definition strategic business plans

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• What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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What is Strategic Planning? Definition, Importance, Model, Process and Examples

By Paul VanZandt

Published on: February 2, 2023

Table of Contents

What is Strategic Planning?

Importance and benefits of strategic planning, strategic planning models, strategic planning process: 6 key steps, what makes an effective strategic plan example, strategic planning example.

Strategic planning is defined as a pivotal organizational endeavor, meticulously charting the mission, goals, and objectives over a strategic timeframe, typically spanning 2-5 years. This comprehensive roadmap takes into meticulous consideration the current organizational landscape, navigating through the intricacies of prevailing legislation, the dynamic business environment, product portfolios, departmental dynamics, and the judicious allocation of budget resources. By weaving together these critical elements, a strategic plan becomes a guiding compass, steering the organization towards its vision with adaptability and foresight.

Strategic planning first entered business environments in the post-war period of the 1950s, and has been so effective that it is still widely used and applied across organizational spectrums, including non-profits.

While a strategic plan is the final outcome of the strategic planning process, here are the key factors and components that feed into creating this plan:

• Profitability and balance sheet management

For any business, profitability and the adjacent balance sheet management is and always should be a key factor to be taken into consideration during strategic planning, depending on the size of the business. Both these factors are in fact co-dependent. For example, one of the key outcomes of a strategic plan is to set the revenue growth percentage to be achieved each year for, say, 3 years. This in turn will require an evaluation of the balance sheet, including any debt payments, dividend payout, shareholder expectations, etc.

Even if the business is a startup and is rich with investor cash to spend in acquiring customers in the short to medium term, it is still aspiring to be profitable and must lay out a larger strategic path to profitability.

• SWOT analysis outcomes

Strength, weaknesses, opportunities, and threats – these are the outcomes and full terms of the abbreviated term, SWOT analysis. Strength refers to the business factors that indicate key factors that are contributing to the achievement of business outcomes. These may be factors related to sales, employee and talent retention, software stack, business efficiency, etc. Similarly, weakness refers to factors that are holding back the growth and achievement of business outcomes, such as poor margins, lack of company data management, employee attrition, etc.

Opportunity refers to areas in the business environment that the business can potentially explore. For example, one of the opportunities identified could be sales in a new market, implementing a better human resources management model, branching into new products and/ or services, etc.

• Operations management

Operations management pertains to the cohesive movement of all moving and communicating parts to produce the company’s products or services. While creating a strategic business plan, management needs to take into account how each department and team will need to interact with each other to produce the results desired as outcomes in the strategic plan. This includes ensuring the right technology stack needed for each team including communication and collaboration technology needed for remote and on-premise task execution.

• Human resource management

Strategic planning involves taking into account all aspects of HR and employee-related spending and policies. One of the key aspects of a strategic plan must be to ensure a harmonious work experience for employees such that it increases employee retention and helps build an environment that enhances employee productivity and workplace satisfaction.

A strategic plan is more than just a business tool, it also plays a key role in defining operational, cultural, and workplace ethics. Here are some of the key aspects of the importance of strategic planning:

1. Provides a unified goal

A strategic plan is like a unified action plan for the whole company in order to achieve common outcomes. For example, a strategic plan to achieve a certain revenue growth each year requires sales, account management, product development, and marketing teams to work together to ensure a seamless lead pipeline, customer upsells and account retention, meet customer expectations, etc.

2. Adds to management transparency

Strategic planning is more than just for direct business growth, it also helps shine clarity to employees and shareholders as to what their mid-to-long-term objectives are and how their actions are derived from these larger goals. Such a plan must always be referenced for citation and justification for key business moves and decisions to make it apparently justified and based on logic and reason. This also encourages team leads and employees to in turn be more transparent with their team members and peers with their plans and goals.

One of the issues most dreaded by investors and employees alike is management that seems to make random decisions without any clear guidance on how they help meet requirements for the final business objectives or tackle the challenges of the day. A strategic plan helps build investor and employee confidence in the management and adds to building a culture of transparency in day-to-day business operations.

3. Identifies hidden strengths and weaknesses

Many strengths and weaknesses in a company may be contributing, yet hidden factors in the path to meeting or hindering the meeting of business goals. A strategic plan’s primary input is a SWOT analysis of the company, which is conducted by auditing the firm to recognize and list strengths and weaknesses within the company. These may be a competitive product, a better monetization model, a weak employee incentive policy, etc.

The important step here is the actual deep analysis and listing down of these strengths and weaknesses and how they can be leveraged or minimized.

4. Leads to better financial health

A company with a clear strategic plan is able to better plan expenses and set the right expectations on return on investment (ROI). It takes into account balance sheets, profitability, accounting and expense management, all of which contribute to better bookkeeping and financial health of the company.

5. Improves management-employee relations

Employees and teams work in silos when the management works in silos. But when a company shares a strategic plan with employees and lays out exactly how each team will be working towards contributing to this larger plan, it gives each team and its members a sense of belonging and importance within the larger company, In today’s environment of hybrid or remote work cultures, it is a key step to ensuring that the company remains cohesive and collaborative in getting work done and meeting final objectives.

Learn more: What is Tactical Planning?

Strategic planning inputs may require one of many of the following business analysis models:

• SWOT analysis

SWOT analysis is the process and visual template for identifying and listing a company’s strengths, weaknesses, opportunities, and threats. These are cornerstone considerations for any leadership team and play a key role in the strategic planning process.

• Business model canvas

A business model canvas is a process used to identify and represent existing business models of an enterprise and develop new models to better meet company goals and objectives. Like SWOT analysis, the business model canvas is also a standard business template.

• PESTEL analysis

PESTEL is an abbreviation for political, economic, social, technological, environmental, and legal, and PESTEL analysis aims to identify the impact of these external factors on a business.

• Cost-benefit analysis

A cost-benefit analysis is a method of evaluating an investment in the business based on the benefits it would bring to the table. This is a good method for ensuring a healthy financial balance sheet where spending and budgeting are carefully analyzed to ensure only those investments bring back reasonable ROI.

Most companies have 2 or more product/service streams or even 2 or more businesses. A BCG matrix is a visual process of managing an enterprise’s portfolio by prioritizing profitable companies with good market share and growth.

An effective strategic planning process requires the following key steps:

1. Identify core business objectives

Strategic planning begins with first identifying your business objectives- what does it produce? What does it do better than the competition? What is the quality-profitability balance? These are examples of the questions that need to be asked to identify core business objectives. The strategic planning tools can be applied at any stage of the planning process to help answer these questions.

2. Identify the objectives of each department

Once the core business objective is ready, it needs to trickle down to an execution plan that involves each department. This in turn will result in breaking down of the core objectives into smaller objectives for the teams. This needs to be laid out with clarity and precision since the team leaders will further use this team goal to assign individual targets for members.

3. Identify potential roadblocks

Before formulating the final strategy, it is important to discuss it with relevant leaders in the company to ensure an error-free process that is achievable with minimal roadblocks. Of course, as the execution work begins, the management should be flexible enough to absorb unforeseen and small issues that are inevitable. The goal here is to avoid any big boulders which may cripple the strategy at a later stage, such as data security, pricing estimations, hiring new employees or expansion to new departments/ teams, investment in new product development, mergers and acquisition plans, etc.

4. Formulate the final strategy

Once the objectives and goals have been scanned for potential roadblocks and alterations/ safeguards have been accommodated, this is the first draft of the final strategic plan for the company. This strategy may be applicable for the foreseeable future or have a specific deadline, it should however be pulled up for revision annually. Small companies or startups who have much to learn on the way, need to keep an active eye on the larger strategy based on changing business realities.

5. Re-evaluate based on feedback

Before you iron out the processes and policies that will enable the execution of the new strategic plan of the company, it is important to hear back from your employees. This doesn’t have to be every single employee, especially if you have a large team, but to the extent possible. You may at first discuss the strategy with team leaders, who if needed, may take it further down the chain to their own team members and absorb their feedback. Complete agreement may not be possible, but it is important that both sides remain flexible while discussions are on but must be prepared to execute once the discussions are over.

6. Set or revise adjacent policies and processes

Now that the strategic plan for the business is complete and sealed, the leadership team needs to start the execution with necessary changes to the processes and policies as the need may be. This may need to include data management process changes, technology stack updates, issue escalation matrix, etc. In some cases, it may not require any change, and the right processes may already be in place with just a new direction based on the strategic plan.

Learn more: What is SWOT Analysis Framework?

Crafting a good example of a strategic plan involves several key elements. Here’s a breakdown of what makes a strategic plan exemplary:

• Clear Mission Statement: A strong strategic plan starts with a clear and concise mission statement that defines the organization’s purpose and the value it aims to provide.
• SMART Objectives: The plan should include specific, measurable, achievable, relevant, and time-bound (SMART) objectives. This ensures that goals are well-defined and actionable.
• Environmental Analysis: A good strategic plan conducts a thorough analysis of the internal and external environment, taking into account strengths, weaknesses, opportunities, and threats (SWOT). This provides a foundation for strategic decision-making.
• Alignment with Vision: The plan should clearly articulate how each objective contributes to the overall vision of the organization. There should be a cohesive alignment between the strategic goals and the long-term vision.
• Resource Allocation: Effective resource allocation is crucial. The plan should outline how financial, human, and other resources will be distributed to support the strategic goals.
• Actionable Steps: Each objective should be broken down into actionable steps or initiatives. This helps in practical implementation and provides a roadmap for achieving the goals.
• Monitoring and Evaluation: A good strategic plan includes mechanisms for ongoing monitoring and evaluation. Key performance indicators (KPIs) should be defined, and regular assessments should be conducted to track progress.
• Flexibility and Adaptability: The plan should acknowledge the dynamic nature of business environments. Flexibility and adaptability are essential to adjust strategies in response to changes in the internal or external landscape.
• Communication Strategy: A strategic plan should include a communication strategy to ensure that stakeholders are well-informed about the goals, progress, and any adjustments made to the plan.
• Inclusivity: Involving key stakeholders in the strategic planning process fosters a sense of ownership and commitment. A good plan considers input from various departments, employees, and external partners.
• Risk Management: Anticipating and addressing potential risks is a vital aspect of a strategic plan. Contingency plans should be in place to mitigate unforeseen challenges.
• Continuous Improvement: A strategic plan should not be static. There should be a commitment to continuous improvement, with regular reviews and updates to ensure its relevance and effectiveness.

By incorporating these elements into your example of a strategic plan, you can demonstrate a comprehensive and thoughtful approach to organizational planning, which may resonate well with both practitioners and those seeking to understand the principles of strategic planning.

A strategic plan is a detailed document that outlines an organization’s goals, objectives, and the actions required to achieve them. While the specific details of a strategic plan will vary depending on the organization, its industry, and its unique circumstances, here’s an example of a strategic plan for a fictional company:

Company: Visionary Tech Solutions (VTS)

Mission Statement: “To empower businesses through innovative technology solutions, fostering growth and sustainability in an ever-evolving digital landscape.”

Strategic Goals: Presented below are ten strategic goals that serve as excellent examples to enhance the functionality of a company.

1. Market Leadership in Tech Solutions:

Objective: Capture a 20% increase in market share within the next three years.

Action Steps:

• Launch two new cutting-edge products catering to emerging market demands.
• Strengthen strategic partnerships with key industry players.
• Implement aggressive marketing campaigns highlighting VTS’s technological prowess.

2. Operational Efficiency:

Objective: Improve operational efficiency by 15% over the next two years.

• Streamline internal processes through the implementation of advanced project management tools.
• Invest in employee training programs to enhance skills and productivity.
• Conduct regular process audits for continuous improvement.

3. Customer-Centric Innovation:

Objective: Introduce at least three customer-centric innovations annually.

• Establish a dedicated R&D team focused on anticipating and addressing customer needs.
• Implement customer feedback loops to gather insights for product enhancements.
• Launch a customer loyalty program to foster long-term relationships.

4. Global Expansion:

Objective: Expand operations to two new international markets within the next four years.

• Conduct thorough market research to identify viable expansion opportunities.
• Establish local partnerships to navigate regulatory and cultural nuances.
• Develop customized marketing strategies tailored to each target market.

5. Resource Allocation:

Budget allocation:

• 30% for research and development.
• 25% for marketing and promotional activities.
• 20% for employee training and development.
• 15% for operational improvements.
• 10% for international expansion initiatives.

6. Monitoring and Evaluation:

• Quarterly performance reviews with key performance indicators (KPIs) tracked against predefined targets.
• Annual comprehensive evaluation of the strategic plan’s effectiveness and adjustments as needed.

7. Communication Strategy:

• Regular updates through internal newsletters, town hall meetings, and an interactive company intranet.
• External communication through press releases, social media updates, and a dedicated section on the company website.

8. Risk Management:

• Identification of potential risks such as technological disruptions, market fluctuations, and geopolitical challenges.
• Development of contingency plans and regular risk assessments.

9. Inclusivity:

• Cross-functional teams involved in the strategic planning process, ensuring diverse perspectives and expertise.

10. Continuous Improvement:

• Commitment to regular reviews and updates to the strategic plan based on industry trends, technological advancements, and feedback from stakeholders.

This example of a strategic plan for Visionary Tech Solutions outlines a roadmap that integrates the company’s mission, strategic goals, resource allocation, monitoring mechanisms, and a commitment to adaptability and continuous improvement. Adjustments should be made as needed based on ongoing evaluations and changes in the business environment.

Learn more: What is Enterprise Planning?

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Long-term strategic business planning is necessary for company growth and success, explains Entrepreneur magazine . Business plans provide companies with the tools to track growth, establish a budget and prepare for unforeseen changes in the market place. A strategic business plan focuses on long-term growth objectives, rather than near-term operating goals and addresses different business strategy types.

A strategic plan includes many elements a business can utilize to attract financing and manage company objectives. To optimize strategic business planning, businesses must clearly define company goals and conduct extensive research to properly understand industry trends. Looking at different strategic planning models will help you decide how to set long-term goals for your small business.

What is a Strategic Business Plan?

A strategic business plan is a written document that pairs the objectives of a company with the needs of the market place. Although a strategic business plan contains similar elements of a traditional plan, a strategic plan takes planning a step further by not only defining company goals but utilizing those goals to take advantage of available business opportunities.

This is achieved by carefully analyzing a particular business industry and being honest about your company's strength and weakness in meeting the needs of the industry. A strategic business plan is followed by tactical plans to help achieve the strategic goals.

Reasons for Strategics Plans

A strategic business plan is necessary to optimize market research and to attain optimum market share for your business. The plan allows businesses to focus on a particular niche in the marketplace, which makes sales, advertising and customer management more effective. The plan allows a company to know as much as possible about the needs of its customers and gaps in the marketplace that need to be filled. A strategic business plan helps a company provide better, more targeted service to its clients.

Strategy vs. Tactics

A strategic business plan might set a goal of diversification for the business. Tactics for achieving this strategic goal might include acquiring a business with different product lines, or adding new products to the company's line. For example, a tennis racquet manufacturer might decided to add strings to its product line, either acquiring a string maker or sourcing its own strings.

A strategic business plan includes extensive market research, industry trends and competitor analyses. A strategic plan will include the components of a traditional plan, such as an executive summary, marketing analysis and financial statements, but a strategic plan will be more specific on how the company will go about achieving company goals.

For example, a strategic business plan will attempt to identify a target market, narrow it down to a manageable size, and establish a strategy for acquiring those customers.

Benefits of Strategic Business Plans

Writing a strategic business plan has many advantages. The plan can serve as an outline for successful completion of company milestones. Company owners are in a better position to not only understand their business but become experts in their industries.

A strategic plan helps executives understand the direction in which their company is headed by reviewing past progress and making changes to improve and grow. The plan is an organizational tool that helps to keep a company on track to meet growth and financial objectives.

Misconceptions About These Plans

Many small business owners feel that strategic business plans are for large companies and big businesses. However, according to the U.S. Small Business Administration, a strategic business plan can benefit companies of all sizes and can be a great advantage to small businesses. Small businesses may utilize different types of planning activities to develop the strategies necessary to attract and retain the customers it needs to succeed.

• Entrepreneur.com: Building a Strategy Pyramid

Sherrie Scott is a freelance writer in Las Vegas with articles appearing on various websites. She studied political science at Arizona State University and her education has inspired her to write with integrity and seek precision in all that she does.

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• What is Strategic Planning?

A strategic planning framework is essential in any industry. For example, strategic planning in healthcare is essential to improving patient care quality.

That said, what is strategic planning? Simply put, strategic planning is the business practice of creating a long-term plan that will achieve an ideal set of goals for a profit-making organization. This is the most commonly accepted strategic planning definition.

Benefits of Strategic Planning

Asking “what is strategic planning?” and “what is the strategic planning process?” helps answer essential questions about your organization. Moreover, strategic planning allows you to have a defined roadmap towards a clear set of goals.

Strategic Planning Misconceptions

“I already have a business plan!"

Strategic plans are not business plans. Instead, a business plan is a medium-term executional business document. Business plans at their longest only span 1 year and include action items that are executed in the course of business quarters. Strategic plans are far longer in scope (up to 15 years).

“Strategic plans are only for large businesses.”

Strategic plans are for every business, including small ones. In the beginning, the strategic plan will focus on research and high-level discussions. As your business progresses this will be replaced by a long-term analysis of business outcomes.

“Strategic plans are only needed once.”

This is absolutely not true. Strategic plans should be updated every two to three years, incorporating new learnings and the results of business actions as part of the analysis.

What Makes Strategic Planning Successful?

Several factors go into creating a successful business strategic plan. These include:

Collaboration and inclusion in the process

The strategic plan and roadmap should include all levels of management, all employees, and outside stakeholders in a planned manner.

Data, not feelings

Topics and decisions must be based on objective, verified data, gathered from inside and outside the organization.

Everyone involved owns the process (shared responsibility and expectations)

When the strategic plan is created, everyone involved should be held responsible for the accuracy and thoroughness of their own piece and held to the same overall timeline and schedules.

Transparency in communications

This is the other side of the shared responsibility point. Everyone involved must be honest in their opinion and share all data requested.

Looking beyond the strategic business plan

Implementation of a strategic plan is an ongoing process, and ideally, the strategic plan should be renewed once every two to three years.

Buy-in from management

All of this is meaningless if management does not set aside a budget and does not commit to the changes set forth in the strategic plan.

Where do Strategic Plans Go Wrong?

What is strategic planning failure?

Generally, not following through on the above points will cause a strategic plan to go awry. Inaction on behalf of the C-suite and lack of buy-in can stall a strategic plan.

The strategic planning process explained

Here are five steps that can help you outline your strategic planning process:

Determine your vision and mission

Gather information

Perform a gap analysis

Determine goals, create a strategic plan template, and map

Monitor progress and refresh

A Strategic Plan Example

This is, of course, an outline. But a strategic plan may look like this:

Dynamo Toys, a company specializing in classic robot toys and figurines, is losing sales over each quarter. Management has decided that it’s time to create a strategic plan for the next 10 years.

This plan includes:

An overview of Dynamo Toy’s vision and mission statements, which include making the most fun toys for children and collectors of the giant robot genre.

A strategic overview of the market (which includes demographic information for Dynamo Toys and its market segments), a SWOT analysis, and a large scale overview of current economic conditions and suppliers.

A gap analysis, which identifies the gaps between where Dynamo is currently and where it wants to be.

Finally, a strategic map, which illustrates how Dynamo will shift from its current position to its defined goals. This includes the various long-term tactics and plans that will be employed. In the case of Dynamo, it talks about how to market to new segments and to strengthen old ones, how to counter competitor moves, what media franchising partnerships to pursue, and how to market to a new generation of kids who have grown up on mobile. This will be included in the entire strategic plan. The steps detailed will be conducted in accordance with Dynamo’s vision and mission statements.

Strategic Planning for Higher Education

Colleges and universities regularly create strategic plans to keep pace with student, market, and economic demands. Strategic planning in higher education is a multi-faceted process where institutional leaders and representatives gather together and visualize a better future for their college or university.

Some institutions us a strategic planning template or framework created in a spreadsheet, however, these strategic plan templates are often difficult to adapt to changing conditions or scenarios.

Synario offers a dynamic solution to the higher education strategic planning challenge. Synario offers financial modeling intelligence that enables higher education finance leaders to create agile strategic plans, making it the go-to strategic planning software for higher education.

To learn more about how Synario helps colleges and universities across the U.S build, analyze, and present their strategic plans, check out this page on  Strategic Planning in Higher Education.

Synario Can Help You with Strategic Planning

Synario’s suite of intelligent  financial modeling software  can help you craft a strategic plan that can help your company navigate the shifting seas of business. We’d love to discuss challenges involved in strategic planning and actionable solutions.  Contact us  today to learn more.

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A step-by-step guide to strategic planning (and what makes it unique)

Discover how strategic planning differs from other project management approaches and learn how to draft a strategy that benefits your organization.

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Capitalize on present opportunities and prepare for the future with strategic planning.

Whether you’re starting a new business or looking to revamp your company’s existing structures, a strategic plan is crucial for success. It complements existing documents, such as mission statements and individualized project plans, and considers future opportunities and potential setbacks.

With a strategic plan suited to your specific goals, you can chart a realistic, sustainable road map that acknowledges your current organizational challenges while unlocking future possibilities. Learn how strategic planning can benefit your organization and set you up for long-term success.

What is strategic planning?

Strategic planning is a continuous, systematic process for organizations to define their short- and long-term direction. It involves comprehensively assessing internal aspects, like employee development, budgets, and timelines, and external elements, such as market trends and competitors, to enable effective resource allocation so your organization can achieve business goals and scale effectively.

The strategic planning process is dynamic and requires adaptability to changing circumstances to establish a structured approach to decision-making and maintain team agility. At its core, strategic planning serves as a road map that steers an organization from its present state toward a well-defined future, ensuring sustainable growth.

The benefits of strategic planning

As a holistic road map, a strategic plan well suited to your organization can propel your productivity. Here are a few benefits that strategic planning brings:

• Creating a shared purpose. Strategic planning involves team members in setting the organization’s mission, vision, and values. This collaborative process ensures that every team member understands and connects with these fundamental principles — fostering a sense of shared purpose and direction.
• Proactive planning. The strategic planning process translates abstract ideas into actionable objectives. Setting specific, attainable goals and mapping out strategies to achieve them provides a clear blueprint for the future that’s guided by informed decision-making and deliberate goal-setting.
• Effective resource allocation. Strategic planning allocates resources such as finances, personnel, and technology based on their potential impact on business goals. This process assesses the resources required to achieve each objective and distributes them to maximize efficiency and effectiveness.
• Defining long-term and short-term goals. Strategic plans break down long-term, overarching goals into smaller, short-term objectives to create a step-by-step pathway to achieve the larger vision. This makes goals more manageable and actionable and enables regular monitoring and adjustment of these goals.
• SWOT analysis. Strategic planning provides a clear understanding of your organization’s current status, position in the market, and well-being through a SWOT (strengths, weaknesses, opportunities, threats) analysis. By evaluating both internal and external factors, this process helps identify areas where your organization excels, where it can improve, and external factors that could impact its success, ultimately helping you strategize for future growth and stability.
• Anticipating market trends. Strategic planning enables organizations to foresee and prepare for future changes by analyzing market data and trends. This proactive approach involves evaluating emerging trends, consumer behavior, and technological advancements to adapt strategies accordingly, ensuring you stay ahead of the curve.

How does a strategic plan differ from other project management and business tools?

When creating a long-term vision, a strategic plan becomes pivotal in steering your organization toward success. However, there are other project management tools and workflows with similar goals. Here’s how strategic plans differ from those processes.

Strategic plans vs. business plans

While a strategic plan outlines the organization’s long-term direction and actions to achieve overarching goals, a business plan focuses more on starting new ventures or restructuring existing ones. The strategic plan is broader in scope and encompasses long-term visions like market expansion, while the business plan might detail the steps to attract new customers and establish brand identity .

For example, a new brick-and-mortar sports apparel store might have a business plan for attracting new customers and establishing a brand identity, with a strategic plan that focuses on expanding into online sales to capture a broader audience over a three-year period.

Strategic plans vs. mission statements

A strategic plan outlines a comprehensive set of strategies to achieve organizational goals, while a mission or vision statement concisely communicates the organization’s core purpose. The mission statement sets the tone and direction, and the strategic plan lays out the specific initiatives, such as research and development investments and partnerships, to realize that vision.

Consider a mission statement for a security camera company — to create seamlessly integrated security systems that protect homes. Meanwhile, their strategic plan details initiatives such as product development, resource allocation, and personnel plans to achieve that mission statement.

Strategic plans vs. company objectives

Company objectives are specific, feasible, and measurable targets. In contrast, a strategic plan provides a broader blueprint for aligning resources and realizing those objectives. The strategic plan incorporates and supports various company objectives through detailed action plans and resource allocation.

For instance, an ecommerce platform aims to increase online sales by 15% in the first quarter. To achieve this, their marketing team creates a strategic plan prioritizing a digital marketing revamp, including optimizing the company website, driving organic traffic, and boosting search engine optimization (SEO).

Strategic plans vs. business cases

Unlike strategic plans, which broadly set the direction for multiple projects and initiatives aligned with a company’s long-term goals, business cases justify individual projects and focus on a specific initiative’s viability and benefits.

For example, a business case might focus on the financial feasibility and expected outcomes of introducing a new analytics feature in a software product. In contrast, the strategic plan of this software company might include goals such as becoming a leader in data-driven solutions, where the analytics function features prominently.

Strategic plans vs. project plans

Project plans are detailed documents that outline specific timelines, tasks, and budgets to complete a project. In contrast, strategic plans incorporate multiple project plans, ensuring they align with the broader goals and vision of the organization, and provide the context and framework for developing and implementing individual project plans.

For a web development team, a project plan could detail the steps for redesigning a client’s website, including milestones, resources, and deadlines. However, the strategic plan for this web development company might aim to become the go-to agency for innovative web solutions. Their strategic plan guides not just this single project but others in terms of technology adoption, client engagement strategies, and market positioning.

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The 5 essential steps to strategic planning

Now that you’re familiar with strategic plans’ benefits and use cases, here are five best practices to create one tailored for your organization.

1. Understand your position

Before drafting the actual plan, it’s essential to understand your position in the market. Conduct a SWOT analysis of your industry that focuses on current market trends, client needs, and the competitive landscape. This comprehensive understanding helps you grasp where your organization stands and what unique opportunities or challenges you might face so you can establish a solid foundation for future strategies.

2. Set clear goals and objectives

After understanding your market position, establish specific, attainable, and measurable objectives that align with your business’s mission and broader goals. Ensure these goals are relevant, time-bound, and fit within your organization’s resources and budget. Doing so effectively guides your efforts and provides a framework for measuring progress.

3. Define the organization-wide plan

After brainstorming broad long- and short-term goals, convert them into a cohesive strategy encompassing all departments. For example, if launching a new website design is your goal, involve developers, designers, and marketers in your planning process. Assess and use each team member’s strengths and encourage cross-departmental collaboration. This step ensures that your strategy is holistic and aligns every department toward common objectives.

4. Establish and meet KPIs

Implement key performance indicators (KPIs) relevant to your project. For a web development agency, these could include metrics such as website loading speed, user engagement rates, or client acquisition. You can also use data visualization tools , like Google Analytics, to gather insights and track objectives and key results.

This phase is where you translate strategy into action by allocating resources according to your pre-established goals and measure the progress against these KPIs.

5. Review and update

Strategic plans in business are flexible. As markets and consumer demands evolve, so must your approach. Regularly review your KPIs, collect customer feedback, study market trends and industry changes, and motivate your team to be flexible when necessary.

A continuous, iterative process ensures your organization remains responsive and aware of ever-changing conditions, allowing you to effectively anticipate new hurdles, improve existing frameworks, and leverage opportunities.

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What is the difference between a business plan and a strategic plan.

It is not uncommon that the terms ‘strategic plan’ and ‘business plan’ get confused in the business world. While a strategic plan is a type of business plan, there are several important distinctions between the two types that are worth noting. Before beginning your strategic planning process or strategy implementation, look at the article below to learn the key difference between a business vs strategic plan and how each are important to your organization.

Definition of a business plan vs. a strategic plan

A strategic plan is essential for already established organizations looking for a way to manage and implement their strategic direction and future growth. Strategic planning is future-focused and serves as a roadmap to outline where the organization is going over the next 3-5 years (or more) and the steps it will take to get there.

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A strategic plan serves 6 functions for an organization that is striving to reach the next level of their growth:.

• Defines the purpose of the organization.
• Builds on an organization’s competitive advantages.
• Communicates the strategy to the staff.
• Prioritizes the financial needs of the organization.
• Directs the team to move from plan to action.
• Creates long-term sustainability and growth impact

Alternatively, a business plan is used by new businesses or organizations trying to get off the ground. The fundamentals of a business plan focus on setting the foundation for the business or organization. While it looks towards the future, the focus is set more on the immediate future (>1 year). Some of the functions of a business plan may overlap with a strategic plan. However, the focus and intentions diverge in a few key areas.

A business plan for new businesses, projects, or organizations serves these 5 functions:

• Simplifies or explains the objectives and goals of your organization.
• Coordinates human resource management and determines operational requirements.
• Secures funding for your organization.
• Evaluates potential business prospects.
• Creates a framework for conceptualizing ideas.

In other words, a strategic plan is utilized to direct the momentum and growth of an established company or organization. In contrast, a business plan is meant to set the foundation of a newly (or not quite) developed company by setting up its operational teams, strategizing ways to enter a new market, and obtaining funding.

A strategic plan focuses on long-term growth and the organization’s impact on the market and its customers. Meanwhile, a business plan must focus more on the short-term, day-to-day operational functions. Often, new businesses don’t have the capacity or resources to create a strategic plan, though developing a business plan with strategy elements is never a bad idea.

Business and strategic plans ultimately differ in several key areas–timeframe, target audience, focus, resource allocation, nature, and scalability.

While both a strategic and business plan is forward-facing and focused on future success, a business plan is focused on the more immediate future. A business plan normally looks ahead no further than one year. A business plan is set up to measure success within a 3- to 12-month timeframe and determines what steps a business owner needs to take now to succeed.

A strategic plan generally covers the organizational plan over 3 to 5+ years. It is set with future expansion and development in mind and sets up roadmaps for how the organization will reach its desired future state.

Pro Tip: While a vision statement could benefit a business plan, it is essential to a strategic plan.

Target Audience

A strategic plan is for established companies, businesses, organizations, and owners serious about growing their organizations. A strategic plan communicates the organization’s direction to the staff and stakeholders. The strategic plan is communicated to the essential change makers in the organization who will have a hand in making the progress happen.

A business plan could be for new businesses and entrepreneurs who are start-ups. The target audience for the business plan could also be stakeholders, partners, or investors. However, a business plan generally presents the entrepreneur’s ideas to a bank. It is meant to get the necessary people onboard to obtain the funding needed for the project.

A strategic plan provides focus, direction, and action to move the organization from where they are now to where they want to go. A strategic plan may consist of several months of studies, analyses, and other processes to gauge an organization’s current state. The strategy officers may conduct an internal and external analysis, determine competitive advantages, and create a strategy roadmap. They may take the time to redefine their mission, vision, and values statements.

Alternatively, a business plan provides a structure for ideas to define the business initially. It maps out the more tactical beginning stages of the plan.

Pro Tip: A mission statement is useful for business and strategic plans as it helps further define the enterprise’s value and purpose. If an organization never set its mission statement at the beginning stages of its business plan, it can create one for its strategic plan.

A strategic plan is critical to prioritizing resources (time, money, and people) to grow the revenue and increase the return on investment. The strategic plan may start with reallocating current financial resources already being utilized more strategically.

A business plan will focus on the resources the business still needs to obtain, such as vendors, investors, staff, and funding. A business plan is critical if new companies seek funding from banks or investors. It will add accountability and transparency for the organization and tell the funding channels how they plan to grow their business operations and ROI in the first year of the business.

The scalability of a business plan vs. strategic plan

Another way to grasp the difference is by understanding the difference in ‘scale’ between strategic and business plans. Larger organizations with multiple business units and a wide variety of products frequently start their annual planning process with a corporate-driven strategic plan. It is often followed by departmental and marketing plans that work from the Strategic Plan.

Smaller and start-up companies typically use only a business plan to develop all aspects of operations of the business on paper, obtain funding and then start the business.

Why understanding the differences between a business plan vs a strategic plan matters

It is important to know the key differences between the two terms, despite often being used interchangeably. But here’s a simple final explanation:

A business plan explains how a new business will get off the ground. A strategic plan answers where an established organization is going in the future and how they intend to reach that future state.

A strategic plan also focuses on building a sustainable competitive advantage and is futuristic. A business plan is used to assess the viability of a business opportunity and is more tactical.

10 Comments

I agree with your analysis about small companies, but they should do a strategic plan. Just check out how many of the INC 500 companies have an active strategic planning process and they started small. Its about 78%,

Strategic management is a key role of any organization even if belong to small business. it help in growth and also to steam line your values. im agree with kristin.

I agree with what you said, without strategic planning no organization can survive whether it is big or small. Without a clear strategic plan, it is like walking in the darkness.. Best Regards..

Vision, Mission in Business Plan VS Strategic Plan ?

you made a good analysis on strategic plan and Business plan the difference is quite clear now. But on the other hand, it seems that strategic plan and strategic management are similar which I think not correct. Please can you tell us the difference between these two?. Thanks

Thank you. I get points to work on it

super answer Thanking you

Hi. I went through all the discussions, comments and replies. Thanks! I got a very preliminary idea about functions and necessity of Strategic Planning in Business. But currently I am looking for a brief nice, flowery, juicy definition of “Business Strategic Planning” as a whole, which will give anyone a fun and interesting way to understand. Can anyone help me out please? Awaiting replies…… 🙂

that was easy to understand,

Developing a strategic plan either big or small company or organization mostly can’t achieve its goal. A strategic plan or formulation is the first stage of the strategic management plan, therefore, we should be encouraged to develop a strategic management plan. We can develop the best strategic plan but without a clear plan of implementation and evaluation, it will be difficult to achieve goals.

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Ecommerce · Strategy · Consulting

What is Strategy? Definition, Components & Examples Explained

by Martin Heubel

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The success of any business is determined by the effectiveness of the strategy it follows. A strategy explains how a company plans to compete in a market and how it intends to grow at a profit.

Businesses worldwide sell goods and services in competitive markets that require them to increase the value for owners and shareholders to secure their future existence.

This calls for a plan that helps managers guide their decisions and use resources effectively to achieve key objectives. This plan is also known as a business strategy.

This article will cover:

• What a business strategy is
• The difference between strategy and tactics
• Corporate level strategies
• Business level strategies
• Functional level strategies
• Why having a business strategy is important

Step 1: Define your vision

Step 2: set your top-level objectives, step 3: analyse your business and the market, step 4: define how to gain competitive advantage, step 5: build a strategy framework, types of business strategies, how to measure strategy success.

• Business strategy examples

What is a business strategy?

The definition is as straight forward as it can be confusing when reading it first:

A business strategy outlines the plan of action to achieve the vision and set objectives of an organization and guides the decision-making processes to improve the company’s financial stability in a competing market.

In an attempt to reduce complexity, many online sources refer to a simpler definition of strategy as:

A high-level plan that helps a business achieve its goals.

While this is still accurate, it does not give a good understanding of how these goals are actually achieved.

To allow for a better and more granular understanding, I will refer to the former definition in the following chapters.

How is strategy different from tactics?

Before we get into the details of building a strategy, it is vital to understand how a strategy differs from a tactic.

While both terms are often interchangeably conf used, they are two entirely different things:

A strategy refers to an organization’s long-term goals and how it plans to reach them. In other words, it shows the path to achieve the defined vision.

A tactic refers to the specific actions taken to reach the set goals in line with the strategy.

For example, company A’s strategy might be to become the cheapest provider in the smartphone market. Their managers then need to negotiate with suppliers to reduce the costs of the electronic components used in production. This is a tactic to achieve the set strategy.

Or, as the English comedian and writer Frank Muir put it:

Strategy is buying a bottle of fine wine when you take someone out for dinner. Tactics is getting them to drink it. Frank Muir

Levels of business strategies

There are three levels at which strategies are typically used: The corporate , business and functional level.

All three levels form the strategic framework of an organization:

1. Corporate Level: Corporate level strategies are the strategic plans of an organisation’s top management. They form the mission and vision statement and have a fundamental impact on the firm’s long-term performance. They guide decisions around growth, acquisitions, diversification and investments.

2. Business Level: Business level strategies integrate into the corporate vision, but with a focus on a specific business. At this level, the vision and objectives are turned into concrete strategies that inform how a business is going to compete in the market.

3. Functional Level: Functional level strategies are designed to answer how functional departments like Marketing, HR or R&D can support the defined business and corporate strategies of an organization.

It’s not uncommon for a firm to have multiple strategies at each level. In fact, this is essential to ensure that the different needs of each layer are accurately reflected.

Although multiple strategies carry the risk of conflicting priorities and objectives, these risks can be reduced if managed correctly. We will come back to this point in a second.

Why is having a business strategy important?

The existence of a strategy is a critical success factor for any business.

Essentially, it reflects the strengths and weaknesses of the company and answers how the company plans to respond to the threats and opportunities in the market in which it operates.

A strategy takes into account the resources at hand and how to best deploy them to achieve its set objectives.

That’s why a strategy is often called the lighthouse for a company’s management: It aligns the efforts of all functional departments and gives its employees a Northstar that guides their daily decision making.

To make this point even clearer, let’s say a business would not have a strategy on how it will compete in a market:

The absence of such a blueprint would lead to disordered actions in each department, limiting the organisation’s effectiveness as a whole. This incoherence always results in a loss of competitive power that will be exploited in the market.

How do you formulate a business strategy?

The above definition already gives some practical advice on how to build an effective strategy:

A strategy needs to outline the vision of a business, define its targets and how it is going to grow and compete long-term.

The strategy building process can be broken down into five steps:

• Define your vision
• Set your top-level objectives
• Analyse your business and the market
• Define how to gain competitive advantage
• Build a strategy framework

Most online sources suggest that strategy formulation should begin by defining the objectives of an organization. But this reaches too far too fast, as it presumes that the offering, the market and the target customers have already been defined.

For a strategy to be successful, it must first consider the company’s core values and its desired future position in the market. This is also known as the company’s vision .

Examples of vision statements from some of the largest companies include:

“Apple strives to bring the best personal computing experience to students, educators, creative professionals, and consumers around the world through its innovative hardware, software, and internet offerings.” Apple

“To be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.” Amazon

Based on a firm’s vision, the offer , its customers and the market can be defined.

This is an important step in the strategy building process because it ensures that the designed strategy reflects the actual needs of the relevant market.

Offer & Value Proposition

An effective business strategy builds directly on the company’s offering and value proposition.

The former lays out what goods and services are offered, while the value proposition explains why people should buy them in the first place.

Note that the value proposition answers why a firm exists and how it is different from its rivals. In other words, it explains how a firm plans to create demand and compete in the market.

To illustrate this with an example, take a look at Shopify . Their value proposition is to offer a single ecommerce platform that lets its customers sell across multiple channels.

Another vital step in building an effective business strategy is to define the type of customer a company serves.

Customers are either categorized as consumers (B2C) or businesses (B2B).

Both groups have different criteria, reasons and motivations for purchasing goods and services. Knowing them allows a firm to accurately address their specific needs and wants in its strategy.

Target Market

Finally, strategy builders need to be clear about the market their offering and value proposition are targeting.

• If a firm sells to consumers (B2C) , a market can be defined by demographic and socio-economic factors, such as gender, age, occupation, education, income, wealth and where someone lives.
• If, however, the offering targets other businesses (B2B) , markets are typically defined by using factors such as the industry, business or sales model of the targeted customer groups.

I recommend reading this article from Annmarie Hanlon if you want to learn more about the specifics of segmenting a market.

After defining the vision, the next step in formulating a business strategy is to set an organisation’s top-level objectives .

These objectives are usually focused on increasing a firm’s sales and profits, as they ensure its existence and improve the shareholder value if publicly traded.

That’s why a strategy essentially aims to answer the question of how a business can compete in the market to grow its revenue, while also improving its financial position.

Note that the formulation of high-level objectives does not include any goals to achieve a company’s mission or to reflect its core values.

This is because the sole purpose of a generic business strategy is to increase the company’s economic value for its owners or shareholders.

The core values and mission are later taken into account when designing the lower-level strategies, such as the marketing or operational strategy.

Once the vision and objectives are defined, strategy builders need to become aware of their business’s strengths and weaknesses and the opportunities and challenges in the marketplace.

This can be done using a SWOT analysis ( S trengths, W eaknesses, O pportunities, T hreats):

The information obtained in the course of a SWOT analysis serves as a basis for the strategy formulation that considers the company’s internal characteristics and the external situation of the market segment.

These insights allow decision-makers to ensure that a firm’s strengths exploit the opportunities in the market, while also addressing potential weaknesses and threats that can limit the organization’s long-term success.

The fourth step in the strategy formulation answers the question of how the set objectives are achieved.

Firms that sell in competitive industries need to define how they want to compete in the market, create demand and increase their sales and margins.

Harvard Business School professor Michael E. Porter identified three types of generic strategies that businesses can choose from when defining their competitive advantage:

• Cost Leadership,
• Differentiation, or

However, firms can also fail to pursue one of these generic strategies effectively. Porter refers to this as being “stuck in the middle” .

In this case, a company does not offer a product or service unique enough to entice customers to buy. At the same time, the price of the offering is too high to compete effectively in the market.

Failure to gain a competitive advantage will result in a poor sales performance, which threatens the future company’s existence.

Let’s take a closer look at the different ways a company can gain a competitive advantage:

Cost Leadership

Cost leadership refers to a company’s ability to produce a product at the lowest cost in its industry.

This cost advantage can be achieved by using economies of scale, proprietary technologies or the ability to create and maintain cost benefits along the supply chain.

The cost leadership strategy requires a firm to effectively lower its cost structures while charging prices for its products that are in line with the industry average.

Example: Low fare airline Ryanair is a typical example of a firm that applies a cost leadership strategy. They successfully compete in the airline industry by driving down costs and utilize economies of scale. For that reason, Ryanair only operates one type of aircraft (Boeing 737-200) in its entire fleet.

Differentiation

In a differentiation strategy, a firm seeks to create a unique offer that is valued by its target customers. Buyers must perceive the offer as far more valuable compared to other alternatives in the industry. In return, a company is able to demand higher prices for its products.

Example: Starbucks is a great example of a firm that has successfully implemented a differentiation strategy. While it sells coffee as a widely available commodity, its well-designed stores, and the unrivalled number of flavour variations are the reason why customers are willing to pay a premium.

The generic strategy of focus aims at only a small number of target market segments. Porter’s matrix defines the competitive scope in these cases as narrow, as a firm only aims at a small portion of the wider market segment.

In that case, a company can either have a cost focus or a differentiation focus :

When a firm seeks to gain a cost advantage, it follows a cost-focused strategy. The firm’s offer is a low-cost alternative to the leading product in the market that still appeals to a specific group of buyers.

On the other hand, the differentiation focus seeks to cater to a specific need in a customer segment. This differentiation focus is the classic niche marketing strategy many small and local businesses follow to compete against the larger chains in their market.

Example: Small online shops that specialize in offering vegan and vegetarian products are a good example of firms that follow a generic focus strategy. Their narrow target scope allows them to become the preferred choice of environmental and health-conscious customer segments.

Based on the execution of the previous steps, a generic business strategy can be formulated.

However, functions such as marketing or finance will not contribute effectively to this generic strategy unless it is translated into more specific lower-level strategies.

The formation of these lower-level strategies that sit underneath a generic business strategy is called a strategy framework .

It ensures the success of the generic business plan, as it captures the vision and needs of the single departments and aligns them with the higher-level objectives.

Product, branding, marketing or operational strategies are only a few examples that contribute to the success of a firm’s overall generic business strategy.

Business strategies are successful when they are directly responsible for growth and improved competitive or financial performance.

The success of a strategic plan can be evaluated by monitoring a range of Key Performance Indicators (KPIs).

However, it is important that …

• … these KPIs measure the level of achievement of the objectives defined in step two of the strategy formulation process.
• … the KPIs are defined before the strategy implementation takes place to ensure accurate measurement.

Normally, some or all of the following KPIs are measured when implementing a new business strategy:

• Sales revenue
• Number of customers
• Repeat customer sales
• Customer retention rate
• Conversion Rate
• Average Order Value (AOV)
• Business Volume

Competitive Position

• Market share
• Market position
• Sales win rate
• Brand awareness & press mentions
• Margin position vs. industry average
• Sales growth vs. industry average

Financial Performance

• Gross Profit
• Operating Profit
• EBIT and EBITDA
• Return on Assets
• Free Cash Flow
• Operating Cash Flow

In practice, companies may measure strategy success in a more granular way. This is because individual departments define their own lower-level strategies.

A more realistic KPI overview is shown in the following chart:

Business Strategy Examples

To illustrate the earlier discussed principles, I have compiled two examples of companies that have successfully implemented their generic business strategy: Amazon and Reckitt Benckiser .

Example 1: Amazon

Amazon is known for its great customer service and fast shipping options.

And while its vision is to be earth’s most customer-centric company , Amazon makes this a reality by continually innovating in existing and new markets. The result? Further growth and greater shareholder value.

In his first shareholder letter from 1997 , Jeff Bezos himself outlined the four principles that guide the company: customer obsession rather than competitor focus, passion for invention , commitment to operational excellence and long-term thinking .

Amazon’s generic business strategy is to gain a competitive advantage by driving down costs (cost leadership), paired with its ability to innovate in competitive markets.

The focus is always the same: serving the needs of end-customers.

This allows Amazon to overtake its competition that often struggles to catch up with the tech giant within several years ( ST-Strategy ).

Its lower-level strategies (operational, marketing, etc.) all follow the generic strategy of focusing on choice, price and economies of scale to create value for customers.

This strategic framework has allowed Amazon to become one of the most successful tech companies in the 21st century.

Example 2: Reckitt Benckiser

Although the company’s name is not known by many consumers, Reckitt’s brand portfolio consists of major household brands, such as Finish, Dettol, Nurofen, Vanish, or Durex.

Faced with slowing sales and increased competition back in 2012, the company had to change its business strategy to return to a path of solid growth.

Under the new strategy, RB:

• Focused on R&D for new product lines that allowed it to achieve its high-level objectives to increase sales and margins;
• Increased its budgets in markets that grew above-average to stimulate further growth;
• Overhauled its brand and marketing strategies and increased budgets in those areas;
• Set and closely monitored multiple key performance indicators with the aim to increase its net revenue growth by +200bps vs. market average each year until 2017.

While Reckitt could not achieve all of its set targets, the modifications of its business strategy helped the company to grow its sales and profits above the market average.

As a result, RB grew £33bn in value for its shareholders between 2012 and 2017.

Still have questions about business strategy?

If you need help to come up with a strategy for your ecommerce business, then get in touch . I offer tailored advice that will help you get clarity about your vision, objectives and how to build a more effective business.

Enjoyed this article? Here are more things you might like:

Porter’s Five Forces Analysis – A complete guide to Michael E. Porter’s 5 Forces Analysis to help you assess your competitive landscape.

The Importance of the Product Life Cycle – A complete break down of the individual stages of the product life cycle to plan your next marketing moves.

Ecommerce Glossary – Stop the guessing. My glossary explains every ecommerce term in under 30 seconds.

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Strategic Business Planning: Definition, Output, Role

by MyMG Team · Published December 2, 2011 · Updated June 26, 2023

Successful businesses are not built overnight: it may take months of hard work before your business can generate any profit. Strategic business planning is a process that involves analyzing your current situation, assessing the competition, and anticipating trends. This process helps you to plan for future activities that will help you to address your business’ current challenges.

In this blog, we will look at the definition of strategic business planning, discuss its output and explore the role of the business plan.

Define Strategic Business Planning

In simple terms, strategic business planning is a series of logical and creative steps to identify long-term business objectives ranked by importance. It is a complex process of collecting information, analyzing input data, and conducting internal and external assessments of available business resources.

SWOT analysis is often used as a primary assessment tool to investigate the business environment and identify the Strengths, Weaknesses, Opportunities, and Threats of the chosen business model. The process is central to ensuring a company’s financial and social development from a strategic perspective.

Strategic Business Planning  is a high-level management process undertaken to identify and approve a business organization’s framework, vision, long-term goals, directions, and objectives. This process ensures that the company positions itself appropriately, considering its marketing capabilities, technological advantages, and available resources. In addition, it serves as a foundation for developing tactical plans and solutions to achieve desired entrepreneurial intentions and commercial benefits.

The process of strategic business planning aims to accomplish the following key objectives :

• To develop a clear vision of the company’s future, including long-term goals and short-term plans.
• To provide a framework for tactical business decisions and activities to help the company implement its business goals.
• To stimulate change management and become a building block for further business development.

Finally, strategic business planning identifies the company’s competitive analysis and provides measures to control external influences that could affect the company’s performance.

For example, an app company like Softorino needs to build a business strategy for 2023 based on its product pipeline, marketing budget, and technology stack. So the company first analyzes its competitors on Product Hunt and Apple App Store to monitor the popularity of different apps and games. It then collects qualitative research data from surveys of customers who have tried Softorino’s popular apps — WALTR PRO, for example. A common question, “ How to add audiobooks to iPhone  without iTunes,” is part of the survey data.

This analysis will ultimately help the company identify actions it must take next year to remain competitive. With a solid grasp of the competitive landscape, Softorino can begin to plan which features it will focus on and integrate into future versions of its apps.

Why Strategic Planning Matters to Business Success

Strategic business planning ensures that the company’s financial and social development is long-term. Over time, it will advance the company’s growth by identifying its strengths and weaknesses, opportunities, and threats. A well-thought-out strategy provides a foundation for developing operational plans to achieve desired financial and social benefits.

Strategic planning prepares businesses for competitive environments, which can offer different choices to their competitors. It opens up new options and encourages entrepreneurship and investment.

Strategic business planning supports the definition of long-term company strategic goals and targets, updated as the company’s performance changes. The definition of these goals also determines the tactics for achieving them under market conditions.

To be more precise, here are three key factors that determine the role of the strategic business process:

• Correlate expected benefits and produced outcomes . As we already know, the process’s outcome is a comprehensive business strategy. Using such a strategy, we can create a link between the benefits we expect to gain and the outcome our business produces. Having a well-developed business strategy enables us to acquire the capability to achieve the expected benefits from the delivered outcomes.
• Fit potential with available resources and the external world . Strategic planning of business activities allows for determining a company’s core competencies and assessing business potential. Then by creating an effective business strategy document, the company gains an opportunity to fit the business potential with available resources best and to handle the challenges of the external world.
• Provide competitive advantages . The strategic business planning process is a foundation for developing a marketing plan dedicated to promoting products/services, attracting the target audience, increasing sales, and strengthening a company’s competitiveness. Through creating a comprehensive business strategy template, the company can efficiently plan for marketing goals and acquire the capability to provide sustainable competitive advantages.

Business Strategy

A business strategy is the specific output of the process. It is a formal business imitation document that states the long-term business intentions of a company and makes a foundation for developing implementation (tactical) plans.

By using SWOT analysis decision makers can create such a strategy, which consists of the following key elements (sections):

• Business Vision
• Mission Statement
• Business Values
• Objectives and Goals

What Makes a Good Business Strategy?

A good business strategy is based on a clear vision of a company’s future and objectives. It should be flexible enough to allow the company to meet its short-term goals while allowing enough time to achieve its long-term plans. A good business strategy is generally based on the company’s strengths, the market environment, and projections for growth and profit.

The critical elements of a good business strategy are as follows:

• A clear strategic vision that provides a direction for future activities.
• Internal and external analysis of the company’s strengths, opportunities, and threats.
• A long-term goal that motivates employees and encourages them to help achieve company goals.
• A measure to evaluate company performance and identify the success of its strategies.
• An integrated and specific plan for action to achieve the strategic objectives.

Business Strategy versus Business Plan

The strategic business plan could also be called the strategic business framework or business strategy. The distinction between these two terms is essential to ensure that the right resources are applied to creating a strategy and that the business framework is not being used as a vehicle for tactical circumstances.

Here are several differences between business strategy and business plan:

• The business strategy reflects the company’s goals and competitive position, while a business plan is an operating manual that supports the day-to-day operation of the business.
• The former focuses on the company’s vision, while the latter provides information about its activities to achieve it.
• The business strategy is a means to evaluate the company’s available resources, while the business plan must capitalize on these resources.

In fact, a business strategy can be considered a general vision of where a company wants to go in terms of structure, form, and function. On the other hand, a business plan contains a set of activities, procedures, or policies that are planned to achieve the vision. Strategic business planning is a process through which you can create and implement a business strategy.

Wrapping Up

Strategic business planning is a tool for implementing a company’s vision and achieving corporate goals. It provides a framework for developing strategies to achieve long-term goals, and it supports the implementation of these strategies with detailed plans and activities.

Strategic business planning is a non-trivial task to solve. But it will be worthwhile, as the resulting plan will provide an essential “roadmap” for business success.

A good business strategy defines a company’s vision, goals, and objectives. It also clarifies why a company is positioned in the market.

Tags: planning strategy

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Backgrounder: Solving the housing crisis: Canada’s Housing Plan

From: Infrastructure Canada

Backgrounder

Today, Prime Minister Justin Trudeau, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, and the Minister of Housing, Infrastructure and Communities, Sean Fraser, unveiled Canada’s Housing Plan, which responds to the significant housing challenges faced by Canadian communities. With Canada’s Housing Plan, the federal government is taking a leadership role and making investments that drive the change needed to help solve Canada's national housing crisis.

Today, Prime Minister Justin Trudeau, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, and the Minister of Housing, Infrastructure and Communities, Sean Fraser, unveiled Canada’s Housing Plan, which responds to the significant housing challenges faced by Canadian communities. With Canada’s Housing Plan, the federal government is taking a leadership role and making investments that drive the change needed to help solve Canada's national housing crisis.

In the years since the pandemic, Canada’s housing sector has faced increasingly difficult challenges, compounded by high interest rates that slowed the economy and home construction. Today, the national housing crisis presents one of Canada’s greatest social and economic challenges. Canada needs to build more homes, faster, to meet the demand of our growing communities.

Today, the Prime Minister, the Deputy Prime Minister and Minister Fraser announced Canada’s vision and plan to solve Canada's national housing crisis. Through Canada’s Housing Plan, the government is committing to building more homes, faster; increasing housing affordability; growing the community housing sector; and, making it easier to rent or buy a home.

Canada is rising to this challenge by:

• Building more homes by bringing down the costs of homebuilding, helping cities make it easier to build homes at a faster pace, changing the way Canadian homebuilders manufacture homes, and growing the workforce to ensure we get the job done.
• Making it easier to rent or own a home by ensuring that every renter or homeowner has a home that suits their needs, and the stability to retain it.
• Helping Canadians who can’t afford a home by building more affordable housing for students, seniors, persons with disabilities, and equity-deserving communities, and eliminating chronic homelessness in Canada.

Building more homes

Making the math work for homebuilders.

• Eliminating GST from new rental apartment construction projects, co-ops, and new student residences built by non-profit universities, and public colleges and school authorities.
• Reforming the Apartment Construction Loan Program (ACLP), and providing a further $15 billion in loans to build a minimum of 30,000 new rental apartments. This brings the program’s total loan funding to over $55 billion with more than 131,000 new rental homes by 2031-32, including $500 million in low-cost financing to support rental housing projects using innovative techniques. This is in addition to the $15 billion announced in the 2023 Fall Economic Statement.
• Launching Canada Builds to leverage funding from the Apartment Construction Loan Program (ACLP) to partner with provinces and territories that launch their own ambitious housing plans, increasing the impact of federal, provincial and territorial investments.
• Launching a Public Lands for Homes plan that will unlock underused public land to build more housing, accelerate the process of making public land available for housing, lease public land instead of selling it off, and create a new mapping tool to keep track of federal lands that can be used for housing.
• Announcing $20 million, through Budget 2024, for Statistics Canada and Canada Mortgage and Housing Corporation (CMHC) for modernizing and enhancing the collection and dissemination of housing data, including municipal-level data on housing starts and completions.
• Introducing the Canada Secondary Suite Loan Program, delivered by the Canada Mortgage and Housing Corporation to provide homeowners up to $40,000 in low-interest loans to add a secondary suite to their existing homes.
• Launching a $4.3 billion Urban, Rural and Northern Indigenous Housing Strategy in 2024 to establish a ‘for Indigenous, by Indigenous’ National Housing Centre, and provide additional distinctions-based investments for culturally appropriate Indigenous housing to be delivered by Indigenous governments, organizations, and housing and service providers.

Working with communities to build more housing, faster

• Providing an additional $400 million dollars to the $4 billion Housing Accelerator Fund (HAF) to incentivize an additional 12,000 new homes in the next three years so more municipalities can cut red tape, fast-track home construction, and invest in affordable housing.
•     Eliminating mandatory minimum parking requirements within 800 metres of a high-frequency transit line;
• Allowing high-density housing within 800 metres of a high-frequency transit line;
• Allowing high-density housing within 800 metres of post-secondary institutions; and,
• Completing Housing Needs Assessments for communities with a population over 30,000.
• $1 billion available to municipalities to support urgent infrastructure needs to enable more housing; and
• Legalizing more housing options by adopting zoning that allows four units as-of-right and that permits more “missing middle” homes, including duplexes, triplexes, townhouses, and small multi-unit apartments;
• Implementing a three-year freeze on increasing development charges from April 2, 2024 levels for municipalities with a population greater than 300,000;
• Adopting forthcoming changes to the National Building Code to support more accessible, affordable, and climate-friendly housing options;
• Providing pre-approval for construction of designs included in the government’s upcoming Housing Design Catalogue; and,
• Implementing measures from the forthcoming Home Buyers’ Bill of Rights and Renters’ Bill of Rights.
• Provinces will have until January 1, 2025 to secure an agreement, and territories will have until April 1, 2025. If a province or territory does not secure an agreement by their respective deadline, their funding allocation will be transferred to the municipal stream.

Changing the way we build homes

• Allocating $11.6 million to the development of a Housing Design Catalogue, which will provide builders and municipalities with a set of standardized designs that will streamline planning, development, and approval processes of new home build.
• Launching the new Homebuilding Technology and Innovation Fund. This Fund will provide $50 million delivered through Next Generation Manufacturing Canada (NGen) to help scale-up, commercialize, and promote adoption of innovative housing technologies and materials in Canada’s homebuilding industry, including for modular and prefabricated homes.
• Investing $50 million over two years for Canada’s regional development agencies to support innovative housing projects, including those in modular housing, automation, and robotics.
• Simplifying the way that Canada builds homes by making specific changes to the National Building Code to support factory build-housing and changes to allow more multi-bedroom apartments in existing neighbourhoods.
• Providing $500 million in low-cost financing for new apartments that use innovative prefabricated homebuilding techniques through the Apartment Construction Loan Program (ACLP).

Growing and training the workforce

• Providing an additional $50 million in the Foreign Credential Recognition Program, building on the federal government’s previous $115 million investment, with a focus on residential construction to help skilled trades workers get more homes built.
• Providing $10 million for the Skilled Trades Awareness and Readiness program to encourage high school students to enter the skilled trades, with an additional $90 million for the Apprenticeship Service, creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers.

Making it easier to rent or own a home

Protecting renters.

• Launching the new $15 million Tenant Protection Fund, through Budget 2024, to provide funding to provincial legal services and tenants’ rights advocacy organizations to better protect tenant rights and ensure that renting a home is fair, open, and transparent.
• Creating the Canadian Renters’ Bill of Rights, in partnership with provinces and territories, to require landlords to disclose a clear history of apartment pricing, significantly reduce renovictions, and create a nationwide standard lease agreement to give renters more agency.
• Strengthening the Canadian Mortgage Charter, and working with fintech companies, credit bureaus, and lenders to prioritize tools so that renters can report and record their rent payment history, strengthening their credit scores, ensuring they get credit for on-time rent payments, and unlocking pathways to become homeowners.

Getting you into your first home

• Extending the limit on insured mortgage amortizations for first-time buyers acquiring new builds by five years to increase access to mortgages for younger Canadians.
• Strengthening the Canadian Mortgage Charter to support access to fair, reasonable, and timely mortgage relief measures from their federally regulated financial institutions.
• Leveraging the tax-free First Home Savings Account to help Canadians meet their saving goals and purchase of their first home, faster. The tax-free First Home Savings Account is already helping over 750,000 Canadians save faster for their first downpayment.

Supporting current homeowners

• Extending the grace period for when homeowners are not required to repay their Home Buyers’ Plan withdrawals to their RRSP, from two to five years, for all those who withdraw between January 1, 2022 and December 31, 2025.
• Launching the Canada Green Buildings Strategy to focus on lowering home energy bills and reducing building emissions by supporting energy efficient retrofits. $903.5 million will go toward the Canada Greener Homes Affordability Program, renewing and improving existing energy efficiency programs, and continuing to develop national approaches to home energy labelling.

Protecting Canada’s existing housing stock

• Creating a short-term rental enforcement fund which will provide $50 million for municipal enforcement of restrictions on short-term rentals, and increase long-term rental units.
• Extending the ban on purchasing residential property by foreign investors, legislated through the Prohibition on the Purchase of Residential Property by Non-Canadians Act , until January 1, 2027.

Helping Canadians who can’t afford a home

Increasing the supply of affordable housing in canada.

• Providing $1 billion to the Affordable Housing Fund (AHF) in addition to the $1 billion top-up announced in the 2023 Fall Economic Statement, bringing the total funding to over $14 billion, to reform and strengthen the program.
• Launching a $1.5 billion Canada Rental Protection Fund to help community housing providers acquire affordable rental units at risk of being sold to investors and repriced in order to preserve their affordability over the long term.
• Launching the $1.5 billion Co-operative Housing Development Program to support new co-operative housing developments across the country.

Providing funding to communities to help end homelessness

• Providing additional investments of $1 billion over four years to stabilize Reaching Home: Canada's Homelessness Strategy.
• Investing $250 million to address the urgent issue of encampments and unsheltered homelessness in communities across Canada, supporting the most vulnerable and ending encampments as vulnerable Canadians transition into dignified housing solutions.

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How to Develop a Business Strategy: 6 Steps

• 25 Oct 2022

Business strategy can seem daunting, and for good reason: It can make or break an organization. Yet, developing a strong strategy doesn’t need to be overwhelming.

In the online course Business Strategy , Harvard Business School Professor Felix Oberholzer-Gee posits that strategy is simple. His secret? Focus on your organization’s value creation.

“Strategy often sounds like a lofty concept that only the most senior executives can develop,” Oberholzer-Gee says. “But actually, anyone can think and act strategically. It doesn’t need to be difficult; all you need is a proven framework.”

Here’s a breakdown of why business strategy is important, the basics of value-based strategy, and six steps for developing your own.

Why Do You Need a Business Strategy?

Business strategy is the development, alignment, and integration of an organization’s strategic initiatives to give it a competitive edge in the market. Devising a business strategy can ensure you have a clear plan for reaching organizational goals and continue to survive and thrive.

According to a study by Bridges Business Consultancy , 48 percent of organizations fail to meet half of their strategic targets and 85 percent fail to meet two-thirds, highlighting why dedication to the business strategy process is crucial.

One type of business strategy is called value-based strategy, which simplifies the process by leveraging the value stick framework to focus on the advantage your business creates.

Access your free e-book today.

What Is Value-Based Strategy?

Value-based strategy , also called value-based pricing, is a pricing method in which an organization relies on the perceived value of its goods and services to determine its pricing structure and resource allocation.

The value stick framework can be used to visualize how various factors impact each other and determine which initiatives to pursue to increase value for all parties.

The value stick has four factors:

• Willingness to pay (WTP) : The highest price a customer is willing to pay for your product or service
• Price : The amount customers have to pay for goods or services
• Cost : The amount a company spends on producing goods or services
• Willingness to sell (WTS) : The lowest amount suppliers are willing to accept for the materials required to produce goods or services

To determine how to best create value, you can toggle each factor on the value stick to see how the others are affected. For instance, lowering price increases customer delight.

"As strategists, we really ask three questions,” Oberholzer-Gee says in Business Strategy. “How can my business best create value for customers? How can my business create value for employees? And how can my business create value by collaborating with suppliers? Think of a company's strategy as an answer to these three questions."

Related: 4 Business Strategy Skills Every Business Leader Needs

6 Steps to Develop a Value-Based Business Strategy

1. define your purpose.

When approaching business strategy, defining your organization’s purpose can be a useful starting point.

This is vital in creating customer and employee value, especially if your organization’s purpose is linked to a cause such as environmental protection or alleviating specific social issues.

A recent survey conducted by clean energy company Swytch found that nearly 75 percent of millennials would take a decrease in salary if it meant working for an environmentally responsible company. Nearly 40 percent selected one job over another because of an organization’s sustainability practices.

Additionally, research in the Harvard Business Review shows that consumers’ motivation to buy from sustainable brands is on the rise. Sales of products marked as sustainable grew more than five times faster than those that weren’t.

By starting with purpose, your organization can create more value down the line.

2. Assess Market Opportunity

Next, understand your market’s competitive landscape. Which companies own shares of the market? What differentiates your competitors’ products from yours? Are there any unmet needs your organization could take advantage of?

Conducting this research before planning a strategy is critical in identifying how your organization provides unique customer value and opportunities to create even more.

3. Create Value for Customers

With an understanding of the market and your company’s purpose, you can determine how your organization provides unique or greater value and strategize ways to improve.

On the value stick, the value captured by customers is called “customer delight.” It can be increased by raising their willingness to pay and decreasing the product’s price. If lowering the price isn’t an option, brainstorm how you could make the product more valuable to customers, thus increasing their willingness to pay.

Some ways to create customer value include:

• Lowering the product’s price
• Increasing the product’s physical quality and longevity
• Providing quick, high-quality customer service and a smooth shopping experience
• Leveraging network effects , if applicable, to create a community of users
• Incorporating an environmental or social cause into processes, packaging, and branding

4. Create Value for Suppliers

In addition to creating value for customers, you also need to provide value for suppliers. Suppliers can include any company that provides raw materials, labor, and transportation to help your organization produce goods or deliver services.

Supplier surplus, also called supplier delight, is created when the cost of materials increases or their willingness to sell decreases. The relationship between a firm and its suppliers can be contentious, given that both want to increase their margins. Yet, there are ways to create value for both parties.

Some ways to create value for suppliers include:

• Agreeing to pay more for higher quality materials : While this increases the supplier surplus, it may also increase customer delight by raising willingness to pay, or increase the firm’s margin by allowing you to raise prices.
• Working with the supplier to increase efficiency : This strategy can increase supplier surplus by lowering the overall cost of the supplier’s labor and their willingness to sell.

5. Create Value for Employees

Creating value for employees is a critical part of an effective business strategy and can be assessed using the value stick. Think of your employees as the “supplier” of labor and the supplier margin as employee satisfaction.

Employee satisfaction can be increased by raising wages or lowering the minimum salary they’re willing to receive by delivering value in other ways. Satisfied employees may provide a better customer experience, resulting in increased customer delight.

The value you provide employees ensures they’re motivated to do their best work, develop their skills, and stay with your company long-term.

Some examples of ways to create value for your employees include:

• Offering competitive salaries and bonuses
• Offering benefits like ample paid vacation and sick days, generous parental leave, and wellness budgets
• Providing flexibility of work location, whether your team is fully remote or hybrid
• Aiding in professional development
• Creating a workplace rich with a diversity of experiences, identities, and ideas
• Fostering a supportive organizational culture

One example from Business Strategy is that of a call center for a diagnostics company. The employees were being paid minimum wage and expressed that the analytical nature of their phone calls with customers warranted higher pay. They also expressed pain points about cumbersome tasks and work conditions.

When a pay increase was implemented for all employees, along with operational changes to make processes smoother, employee productivity increased to the point that it balanced out the higher cost of salaries.

Because the employees’ satisfaction increased, they also began providing better experiences on the phone with customers. This increased the customers’ willingness to pay, directly impacting customer delight.

6. Map Strategy to Actionable Tasks and KPIs

Amidst creating value for each of the three groups, don’t forget the fourth party that needs value: your company. By creating value for employees, suppliers, and customers, you’re creating value for your firm, too.

To ensure you’re tracking to goals, determine your key performance indicators, what metrics constitute success, and how you’ll report results over time. Then, break each of the above value-creation goals into action items. For instance, what steps can you take to increase your employees’ compensation? Who will be responsible for each task?

Having actionable assignments and clear metrics for success will allow for a smooth transition from strategy formulation to execution.

Building Your Strategic Skill Set

By leveraging the value stick, you can create a business strategy that provides value to employees, customers, suppliers, and your firm.

To develop your strategies further and dig deeper into how to navigate value creation, consider taking an online course like Business Strategy . Professor Oberholzer-Gee walks through real-world examples of business challenges, prompts you to consider how you’d create value, and then reveals what those business leaders did and how you can apply the lessons to your organization.

Want to learn more about how to craft a successful strategy for your organization? Explore Business Strategy , one of our online strategy courses , to learn how to create organizational value. Not sure which course is the right fit? Download our free flowchart .

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Axios Sees A.I. Coming, and Shifts Its Strategy

“The premium for people who can tell you things you do not know will only grow in importance, and no machine will do that,” says Jim VandeHei, C.E.O. of Axios.

By Katie Robertson

In the view of Jim VandeHei, the chief executive of Axios, artificial intelligence will “eviscerate the weak, the ordinary, the unprepared in media.”

The rapid rise of generative A.I. — and its implications for how people will discover and consume news — has unsettled many media executives. Like them, Mr. VandeHei has spent the past year or so pondering how to respond.

Now he’s becoming one of the first news executives to adjust their company’s strategy because of A.I.

Mr. VandeHei says the only way for media companies to survive is to focus on delivering journalistic expertise, trusted content and in-person human connection. For Axios, that translates into more live events, a membership program centered on its star journalists and an expansion of its high-end subscription newsletters.

“We’re in the middle of a very fundamental shift in how people relate to news and information,” he said, “as profound, if not more profound, than moving from print to digital.”

“Fast forward five to 10 years from now and we’re living in this A.I.-dominated virtual world — who are the couple of players in the media space offering smart, sane content who are thriving?” he added. “It damn well better be us.”

Axios is pouring investment into holding more events, both around the world and in the United States. Mr. VandeHei said the events portion of his business grew 60 percent year over year in 2023.

The company has also introduced a $1,000-a-year membership program around some of its journalists that will offer exclusive reporting, events and networking. The first one, announced last month, is focused on Eleanor Hawkins, who writes a weekly newsletter for communications professionals. Her newsletter will remain free, but paying subscribers will have access to additional news and data, as well as quarterly calls with Ms. Hawkins.

Membership programs will next be built around Sara Fischer, a media reporter, and the business editor Dan Primack, who writes the daily Pro Rata newsletter, according to a person familiar with the company’s plans.

“I’m trying to align the company with the people who have a ton of talent: They thrive, we thrive,” Mr. VandeHei said.

Axios will expand Axios Pro, its collection of eight high-end subscription newsletters focused on specific niches in the deals and policy world. The subscriptions start at $599 a year each, and Axios is looking to add one on defense policy. The company just hired an executive, Danica Stanciu, to oversee the expansion into more policy areas. Ms. Stanciu was instrumental in growing Politico Pro, Politico’s premium subscription offering, into a thriving business.

“The premium for people who can tell you things you do not know will only grow in importance, and no machine will do that,” Mr. VandeHei said.

Part of the pivot entails a restructuring of Axios’s leadership team. Sara Kehaulani Goo, the editor in chief of the Axios newsroom, will head up the editorial side of events and running new platforms. Aja Whitaker-Moore, the executive editor of the newsroom, will be promoted to editor in chief and will oversee all published content.

“I hope the next leg of this journey can really be focused on how we take the subject matter expertise to the next level,” she said.

Axios was started in 2017 by Mr. VandeHei, a co-founder of Politico, along with Mike Allen and Roy Schwartz. In August 2022, Cox Enterprises acquired Axios in a deal that valued the company at $525 million, with its founders staying on as minority shareholders.

Mr. VandeHei said Axios was not currently profitable because of the investment in the new businesses. The company has continued to hire journalists even as many other news organizations have cut back. An Axios spokeswoman said that Axios Local now had nearly two million subscribers across 30 newsletters, and that Axios’s national newsletters had about 1.5 million.

In addition to figuring out how A.I. could change news consumption by the public, many media companies are racing to figure out how to address the ingestion of their content by A.I. chatbots. The New York Times, for example, sued Microsoft and OpenAI in December for copyright infringement, arguing that millions of articles were used, without authorization, to train the tech companies’ chatbots.

Mr. VandeHei said that while he thought publications should be compensated for original intellectual property, “that’s not a make-or-break topic.” He said Axios had talked to several A.I. companies about potential deals, but “nothing that’s imminent.”

“One of the big mistakes a lot of media companies made over the last 15 years was worrying too much about how do we get paid by other platforms that are eating our lunch as opposed to figuring out how do we eat people’s lunch by having a superior product,” he said.

Katie Robertson covers the media industry for The Times. Email:  [email protected]   More about Katie Robertson

Netflix is shifting strategy away from big-budget action flicks and big-name stars. Here's its new plan.

• Dan Lin, Netflix's new film chief, wants to diversify its movie offerings.
• The move follows criticism of Netflix's focus on big-budget films.
• Lin's plan involves prioritizing in-house producers and skipping theatrical releases.

Tired of seeing the same action movie on Netflix over and over? Netflix knows, and they're working on it.

High-octane action films backed by big-name casts have dominated Netflix in recent years. Dan Lin, the company's new film chief, now wants to change that, according to The New York Times .

It might have something to do with Mark Wahlberg.

Related stories

In 2020, Netflix paid Wahlberg a whopping $30 million to star in "Spenser Confidential," which clocks in at 24 on the highest-paid film roles of all time . Critics panned the action thriller, an adaptation of Robert P. Barker's 2013 novel "Wonderland." It scored a dismal 36% on Rotten Tomatoes despite the hefty investment.

Netflix appears to want to learn from that lesson.

Netflix's previous film chief, Scott Stuber, left the company in January following clashes with bosses over what kinds of films to produce.

Before Stuber's exit, Netflix Chief Content Officer Bela Bajaria met with the company's film department, where she said film quality needed to improve, according to the Times. In the meeting, Bajaria told staff that the company was moving in a new direction and to consider leaving if they were not on board, according to the outlet.

Lin is now tasked with producing a wider variety of films, which the company thinks can be done at a lower budget, to connect better with the site's audience, the Times reported. One of his first moves was putting an end to massive upfront paychecks for actors.

Lin quickly went to work reorganizing the company's film department, laying off 15 of its 150 film department staff, and reorganizing the department by budget rather than genre, according to the outlet. Lin also "indicated that Netflix is no longer only the home of expensive action flicks featuring big movie stars."

The company is now emphasizing its own producers, who it expects to become "more aggressive" at developing their own concepts instead of waiting for other producers to bring in big deals, the Times reported.

Netflix did not immediately return a request for comment from Business Insider on Sunday.

Disclosure: Mathias Döpfner, CEO of Business Insider's parent company, Axel Springer, is a Netflix board member.

Watch: Marketing leaders from Amazon, LinkedIn, Lego Group and more tell Insider what pandemic-fueled business changes are likely to stick around

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Exclusive: Tesla scraps low-cost car plans amid fierce Chinese EV competition

• Medium Text

• Entry-level Tesla car won’t be built, three sources tell Reuters
• Tesla to focus on self-driving taxis instead, sources said
• Strategy shift comes as Tesla faces competition from China EV makers including BYD

‘HALT ALL FURTHER ACTIVITIES’

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Reporting by Hyunjoo Jin in San Francisco, Norihiko Shirouzu in Austin and Ben Klayman in Detroit. Editing by Marla Dickerson and Brian Thevenot.

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Alaska Air Group is not concerned about the production rate of Boeing's 737 MAX planes as it is more focused on the quality and safety of the planemaker's jets, a top company executive said on Thursday.