Business Strategy Examples For Small Business – What is strategic business planning? The Importance of Strategic Planning The Process of Strategic Planning Six Examples of Strategic Planning Elements of Strategic Planning Implementation
Operating without a strategic plan is like being in the passenger seat of your own company. You see him accelerate and pass one milestone after another. Eventually, however, you watch helplessly as it drifts aimlessly, or worse, crashes and burns. Strategic planning puts you behind the wheel. It serves as a blueprint that defines the direction the company should take and helps managers prepare for potential obstacles. Businesses and markets without this foundation and foresight are much more likely to be lost, trapped or torn apart.
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What is strategic business planning? Strategic planning is a systematic process for developing an organization’s direction. It also articulates the goals and actions needed to achieve that vision and describes the metrics to measure success. By helping you refocus on your core purpose, goals, development, and opportunities, strategic planning reintroduces the “big picture.” It is the basis for the realization of the entrepreneurs’ vision, which they convey to the stakeholders in the strategic business plan and program. A strategic plan is commonly confused with a business plan, which is used to start a business, obtain financing, or conduct direct business and usually covers a year. A strategic plan, on the other hand, deals with high-level thinking and generally spans 3 to 5 years. It can be created at any time and should be reviewed regularly. Key points to review the plan include when the company begins a new venture (such as a new product launch), when the economy or competitive environment changes, or when new regulations or trends affect the business environment.
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Taking the time to figure out exactly where your business and your management team are going (and how you’re going to get there) can help mitigate the risks associated with growing your business. In fact, a strategic planning process can drive long-term success by strengthening these five key areas:
Having a clear picture of the future of your business, along with a plan to get there, will make your business much more proactive. Instead of constantly reacting to external forces beyond your control, you can make strategic moves that will help you achieve your long-term goals.
Strategic planning can even help you anticipate adverse scenarios before they happen and take precautions to avoid them. You can stay on top of market trends and avoid common industry pitfalls.
Every company has a limited amount of human and financial resources. By pinpointing the activities needed to achieve goals, a strategic plan helps you estimate costs and resources for the most efficient allocation of resources.
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CEOs must be selective about which new opportunities they invest in and which ones they avoid. In the strategic planning process, it is clear when to spend and when to approve.
The business environment is changing rapidly. CEOs must contend with new government regulations, changing workforce demographics, technological advances like Facebook, and economic uncertainty. The strategic plan puts these challenges into perspective.
The process of reviewing your company’s strengths, weaknesses and opportunities can help you overcome difficult situations. You’ll be ready to respond to a competitor’s new product launch, a technology upgrade in your manufacturing facility, or a disgruntled customer base. This level of foresight can lead to increased profitability and market share.
A strategic plan is essential for communicating your vision to investors, managers, and employees. It ensures that all key stakeholders are on the same page rather than (perhaps unintentionally) at odds with each other.
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Even more than achieving consensus, the strategic planning process can improve performance. For example, you can generate ideas for restructuring to help employees reach their full potential. Sharing goals and realistic metrics to measure them also motivates employees to follow through on their efforts.
Running a business is a tumultuous endeavor; many CEOs are familiar with the feast-famine, boom-bust cycle. And organizations that don’t have a solid foundation like that provided by a strategic plan have the most problems.
According to TAB Pulse research, business owners who say they have a high-quality strategic plan are much more likely to expect strong increases in profits and sales over the next year than owners who don’t.
How to draw up a strategic business plan? There are many different frameworks you can use, but in general the design process addresses four aspects.
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Assess where your business is today. This includes reviewing key business information (such as key customers, financial documents) and writing or…
Assess where your business is today. This includes reviewing basic business information (such as key financial documents) and writing or revising your vision, mission statement and core values. Do they still resonate with your vision?
Changes in circumstances, management or the market may require you to rethink the core of your business from time to time. Take time for serious reflection to arrive at something truly important. You can also reach out to your staff, a business owner advisory board, or a business coach.
Avoid jargon when writing these basic business documents. What is the most idealistic version of your business? What are your most ambitious goals? What is the best vision of what your business could be?
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SWOT analysis is a tool for critically evaluating your company’s strengths, weaknesses, opportunities and threats. Can you provide information on…
SWOT analysis is a tool for critically evaluating your company’s strengths, weaknesses, opportunities and threats. It can provide insight into where your company should focus its marketing efforts, give you a better understanding of your industry and your customers, alert you to your competitive advantages, and inform you of potential threats to your growth.
Even if you’ve done a SWOT analysis in the past, it’s useful to do another one as part of your strategic planning process.
Explore specific goals that will help you achieve your vision. This can include things like launching a new product, testing different…
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Explore specific goals that will help you achieve your vision. This may include things like launching a new product, testing different marketing strategies, reallocating financial resources, or improving employee culture. Also identify the specific initiatives needed to achieve the overall goals.
Setting goals is only effective if you actually achieve them, so you also need to determine how you will measure success. Key Performance Indicators (KPIs) are specific metrics that you will track to determine progress toward your goals. KPIs can include things like percentage of market share, cost of customer acquisition, and average time to resolve a support request.
Goals are future-oriented, so you need short-term action steps now. Unlike goals, tasks should last only a few days or weeks. rest…
Goals are future-oriented, so you need short-term action steps now. Unlike goals, tasks should last only a few days or weeks. Break tasks down into the smallest possible steps. Keep asking yourself, “What needs to happen before we can take the next step?”
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For example, the goal of “updating aging equipment” could be broken down into individual tasks such as “research vendors,” “make appointments with representatives at the next trade show,” and “purchase equipment.”
Finally, set a schedule to review your strategic plan (at least quarterly). Regular monitoring and analysis of your plan ensures you stay on track and progress towards your goals. Ask the hard questions during these reviews to avoid continuing with an outdated plan.
SWOT may be the most common tool used in the strategic planning process, but it is not right for everyone. Some critics feel that the scope is too limited and does not encourage in-depth analysis. Therefore, business consultants have created several alternatives, each of which has its own structure.
SOAR analysis is a common and more positive SWOT analysis. It stands for Strengths, Opportunities, Aspirations and Outcomes, and the goal is to use appreciative inquiry to focus on what works rather than perceived weaknesses or potential threats. NOISE stands for Needs, Opportunities, Improvements, Strengths and Exceptions. This solution-focused process examines what’s working and what needs improvement, and encourages you to explore opportunities you didn’t know existed. The five forces framework examines competitive rivalry, supplier power, buyer power, threat of substitution, and threat of new entry. It can help companies assess the attractiveness of an industry, how trends will affect competition in the industry, which industries the company should compete in, and how they can position themselves for success.
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Hambrick and Fredrickson’s strategic diamond framework consists of five essential parts that must form a unified whole: arenas, vehicles, differentiators, staging and economic logic. It’s meant to serve as a concise way to show how the pieces of an organization’s strategy fit together. STEEPLE is an acronym for Social, Technological, Economic, Environmental, Political, Legal and Ethical, each of which is an external factor that you will be judging with this tool. (There are several similar versions of this external model, including PEST and STEEP). A CORE assessment uses a purely financial perspective to develop a long-term business strategy and plan. Analyze the company’s capital investment, location, ownership stake, risk factors and exit strategy.
A strategic plan is useless if it sits on a shelf gathering dust. Therefore, implementation is perhaps most critical