Strategic & Tactical Planning: A Business Strategy Model
Strategic Planning
Strategic planning diagnoses the organization’s internal and external environments, defines its vision and mission, sets overall goals, creates and selects strategies for implementation, and allocates resources to achieve these goals.
Contingency Planning
Contingency planning prepares the organization for significant, unexpected, and sudden changes (positive or negative) that require an immediate response.
Strategies
Strategies are the main courses of action chosen and implemented to achieve one or more goals.
Downscoping
Downscoping involves disposing of a business, creating a branch, or using other means to eliminate divisions or business lines unrelated to the core business.
Diversification
Diversification is the variety of goods and/or services produced by an organization and the number of different markets it serves.
Vision
The vision expresses the organization’s purpose and fundamental operations, aiming to inspire its members.
Mission
The mission defines what the business seeks to do and for whom. It is the reason for its existence, providing meaning and direction to its activities. It aims to satisfy potential customers, staff, competitors, and the community.
Tactical Planning
Tactical planning involves making decisions about who does what and how, usually with a one- or two-year time horizon.
Core Competencies
Diagnosing strengths and weaknesses allows administrators to identify core competencies and determine areas for improvement.
Resource Allocation
Resource allocation involves organizing money, people, facilities, and other resources to address business opportunities.
Organizational Goals
Organizational goals are the results that administrators and others commit to achieving for the organization’s survival and long-term growth.
Business Strategy
Business strategy refers to the resources and actions implemented to achieve desired goals in a specific market with a set of interconnected goods or services.
Single Business Strategy
A single business strategy involves offering a specific set of goods or services to a particular market.
Market Penetration Strategy
Market penetration strategy seeks growth in existing markets with current products or services.
Dominant Business Strategy
A dominant business strategy caters to various market segments.
Unrelated Business Strategy
An unrelated business strategy offers diverse products (goods and services) to various markets.
Corporate Strategy
Corporate strategy focuses on the types of businesses the company wants to be in, how to acquire or dispose of businesses, resource allocation, and developing synergy between businesses.
Strategic Business Unit
A strategic business unit is a division offering a set of products or services with its own mission and goals.
Forward Integration Strategy
Forward integration means entering the business of customers, moving closer to the final consumer.
Backward Integration Strategy
Backward integration means entering the business of suppliers, usually to control component quality, ensure timely delivery, or stabilize prices.
Horizontal Integration Strategy
Horizontal integration involves acquiring competitors to consolidate and expand market share.
Strategic Alliances
Strategic alliances are an alternative to traditional backward, forward, and horizontal integration.
Stock Options
Stock options give employees the right to purchase company shares at a fixed price within a specified period.
Functional Strategy
Functional strategy defines resource allocation for functional areas like operations, marketing, human resources, finance, legal, accounting, etc.
Operational Strategies
Operational strategies specify how the company develops and uses its productive capacities to support business strategies.
Marketing Strategies
Marketing strategies address how the company distributes and sells its goods and services.
Finance Strategies
Finance strategies identify how to acquire and allocate financial resources.
Market Development Strategy
Market development strategy seeks new markets for existing goods or services.
Product Development Strategy
Product development strategy involves developing new or improved goods or services for current markets.
Differentiation Strategy
Differentiation strategy offers goods or services that customers perceive as unique and valuable.
Focused Differentiation Strategy
Focused differentiation targets a specific niche, meeting the unique needs of certain customers or a geographic market.
Cost Leadership Strategy
Cost leadership strategy competes by offering the lowest possible prices.
Focused Cost Leadership Strategy
Focused cost leadership targets a specific niche with the lowest possible prices.
Related Diversification Strategy
Related diversification involves acquiring businesses related to the current organization in technology, markets, or products.
Related Business Strategy
Related business strategy offers a range of complementary goods or services.
Conglomerate Diversification Strategy
Conglomerate diversification adds unrelated businesses to the company’s portfolio.
Outsourcing Strategy
Outsourcing hires external organizations for services or manufacturing previously done in-house.
Integrated Strategy Model
An integrated strategy model has five elements: Area (where the company operates), Vehicle (how it gets there), Differentiators (how it stands out), Staging (speed and sequence of moves), and Economic Logic (how it profits).
General Model of Competitive Strategies
This model provides a framework of four core business strategies, focusing on staying ahead of competitors in attracting customers.