Strategic planning

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Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.

In order to determine the future direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue particular courses of action. Generally, strategic planning deals with at least one of three key questions:[1]

  1. "What do we do?"
  2. "For whom do we do it?"
  3. "How do we excel?"

George Friedman in The Next 100 Years summarises "the fundamental principle of strategic planning: hope for the best, plan for the worst".[2]

Key components[edit]

Video explaining the strategic plan of the Wikimedia Foundation

The key components of strategic planning include an understanding of an entity's vision, mission, values and strategies. In the commercial world a vision statement or a mission statement may encapsulate the vision and mission.

  • Vision outlines what the organization wants to be, or how it wants the world in which it operates to be (an "idealised" view of the world).[citation needed]
  • Mission defines the fundamental purpose of an organization or an enterprise, succinctly describing why it exists and what it does to achieve its vision.[citation needed]
  • Values are beliefs that are shared among the stakeholders of an organization.[citation needed]
  • Strategy, narrowly defined, means "the art of the general".[citation needed]

Organizations sometimes summarize goals and objectives into a mission statement or a vision statement. Others begin with a vision and mission and use them to formulate goals and objectives. A newly emerging approach is to use a visual strategic plan such as is used within planning approaches based on outcomes theory. When using this approach, the first step is to build a visual outcomes model of the high-level outcomes being sought and all of the steps which it is believed are needed to get to them. The vision and mission are then just the top layers of the visual model.

Tools and approaches[edit]

Tools include:

  • Balanced Scorecards, which creates a systematic framework for strategic planning;
  • Scenario planning, which was originally used in the military and recently used by large corporations to analyze future scenarios.
  • SWOT analysis (Strengths. Weaknesses, Opportunities, Threats)
  • PEST analysis (Political, Economic, Social, and Technological)
  • EPISTEL (Environment, Political, Informatic, Social, Technological, Economic and Legal).
  • ATM Approach (Antecedent Conditions, Target Strategies, Measure Progress and Impact).[3]

Situational analysis[edit]

There are several factors to assess in the external situation analysis:

  1. Markets (customers)
  2. Competition
  3. Technology
  4. Supplier markets
  5. Labor markets
  6. The economy
  7. The regulatory environment

It is rare to find all seven of these factors having critical importance. It is also uncommon to find that the first two - markets and competition - are not of critical importance.[4]

With regard to market planning specifically, researchers have recommended a series of action steps or guidelines in accordance to which market planners should plan.[5]

See also[edit]

References[edit]

  1. ^ J. Scott Armstrong (1986). "The Value of Formal Planning for Strategic Decisions: A Reply". Strategic Management Journal 7: 183–185. 
  2. ^ Friedman, George (2010) [2009]. The Next 100 Years: A Forecast for the 21st Century. Black Inc. p. 69. ISBN 9781921825545. Retrieved 2013-08-03. "[...] the Chinese must use their growing economic strength to develop military options against the United States. They will simply be acting in accordance with the fundamental principle of strategic planning: hope for the best, plan for the worst." 
  3. ^ Renger, R., & Titcomb, A. (2002). A Three Step Approach to Teaching Logic Models. American Journal of Evaluation, 23(4), 493-503.
  4. ^ (Bradford "External Situation - What to Consider")
  5. ^ J. Scott Armstrong (1985). "Evidence on the Value of Strategic Planning in Marketing: How Much Planning Should a Marketing Planner Plan?". Strategic Marketing and Management: 73–87. 

Further reading[edit]

  • John Argenti (1968). Corporate Planning - A Practical Guide. Allen & Unwin.
  • Erica Olsen (2012). Strategic Planning Kit for Dummies, 2nd Edition. John Wiley & Sons, Inc.
  • Max Mckeown (2012), The Strategy Book, FT Prentice Hall.
  • Patrick J. Burkhart and Suzanne Reuss (1993). Successful Strategic Planning: A Guide for Nonprofit Agencies and Organizations. Newbury Park: Sage Publications.
  • Bradford and Duncan (2000). Simplified Strategic Planning. Chandler House.
  • Stephen G. Haines (2004). ABCs of strategic management : an executive briefing and plan-to-plan day on strategic management in the 21st century.
  • Kono, T. (1994) "Changing a Company's Strategy and Culture", Long Range Planning, 27, 5 (October 1994), pp: 85-97
  • Philip Kotler (1986), "Megamarketing" In: Harvard Business Review. (March—April 1986)
  • John Naisbitt (1982). Megatrends: Ten New Directions Transforming our Lives. Macdonald.
  • T. Levitt (1960) "Marketing myopia", In: Harvard Business Review, (July—August 1960)
  • M. Lorenzen (2006). "Strategic Planning for Academic Library Instructional Programming." In: Illinois Libraries 86, no. 2 (Summer 2006): 22-29.
  • L. Fahey and V. K. Narayman (1986). Macroenvironmental Analysis for Strategic Management&rdquo. West Publishing.
  • R. F. Lusch and V. N. Lusch (1987). Principles of Marketing. Kent Publishing,
  • Brian Tracy (2000). The 100 Absolutely Unbreakable Laws of Business Success. Berrett, Koehler Publishers.
  • Michael Allison and Jude Kaye (2005). Strategic Planning for Nonprofit Organizations. Second Edition. John Wiley and Sons.
  • John Argenti (1974). Systematic Corporate Planning. Wiley.