If you ask 100 business owners, coaches, or consultants, you will probably get 100 different answers. But the answer is in the name.
Strategic Planning = Strategy + Planning
Bur, unfortunately, I find that most strategic planning is heavy on planning, but light on strategy. So that begs a second question:
What is strategy?
Without going into a long list of all the things strategy is not, let’s turn to strategy guru Michael Porter for his definition:
“Strategy is the big picture of how the organization is going to win in its environment, whatever that is.”
Most businesses, coaches, and consultants do not take the competitive environment into consideration when doing strategic planning. At best they do a SWOT analysis and depend on the business leaders to brainstorm the opportunities and threats to the organization.
A good strategy and strategic plan begin with understanding the competitive environment – that combination of factors that influence how the organization is going to win – creating value for a particular set of customers and capturing some of that value for themselves.
This environmental analysis should include understanding factors like:
- The anticipated growth rate of the industry.
- How the firm compares to its competitors in terms of profit, costs, and competitive advantage.
- The economic, political, technological, and other factors that influence the market.
- How competitors, substitute products, and the supply chain affect the busines.
A thorough analysis of these factors will help the business define what “winning” is, and how the business will win in their environment.
For an in-depth view of how Visionary Results performs strategic planning, watch this video.
