Strategic Planning Process: A Comprehensive Guide
COMPONENTS OF THE STRATEGIC PLANNING PROCESS
Strategic planning analyzes and processes internal and external business information to evaluate the current situation, analyze the competitive landscape, and project a future for the organization.
Strategists
Strategists are key organizational officials, such as board members, presidents, managers, and vice presidents, who have the decision-making power to shape the company’s future performance. These individuals are integral to the company, so the strategic planning process should be participatory, with managers committing to the company’s values, principles, vision, mission, and goals. A strategist must be a leader with the ability to achieve business goals.
Addressing Strategic Direction
Organizations must clearly define their strategic direction, encompassing their vision, mission, and corporate principles.
Diagnosis and SWOT Analysis
Determining the strategic analysis of the enterprise’s current situation is crucial. Obtaining and processing information about the environment leads to a SWOT analysis, which allows organizations to:
- Exploit their strengths
- Mitigate the effect of their weaknesses
- Anticipate and prepare to seize opportunities
- Prevent threats through timely diagnosis
The internal audit includes the environment, competition, corporate culture, and internal strengths and weaknesses.
1.4 Options
Strategic options should be explored after considering the company’s strategic direction, strategic diagnosis, and SWOT analysis. This allows for anticipating opportunities and threats and leveraging strengths and weaknesses.
Based on the SWOT analysis, the company must define its market behavior vector, analyze its product portfolio, and define overall strategic objectives and projects to achieve its mission effectively.
Strategy Formulation
Action plans are shaped by strategic choices. It’s crucial to project each strategic project, defining objectives and strategies for each functional area within those projects.
These strategic projects and action plans should be reflected in the strategic budget, which is the true strategic plan. This budget should adhere to the company’s rules.
Output Indicators Management
Indices measure the company’s performance management based on objectives, action plans, and the strategic budget. Regular measurement provides timely feedback, enabling adjustments and modifications to the strategic planning process as needed.
This periodic assessment system institutionalizes the strategic audit, leading to a strategic culture. This ensures the strategic planning process remains dynamic and enduring within the organization.
Strategy Promotion
Once defined, the strategic plan should be communicated throughout the organization. This ensures all employees understand their responsibility in implementing the plan and are committed to it. Aligning strategies, processes, people, and customers with the strategic plan ensures a shared vision, which is key to strategic success.
WHAT IS STRATEGIC PLANNING?
Strategic planning is the process where an organization defines its business, long-term vision, and strategies to achieve them based on a SWOT analysis. It involves the participation of managers, continuous information gathering about key success factors, ongoing review, and adjustments. This indicates a management style that fosters company success.
3. Stages of the Strategic Planning Process
- Defining the time horizon (e.g., 3 years)
- Corporate principles
- Strategic Diagnostics (SWOT analysis, where we are today)
- Strategic directions (vision, mission, strategic objectives, strategic priorities, where we want to be)
- Strategic projection (strategic areas, strategic projects, how we will achieve our goals)
- Strategic Alignment (Vision comparative strategic maps)
- Operational Plan (strategies, action plans, tasks to achieve the vision)
- Strategic payment (Index management, organizational performance, achievements of the process)
4. BASIC DEFINITIONS
4.1 Strategic Diagnostics
Defined as the analysis of a company’s internal strengths and weaknesses, as well as the opportunities and threats it faces.
4.2 Strengths
Activities and internal attributes that contribute to achieving organizational objectives.
4.3 Weaknesses
Internal activities that hinder the company’s success.
4.4 Opportunities
External events or circumstances that the company can capitalize on if pursued in a timely manner.
4.5 Threats
External factors that can negatively impact the organization’s operational development.
5. ORGANIZATIONAL PRINCIPLES
The set of principles, values, and beliefs that guide the company and define its essence.
5.1 Mission
Defines the business purpose of the company or a functional area, expressing its rationale and encompassing all its dimensions. It considers the customer as a fundamental part of the business.
5.2 Vision
The company’s aspirations and projections within a specific timeframe (e.g., 3 to 5 years). It should be ambitious, motivating, and encourage employee retention.
5.3 Action Plans
Specific tasks each area must perform to execute strategies within an operational plan, allowing for monitoring and evaluation.
5.4 Internal Diagnostics
The process of identifying weaknesses, strengths, opportunities, and threats within the business or strategic unit.
5.5 External Diagnosis
The process of identifying opportunities and threats in the external environment.
6. DIAGNOSTIC PROCEDURE
6.1 Directive Capacity
Weaknesses or strengths related to administrative processes such as planning, decision-making, coordination, communication, and control.
6.2 Competitive Capacity
Factors related to the commercial area, including product or service quality, product portfolio, distribution channels, market share, pricing, advertising, and customer loyalty.
6.3 Financial Capacity
Financial strengths or weaknesses such as debt, borrowing capacity, credit lines, profitability margin, liquidity, inventory turnover, portfolio turnover, and demand elasticity.
6.4 Technical Capacity or Technology
Encompasses the production process, industrial infrastructure, and processes in service companies. Includes technology (hardware), production processes, and access to public services.
6.5 Human Talent Capacity
Strengths and weaknesses related to human resources, including education, training, stability, motivation, membership, and development programs.
7. EXTERNAL DIAGNOSIS
7.1 Economic Factors
National and international economic performance indicators such as inflation, recession, devaluation, disposable income, GDP growth rate, and international economic performance.
7.2 Political Factors
The use of power in the nation, including international agreements, laws, regulations, standards, and data from government bodies that may affect the company.
7.3 Social Factors
Aspects that affect people’s lives, such as values, culture, health, education, beliefs, and societal trends.
7.4 Technological Factors
Advancements in industrial machinery, tools, equipment (hardware), and processes (software).
7.5 Geographical Factors
Elements related to location, space, topography, climate, and natural resources.
7.6 Competitive Factors
Factors determined by competition in the environment, including products, services, quality, and overall competitiveness.