What is Strategic Planning?
Strategic planning is an organizational activity that outlines your aim to carry out marketing efforts for the coming year. The process helps your organization identify solutions to achieve goals.
What is the definition of strategic planning? For starters, strategizing is the act of finding the best option to achieve a major aim. Whereas, planning means to prepare or get ready to pursue a goal or objective. Strategic planning is therefore the identification of the most productive approach to carry out your market initiatives.
The strategic planning process helps you achieve your goals by gathering resources and compiling information. This can be achieved by framing or modeling your plan.
The strategic planning framework gives you the ability to analyze data and information from a different perspective. Whereas, the strategic planning model is a template that guides you from the beginning till the end.
Purpose of Strategic Planning
What is the purpose of strategic planning? The objective of planning is to outline your marketing efforts as noted. Planning gives your organization the ability to identify effective goals and objectives to achieve your plan. In doing so, you can carry out the company vision & mission in a timely manner.
Benefits of Strategic Planning
What are the benefits of strategic planning? First and foremost, it gives you the ability to identify your current situation. Secondly, it helps you identify the most productive approach to achieve your company vision. Thirdly, planning enables your organization to identify organizational strengths and weaknesses. Lastly, the planning process equips you to identify your target audience. More importantly, it enables you to determine the most successful way to communicate with your target audience.
Strategic Planning Process
The strategic planning process focuses on the 3 C’s (competitors, customers, corporations). Before you can formulate and implement a tactical marketing strategy, you must conduct a detailed analysis of the 3 C’s.
Examining your competitors – The competition refers to examining your strengths vs your rivals. This also includes threats or competitive constraints that could neutralize your business.
Examining your customers – The customer ‘element’ refers to scanning for new opportunities in the marketing mix. More specifically, identifying possible changes in customer preference and finding prospects.
Examining your company – The corporation ‘element’ refers to the capacity of your organization’s ability to move forward to leverage market-based opportunities. It involves accessing external vulnerability to constraints.
Formulation and Implementation
Strategic planning involves two major processes, formulation, and implementation. The formation process involves scanning organizational elements and then making strategic decisions about your competitive strategy. The formulation process consists of three phases; examination, strategy formation, and goal setting. On the second hand, the implementation process involves deciding how resources will be utilized to achieve company objectives. It consists of two processes; structure and control and feedback.
Strategic Planning Framework
The strategic planning framework focuses on the 3 C’s (customers, competitors, company’s). This framework gives you the ability to develop various goals including your corporate objectives, business objectives, and functional objectives. The findings provide input for the course of your organization.
9 strategic planning framework tools:
- Gap Analysis
- Environmental Analysis
- STEEPLE Analysis
- Porter’s Five Force Analysis
- Growth-Share Matrix
- Scenario Planning
- Guiding Policies
- Balanced Scorecards/Strategy Map
- Responsive Evaluation
1. Gap Analysis
The gap analysis compares your current performance with your potential or desired performance. With this analysis, you can determine if you have areas where you can improve. If you have a new product, gap analysis can also identify gaps in your market.
The gap analysis can be studied from different perspectives which include: organization (e.g., human resources), business direction, business processes, and information technology.
This process helps you in the development process by clearing structuring a plan for improvement. In other words, it helps you get the most out of your resources.
The usage gap represents the current usage of all consumers vs the full potential of the entire market scope. Data calculation includes:
Existing usage accounts for the total current market in which market shares are calculated. You can gather this information from marketing research, panel research, and Adhoc work.
The product gap or positioning gap identifies markets from which an organization is excluded on the basis of product(s) or service characteristics. Ordinarily, this happens when a market is segmented and the organization does not provide offerings in some segments or because the position of an organization itself excludes certain consumers.
2. Environmental Analysis
The environmental analysis should be carried out at an early stage of business development. More specifically, before you develop the mission statement, and your vision statement. This is important because you need to identify your organization’s strengths and weaknesses before you develop a marketing plan.
In 1980, Porter wrote that the development of a competitive strategy should include four essential elements, which include:
- 1. Identify internal strengths and weaknesses. 2. Establish strong values and morals among leaders. (i.e., management and the board). 3. Discover the threats and opportunities within your marketplace. 4. Broader societal expectations.
The first two inputs are internal elements of your business while the last two are external elements. As noted, the strategic planning framework is used to analyze both internally and externally. You can use the strategic planning framework to find internal and external strengths and weaknesses. Similarly, you can also use the strategic planning framework to identify internal and external opportunities and threats. Executing the opportunities and threats analysis will put your organization in a position to gain a sustainable competitive advantage.
3. STEEPLE Analysis
SPEEPLE is an acronym that stands for Social, Technological, Economic, Environmental, Political, Legal, and Ethics. The process enables you to identify business constraints and opportunities. It involves scanning the environmental components of your business environment.
Furthermore, the STEEPLE analysis is an extension of the PEST analysis and adds ethics. The term ethics refers to the code of ethics among your company’s representatives. The ethical component is designed to help you establish organizational values and morals.
4. Porter’s Five Forces Analysis
Porter’s five forces analysis is one of many strategic analysis tools and techniques. The process involves uncovering threats and opportunities within your marketplace by examining the business competition. You can gather vital information about your competitors, customers, and marketplaces.
Porter’s five forces – 1. The threat of new entrants. 2. Threat of substitute(s). 3. Bargaining power of customers. 4. Bargaining power of suppliers. 5. Competitive rivalry.
The process gives you the ability to discover indispensable internal data and information. More specifically, if your business is accomplishing the desired results. Consequently, you can identify the ingredients that serve value.
5. Growth-Share Matrix
The growth-share matrix (BCG) is a corporate planning tool that prompts businesses to determine where and how to invest. It helps organizations find growth opportunities through examining products.
This includes reviewing a product portfolio to determine whether you should keep or sell your products. In addition, the growth-share matrix helps you allocate resources used for brand marketing, product management, portfolio analysis, and organizational strategic management.
6. Scenario Planning
Scenario planning is the process of analyzing futuristic possibilities for your organization. The evidence you gather allows you to test different scenarios. Consequently, you can predict changes and implement durable solutions.
As you may already know, it’s impossible to foresee what your business will look like in the future. You can create as many predictions as you’d like–but you’ll never truly know (factually) what the business will look like in the future.
Nevertheless, must guess or predict futuristic business components to determine your budget, strategy, and most importantly, your marketing plan.
7. Guiding Policies
The guiding policy outlines your plan of action to overcome obstacles and function under pressure. It equips your company with strategic methods for maneuvering on unknown terrain or problem-solving. Accordingly, the guiding policy must include a series of coherent measures to guide your company in the event of market limitations.
8. Balanced Scorecards – Strategy Map
The scorecard focuses on your strategic agenda, portfolio initiatives, and financial/non-financial data. You can use these tools to measure, monitor, and control your strategy. Additionally, analyzing your performance makes it possible to determine the capacity of your organization.
Alternatively, a strategy map is a diagram you used to organize and document your strategic goals. The diagram provides a visual presentation of your organization’s goals. Your strategy map is designed to develop your goals and objectives.
9. Responsive Evaluation
Evaluation is a technique of strategic planning that’s rarely used. The responsive evaluation involves measuring the effectiveness of educational marketing programs. It entails contrasting your program activities, the uniqueness of your activities, and the social diversity of people.
One of the main benefits of the response evaluation is it allows organizations to identify a go-to strategy. By doing so, businesses to increase their customer conversation rates.