Strategic planning is an company’s process of defining its strategy, or direction, and making decisions regarding how its resources are used to implement this strategy. This includes its capital, both financial and human. Some well known business analysis techniques that can be used in strategic planning include: SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological, Economic, Ecological, and Regulatory factors and EPISTELS (Environment, Political, Informatic, Social, Technological, Economic, Legal and Spiritual) Strategic planning is the formal consideration of an company’s future course. All strategic planning deals with at least one of the three following key questions:
“What do we do?”
“For whom do we do it?”
“How do we excel?”
In strategic planning, the third question is better phrased “How can we surpass or avoid our competition?”. (Bradford and Duncan, page 1).
In many organizations, this is viewed as a process for determining where an organization is going over the next year or more -typically 3 to 5 years, although some extend their vision to 20 years.
In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the “strategic plan”.
Business strategies can be categorized in many ways. One popular method is to assess strategies based on their degree of aggressiveness. Aggressiveness strategies are rated according to their marketing assertiveness, their risk propensity, financial leverage, product innovation, speed of decision making, and other measures of business aggressiveness. Typically the range of aggressiveness strategies is classified into four categories: prospector, defender, analyzer, and reactor.
This is the most aggressive of the four strategies. It typically involves active programs to expand into new markets and stimulate new opportunities.
This strategy entails a decision not to aggressively pursue markets. As a result, they tend to do none of the things prospectors do. A defender strategy entails finding, and maintaining a secure and relatively stable market
The analyzer is in between the defender and prospector. They take less risk and make less mistakes than a prospector, but are less committed to stability than defenders. Most firms are analyzers
A reactor has no proactive strategy. They react to events as they occur. They respond only when they are forced to by macro-environmental pressures. This is the least effective of the four strategies. It is without direction or focus.
Forming a business strategy and creating a plan to discover new business opportunities is extremely important to the success of any business.
The Cambridge Technology Group (http://www.cambridgetechnologygroup.com/), with Professor Donovan, helps organizations find the next big business opportunity. CTG has three distinct components, all striving towards finding, enabling, and creating the next big business opportunity for our clients and partners: Executive Programs, Strategy Sessions, and Institutionalize.