Strategic Planning

Strategic planning is the process by which senior management and strategic planners take to identify the areas to compete in and to maximise returns on their investment. 

Before any planning can be done, the thinking must have been completed. Should we enter into this market, should we develop this new product, should we go into this market segment - these are all strategic thinking issues and the answer to this will determine the plans that come out of them. Hence within the whole strategy value chain, senior management will have to apply strategic thinking before embarking on the plan. This process pre-supposes that the thinking has been done.

Strategic thinking before strategic planning

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ABCDE Process

At AITC, we developed a strategic planning protocol called ABCDE of Strategic Planning. By fleshing out these five main elements, an organisation would be able to execute the intent identified during strategic thinking. ABCDE is the acronym of the strategic planning elements:

Arena

Arena refers to the segment within which the company will operate. This is defined geographically, demographically and psychographically as well. The arena is chosen so that the business will enjoy competive advantage including the presence of barriers to entry, the ease of entry, the absence, or weakness, of incumbents and the ability of the company to recoup the investment in the shortest period of time.

 

KEY OUTPUT: Where, and to whom, shall we offer our next generation product?

By

The By element refers to by whom, by what, by when, etc. In essence, this is where the business identifies the 4Ws and 1H of the plan. The 4Ws are: who, what, when, where and the H is the how. Obviously the why has been identified during the strategic thinking phase.

 

KEY OUTPUT: What resources do we need to achieve our intent?

Course

The Course identifies the route that the business will take to achieve the objective. Having already identified the resources available in the previous segment, leaders will now plot the course backwards from there they want to be all the way back to where they are. Along the way, they will identify the milestones to be achieved and the time taken to get there. The Course will also identify alternative paths, identifying the preferred route and the indicators to help decision makers identify the actual business trajectory and the preferred course of action in these events. Finally, the Course synchronises resources so that they are applied in a "just-in-time" manner.

 

KEY OUTPUT: The Resource Allocation Plan

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Differentiator

While technically an element of both By and Course, and a key input in strategic thinking, this still takes centre stage in this step because of the disruptive nature that Differentiators present. Hence, business innovation will feature strongly in this, mapping itself back onto the Course.

 

KEY OUTPUT: New innovations to be aligned with the overall Resource Allocation Plan

Economics

Here, the financial scenarios are played out, looking at how to support each innovation while also planning the risk-reward matrix. Risk mitigation plans are also put in place in this step as the business uses the hypothesis-driven process to allow innovation to thrive and yet put financial limits to keep them from over-committing.

 

KEY OUTPUT: Budgets and Financial KPIs

Leading strategic planning

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