fixed price point that suits midsize businesses much more than smaller ones. So the company decides that it should leverage a tiered pricing structure that offers a limited suite of features at a price that small businesses and startups can afford.

The factors the company elects to use as reference points for the plan's success are customer retention and new user acquisition. Once those have been established, leadership would explain why the goals, plans, and metrics it has outlined make sense.

If you track the process I‘ve just plotted, you’ll see the Theory of Change in motion. It starts with a big-picture goal and works its way down to specific initiatives and ways to gauge their effectiveness.

4. Hoshin Planning

The Hoshin Planning model is a process that aims to reduce friction and inefficiency by promoting active and open communication throughout an organization. In this model, everyone within an organization—regardless of department or seniority—is made aware of the company's goals.

Hoshin Planning rests on the notion that thorough communication creates cohesion, but that takes more than contributions from leadership. This model requires that results from every level be shared with management.

The ideal outcomes set according to this model are also conceived of by committee to a certain extent. Hoshin Planning involves management hearing and considering feedback from subordinates to come up with reasonable, realistic, and mutually understood goals.

Strategic Planning Model Hoshin Planning

The model is typically partitioned into seven steps:

  • establishing a vision
  • developing breakthrough objectives
  • developing annual objectives
  • deploying annual objectives
  • implementing annual objectives
  • conducting monthly and quarterly reviews
  • conducting an annual review.

Note: The first three steps are referred to as the “catchball process.” It's where company leadership sets goals and establishes strategic plans to send down the food chain for feedback and new ideas. That stage is what really separates Hoshin Planning from other models.

Example of Hoshin Planning

For this example, let‘s imagine a company that manufactures commercial screen printing machines. The business has seen success with smaller-scale, retail printing operations, but realizes that selling almost exclusively to that market won’t make for long-term, sustainable growth.

Leadership at the company decides that it's interested in making an aggressive push to move up-market towards larger enterprise companies. However, before they can establish that vision, they want to ensure that the entire company is willing and able to work with them to reach those goals.

Once they‘ve set a tentative vision, they begin to establish more concrete objectives and send them down the management hierarchy. One of the most pressing activities they’re interested in pursuing is a near-comprehensive product redesign to make their machines better suited for higher volume orders.

They communicate those goals throughout the organization and ask for feedback along the way. After the product team hears their ideal plans, it relays that the product overhaul that leadership is looking into isn‘t viable within the timeframe they’ve provided. Leadership hears this and adjusts their expectations before doling out any sort of demands for the redesign.

Once both parties agree on a feasible timeline, they begin to set more definitive objectives that suit both the company‘s ambitions and the product team’s capabilities.

Strategic Plan Example

The strategic plan above is for a fictitious shoe company and outlines the way in which it'll differentiate itself within the market. It effectively uses each step in the strategic planning model framework and is written in a way to give a brief overview of how the company will enter the market and sustain longevity.

If you're working on a strategic planning model for an existing business, your plan will look similar, but have a few tweaks to the goals, including more goals about improving sales and processes. When drafting the action plan and evaluation parts of the plan, be sure to think tactically about the actions that will help you achieve the goals, and use your mission, vision, and values to guide the choices you make.

Strategic Planning Tools

There are additional resources you can use to support whatever strategic planning model you put in place. Here are some of those:

1. SWOT Analysis

SWOT analysis is a strategic planning tool and acronym for strengths, weaknesses, opportunities, and threats. It's used to identify each of these elements in relation to your business.

This strategic planning tool allows you to determine new opportunities and which areas of your business need improvement. You'll also identify any factors or threats that might negatively impact your business or success.

Strategic Planning Tools SWOT Analysis

2. Porter's Five Forces

Use Porter‘s Five Forces as a strategic planning tool to identify the economic forces that impact your industry and determine your business’ competitive position. The five forces include:

  • Competition in the industry
  • Potential of new entrants into the industry
  • Power of suppliers
  • Power of customers
  • Threat of substitute products

To learn more, check out this comprehensive guide to using Porter's Five Forces .

Strategic Planning Tools Porter's Five Forces

3. Visioning

Visioning is a goal-setting strategy used in strategic planning. It helps your organization develop a vision for the future and the outcomes you'd like to achieve.

Once you reflect on the goals you‘d like to reach within the next five years or more, you and your team can identify the steps you need to take to get where you’d like to be. From there, you can create your strategic plan.

4. PESTLE Analysis

The PESTLE analysis is another strategic planning tool you can use. It stands for:

  • P: Political
  • E: Economic
  • T: Technological
  • E: Environmental

Each of these elements allow an organization to take stock of the business environment they're operating in, which helps them develop a strategy for success. Use a PESTLE Analysis template to help you get started.

Strategic Planning Tools: Pestle

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Strategic Planning in Business

ProjectManager

Table of Contents

What is business strategic planning, the strategic planning process in 3 steps, what is a business strategic plan, key components of a business strategic plan, business strategic plan example, strategic plan vs. business plan.

Strategic planning is key for success in business. By planning strategically for the future, a business can achieve its goals. It’s easier said than done, but the more you know about strategic planning, the better chance you have at succeeding.

Business strategic planning is the process of creating a business strategy and an accompanying business strategic plan to implement a company’s vision and achieve its goals over time. The main goal of strategic planning is to take a company from its current state to its desired state through a series of business actions.

The business strategic planning process usually consists of defining business goals, doing a SWOT analysis to assess the company’s business environment and developing a business strategy. The leadership team is in charge of business strategic planning, as it has a very important impact on the overall direction of a company.

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Strategic Planning is one of the three levels of organizational planning, which is the process that allows organizations to define its objectives for the future and make action plans to guide the efforts of each of its departments, employees and management levels .

The other two levels of organizational planning are tactical and operational planning. Let’s see how these three types of organizational planning differ from each other.

Strategic Planning vs. Tactical Planning

While a strategic plan is created by the top management team and defines the high-level strategic goals of an entire organization, a tactical plan has a narrower scope. A tactical plan is created by the middle management level of a business and describes the specific goals, initiatives, challenges and resources for each department and how its efforts contribute to the completion of the larger strategic plan of the business.

Strategic Planning vs. Operational Planning

An operational plan allows you to establish guidelines, procedures and best practices for the daily operations of your business. The main objective of operational planning is to ensure that your business operations contribute to the accomplishment of the strategic objectives defined in the strategic plan.

Strategic planning is very important, but it doesn’t need to be overly complex. Let’s simplify this process by breaking it down into three simple steps.

1. Set Business Goals

A business goal is simply an accomplishment that a company wants to achieve in the short, medium or long term. Business goals can take many forms such as increasing sales, revenue, customer satisfaction levels and brand positioning, among many other things.

2. Conduct a SWOT Analysis

The goal of a business strategy is to leverage the strengths of a business and minimize the impact of its weaknesses. Those two things are internal factors. The strengths of a company can become competitive advantages that can lead to business growth. There are many types of business strengths and weaknesses such as scale, speed, or R&D, just to name a few.

Threats and opportunities refer to external factors such as competitors or an untapped market. A successful business strategy considers all of these factors to define how a product or service will be created, marketed and sold, and a SWOT analysis is a great starting point.

3. Develop a Business Strategy & Strategic Plan

Once you’ve completed your SWOT analysis, you can create a business strategy that’s designed to help position your company in the market. Your business strategy guides how you produce, market and sell your product or service based on internal and external analysis.

Then, you’ll need a strategic plan to explain how you plan to execute that business strategy. To oversee the execution of a business strategic plan, managers need to manage time, costs and tasks. ProjectManager is a project planning tool that allows managers to plan, schedule and manage their team’s work. Plan your work with professional tools such as Gantt charts, kanban boards, task lists and calendars. Then track your progress in real time to stick to your strategic plan. Get started for free.

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A business strategic plan is an implementation plan that’s meant to turn a business strategy into action items that can be executed over time. Business strategic plans are usually executed over the course of 3-5 years.

How to Develop a Strategic Plan

To develop a strategic plan, you should ask yourself the following three questions.

  • Where Is the Business Now? Gather as much information on your business as possible including internal operations and what drives its profitability. Compare the business to competitors and note the similarities and differences in detail. This isn’t a day-to-day operational study, but a broader look at the business in context to itself and its environment. But don’t go crazy; stay realistic in terms of your business goals. Be detached and critical in your analysis.
  • Where Do You Want to Go? Now it’s time to decide what your top-level objectives are for the future. Start with a vision statement , objectives, values, techniques and goals. Look forward to five years or more to forecast where you want the business to be at that time. This means figuring out what the focus of the business will be in the future. Will that focus differ from what it is now, and what competitive advantages do have you in the marketplace? This is where you build the foundation and initiate changes.
  • How Can You Get There? Once you know where you are and where you want to go, it’s time to plan. What are the changes to the structure, financing, etc., necessary for the business to get there? Decide on the best way to implement those changes, the timeframe with deadlines and how to finance it. Remember, this is looking at the business at large, so consider major endeavors such as diversification, existing growth, acquisition and other functional matters. A gap analysis can be a big help here.

Once you’ve answered the above questions and have a way to achieve the long-term goals laid out in the strategic plan, the next step is making sure you have the right person to manage all of its moving parts. They must be analytical, a creative thinker and able to grasp operational detail.

That doesn’t mean the strategic plan is led by one person. It’s best to not do it alone; seek other opinions. The people in your organization, from bottom to top, are all great resources to offer perspectives from their standpoints. Don’t forget to take in the advice of stakeholders, including customers, clients, advisors and consultants.

To create a strong strategic plan, one must first have a strong understanding of the business that is to expand. How does the business work? Where does the business stand in relation to competitors in the marketplace? A strategic plan is built on the bones of the following foundational elements:

  • Mission Statement: The mission statement describes what your company does.
  • Vision Statement: The vision statement explains where your company expects to be in the future.
  • Core Values: Guiding principles that shape your company’s organizational culture.
  • Business Objectives: Consider using the SMART goal-setting technique . This simply means setting up specific, measurable, attainable, relevant and time-bound objectives that your company wants to achieve.
  • SWOT Analysis: External and internal factors that make up your company’s business competitive environment.
  • Action Plan: A plan outlining steps that will be taken to achieve the business objectives of your organization.
  • Financials: A section that shows the financial performance expectations, the budget and the resources that will be required to implement the action plan.
  • Performance Measurements: Performance indicators that will be used to measure the effectiveness of the action plan.

Never forget to check your strategic plan against reality. In addition to being achievable, it must be practical for your business environment, resources and marketplace.

Now let’s look at a simple business strategic plan example. This is a strategic plan for a small construction company.

1. Mission, Vision & Core Values

  • Mission Statement: To build residential spaces that provide wellbeing for our clients.
  • Vision Statement: To offer the best construction experience for our clients and expand our brand throughout the globe.
  • Core Values: Sustainable innovation and respect for the environment.

2. Business Objectives

  • Business Objective 1: Grow operating margin from 15% to 20% over the next year.
  • Business Objective 2: Reduce operating costs by 5% over the next quarter
  • Business Objective 3: Increase the number of new contracts generated by 10% over the next year

3. SWOT Analysis

  • Strengths: Available financing, brand visibility and know-how.
  • Weaknesses: Lack of PPE, human capital and expertise in construction areas such as plumbing, electrical work and masonry, which requires subcontractors.
  • Opportunities: Lack of environmentally-friendly construction companies in the market.
  • Threats: Larger construction companies compete for contracts in the area.

4. Action Plan

  • Business Objective 1: To grow operating margin, new employees with plumbing, electrical work and masonry experience will be hired to cut down subcontractor costs. This must be done by the end of the first quarter.
  • Business Objective 2: To reduce operating costs, the company will acquire property, plant and equipment. By doing this, the company will no longer rent equipment from third parties, which will reduce operating costs significantly in the medium and long term.
  • Business Objective 3: To increase the number of new contracts generated, the leadership team will invest more in the PR, marketing and advertising departments. The company will also invest in key positions for the construction bidding process such as contract estimators.
  • Financials: This section will explain in detail what are the costs associated with the work items in the action plan as well as the expected financial benefits for the company.

Our free strategic plan template helps leadership teams gather important information about their business strategy, which makes it the perfect tool to start shaping a strategic plan for your business or project.

business planning strategic analysis

More Free Strategic Planning Templates

Here are some free strategic planning templates for Word and Excel that will help you with key aspects of the strategic planning process. Use them individually or add them to your strategic plan template for Word so you don’t miss any detail about your organizational strategy.

Strategic Roadmap Template

This strategic roadmap template allows you to map the activities, strategic projects and initiatives that each business department will execute to accomplish the objectives defined in the strategic plan of an organization.

business planning strategic analysis

Strategic Map Template

This strategic map template it’s a strategic planning tool that allows you to visualize all the strategic objectives of your organization and understand how they’re interrelated.

strategic map template

Balanced Scorecard Template

A balanced scorecard is a chart that allows you to set strategic objectives that will benefit your business in one of four key areas, its finances, internal processes, customer satisfaction and organizational learning.

Balanced Scorecard Template

Vision Statement Template

The vision statement is one of the most important aspects of the organizational strategy of a business. It’s a short but powerful statement that describes the overall direction of a company and what it intends to achieve in the future. This free vision statement template will help you focus on what matters most and define the vision of your business.

Vision Statement Template

A strategic plan is a type of business plan, but there are distinctions between the two. Whereas a strategic plan is for implementing and managing the strategic direction of a business, a business plan is more often the document that starts a business.

A business plan is used primarily to get funding for the venture or direct the operation, and the two plans target different timeframes in business history. A strategic plan is used to investigate a future period, usually between three-to-five years. A business plan is more routinely a year out.

A Different Intent

A strategic plan offers a business focus, direction and action to help the business grow from the point it presently resides to a greater market share in the future. A business plan, on the other hand, is more focused on offering a structure to capture and implement ideas that initially define a business.

With a strategic plan, existing resources are prioritized to increase revenue and return on investment. The business plan is different in that it’s seeking funding for a venture that doesn’t yet exist. Where a strategic plan is building a sustainable competitive advantage in the future, a business plan is designed to take advantage of a current business opportunity.

So, a strategic plan is communicating direction to teams and stakeholders in order to achieve future goals. A business plan isn’t talking to staff, which is likely nonexistent or minimal at this point. It’s speaking to banks and other financial supporters.

Related Strategic Planning Content

  • Strategic Project Management: Planning Strategic Projects
  • Strategic Planning Models: An Introduction to 5 Popular Models
  • A Quick Guide to Strategic Initiatives
  • How to Create a Strategic Roadmap for Your Organization
  • Project Alignment: Aligning Your Project to Business Strategy

Strategic planning, like any planning, requires keeping a lot of balls in the air. That means having the right tool to plan, monitor and report on all the various tasks and resources. ProjectManager is online project management software that gives you control over every aspect of creating and implementing a strategic plan. Try it today with this free 30-day trial.

Click here to browse ProjectManager's free templates

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Internal & external analysis, what is an internal and external analysis.

An internal and external strategic analysis refers to reviewing your organization’s current state from an internal and external perspective. The output of completing an internal and external analysis – also known as a strategic analysis – is to have a clear picture of your organization’s current state.

How does a strategic analysis fit into strategic planning?

Before any organization jumps into the core of strategic planning process, it’s vital to clearly understand where your organization is today . Without clearly defining where you are today (your current state), you can’t define your bold destination of the future (vision) or create the roadmap to get there (your annual strategic plan).

Completing an internal and external analysis lays the groundwork and foundation for the bones of your strategic plan, influencing everything from your competitive advantages, growth strategy, and major themes that influence your entire strategic plan’s framework.It also helps you better understand the gaps you need to overcome to reach your future goals.

Pro Tip: DO NOT SKIP THIS STEP IN PLANNING! It may seem tempting to skip things like your SWOT, completive analysis, and strategic market analysis, but don’t do it! Build a plan that helps you go from where you are today to a bold place in the future.

What is the output of an internal and external analysis?

The result or output from this work should be a fully fleshed-out current state analysis for your organization’s growth. This should include:

  • What you’re best at, and what you need to improve upon.
  • Your clearly defined competitive advantages.
  • Areas of market opportunity or growth opportunity to pursue.
  • A clear understanding of your competitors and what they’re best at.
  • Strategic themes to use as the framework for your plan.

What is an internal analysis?

Analyzing Your Internal Factors

What is an internal analysis.

An internal analysis examines your organization’s core competencies today that are influenced by internal factors – factors that are not driven by external market dynamics. This analysis would look at the organization’s strengths and weaknesses in meeting the needs of your customers or stakeholders

As you dive deeper into an internal analysis process, you will examine internal factors that give an organization advantages and disadvantages in meeting the needs of its market, customers, partners, and even employees. Any analysis of company strengths should be market-oriented/customer-focused because strengths are only meaningful when they assist the firm in meeting customer needs.

Internal Factors to Consider

An internal analysis can look at all internal factors affecting a company’s business performance. Here are the three most common factors to consider as you conduct your internal analysis:

Your Organization’s Resources

A good starting point to identify resources is to look at tangible and intangible resources available to your organization.

Tangible resources are the easiest to identify and evaluate financial resources, and physical assets are identified and valued in the firm’s financial statements.

Intangible resources are largely invisible, but over time become more important to the firm than tangible assets because they can be a main source of competitive advantage. Such intangible resources include reputational assets (brands, images, etc.) and technological assets (proprietary technology and know-how).

Your Organization’s Capabilities

Organizational capabilities are used to refer to a firm’s capacity for undertaking a particular productive activity. Our interest is not in capabilities per se but in capabilities relative to other firms. We will use the functional classification approach to identify the firm’s capabilities. A functional classification identifies the organizational capabilities of each of the principal functional areas.

Your Human Resources (Employees)

Technically, this could fall underneath your organization’s resources, but it’s worth separating human resources into its own category. After all, without your organization’s human capital, you wouldn’t exist!

Internal Forces

Data to Use in an Internal Analysis

Before you conduct your internal analysis, we recommend collecting the following as references:

Employee Surveys

What do your employees say your organization does well, and where must you improve? Surveys need to be from within the previous 12 months!

Customer Surveys

What do customers love most about your organization, product, or service? How do you best meet their needs? Again, these surveys must be from within at least the previous 12 months.

Business Strategy of Record + Current Performance

Having your previous strategic plan and performance data to reference is always helpful as you complete your strategic internal analysis process.

List of Resources

Your tangible and intangible resources may directly influence your internal strategic strengths, weaknesses, problems, constraints, and uncertainties.

A List of Capabilities

Capabilities [or lack of capabilities] are helpful to reference and identify internal strategic strengths, weaknesses, problems, constraints, and uncertainties.

Questions to Consider for Your Internal Analysis

  • What do you do best?
  • What do we do best?
  • What do our customers value most from our organization?
  • How do we uniquely serve our customers?
  • What are our company resources – assets, intellectual property, and people?
  • How are we using our resources well?
  • Where do we need to be more efficient?
  • How do our employees or shareholders perceive us?
  • How are we meeting our employees’ needs?
  • What are our organization’s core capabilities?
  • What do we need to improve upon?

Internal analysis data

Tools to Conduct Your Internal Analysis

Swot analysis.

Conducting a SWOT analysis is easily the most common approach to completing an internal analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. The internal component of a SWOT analysis specifically looks at your organization’s core strengths (S) and weaknesses (W).

Pro Tip: A SWOT’s S and W portion is directly influenced by your organization’s internal factors – meaning factors you can directly influence. You can check out our full post on SWOT analysis here and download the free SWOT analysis guide here .

VRIO Framework

The VRIO framework is an internal analysis tool designed to help you identify your organization’s competitive advantages.

The VRIO analysis too helps you evaluate if a core strength, capability, or resource is a competitive advantage by assessing if that strength is valuable to your market, rare in competition, hard to copy, and organized to act upon.

Pro Tip: The VRIO framework evaluates internal strengths but needs external strategic analysis of your competition. So, it uses internal and external factors to help you identify your competitive advantages.

Download our Free VRIO Template and Examples!

What is the Output of an Internal Analysis?

There are a few important outputs from an internal analysis that help create the foundation of your business strategy formulation and direction:

  • Output #1: A clear list of internal strengths and internal weaknesses of an organization.
  • Output #2: Strategic issues to address (from an internal perspective).
  • Output #3: A list of strengths to use as fodder for your competitive advantages (you’ll need to use these paired with a competitive analysis to identify competitive advantages).
  • Output #4: Themes to use in your strategic framework and strategic planning objectives.

What is an external analysis?

Analyzing Your External Factors

An external analysis examines the external factors and forces that impact your organization’s operating environment. External factors, by nature, exist beyond the walls of your organization and internal environment. They are forces and dynamics beyond your control, but still, impact your organization level and position in the marketplace.

Pro Tip: A helpful way to think about external forces is to ask, “would this be an issue or opportunity even if our organization did not exist?” If yes, it is an issue that is an external force.

The goal of these exercises is to identify external opportunities, threats, trends, and strategic uncertainties.

External Factors to Consider

An external analysis can be used to look at all external factors affecting a company. Here are the three most common factors to consider as you conduct your external analysis:

Market Trends

Market-level data, including overall size, projected growth, profitability, entry barriers, cost structure, distribution system, trends, and key success factors in your competitive market.

Industry Data and Trends

This data looks at what’s happening in your industry, including factors like vendors, suppliers, competitors, and buyers’ power.

Operating Environment Trends

This looks at global forces, demographic changes, political winds, ecological and natural issues, technological trends, economic factors, and social/cultural shifts. This is most often completed using a PESTLE analysis.

External forces

Data to Use in External Analysis

Industry and market reports.

What are important and potentially important markets? What are their size and growth characteristics? What markets are declining? What are the driving forces behind sales trends? Who competes in your market, and what is their market share?

Market Profitability Projections

For a holistic strategic analysis of your major market, consider the following factors: Is this a business where the average firm will make money? How intense is the competition among existing firms? Evaluate the threats from potential entrants and substitute products. What is the bargaining power of suppliers and customers? How attractive/profitable is the market now and in the future?

Cost Structure

What are the major cost and value-added components for various types of competitors?

Supplier and Distribution Data

What’s happening in your supply chain market? What are the alternative channels of distribution? How are they changing?

Operating Environment Factors

The interest is in environmental analysis and events that have the potential to affect strategy. This analysis should identify such trends and events and estimate their likelihood and impact. When conducting these types of strategic analysis, it is easy to get bogged down in an extensive, broad survey of trends. It is necessary to restrict the analysis to areas relevant enough to impact strategy significantly.

  • Economic: What economic trends might have an impact on business activity? (Interest rates, inflation, unemployment levels, energy availability, disposable income, etc)
  • Technological: To what extent are existing technologies maturing? What technological developments or trends are affecting or could affect our industry?
  • Legal Forces: What changes in regulation are possible? What will their impact be on our industry? What tax or other incentives are being developed that might affect strategy development? Are there political or governmental stability risks?
  • Sociocultural: What are the current or emerging lifestyle, fashion, and culture trends? What are their implications? What demographic trends will affect the market size of the industry? (i.e. growth rate, income, population shifts) Do these trends represent an opportunity or a threat?

Questions to Consider for Your External Analysis

Assessing Your Marketing (External Factors):

  • What is happening externally and internally that will affect our company?
  • Who are our customers?
  • What are the strengths and weaknesses of each competitor?
  • What are the driving forces behind sales trends?
  • What are important and potentially important markets?
  • What is happening in the world that might affect our company?

Assess Your Competition (External Factors):

  • How are we different from the competition?
  • How are our competitors winning?
  • How are our competitors losing?
  • What does our competition do better than us?
  • How do we best serve our market/customers?
  • What competitive moves can we make against our competitors?

External analysis data

Tools to Conduct Your External Analysis

Pestle analysis.

A PESTLE analysis is an external analysis tool that helps you determine how your business or organization stands up against external, macro-level external environment factors that could impact your business. It is an acronym for Political, Economic, Sociological, Technological, and Environmental factors. These are the core areas in the operating environment that could affect the success of an organization the most.

However, it is not enough to just name the external factors that could impact your organization. You must determine whether these factors will primarily pose an opportunity or a threat to your organization’s growth.

Download our Free PESTLE Template and Examples!

As we said earlier, a SWOT analysis is the most common approach to finishing your external analysis. To complete the external analysis portion of the SWOT, you’ll examine Opportunities (O) and Threats (T).

Pro Tip: A SWOT’s O and T portion is directly influenced by your organization’s external factors – meaning factors you can’t directly influence. You can check out our full post on SWOT analysis here and download the free SWOT analysis guide here .

Competitor Analysis-

Your competitor analysis will look at three different types of competitors:

  • Direct competitors (those in your direct market space and always listed with you in a customer shortlist).
  • Indirect competitors (those who aren’t quite in your same market sphere, but who you should still watch out for as indirect competitors could become direct).
  • Substitutes or new entrants (those who may have alternative products or who are not quite at your level as to be considered direct competition).

Identify Competitors

  • Against whom do we compete?
  • Who are our most intense competitors? Less intense?
  • Makers of substitute products?
  • Can these competitors be grouped into strategic groups based on assets, competencies, or strategies?
  • Who are potential competitive entrants?
  • What are their barriers to entry?

Evaluate Your Competitors

  • What are their objectives and strategies?
  • What is their cost structure? Do they have a cost advantage or disadvantage?
  • What is their image and positioning strategy?
  • Which are the most successful/unsuccessful competitors over time? Why?

What is the Output of an External Analysis? Why is it Important in Strategic Planning?

Completing an external analysis helps your organization identify opportunities, headwinds, and tailwinds as you build your organization’s core strategy, approach to growth, and moves you can make against your competitors.

Here are the four common outputs from completing an external analysis.

  • Output #1: Clear market opportunities to use as part of your growth strategy.
  • Output #2: Identify areas of headwinds that will work against your organization.
  • Output #3: Your competitive advantages.
  • Output #4: Competitive moves you could make against your competition.

Strategic Analysis Process: Pulling Together Your Internal and External Analysis

After you finished analyzing your internal and external environments, it’s important to pull it all together as a final product for your strategic plan.

A complete strategic analysis looks like this:

  • Synthesized internal strengths and weaknesses.
  • Identified competitive advantages.
  • Competitive moves you can make against your competition.
  • Headwinds and tailwinds for your market.
  • External forces that might impact your organization.
  • A clear set of opportunities to use in your growth strategy.

Pulling together a Current State Summary

Once you’ve completed your internal and external analysis, pulling together a current state summary is helpful. This summary captures your current state of the organization and is usually about 3-4 sentences long.

It’s designed to create an objective summary of your organization – where you are today – to include external environment and internal forces impacting your performance.

Quality Check – How You Know You Got it Right

A complete strategic analysis should meet the following requirements:

  • Are there clear key components or themes from the SWOT that capture where we are today?
  • What are the key shifts we have seen over the past few years (internally or externally) that define our current state?
  • What have we learned from the internal and external analysis that is critical to address in the strategic plan?

How to perform a SWOT

SWOT – The Most Common Internal and External Analysis Tool

We’ve already mentioned this, but completing a SWOT is the most common exercise to complete both an internal and external analysis. Check out the video, SWOT analysis post, and the free downloadable guide .

An internal analysis looks at the factors that are happening internally in your organization. They evaluate your company’s strengths and weaknesses, taking into account things like resource management and employee performance.

An external analysis would look at the things surrounding your macro- and micro-operating environment such as a competitor analysis and a PESTLE analysis.

You could use one or the other, but it won’t give you the full picture of what your organization is up against or the moves you need to make to ensure you’re shoring up your strengths and fixing your weaknesses. Doing both an internal and external analysis, even in the form of a SWOT matrix, will help you get a full picture of your position in your market. It is highly recommended you do both by utilizing at least one internal analysis tool and one external analysis tool.

Conducting an internal and external analysis is important to conduct and organize before you begin your strategy planning as it allows you to identify and assess your own strengths, weaknesses, and competitive advantages, as well as identify the external factors that may become obstacles in your strategic growth or opportunities for strategic growth.

16 Comments

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Strategic thinking, analysis & business planning, turning strategy into action and results, classroom sessions:, online sessions:, introduction.

This Strategic Thinking, Analysis & Business Planning training course gives you a robust practical framework to formulate, develop, and implement plans to achieve strategic goals and realize your vision. It shows you how to break out of reacting to day-to-day problems, so you can build a team or organization that is more proactive and resilient to change.

A key feature of this training course is a comprehensive strategic management system that guides you through the steps needed to develop the right strategy then translate it into a business plan that provides the foundation for achieving strategic alignment of operational plans and individual objectives with your business model.

This GLOMACS Strategic Thinking, Analysis & Business Planning training course highlights:

  • The difference between good and bad strategies
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  • Balancing financial and non-financial objectives and goals
  • Developing an existing company / division / department
  • Aligning all activity to focus on the strategic goals and not be distracted by less important issues

The central objectives of this Strategic Thinking, Analysis & Business Planning training course are as follows:

  • Learn how to develop a plan to achieve the goals you want for you and your organization (company / division / business unit / team)
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  • Identify the principles and mechanisms that drive successful implementation
  • Develop measurable action plans that result in success
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This highly interactive Strategic Thinking, Analysis & Business Planning training course encourages delegate participation through a combination of short lectures, large and small group discussion, practical exercises, case studies, and breakout sessions to practice new skills. The comprehensive course manual has been designed to be practical, and easy to use. Delegates will gain the skills and motivation they need to design, develop and implement powerful but simple strategies.

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Enhanced Strategic Thinking and Business Planning training course enables an organization to increase stakeholder satisfaction through:

  • A greater strategic perspective at all levels of the organization
  • Development of the next generation of strategic leaders
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  • Better appreciation by functional specialists / managers of the challenges faced by top management in steering an organization through change
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  • Creating tomorrow’s organization out of today’s 

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Delegates will develop their ability to use strategic thinking to become more proactive and build business plans to implement strategic initiatives through:

  • Greater confidence in understanding the potential strategic impact of current managerial roles
  • A better appreciation of the interconnected nature of major business decisions
  • Understanding how to shift from reacting to problems to making things happen the way you want for you and your organization
  • Knowing how to simplify—be able to deliver 3-5 critical things instead of struggling with 30-50 un-prioritised tasks
  • Developing and delivering long, medium, and short-term plans

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This GLOMACS Strategic Thinking, Analysis & Business Planning training course provides a vital knowledge base to prepare for greater responsibility and moving into more senior roles. It will benefit managers who are about to take on strategic responsibility; those who have recently done so and more established senior managers who want to update their knowledge, including:

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Strategic Thinking and Planning

  • The essence of strategy – core concept and definition of te rms
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  • Strategic and operational goals – The significance and difference
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Developing Strategy – The Power of Business Analysis

  • Understanding the importance and value of a “Business Model”
  • Vision, values, mission and goals – Strategy as perspective
  • Analysing your business environment
  • How to evaluate your organisation’s competencies and capabilities?
  • Resource-based approaches to strategy

Strategy Development, Choice and Translation

  • Levels of strategy: Corporate, business and functional
  • Competitive strategy – Strategy as position
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Embedding Strategy in the Organisation

  • Communicating strategy and managing stakeholders
  • How to manage strategic risk?
  • Alignment of operations with strategy
  • Strategic performance measurement
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  • Integrating strategic and operational management processes

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  • Understanding and overcoming psychological bias
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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.         

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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.

Product Updates

business planning strategic analysis

The Strategy Story

Lindt SWOT Analysis

business planning strategic analysis

Before we dive deep into the SWOT analysis, let’s get the business overview of Lindt. Lindt & Sprüngli AG, commonly known as Lindt, is a renowned Swiss chocolatier and confectionery company founded in 1845. The company is famous for its premium chocolate products, which include a wide range of bars, truffles, and seasonal items. Lindt is recognized for its high-quality ingredients, meticulous production process, and distinctive smooth chocolate texture.

Lindt’s origins date back to when David Sprüngli-Schwarz and his son, Rudolf Sprüngli-Ammann, first opened a small confectionery shop in Zurich. The company’s breakthrough came in 1879 when Rodolphe Lindt, a Swiss chocolate maker, invented the conching process, significantly developing smoother and more flavorful chocolate. This innovation established Lindt’s reputation as a premium chocolate producer.

Lindt & Sprüngli has grown significantly over the years, both organically and through acquisitions, expanding its presence worldwide. The company operates several prestigious brands, including Lindt, Ghirardelli, Russell Stover, Caffarel, and Hofbauer, catering to various consumer tastes and preferences across different markets.

Lindt’s business model encompasses both the manufacturing and retailing of chocolate products. The company has production facilities in Europe and the United States, ensuring strict quality control and adherence to its high standards. Additionally, Lindt operates a network of retail stores, including flagship Lindt Chocolate Cafés and Lindt Chocolate Shops, offering consumers a premium shopping experience. These stores sell a wide range of Lindt products and serve as brand ambassadors, enhancing customer engagement and loyalty.

Financial Performance 2022 : Lindt generated revenue of CHF 4.97 billion, +10.8% compared to the previous year, and Operating profit (EBIT) of CHF 745 million, +15.5% compared to last year.

Sustainable Cocoa. Delicious Chocolates. Lindt & Sprüngli

Here is the SWOT analysis for  Lindt

A SWOT analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats of a business, project, or individual. It involves identifying the internal and external factors that can affect a venture’s success or failure and analyzing them to develop a strategic plan. In this article, we do a SWOT Analysis of Lindt.

SWOT Analysis: Meaning, Importance, and Examples

  • Brand Reputation : Lindt enjoys a strong reputation for quality and craftsmanship in the chocolate industry, established over many years. Its brand is synonymous with luxury and premium chocolate products.
  • Product Quality and Innovation : Lindt is renowned for its high-quality ingredients and innovative chocolate creations. The company’s commitment to using fine cocoa and its mastery in chocolate-making contribute to its superior product offerings.
  • Global Presence : Lindt operates on a global scale, with products available in numerous countries around the world. This international presence allows Lindt to reach a broad customer base and leverage global market opportunities.
  • Diverse Product Range : The company offers various chocolate products, including bars, truffles, and seasonal items, catering to different consumer preferences and occasions.
  • Vertical Integration : Lindt controls much of its supply chain, from selecting cocoa beans to manufacturing and retailing chocolate products. This vertical integration allows for better quality control and operational efficiency.
  • Strong Retail Network : Lindt operates a network of branded retail stores, including Lindt Chocolate Shops, Lindt Chocolate Cafés, and Lindt Factory Outlets, providing a unique brand experience and direct customer engagement.
  • Sustainability Initiatives : Lindt is committed to sustainability and ethical practices in cocoa sourcing. The company’s initiatives to support sustainable cocoa farming and improve farmers’ livelihoods strengthen its brand image and appeal to socially conscious consumers.
  • Marketing and Branding : Lindt’s effective marketing strategies and iconic branding, including its Gold Bunny and Lindor Truffles, have established a strong emotional connection with consumers and a distinctive brand identity.
  • Financial Stability : Lindt has shown consistent financial performance with strong profitability, underlining its operational efficiency and effective business strategy.
  • Innovation in Retail Experience : Lindt continues to innovate in its retail strategy, offering personalized products and immersive shopping experiences that enhance customer engagement and loyalty.

  • Premium Pricing : Lindt’s products are positioned in the premium segment of the market, which might limit its appeal to a broader audience, especially in price-sensitive markets or during economic downturns.
  • Competition : The chocolate and confectionery market is highly competitive, with numerous global and local brands. Lindt competes not only with other premium brands but also with mass-market brands that offer lower-priced alternatives.
  • Dependence on the European Market : Although Lindt has a global presence, it has a significant reliance on European markets. Any European economic or regulatory changes could disproportionately affect Lindt’s overall performance.
  • Supply Chain Vulnerabilities : Being dependent on raw materials like cocoa, sugar, and dairy, Lindt is susceptible to fluctuations in commodity prices and potential supply chain disruptions, which can impact production costs and profitability.
  • Limited Product Diversification : While Lindt has a diverse range of chocolate products, its portfolio is primarily concentrated within the confectionery segment. This limited diversification makes Lindt more vulnerable to industry-specific risks than companies with a broader product range.
  • Health and Wellness Trends : Increasing consumer focus on health, wellness, and natural ingredients can pose a challenge to traditional chocolate and confectionery brands like Lindt, requiring adaptation in product offerings to meet changing consumer preferences.
  • Sustainability and Ethical Concerns : The chocolate industry faces scrutiny regarding ethical sourcing, particularly concerning cocoa. While Lindt has initiatives in place, any lapses or negative perceptions in this area could impact the brand’s reputation.
  • Retail Store Operations : Lindt’s investment in branded retail stores, while offering brand experience advantages, also incurs high operational costs and risks, especially in fluctuating retail environments and changing consumer shopping behaviors.

Opportunities

  • Market Expansion : Expanding into emerging markets with growing middle-class populations can offer new revenue streams for Lindt as demand for premium products increases in these regions.
  • Product Diversification : Lindt can explore diversifying its product portfolio beyond traditional chocolates to include health-oriented or alternative ingredient products catering to evolving consumer preferences for healthier options.
  • Sustainability and Ethical Sourcing : Strengthening commitments to sustainability and ethical sourcing, especially in cocoa production, can enhance brand reputation and appeal to socially conscious consumers.
  • E-Commerce and Digital Sales Channels : Expanding e-commerce capabilities and digital sales channels can capture the growing trend of online shopping, providing convenience to customers and reaching wider markets.
  • Innovative Packaging and Products : Introducing innovative packaging solutions that are environmentally friendly and developing unique product offerings for special occasions and gifting can attract new customers.
  • Collaborations and Partnerships : Strategic collaborations with other luxury brands, cafes, and hotels can introduce Lindt products to new audiences and create premium consumption experiences.
  • Personalization and Customization : Offering personalized and customized chocolate products can cater to the demand for bespoke gifts and experiences, enhancing customer engagement.
  • Health-Conscious Products : Developing a range of health-conscious products, such as sugar-free, organic, or vegan chocolates, can tap into the growing market segment focused on health and wellness.
  • Retail Experience Innovation : Innovating the retail experience in Lindt stores, such as chocolate-making classes or tasting events, can enhance brand engagement and provide unique value propositions to consumers.
  • Brand Extensions : Lindt can explore brand extensions into related luxury food and beverage segments, leveraging its premium brand image to introduce new product categories.

  • Economic Fluctuations : Economic downturns and reduced consumer spending can significantly affect the demand for premium chocolate and confectionery products, impacting Lindt’s sales and profitability.
  • Intense Competition : The confectionery market is highly competitive, with numerous players ranging from artisanal chocolatiers to large multinational corporations. Increased competition can lead to price pressures and market share erosion.
  • Raw Material Price Volatility : Fluctuations in the prices of critical raw materials such as cocoa, sugar, and dairy can affect Lindt’s production costs and margins, given its reliance on high-quality ingredients.
  • Changing Consumer Preferences : Growing health consciousness and shifting dietary preferences towards healthier, low-sugar or alternative ingredient products can challenge traditional chocolate consumption patterns.
  • Regulatory Challenges : Stricter food and safety regulations, labeling requirements, and import/export restrictions can impose additional operational and compliance costs on Lindt’s global operations.
  • Supply Chain Disruptions : Events such as natural disasters, pandemics, and geopolitical tensions can disrupt the supply chain, affecting the availability of raw materials and the distribution of finished products.
  • Counterfeit Products : The presence of counterfeit or imitation products can damage Lindt’s brand reputation and result in lost sales, particularly in less regulated markets.
  • Sustainability and Ethical Sourcing Pressures : The chocolate industry faces scrutiny regarding environmental sustainability and ethical labor practices in cocoa production. Failure to meet these expectations can impact Lindt’s brand image and consumer trust.
  • Retail Channel Disruptions : Shifts in retail landscapes, such as the decline of traditional brick-and-mortar stores and the rise of e-commerce, require adaptation in Lindt’s retail and distribution strategies.
  • Cybersecurity Risks : As Lindt expands its digital footprint through e-commerce and online platforms, cybersecurity threats risk customer data and business operations.

Check out the SWOT Analysis of Global Businesses

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  6. 32 Great Strategic Plan Templates to Grow your Business

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  1. Strategic Planning: Business Plan in 1 Minute

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COMMENTS

  1. Strategic Analysis: What It Is & How To Do It Effectively

    Strategic analysis is a crucial part of long-term business planning and the first step in the planning process. In this article, we'll define strategic analysis in more detail, describe the methods used to conduct it, and list the key components of strategic analysis so you can carry it out successfully. What is strategic analysis?

  2. Strategic Analysis

    The purpose of a strategic analysis is to analyze an organization's external and internal environment, assess current strategies, and generate and evaluate the most successful strategic alternatives. Strategic Analysis Process The following infographic demonstrates the strategic analysis process: 1.

  3. What is Strategic Analysis? 8 Best Strategic Analysis Tools + Examples

    Strategic analysis is the process of researching and analyzing an organization along with the business environment in which it operates to formulate an effective strategy. This process of strategy analysis usually includes defining the internal and external environments, evaluating identified data, and utilizing strategic analysis tools.

  4. 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.

  5. 7 Strategic Planning Models and 8 Frameworks To Start [2023] • Asana

    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.

  6. Strategic Business Analysis

    Strategic business analysis requires a focus on all aspects of the organization. It leverages business analysis, change leadership, and program and project management. Strategic business analysis focuses on 'what and why', not the 'how' of solution implementation. Strategy to Execution Framework ®

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

    Strategic planning defines how the enterprise will realize its strategic ambitions in the midterm. Too often, strategic plans are created and then forgotten until the next planning cycle begins.

  8. 20 Strategic Planning Frameworks for Business Success

    12. Issue-Based Strategic Planning. The issue-based strategic model is oriented in the present and projects into the future. It aims to identify the major challenges your organization faces now —in other words, you start with the problems to iron out issues before expanding, shifting your strategy, etc.

  9. Strategic analysis

    Strategic analysis of an organization is an essential factor when it comes to formulating a plan for the smoother working of your company. Strategic analysis refers to the process of researching an organization and its working environment to formulate a strategy. There are many other definitions of strategic analysis with a different perspective.

  10. Strategic analysis: Definition, types and benefits

    The analysis is a part of business planning that has a systematic strategy and appropriate resource investment and can help you reach your goal as an organization. One of the main characteristics is that it makes you consider your competitors and helps you evaluate your business strategies to keep you on top of the race.

  11. 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. It's ...

  12. Strategic Analysis: Definition, Types and Processes

    Strategic analysis is a process that can help businesses and individuals to better understand their goals, what obstacles might get in their way and how to overcome those obstacles. Specifically, strategic analysis may concern: Finding strengths Noting weaknesses Identifying and understanding competition Understanding market changes

  13. 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.

  14. Strategic Planning

    1. Strategy Formulation In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization's strengths and weaknesses, as well as opportunities and threats ( SWOT Analysis ).

  15. The future of business planning and analysis

    Broaden the scope of traditional financial planning and analysis (FP&A) to business planning and analysis (BP&A). For decades, organizations' finance departments have used FP&A to budget and forecast within a fiscal year, conduct historical reporting, and generate standard reports. While this traditional approach worked well in the past ...

  16. Strategic analysis: how to conduct scenario study + 3 tools

    Competitor appraisal and strategic planning play a crucial role when conducting strategic scenario analysis for a business plan. These factors enable an accurate projection of potential circumstances. Here are some essential actions with strategic objectives that every company needs to consistently map: 1. Strategic Thinking

  17. 9 Strategic Planning Models and Tools for the Customer-Focused Business

    SWOT analysis is a strategic planning tool and acronym for strengths, weaknesses, opportunities, and threats. It's used to identify each of these elements in relation to your business. This strategic planning tool allows you to determine new opportunities and which areas of your business need improvement.

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