a publication by clearpoint strategy

2. Strategic Planning Process Models
Planning Model
- a set of variables classified as endogenous
and exogenous, cause effect relationships
among these variables and the consistency of
these relations.

3. Endogenous and Exogenous
Variables
These are terms to describe internal and
external factors respectively affecting the
organization‘s business production, efficiency,
growth and profitability. You are not able to
control all endogenous business factors.
Likewise, you can't control but should be able to
see the exogenous economy influence to your
organization. It is important to digest how these
factors affect your unique organization situation
so you can implement strategies and changes
building a stronger organization

4. Planning Model
• Modeling provides a logical, abstract template
to help organize the analyst's thoughts. The
model helps the planners logically isolate and
sort out complicated chains of cause and effect
and influence between the numerous
interacting elements in a situation.

5. Effective Strategic
Planning Models
• Strategy Map
• Balanced Scorecard
• SWOT Analysis
• PEST Mode
• Gap Planning
• Blue Ocean Strategy
• Porter's Five Forces
• VRIO Framework
By:

6. https://www.clearpointstrategy.com/strategic-planning-models/
ForMediumsized
Company

7. Strategy Map
Benefits:
• It provides a simple, clean, visual representation
that is easily referred back to.
• It unifies all goals into a single strategy.
• It gives every employee a clear goal to keep in
mind while accomplishing tasks and measures.
• It helps identify your key goals.
• It allows you to better understand which
elements of your strategy need work.
• It helps you see how your objectives affect the
others.

8. Financial Perspective
• Primary goal is to grow our profits. This
is driven by two other goals: manage
costs and grow revenue. Having three
financial perspective goals is simple and
fairly typical. Your organization may want
to consider being more specific about your
goals, like ―double revenue in three years‖
or ―manage overhead expenses.‖

9. Customer Perspective
• How must we look to our customers?” You
may list things like “quality of product,”
“knowledgeable service,” or “ease of use.” Try
not to list everything—just the top three or
four things.

10. • From there, consider your customer strategy. Are you
trying to grow revenue from your current customers or
grow the number of customers? You might say both,
but it‘s important to be very clear about your strategy
here. Some organizations put their customer objectives
in the voice of the customer, such as ―X has the best
service‖ or ―we view X as a partner.‖ Other
companies may also list the basic customer needs,
like ―competitive pricing,‖ ―quality offering,‖ or ―great
warranty.‖ You may not measure these, but it is
important to communicate them on the map.
Customer Perspective

11. Internal Perspective
These are the internal processes or things that your
organization must do well in order to make your
customers happy (and manage your expenses).
Many organizations now use themes in order to
better group their internal processes
• Innovation—This could be product, process, or
service innovation and is the lifeblood of your
long-term company future So, what do you need
to invest in to ensure long-term organizational
success? How will you innovate? Put two or three
objectives in this section.

12. • Customer Management—Think about the
internal processes you have that will keep your
customers happy. Perhaps this is how you
support your customers or how you listen to
them for feedback on the next generation of
interaction. Maybe you‘re migrating them from
one platform to another (paper vs.. electronic, for
example). all link to the customer perspective
and outcomes.
Internal Perspective

13. • Operational excellence—Think about
managing your own business and
becoming more cost effective. Are you
reducing waste or improving output?
Perhaps you‘re ready to restructure your
operations for efficiency‘s sake. This
theme may link directly to the financial
goal of managing costs.
Internal Perspective

14. Learning & Growth
Look at things from a ―people‖ perspective. Perhaps
two of these goals might be to ―build engineering
talent‖ and ―institute greater accountability‖
throughout the organization. consider what skills
you need that are related to your strategy, what kind
of culture you value, and whether there are any
tools or resources you need for your staff.

15. Learning & Growth
• Retirement – Apply succession planning
and skills transfer to potential staff;
IPCR/OPCR and monitor results

16. Takeaway
• A strategy map is an amazing communication
device that serves some excellent purposes. It
allows your organization to provide focus
internally and show your customers and
investors where you‘re on track. But it can be
even more powerful when used as the first step
toward a Balanced Scorecard (BSC).

17. Balanced Scorecard
The Balanced Scorecard is a strategy management
framework created by Drs. Robert Kaplan and David
Norton. It takes into account your:
– Objectives, which are high-level organizational
goals.
– Measures, which help you understand if you‘re
accomplishing your objective strategically.
– Initiatives, which are key action programs that
help you achieve your objectives.

20. • The first process—translating the vision—
helps managers build a consensus
concerning a company‘s strategy and
express it in terms that can guide action at
the local level.
• The second—communicating and
linking—calls for communicating a strategy
at all levels of the organization and linking
it with unit and individual goals.

21. • The third—business planning—enables
companies to integrate their business
plans with their financial plans. The
fourth—feedback and learning—gives
companies the capacity for strategic
learning, which consists of gathering
feedback, testing the hypotheses on which
a strategy is based, and making necessary
adjustments.

22. • in 1992, companies were busy transforming
themselves to compete in the world of
information; their ability to exploit intangible
assets was becoming more decisive than
their ability to manage physical assets. The
scorecard allowed companies to track
financial results while monitoring progress in
building the capabilities needed for growth.
The tool was not intended to be a
replacement for financial measures but rather
a complement—and that‘s just how most
companies treated it.

23. SWOT Analysis
A SWOT analysis (or SWOT matrix) is a
high-level model used at the beginning of
an organization‘s strategic Planning. It is
an acronym for ―strengths, weaknesses,
opportunities, and threats.‖ Strengths and
weaknesses are considered internal
factors, and opportunities and threats are
considered external factors.

24. Strengths
• Able to respond very quickly as we have no red tape,
and no need for higher management approval.
• Able to give really good customer care, as the current
small amount of work means we have plenty of time
to devote to customers.
• Our lead consultant has a strong reputation in the
market.
• We can change direction quickly if we find that our
marketing is not working.
• Low overheads, so we can offer good value to
customers.

25. Weaknesses
• Our company has little market presence or
reputation.
• We have a small staff, with a shallow skills
base in many areas.
• We are vulnerable to vital staff being sick
or leaving.
• Our cash flow will be unreliable in the early
stages.

26. Opportunities
• Our business sector is expanding, with
many future opportunities for success.
• Local government wants to encourage
local businesses.
• Our competitors may be slow to adopt new
technologies.

27. Threats
• Developments in technology may change
this market beyond our ability to adapt.
• A small change in the focus of a large
competitor might wipe out any market
position we achieve.
https://www.mindtools.com/pages/article/newTMC_05.htm

28. PEST Mode
• PEST is also an acronym—it stands for
―political, economic, sociocultural, and
technological.‖ Each of these factors is
used to look at an industry or business
environment, and determine what could
affect an organization‘s health. The PEST
model is often used in conjunction with the
external factors of a SWOT analysis.

29. Benefits of PEST Analysis
Some benefits that we can gain from the findings of a PEST
Analysis:
– Provides an understanding of the wider business
environment.
– Encourages the development of strategic thinking.
– Straightforward and only costs time to do.
– May raise awareness of threats to a project.
– Can help an organization to anticipate future difficulties
and take action to avoid or minimize their effect.
– Can help an organization to identify and exploit
opportunities.

30. https://www.visual-paradigm.com/guide/strategic-analysis/what-is-pest-analysis/

31. Political Factors
• These are all about how and to what degree a
government intervenes in the economy. This can
include - government policy, political stability or
instability in overseas markets, foreign trade policy,
tax policy, labor law, environmental law, trade
restrictions and so on.
• It is clear from the list above that political factors
often have an impact on organizations and how they
do business. Organizations need to be able to
respond to the current and anticipated future
legislation, and adjust their marketing policy
accordingly.

32. Economic Factors
• Economic factors have a significant impact on how an
organization this include - economic growth, interest
rates, exchange rates, inflation, disposable income of
consumers , etc
• Macro-economic factors deal with the management of
demand in any given economy. Governments use
interest rate control, taxation policy and government
expenditure as their main mechanisms for managing
macro-economic factors.
• Micro-economic factors are all about the way people
spend their incomes.

33. Social Factors
• Social factors are the areas that involve the
shared belief and attitudes of the population.
These factors include - population growth, age
distribution, health consciousness, career
attitudes and so on. These factors are of
particular interest as they have a direct effect on
how marketers understand customers and what
drives them.

34. Technological Factors
Know how fast the technological landscape
changes and how this impacts the way we market
our products. Technological factors affect
marketing and the management thereof in three
distinct ways:
– New ways of producing goods and services
– New ways of distributing goods and services
– New ways of communicating with target
markets

35. Gap Planning
Gap planning is also referred to as a ―Need-Gap
Analysis,‖ ―Need Assessment,‖ or ―the Strategic-
Planning Gap.‖ It is used to compare where an
organization is now, where it wants to be, and
how to bridge the gap between. It is primarily
used to identify specific internal deficiencies.
Gap analysis: The right method for
transitioning to ISO 9001:2015

36. Gap Planning
• In your gap planning research, you may also
hear about a ―change agenda‖ or ―shift chart.‖
These are similar to gap planning, as they both
take into consideration the difference between
where you are now and where you want to be
along various axes. From there, your planning
process is about how to ‗close the gap.‘

37. https://expertprogrammanagement.com/2017/09/gap-analysis/

38. Blue Ocean Strategy
• Blue Ocean Strategy is a strategic planning model that
emerged in a book by the same name in 2005. by W.
Chan Kim and Renée Mauborgne, professors at the
European Institute of Business Administration (INSEAD).
• The idea behind Blue Ocean Strategy is for organizations
to develop in ―uncontested market space‖ (e.g. a blue
ocean) instead of a market space that is either developed
or saturated (e.g. a red ocean). If your organization is able
to create a blue ocean, it can mean a massive value boost
for your company, its buyers, and its employees.

39. What characterizes Red Ocean Dwelling vs. Blue
Ocean Creating Organizations?
• Red Ocean companies try to outperform their rivals to
grab a greater share of existing demand. As the market
space gets crowded, prospects for profits and growth
reduce. Products become commodities and cut-throat
competition turns the ocean bloody red.
• Blue Ocean companies, in contrast, access untapped
market space and create demand, and so they have the
opportunity for highly profitable growth. In Blue Oceans,
competition is irrelevant. Yes, imitators arise, but
experience shows there is a wide window of opportunity
to stay ahead of imitators.

40. https://www.slideshare.net/JosephWinthropGodoy1/blue-ocean-versus-red-ocean
Blue Ocean Strategy VS. Red
Ocean strategy

41. • What consistently separates winners from losers
in creating Blue Oceans is their approach to
strategy. Creators of blue oceans do not use the
competition as their benchmark, but follow a
different strategic logic that we call value
innovation. Instead of focusing on beating the
competition, Blue Ocean-creating organizations
make them irrelevant, by simultaneously creating
a leap in value for buyers, and their organization,
thereby opening up new and uncontested market
space.

42. Blue Ocean creating businesses follow a different
strategic logic
• We Challenge Industry Conditions & Paradigms
• We Focus On Customers, Not Competitors
• We Don‘t Segment Customers, We Aggregate Them
• Our Assets Capabilities Are Not Fixed, They Are
Fluid
• We Solve Problems Across The Entire Supply Chain

43. Porter's Five Forces
• Porter‘s Five Forces is an older strategy execution framework created
by Michael Porter in 1979 built around the forces that impact the
profitability of an industry or a market. The five forces it examines are:
• The threat of entry. Could other companies enter the marketplace
easily, or are there numerous entry barriers they would have to
overcome?
• The threat of substitute products or services. Can buyers easily
replace your product with another?
• The bargaining power of customers. Could individual buyers put
pressure on your organization to, say, lower costs?
• The bargaining power of suppliers. Could large retailers put
pressure on your organization to drive down the cost?
• The competitive rivalry among existing firms. Are your current
competitors poised for major growth? If one launches a new product or
files a new patent—could that impact your company?
• The amount of pressure on each of these forces can help you
determine how future events will impact the future of your company

44. • The threat of substitute products or services. Can buyers
easily replace your product with another?
• The bargaining power of customers. Could individual
buyers put pressure on your organization to, say, lower costs?
• The bargaining power of suppliers. Could large retailers put
pressure on your organization to drive down the cost?
• The competitive rivalry among existing firms. Are your
current competitors poised for major growth? If one launches
a new product or files a new patent—could that impact your
company?
• The amount of pressure on each of these forces can help you
determine how future events will impact the future

45. https://www.visual-paradigm.com/guide/strategic-analysis/what-is-five-forces-analysis/

46. VRIO Framework
The VRIO is an acronym for value, rarity,
limitability, organization.‖ This framework relates
more to your vision statement than your overall
strategy. The ultimate goal in implementing the
VRIO model is that it will result in a competitive
advantage in the marketplace.

47. • Value: Are you able to exploit an opportunity or
neutralize an outside threat using a particular
resource?
• Rarity: Is there a great deal of competition in your
market, or do only a few companies control the
resource referred to above?
• Iimitability: Is your organization‘s product or service
easily imitated, or would it be difficult for another
organization to do so?
• Organization: Is your company organized enough
to be able to exploit your product or resource?

48. Is one strategic planning model better than
the others?
• Some of these frameworks have been around
longer than others, or have been used in
various case studies in different ways. And
sometimes managers are more comfortable
with one over another, for a any number of
reasons.
• We recommend determining which of these
strategic planning models applies most to
your organization‘s way of thinking.

49. • For example, if you still need to work out your
vision statement, it may be wise to begin with
the VRIO framework and then move to
something like the Balanced Scorecard to
track and manage your ongoing strategy.
• If you are set on pitching a particular strategic
planning model to management, be prepared
to give your boss or board of directors an
example of another successful company that
has utilized that particular model

50. Sources
Avery Hale (2017) Strategic Planning Models To Consider
https://www.clearpointstrategy.com/strategic-planning-models/.
Accessed Aug. 14, 2018
https://www.mindtools.com/pages/article/newTMC_05.htm
https://www.visual-paradigm.com/guide/strategic-analysis/what-is-five-forces-analysis/
https://expertprogrammanagement.com/2017/09/gap-analysis/
https://www.slideshare.net/JosephWinthropGodoy1/blue-ocean-versus-red-ocean

51. Photo credit