When it comes to the success of your business, you can’t afford to leave anything up to chance. It’s important to plan and prepare for the future, while ensuring you aren’t losing sight of executing in the present.
The fact of the matter is, whether it's running a business, taking a road trip, building a house, or just about any project, strategic planning is crucial. So, how do you create a plan? What are some strategic planning models or methods? As far as creating a plan for your business goes, there are many different strategic planning techniques and models. The good news is you don’t need some strategic planning models pdf or powerpoint. We are going to break down a few types of strategic planning models right here in this blog.
What are the Models of Strategic Planning?
There are several strategic planning models. In fact, some sources suggest there are over 20 of them, including:
- Balanced Scorecard
- Strategy Map
- SWOT Analysis
- PEST Model
- Gap Planning
- Blue Ocean Strategy
- Porter’s Five Forces
- VRIO Framework
- Balridge Framework
- Objective and Key Results
- Issue-based Strategic Planning
- Goal-Based Strategic Planning
- Alignment Strategic Planning Model
- Organic Model
- Real-Time Strategic Planning
- Scenario Planning
- Ansoff Matrix
- 7s Model
- Constraints Analysis
- Hoshin Planning
While it doesn’t really make sense for us to cover every single one, or try and tell you exactly which one(s) might be right for you, we can explain a few of the most popular basic strategic planning models in more depth. We are going to focus on four strategic management models in particular: SWOT, PEST, Balanced Scorecard, and Real-Time Model.
SWOT analysis is a useful and popular tool in strategic planning. It allows you to assess your current: Strengths, Weaknesses, Opportunities, Threats. SWOT analysis is sometimes referred to as a situational analysis or assessment because it reviews all factors as they pertain to your current situation.
To perform a SWOT analysis, you need to make a comprehensive list of factors that fall into each category. For strengths and weaknesses, you should focus on internal factors, while opportunities and threats should consider external variables. For example, some list items might include:
- S - strong social media presence, loyal customer base
- W - lack of working capital, overworked employees
- O - emerging new markets, acquisitions or mergers
- T - new regulations, more competition
Once you identify all of the factors that contribute to each category, you can go about implementing initiatives or strategies to maintain, improve, or fix anything in need of attention.
The PEST model is similar to the SWOT model except you are focusing solely on external factors and solutions. PEST stands for:
For some businesses, the PEST model also expands to PESTLE, with the L and E standing for:
The PEST model is great for helping you understand what external factors contribute to (or constrict) the success of your business. Again for this model, it’s important to consider any and all variables that fall under each category to thoroughly understand where you need to devote attention and resources during strategic planning. Examples include things like:
- P - taxes, tariffs, conflicts
- E - interest rate, inflation rate, unemployment rate
- S - demographics, health, media, education
- T - patents, IT, communication, research and development
- L - regulatory bodies, consumer protection
- E - Climate, geographical locations, natural disasters
While the PEST model is a popular strategic planning technique, it is most successful when paired with internally focused models.
The balanced scorecard method is a holistic approach that looks to focus on the entire business picture. It takes the organization's strategic goals and translates them into objectives that are measurable and easily monitored.
Generally speaking, it outlines four main business perspectives:
- Customers/Clients - their value, satisfaction, and retention
- Financial - your effectiveness in using resources, your financial performance
- Internal Process - the efficiency of your business, the quality of your output
- Organizational Capacity (a.k.a. Learning and Growth) - your company culture, infrastructure and technology, human capital, and resources
By using the balanced scorecard to report on each of those factors, you can also:
- Communicate your goals clearly.
- Align everyone’s daily workflow with the company strategy.
- Prioritize projects, products, components, or services.
- Monitor overall progress towards strategic goals.
The balanced scorecard is a great way to discern how your company is creating value. It can help from beginning steps like outlining mission and values all the way through executing your strategic plan.
As you might be able to tell from the name, the real-time model is a fluid method that can help deal with a rapidly changing work environment. In this model, there are three levels of strategy and success:
- Organizational - Forming strategies in response to trends or opportunities that impact your institution’s ability to advance your mission. These strategies include things like identifying your mission, vision, trends, competitors, and more.
- Programmatic - Deciding how to achieve and respond to specific outcomes and environmental changes.
- Operational - Studying internal systems, policies, and people to develop and revise strategies for your company.
The main goal of the real-time strategic planning model is to identify your competitive advantage. By combining that with a long-term direction and strategies for handling the constant change of the short-term environment, this model is great for companies in quickly changing industries.
No matter which strategic models you chose to use in your planning process, staying on top of everything can still be hard to do. After all, making and sticking to a strategic plan can be stressful. That’s where Elate comes in.
Elevate Your Business With Elate
Strategic planning has never been as easy as it is with Elate. Our platform simplifies and streamlines the strategic planning process, taking the stress out of it. At Elate, where we think of planning in a complete life cycle: Build, Execute, Review.
Our approach empowers you to build your strategic plan, execute the objectives or initiatives critical to success, and review past performance outcomes with key performance indicators. We make it easy to stay on track with transparent reporting, easy collaboration, and one-click integrations with other tools like Salesforce or Hubspot. Your vision can finally meet your strategy.