Strategic Planning Models
What is a strategic planning model?
A strategic planning model provides an outline of the steps that need to be taken in order to develop an effective plan based on the organisation’s goals and objectives. It typically includes elements such as setting the mission and vision, analysing and assessing the environment, defining goals and objectives, developing strategies, implementation and evaluation.
The importance of a strategic planning model
A strategic planning model is an essential tool for creating a long-term plan for a business. It allows an organisation to set goals, align resources and initiatives, and analyse the current environment to support the development of a successful strategy. The model is beneficial in both short and long-term planning by helping to create an overarching vision, identify trends and risks, and define strategies. Additionally, it supports decision-making as well as provides clarity on objectives and priorities.
There are a variety of strategic planning models that can be very different from one another. The type of organisation will dictate which strategic planning model is used. We briefly discuss a few below.
Balanced Scorecard
The Balanced Scorecard consists of four key components: Financial Performance, Customer Perspective, Internal Processes, and Learning and Growth. It provides organisations with an integrated view of how their strategies are being implemented, measured, and adjusted over time.
Porter’s Five Forces
Porter’s Five Forces is a strategic planning model to assess the competitive environment of a business. This model is used by organisations to analyse the industry they are in and to develop strategies to remain competitive within their industry. The five forces are:
- Threat of new entrants
- Bargaining power of buyers
- Bargaining power of suppliers
- Threat of substitute products
- Rivalry among existing competitors.
SWOT
SWOT analysis is a strategic planning model used to help you identify the strengths, weaknesses, opportunities, and threats of a given project or venture within your business. This analysis tool provides a framework for a business or organisation to assess its current situation from different angles and to develop a plan for long-term success.
PESTLE Analysis
PESTLE Analysis is a strategic planning model that highlights the external environmental factors that can impact a business. This model helps businesses evaluate the Political, Economic, Social, Technology, Legal and Environmental forces that can influence their industry. By considering all of these factors, businesses can better anticipate changes in their environment, develop strategies to take advantage of opportunities, and mitigate against threats.
VRIO
VRIO is a strategic planning model used to assess the competitive advantages that a firm has or could obtain. The acronym stands for Value, Rareness, Imitability, and Organisational Appropriateness. With this model, firms can determine which resources and capabilities they possess that could give them a competitive edge.
The most effective way to plan for the future is through a strategic plan to have a clear understanding of what needs to happen next.
This will provide clarity about where you want to go, and creates consistency across your organisation. When executed correctly, it leads to better decision-making, improved processes, increased efficiency, and ultimately greater profitability.
Let’s have a chat and see what the best strategic planning model is for you to get you where you need to be. Contact me today.
