business planning strategic analysis

What is Strategic Analysis? 8 Best Strategic Analysis Tools + Examples

A huge part of developing a strategic plan is a reliable, in-depth strategic analysis. An organization is separated into internal and external environments. Both components should be scrutinized to identify factors influencing organizations and guiding decision-making.

In this article, we'll cover:

What Is Strategic Analysis?

Types of strategic analysis, benefits of strategic analysis for strategy formulation, strategic analysis example - walmart, how to do a strategic analysis: key components, strategic analysis tools, how to choose the right strategic analysis tool, the next step: from analysis to action with cascade 🚀.

⚠️ Remember, insights aren't enough! Understanding your internal & external environment is vital, but true strategy comes from action. Cascade Strategy Execution Platform bridges the gap between analysis and execution. Talk to our strategy experts to turn your strategic analysis into a winning roadmap with clear goals and measurable results.

Strategic analysis is the process of researching and analyzing an organization along with the business environment in which it operates to formulate an effective strategy. This process of strategy analysis usually includes defining the internal and external environments, evaluating identified data, and utilizing strategic analysis tools.

By conducting strategic analysis, companies can gain valuable insights into what's working well and what areas need improvement. These valuable insights become key inputs for the strategic planning process , helping businesses make well-informed decisions to thrive and grow.

When it comes to strategic analysis, businesses employ different approaches to gain insights into their inner workings and the external factors influencing their operations.

Let's explore two key types of strategic analysis:

Internal strategic analysis

The focus of internal strategic analysis is on diving deep into the organization's core. It involves a careful examination of the company's strengths, weaknesses, resources, and competencies. By conducting a thorough assessment of these aspects, businesses can pinpoint areas of competitive advantage, identify potential bottlenecks, and uncover opportunities for improvement.

This introspective analysis acts as a mirror , reflecting the organization's current standing, and provides valuable insights to shape the path that will ultimately lead to achieving its mission statement.

External strategic analysis

On the other hand, external strategic analysis zooms out to consider the broader business environment. This entails conducting market analysis, trend research, and understanding customer behaviors, regulatory changes, technological advancements, and competitive forces. By understanding these external dynamics, organizations can anticipate potential threats and uncover opportunities that can significantly impact their strategic decision-making.

The external strategic analysis acts as a window , offering a view of the ever-changing business landscape.

The analysis phase sets “the stage” for your strategy formulation.

The strategic analysis informs the activities you undertake in strategic formulation and allows you to make informed decisions. This phase not only sets the stage for the development of effective business planning but also plays a crucial role in accurately framing the challenges to be addressed.

These are some benefits of strategic analysis for strategy formulation:

• Holistic View : Gain a comprehensive understanding of internal capabilities, the external landscape, and potential opportunities and threats.
• Accurate Challenge Framing : Identify and define core challenges accurately, shaping the strategy development process. ‍
• Proactive Adaptation : Anticipate potential bottlenecks and areas for improvement, fostering proactive adaptability. ‍
• Leveraging Strengths : Develop strategies that maximize organizational strengths for a competitive advantage.

At the very least, the right framing can improve your understanding of your competitors and, at its best, revolutionize an industry. For example, everybody thought that the early success of Walmart was due to Sam Walton breaking the conventional wisdom:

“A full-line discount store needs a population base of at least 100,000.”

But that’s not true.

Sam Walton didn’t break that rule, he redefined the idea of the “store,” replacing it with that of a “network of stores.” That led to reframing conventional wisdom, developing a coherent strategy, and revolutionizing an industry.

📚 Check out our #StrategyStudy: How Walmart Became The Retailer Of The People

Strategy is not a linear process.

Strategy is an iterative process where strategic planning and execution interact with each other constantly.

First, you plan your strategy, and then you implement it and constantly monitor it. Tracking the progress of your initiatives and KPIs (key performance indicators) allows you to identify what's working and what needs to change. This feedback loop guides you to reassess and readjust your strategic plan before proceeding to implementation again. This iterative approach ensures adaptability and enhances the strategy's effectiveness in achieving your goals.

Strategic planning includes the strategic analysis process.

The content of your strategic analysis varies, depending on the strategy level at which you're completing the strategic analysis.

For example, a team involved in undertaking a strategic analysis for a corporation with multiple businesses will focus on different things compared to a team within a department of an organization.

But no matter the team or organization's nature, whether it's a supply chain company aiming to enhance its operations or a marketing team at a retail company fine-tuning its marketing strategy, conducting a strategic analysis built on key components establishes a strong foundation for well-informed and effective decision-making.

The key components of strategic analysis are:

Define the strategy level for the analysis

• Complete an internal analysis
• Complete an external analysis

Unify perspectives & communicate insights

Strategy comes in different levels depending on where you are in an organization and your organization's size.

You may be creating a strategy to guide the direction of an entire organization with multiple businesses, or you may be creating a strategy for your marketing team. As such, the process will differ for each level as there are different objectives and needs.

The three strategy levels are:

• Corporate Strategy
• Business Strategy
• Functional Strategy

👉🏻If you're not sure which strategy level you're completing your strategy analysis for, read this article explaining each of the strategy levels .

Conduct an internal analysis

As we mentioned earlier, an internal analysis looks inwards at the organization and assesses the elements that make up the internal environment. Performing an internal analysis allows you to identify the strengths and weaknesses of your organization.

Let's take a look at the steps involved in completing an internal analysis:

1. Assessment of tools to use

First, you need to decide what tool or framework you will use to conduct the analysis.

You can use many tools to assist you during an internal analysis. We delve into that a bit later in the article, but to give you an idea, for now, Gap Analysis , Strategy Evaluation , McKinsey 7S Model , and VRIO are all great analysis techniques that can be used to gain a clear picture of your internal environment.

2. Research and collect information

Now it’s time to move into research . Once you've selected the tool (or tools) you will use, you will start researching and collecting data.

The framework you use should give you some structure around what information and data you should look at and how to draw conclusions.

3. Analyze information

The third step is to process the collected information. After the data research and collection stage, you'll need to start analyzing the data and information you've gathered.

How will the data and information you've gathered have an impact on your business or a potential impact on your business? Looking at different scenarios will help you pull out possible impacts.

4. Communicate key findings

The final step of an internal analysis is sharing your conclusions . What is the value of your analysis’ conclusions if nobody knows about them?

You should be communicating your findings to the rest of the team involved in the analysis and go even further. Share relevant information with the rest of your people to demonstrate that you trust them and offer context to your decisions.

Once the internal analysis is complete , the organization should have a clear idea of where they're excelling, where they're doing OK, and where current deficits and gaps lie.

The analysis provides your leadership team with valuable insights to capitalize on strengths and opportunities effectively. It also empowers them to devise strategies that address potential threats and counteract identified weaknesses.

Beginning strategy formulation after this analysis will ensure your strategic plan has been crafted to take advantage of strengths and opportunities and offset or improve weaknesses & threats. This way, the strategic management process remains focused on the identified priorities, enabling a well-informed and proactive approach to achieving your organizational goals.

You can then be confident that you're funneling your resources, time, and focus effectively and efficiently.

Conduct an external analysis

As we stated before, the other type of strategic analysis is the external analysis which looks at an organization's environment and how those environmental factors currently impact or could impact the organization.

A key difference between the external and the internal factors lies in the organization's level of control.

Internally, the organization wields complete control and can actively influence these factors. On the other hand, external components lie beyond the organization's direct control, and the focus is on scanning and reacting to the environment rather than influencing it.

External factors of the organization include the industry the organization competes in, the political and legal landscape the organization operates in, and the communities they operate in.

The steps for conducting an external analysis are much the same as an internal analysis:

• Assessment of tools to use
• Research and collect information
• Analyze information
• Communicate key findings

You'll want to use a tool such as SWOT analysis , PESTLE analysis , or Porter's Five Forces to help you add some structure to your analysis. We’ll dive into the tools in more detail further down this article!

Chances are, you didn't tackle the entire analysis alone. Different team members likely took responsibility for specific parts, such as the internal gap analysis or external environmental scan. Each member contributed valuable insights, forming a mosaic of information.

To ensure a comprehensive understanding, gather feedback from all team members involved. Collate all the data and share the complete picture with relevant stakeholders across your organization.

Much like strategy, this information is useless if not shared with everyone.

Remember : There is no such thing as overcommunication.

If you have to keep only one rule of communication, it’s that one. Acting on the insights and discoveries distilled from the analysis is what gives them value. Communicating those findings with your employees and all relevant (internal and external) stakeholders enables acting on them.

Setting up a central location where everyone can access the data should be your first step, but it shouldn't end there. Organize a meeting to go through all the key findings and ensure everyone is on the same page regarding the organization's environment.

There are a number of strategic analysis tools at your disposal. We'll show you 8 of the best strategic analysis tools out there.

The 8 best strategic analysis tools:

Gap analysis, vrio analysis, four corners analysis, value chain analysis.

• SWOT Analysis

Strategy Evaluation

Porter's five forces, pestel analysis.

Note: Analytical tools rely on historical data and prior situations to infer future assumptions. With this in mind, caution should always be used when making assumptions based on your strategic analysis findings.

The Gap Analysis is a great internal analysis tool that helps you identify the gaps in your organization, impeding your progress towards your objectives and vision.

The analysis gives you a process for comparing your organization's current state to its desired future state to draw out the current gaps, which you can then create a series of actions that will bridge the identified gap.

The gap analysis approach to strategic planning is one of the best ways to start thinking about your goals in a structured and meaningful way and focuses on improving a specific process.

👉 Grab your free Gap Analysis template to streamline the process!

The VRIO Analysis is an internal analysis tool for evaluating your resources.

It identifies organizational resources that may potentially create sustainable competitive advantages for the organization. This analysis framework gives you a process for categorizing the resources in your organization based on whether they hold certain traits: Valuable, Rare, Inimitable, and Organized.

The framework then encourages you to begin thinking about moving those resources to the “next step'' to ultimately develop those resources into competitive advantages.

👉 Grab your free VRIO strategy template that will help you to develop and execute a strategy based on your VRIO analysis.

The Four Corners Analysis framework is another internal analysis tool that focuses on your organization's core competencies.

However, what differentiates this tool from the others is its long-term focus. To clarify, most of the other tools evaluate the current state of an entity, but the Four Corners Analysis assesses the company’s future strategy, which is more precise because it makes the corporation one step ahead of its competitors.

By using the Four Corners, you will know your competitors’ motivation and their current strategies powered by their capabilities. This analysis will aid you in formulating the company’s trend or predictive course of action.

Similar to VRIO, the Value Chain Analysis is a great tool to identify and help establish a competitive advantage for your organization.

The Value Chain framework achieves this by examining the range of activities in the business to understand the value each brings to the final product or service.

The concept of this strategy tool is that each activity should directly or indirectly add value to the final product or service. If you are operating efficiently, you should be able to charge more than the total cost of adding that value.

A SWOT analysis is a simple yet ridiculously effective way of conducting a strategic analysis.

It covers both the internal and external perspectives of a business.

When using SWOT, one thing to keep in mind is the importance of using specific and verifiable statements. Otherwise, you won’t be able to use that information to inform strategic decisions.

👉 Grab your free SWOT Analysis template to streamline the process!

Generally, every company will have a previous strategy that needs to be taken into consideration during a strategic analysis.

Unless you're a brand new start-up, there will be some form of strategy in the company, whether explicit or implicit. This is where a strategy evaluation comes into play.

The previous strategy shouldn't be disregarded or abandoned, even if you feel like it wasn't the right direction or course of action. Analyzing why a certain direction or course of action was decided upon will inform your choice of direction.

A Strategic Evaluation looks into the strategy previously or currently implemented throughout the organization and identifies what went well, what didn't go so well, what should not have been there, and what could be improved upon.

👉To learn more about this analysis technique, read our detailed guide on how to conduct a comprehensive Strategy Evaluation .

Complementing an internal analysis should always be an analysis of the external environment, and Porter's Five Forces is a great tool to help you achieve this.

Porter's Five Forces framework performs an external scan and helps you get a picture of the current market your organization is playing in by answering questions such as:

• Why does my industry look the way it does today?
• What forces beyond competition shape my industry?
• How can I find a position among my competitors that ensures profitability?
• What strategies can I implement to make this position challenging for them to replicate?

With the answer to the above questions, you'll be able to start drafting a strategy to ensure your organization can find a profitable position in the industry.

👉 Grab your free Porter’s 5 Forces template to implement this framework!

We might sound repetitive, but external analysis tools are critical to your strategic analysis.

The environment your organization operates in will heavily impact your organization's success. PESTEL analysis is one of the best external analysis tools you can use due to its broad nature.

The name PESTEL is an acronym for the elements that make up the framework:

• Technological
• Environmental

Basically, the premise of the analysis is to scan each of the elements above to understand the current status and how they can potentially impact your industry and, thus, your organization.

PESTEL gives you extra focus on certain elements that may have a wide-ranging impact, and a birds-eye view of the macro-environmental factors.

There are as many ways to do strategy as there are organizations. So not every tool is appropriate for every organization.

These 8 tools are our top picks for giving you a helping hand through your strategic analysis. They're by no means the whole spectrum. There are many other frameworks and tools out there that could be useful and provide value to your process.

Choose the tools that fit best with your approach to doing strategy. Don’t limit yourself to one tool if it doesn’t make sense, don’t be afraid to combine them, mix and match! And, be faithful to each framework but always as long as it fits your organization’s needs.

Completing the strategic analysis phase is a crucial milestone, but it's only the beginning of a successful journey. Now comes the vital task of formulating a plan and ensuring its effective execution. This is where Cascade comes into play, offering a powerful solution to drive your strategy forward.

Cascade is your ultimate partner in strategy execution. With its user-friendly interface and robust features, it empowers you to translate the strategic insights distilled from your strategic analysis into actionable plans.

Some key features include:

• Planner : Seamlessly build out your objectives, initiatives, and key performance indicators (KPIs) while aligning them with the organization's goals. Break down the complexity from high-level initiative to executable outcomes. ‍
• Alignment Map : Visualize how different organizational plans work together and how your corporate strategy breaks down into operational and functional plans.

• ‍ Metrics & Measures : Connect your business data directly to your core initiatives in Cascade for clear data-driven alignment. ‍

• Integrations : Consolidate your business systems underneath a unified roof. Import context in real-time by leveraging Cascade’s native, third-party connector (Zapier/PA), and custom integrations. ‍
• Dashboards & Reports : Stay informed about your strategy's performance at every stage with Cascade's real-time tracking and progress monitoring, and share it with your stakeholders, suppliers, and contractors.

Experience the power of Cascade today! Sign up today for a free forever plan or book a guided 1:1 tour with one of our Cascade in-house strategy execution experts.

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• 7 strategic planning models, plus 8 fra ...

7 strategic planning models, plus 8 frameworks to help you get started

Strategic planning is vital in defining where your business is going in the next three to five years. With the right strategic planning models and frameworks, you can uncover opportunities, identify risks, and create a strategic plan to fuel your organization’s success. We list the most popular models and frameworks and explain how you can combine them to create a strategic plan that fits your business.

A strategic plan is a great tool to help you hit your business goals . But sometimes, this tool needs to be updated to reflect new business priorities or changing market conditions. If you decide to use a model that already exists, you can benefit from a roadmap that’s already created. The model you choose can improve your knowledge of what works best in your organization, uncover unknown strengths and weaknesses, or help you find out how you can outpace your competitors.

In this article, we cover the most common strategic planning models and frameworks and explain when to use which one. Plus, get tips on how to apply them and which models and frameworks work well together. 

Strategic planning models vs. frameworks

First off: This is not a one-or-nothing scenario. You can use as many or as few strategic planning models and frameworks as you like. 

When your organization undergoes a strategic planning phase, you should first pick a model or two that you want to apply. This will provide you with a basic outline of the steps to take during the strategic planning process.

During that process, think of strategic planning frameworks as the tools in your toolbox. Many models suggest starting with a SWOT analysis or defining your vision and mission statements first. Depending on your goals, though, you may want to apply several different frameworks throughout the strategic planning process.

For example, if you’re applying a scenario-based strategic plan, you could start with a SWOT and PEST(LE) analysis to get a better overview of your current standing. If one of the weaknesses you identify has to do with your manufacturing process, you could apply the theory of constraints to improve bottlenecks and mitigate risks. 

Now that you know the difference between the two, learn more about the seven strategic planning models, as well as the eight most commonly used frameworks that go along with them.

1. Basic model

The basic strategic planning model is ideal for establishing your company’s vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

If it’s your first strategic planning session, the basic model is the way to go. Later on, you can embellish it with other models to adjust or rewrite your business strategy as needed. Let’s take a look at what kinds of businesses can benefit from this strategic planning model and how to apply it.

Small businesses or organizations

Companies with little to no strategic planning experience

Organizations with few resources 

Write your mission statement. Gather your planning team and have a brainstorming session. The more ideas you can collect early in this step, the more fun and rewarding the analysis phase will feel.

Identify your organization’s goals . Setting clear business goals will increase your team’s performance and positively impact their motivation.

Outline strategies that will help you reach your goals. Ask yourself what steps you have to take in order to reach these goals and break them down into long-term, mid-term, and short-term goals .

Create action plans to implement each of the strategies above. Action plans will keep teams motivated and your organization on target.

Monitor and revise the plan as you go . As with any strategic plan, it’s important to closely monitor if your company is implementing it successfully and how you can adjust it for a better outcome.

2. Issue-based model

Also called goal-based planning model, this is essentially an extension of the basic strategic planning model. It’s a bit more dynamic and very popular for companies that want to create a more comprehensive plan.

Organizations with basic strategic planning experience

Businesses that are looking for a more comprehensive plan

Conduct a SWOT analysis . Assess your organization’s strengths, weaknesses, opportunities, and threats with a SWOT analysis to get a better overview of what your strategic plan should focus on. We’ll give into how to conduct a SWOT analysis when we get into the strategic planning frameworks below.

Identify and prioritize major issues and/or goals. Based on your SWOT analysis, identify and prioritize what your strategic plan should focus on this time around.

Develop your main strategies that address these issues and/or goals. Aim to develop one overarching strategy that addresses your highest-priority goal and/or issue to keep this process as simple as possible.

Update or create a mission and vision statement . Make sure that your business’s statements align with your new or updated strategy. If you haven’t already, this is also a chance for you to define your organization’s values.

Create action plans. These will help you address your organization’s goals, resource needs, roles, and responsibilities. 

Develop a yearly operational plan document. This model works best if your business repeats the strategic plan implementation process on an annual basis, so use a yearly operational plan to capture your goals, progress, and opportunities for next time.

Allocate resources for your year-one operational plan. Whether you need funding or dedicated team members to implement your first strategic plan, now is the time to allocate all the resources you’ll need.

Monitor and revise the strategic plan. Record your lessons learned in the operational plan so you can revisit and improve it for the next strategic planning phase.

The issue-based plan can repeat on an annual basis (or less often once you resolve the issues). It’s important to update the plan every time it’s in action to ensure it’s still doing the best it can for your organization.

You don’t have to repeat the full process every year—rather, focus on what’s a priority during this run.

3. Alignment model

This model is also called strategic alignment model (SAM) and is one of the most popular strategic planning models. It helps you align your business and IT strategies with your organization’s strategic goals. 

You’ll have to consider four equally important, yet different perspectives when applying the alignment strategic planning model:

Strategy execution: The business strategy driving the model

Technology potential: The IT strategy supporting the business strategy

Competitive potential: Emerging IT capabilities that can create new products and services

Service level: Team members dedicated to creating the best IT system in the organization

Ideally, your strategy will check off all the criteria above—however, it’s more likely you’ll have to find a compromise. 

Here’s how to create a strategic plan using the alignment model and what kinds of companies can benefit from it.

Organizations that need to fine-tune their strategies

Businesses that want to uncover issues that prevent them from aligning with their mission

Companies that want to reassess objectives or correct problem areas that prevent them from growing

Outline your organization’s mission, programs, resources, and where support is needed. Before you can improve your statements and approaches, you need to define what exactly they are.

Identify what internal processes are working and which ones aren’t. Pinpoint which processes are causing problems, creating bottlenecks , or could otherwise use improving. Then prioritize which internal processes will have the biggest positive impact on your business.

Identify solutions. Work with the respective teams when you’re creating a new strategy to benefit from their experience and perspective on the current situation.

Update your strategic plan with the solutions. Update your strategic plan and monitor if implementing it is setting your business up for improvement or growth. If not, you may have to return to the drawing board and update your strategic plan with new solutions.

4. Scenario model

The scenario model works great if you combine it with other models like the basic or issue-based model. This model is particularly helpful if you need to consider external factors as well. These can be government regulations, technical, or demographic changes that may impact your business.

Organizations trying to identify strategic issues and goals caused by external factors

Identify external factors that influence your organization. For example, you should consider demographic, regulation, or environmental factors.

Review the worst case scenario the above factors could have on your organization. If you know what the worst case scenario for your business looks like, it’ll be much easier to prepare for it. Besides, it’ll take some of the pressure and surprise out of the mix, should a scenario similar to the one you create actually occur.

Identify and discuss two additional hypothetical organizational scenarios. On top of your worst case scenario, you’ll also want to define the best case and average case scenarios. Keep in mind that the worst case scenario from the previous step can often provoke strong motivation to change your organization for the better. However, discussing the other two will allow you to focus on the positive—the opportunities your business may have ahead.

Identify and suggest potential strategies or solutions. Everyone on the team should now brainstorm different ways your business could potentially respond to each of the three scenarios. Discuss the proposed strategies as a team afterward.

Uncover common considerations or strategies for your organization. There’s a good chance that your teammates come up with similar solutions. Decide which ones you like best as a team or create a new one together.

Identify the most likely scenario and the most reasonable strategy. Finally, examine which of the three scenarios is most likely to occur in the next three to five years and how your business should respond to potential changes.

5. Self-organizing model

Also called the organic planning model, the self-organizing model is a bit different from the linear approaches of the other models. You’ll have to be very patient with this method. 

This strategic planning model is all about focusing on the learning and growing process rather than achieving a specific goal. Since the organic model concentrates on continuous improvement , the process is never really over.

Large organizations that can afford to take their time

Businesses that prefer a more naturalistic, organic planning approach that revolves around common values, communication, and shared reflection

Companies that have a clear understanding of their vision

Define and communicate your organization’s cultural values . Your team can only think clearly and with solutions in mind when they have a clear understanding of your organization's values.

Communicate the planning group’s vision for the organization. Define and communicate the vision with everyone involved in the strategic planning process. This will align everyone’s ideas with your company’s vision.

Discuss what processes will help realize the organization’s vision on a regular basis. Meet every quarter to discuss strategies or tactics that will move your organization closer to realizing your vision.

6. Real-time model

This fluid model can help organizations that deal with rapid changes to their work environment. There are three levels of success in the real-time model: 

Organizational: At the organizational level, you’re forming strategies in response to opportunities or trends.

Programmatic: At the programmatic level, you have to decide how to respond to specific outcomes or environmental changes.

Operational: On the operational level, you will study internal systems, policies, and people to develop a strategy for your company.

Figuring out your competitive advantage can be difficult, but this is absolutely crucial to ensure success. Whether it’s a unique asset or strength your organization has or an outstanding execution of services or programs—it’s important that you can set yourself apart from others in the industry to succeed.

Companies that need to react quickly to changing environments

Businesses that are seeking new tools to help them align with their organizational strategy

Define your mission and vision statement. If you ever feel stuck formulating your company’s mission or vision statement, take a look at those of others. Maybe Asana’s vision statement sparks some inspiration.

Research, understand, and learn from competitor strategy and market trends. Pick a handful of competitors in your industry and find out how they’ve created success for themselves. How did they handle setbacks or challenges? What kinds of challenges did they even encounter? Are these common scenarios in the market? Learn from your competitors by finding out as much as you can about them.

Study external environments. At this point, you can combine the real-time model with the scenario model to find solutions to threats and opportunities outside of your control.

Conduct a SWOT analysis of your internal processes, systems, and resources. Besides the external factors your team has to consider, it’s also important to look at your company’s internal environment and how well you’re prepared for different scenarios.

Develop a strategy. Discuss the results of your SWOT analysis to develop a business strategy that builds toward organizational, programmatic, and operational success.

Rinse and repeat. Monitor how well the new strategy is working for your organization and repeat the planning process as needed to ensure you’re on top or, perhaps, ahead of the game. 

7. Inspirational model

This last strategic planning model is perfect to inspire and energize your team as they work toward your organization’s goals. It’s also a great way to introduce or reconnect your employees to your business strategy after a merger or acquisition.

Businesses with a dynamic and inspired start-up culture

Organizations looking for inspiration to reinvigorate the creative process

Companies looking for quick solutions and strategy shifts

Gather your team to discuss an inspirational vision for your organization. The more people you can gather for this process, the more input you will receive.

Brainstorm big, hairy audacious goals and ideas. Encouraging your team not to hold back with ideas that may seem ridiculous will do two things: for one, it will mitigate the fear of contributing bad ideas. But more importantly, it may lead to a genius idea or suggestion that your team wouldn’t have thought of if they felt like they had to think inside of the box.

Assess your organization’s resources. Find out if your company has the resources to implement your new ideas. If they don’t, you’ll have to either adjust your strategy or allocate more resources.

Develop a strategy balancing your resources and brainstorming ideas. Far-fetched ideas can grow into amazing opportunities but they can also bear great risk. Make sure to balance ideas with your strategic direction. 

Now, let’s dive into the most commonly used strategic frameworks.

8. SWOT analysis framework

One of the most popular strategic planning frameworks is the SWOT analysis . A SWOT analysis is a great first step in identifying areas of opportunity and risk—which can help you create a strategic plan that accounts for growth and prepares for threats.

SWOT stands for strengths, weaknesses, opportunities, and threats. Here’s an example:

9. OKRs framework

A big part of strategic planning is setting goals for your company. That’s where OKRs come into play. 

OKRs stand for objective and key results—this goal-setting framework helps your organization set and achieve goals. It provides a somewhat holistic approach that you can use to connect your team’s work to your organization’s big-picture goals.  When team members understand how their individual work contributes to the organization’s success, they tend to be more motivated and produce better results

10. Balanced scorecard (BSC) framework

The balanced scorecard is a popular strategic framework for businesses that want to take a more holistic approach rather than just focus on their financial performance. It was designed by David Norton and Robert Kaplan in the 1990s, it’s used by companies around the globe to: 

Communicate goals

Align their team’s daily work with their company’s strategy

Prioritize products, services, and projects

Monitor their progress toward their strategic goals

Your balanced scorecard will outline four main business perspectives:

Customers or clients , meaning their value, satisfaction, and/or retention

Financial , meaning your effectiveness in using resources and your financial performance

Internal process , meaning your business’s quality and efficiency

Organizational capacity , meaning your organizational culture, infrastructure and technology, and human resources

With the help of a strategy map, you can visualize and communicate how your company is creating value. A strategy map is a simple graphic that shows cause-and-effect connections between strategic objectives. 

The balanced scorecard framework is an amazing tool to use from outlining your mission, vision, and values all the way to implementing your strategic plan .

You can use an integration like Lucidchart to create strategy maps for your business in Asana.

11. Porter’s Five Forces framework

If you’re using the real-time strategic planning model, Porter’s Five Forces are a great framework to apply. You can use it to find out what your product’s or service’s competitive advantage is before entering the market.

Developed by Michael E. Porter , the framework outlines five forces you have to be aware of and monitor:

Threat of new industry entrants: Any new entry into the market results in increased pressure on prices and costs. 

Competition in the industry: The more competitors that exist, the more difficult it will be for you to create value in the market with your product or service.

Bargaining power of suppliers: Suppliers can wield more power if there are less alternatives for buyers or it’s expensive, time consuming, or difficult to switch to a different supplier.

Bargaining power of buyers: Buyers can wield more power if the same product or service is available elsewhere with little to no difference in quality.

Threat of substitutes: If another company already covers the market’s needs, you’ll have to create a better product or service or make it available for a lower price at the same quality in order to compete.

Remember, industry structures aren’t static. The more dynamic your strategic plan is, the better you’ll be able to compete in a market.

12. VRIO framework

The VRIO framework is another strategic planning tool designed to help you evaluate your competitive advantage. VRIO stands for value, rarity, imitability, and organization.

It’s a resource-based theory developed by Jay Barney. With this framework, you can study your firmed resources and find out whether or not your company can transform them into sustained competitive advantages. 

Firmed resources can be tangible (e.g., cash, tools, inventory, etc.) or intangible (e.g., copyrights, trademarks, organizational culture, etc.). Whether these resources will actually help your business once you enter the market depends on four qualities:

Valuable : Will this resource either increase your revenue or decrease your costs and thereby create value for your business?

Rare : Are the resources you’re using rare or can others use your resources as well and therefore easily provide the same product or service?

Inimitable : Are your resources either inimitable or non-substitutable? In other words, how unique and complex are your resources?

Organizational: Are you organized enough to use your resources in a way that captures their value, rarity, and inimitability?

It’s important that your resources check all the boxes above so you can ensure that you have sustained competitive advantage over others in the industry.

13. Theory of Constraints (TOC) framework

If the reason you’re currently in a strategic planning process is because you’re trying to mitigate risks or uncover issues that could hurt your business—this framework should be in your toolkit.

The theory of constraints (TOC) is a problem-solving framework that can help you identify limiting factors or bottlenecks preventing your organization from hitting OKRs or KPIs . 

Whether it’s a policy, market, or recourse constraint—you can apply the theory of constraints to solve potential problems, respond to issues, and empower your team to improve their work with the resources they have.

14. PEST/PESTLE analysis framework

The idea of the PEST analysis is similar to that of the SWOT analysis except that you’re focusing on external factors and solutions. It’s a great framework to combine with the scenario-based strategic planning model as it helps you define external factors connected to your business’s success.

PEST stands for political, economic, sociological, and technological factors. Depending on your business model, you may want to expand this framework to include legal and environmental factors as well (PESTLE). These are the most common factors you can include in a PESTLE analysis:

Political: Taxes, trade tariffs, conflicts

Economic: Interest and inflation rate, economic growth patterns, unemployment rate

Social: Demographics, education, media, health

Technological: Communication, information technology, research and development, patents

Legal: Regulatory bodies, environmental regulations, consumer protection

Environmental: Climate, geographical location, environmental offsets

15. Hoshin Kanri framework

Hoshin Kanri is a great tool to communicate and implement strategic goals. It’s a planning system that involves the entire organization in the strategic planning process. The term is Japanese and stands for “compass management” and is also known as policy management. 

This strategic planning framework is a top-down approach that starts with your leadership team defining long-term goals which are then aligned and communicated with every team member in the company. 

You should hold regular meetings to monitor progress and update the timeline to ensure that every teammate’s contributions are aligned with the overarching company goals.

Stick to your strategic goals

Whether you’re a small business just starting out or a nonprofit organization with decades of experience, strategic planning is a crucial step in your journey to success. 

If you’re looking for a tool that can help you and your team define, organize, and implement your strategic goals, Asana is here to help. Our goal-setting software allows you to connect all of your team members in one place, visualize progress, and stay on target.

Related resources

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9 Strategic Planning Models and Tools for the Customer-Focused Business

Published: July 11, 2023

As the economist and business strategy guru, Michael Porter, says, “The essence of strategy is choosing what not to do.”

With strategic planning, businesses identify their strengths and weaknesses, choose what not to do, and determine which opportunities should be pursued. In sales operations, having a clearly defined strategy will help your organization plan for the future, set viable goals, and achieve them.

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So, how do you get started with strategic planning? You‘ll begin with strategic planning models and tools. Let’s take a look at nine of the most prominent ones here.

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Strategic planning models.

Strategic planning is used to set up long-term goals and priorities for an organization. A strategic plan is a written document that outlines these goals.

Don't confuse strategic planning and tactical planning . Strategic planning is focused on long-term goals, while tactical planning is focused on the short-term.

Here are a few strategic planning models you can use to get started.

1. The Balanced Scorecard

The Balanced Scorecard is one of the most prominent strategic planning models, tailored to give managers a comprehensive overview of their companies' operations on tight timelines. It considers both financial and operational metrics to provide valuable context about how a business has performed previously, is currently performing, and is likely to perform in the future.

The model plays on these concerns: time, quality, performance/service, and cost. The sum of those components amount to four specific reference points for goal-setting and performance measurement:

• Customer: How customers view your business
• Internal Process: How you can improve your internal processes
• Organizational Capacity: How your business can grow, adapt, and improve
• Financial: The potential profitability of your business

Those four categories can inform goals that are more thoughtful and focused while surfacing the most appropriate metrics with which you can use to track them. But the elements you choose to pursue and measure are ultimately up to you. As there's no definitive list, they will vary from organization to organization.

That being said, there‘s a universally applicable technique you can use when leveraging the model—creating a scorecard. This is a document that keeps track of your goals and how you apply them. Here’s an example of what a scorecard might look like:

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The Balanced Scorecard is ideal for businesses looking to break up higher-level goals into more specific, measurable objectives. If you're interested in translating your big-picture ambitions into actionable projects, consider looking into it.

Example of the Balanced Scorecard

Let‘s imagine a B2B SaaS company that sells a construction management solution. It’s been running into trouble from virtually all angles. It‘s struggling with customer retention and, in turn, is hemorrhaging revenue. The company’s sales reps are working with very few qualified leads and the organization's tech stack is limiting growth and innovation.

The business decides to leverage a Balanced Scorecard approach to remedy its various issues. In this case, the full strategic plan—developed according to this model—might look like this:

• The company sets a broad financial goal of boosting revenue by 10% year over year.
• To help get there, it aims to improve its customer retention rate by 5% annually by investing in a more robust customer service infrastructure.
• Internally, leadership looks to improve the company's lead generation figures by 20% year over year by revamping its onboarding process for its pre-sales team.
• Finally, the business decides to move on from its legacy tech stack in favor of a virtualized operating system, making for at least 50% faster software delivery for consistent improvements to its product.

The elements listed above address key flaws in the company‘s customer perception, internal processes, financial situation, and organizational capacity. Every improvement the business is hoping to make involves a concrete goal with clearly outlined metrics and definitive figures to gauge each one’s success. Taken together, the organization's plan abides by the Balanced Scorecard model.

2. Objectives and Key Results

As its name implies, the OKR strategic planning model revolves around translating broader organizational goals into objectives and tracking their key results. The framework rests on identifying three to five attainable objectives and three to five results that should stem from each of them. Once you have those in place, you plan tactical initiatives around those results.

After you‘ve figured out those reference points, you determine the most appropriate metrics for measuring their success. And once you’ve carried out the projects informed by those ideal results, you gauge their success by giving a score on a scale from 0 to 1 or 0%-100%.

For instance, your goal might be developing relationships with 100 new targets or named accounts in a specific region. If you only were able to develop 95, you would have a score of .95 or 95%. Here's an example of what an OKR model might look like:

It's recommended that you structure your targets to land at a score of around 70% — taking some strain off workers while offering them a definitive ideal outcome. The OKR model is relatively straightforward and near-universally applicable. If your business is interested in a way to work towards firmly established, readily visible standards this model could work for you.

Example of the Objectives and Key Results

Let's consider a hypothetical company that makes educational curriculum and schedule planning for higher-education institutions. The company decides it would like to expand its presence in the community college system in California, something that constitutes an objective.

But what will it take to accomplish that? And how will the company know if it's successful? Well, in this instance, leadership within the business would get there by establishing three to five results they would like to see. Those could be:

• Generating qualified leads from 30 institutions
• Conducting demos at 10 colleges
• Closing deals at 5 campuses

Those results would lead to initiatives like setting standards for lead qualification and training reps at the top of the funnel on how to use them appropriately, revamping sales messaging for discovery calls, and conducting research to better tailor the demo process to the needs of community colleges.

Leveraging this model generally entails repeating that process between two and four more times, ultimately leading to a sizable crop of thorough, actionable, ambitious, measurable, realistic plans.

3. Theory of Change (TOC)

The Theory of Change (TOC) model revolves around organizations establishing long-term goals and essentially “working backward” to accomplish them. When leveraging the strategy, you start by setting a larger, big-picture goal.

Then, you identify the intermediate-term adjustments and plans you need to make to achieve your desired outcome. Finally, you work down a level and plan the various short-term changes you need to make to realize the intermediate ones. More specifically, you need to take these strides:

• Identify your long-term goals.
• Backward map the preconditions necessary to achieve your goal, and explain why they're necessary.
• Identify your basic assumptions about the situation.
• Determine the interventions your initiative will fulfill to achieve your goals.
• Come up with indicators to evaluate the performance of your initiative.
• Write an explanation of the logic behind your initiative.

Here's another visualization of what that looks like.

This planning model works best for organizations interested in taking on endeavors like building a team, planning an initiative, or developing an action plan. It's distinct from other models in its ability to help you differentiate between desired and actual outcomes. It also makes stakeholders more actively involved in the planning process by making them model exactly what they want out of a project.

It relies on more pointed detail than similar models. Stakeholders generally need to lay out several specifics, including information related to the company's target population, how success will be identified, and a definitive timeline for every action and intervention planned. Again, virtually any organization — be it public, corporate, nonprofit, or anything else — can get a lot out of this strategy model.

Example of the Theory of Change

For the sake of this example, imagine a business that makes HR Payroll Software , but hasn‘t been doing too well as of late. Leadership at the company feels directionless. They think it’s time to buckle down and put some firm plans in motion, but right now, they have some big picture outcomes in mind for the company without a feel for how they're going to get done.

In this case, the business might benefit from leveraging the Theory of Change model. Let‘s say its ultimate goal is to expand its market share. Leadership would then consider the preconditions that would ultimately lead to that goal and why they’re relevant.

For instance, one of those preconditions might be tapping into a new customer base without alienating its current one. The company could make an assumption like, “We currently cater to mid-size businesses almost exclusively, and we lack the resources to expand up-market to enterprise-level prospects. We need to find a way to more effectively appeal to small businesses.”

Now, the company can start looking into the specific initiatives it can take to remedy its overarching problem. Let's say it only sells its product at a fixed price point that suits midsize businesses much more than smaller ones. So the company decides that it should leverage a tiered pricing structure that offers a limited suite of features at a price that small businesses and startups can afford.

The factors the company elects to use as reference points for the plan's success are customer retention and new user acquisition. Once those have been established, leadership would explain why the goals, plans, and metrics it has outlined make sense.

If you track the process I‘ve just plotted, you’ll see the Theory of Change in motion. It starts with a big-picture goal and works its way down to specific initiatives and ways to gauge their effectiveness.

4. Hoshin Planning

The Hoshin Planning model is a process that aims to reduce friction and inefficiency by promoting active and open communication throughout an organization. In this model, everyone within an organization—regardless of department or seniority—is made aware of the company's goals.

Hoshin Planning rests on the notion that thorough communication creates cohesion, but that takes more than contributions from leadership. This model requires that results from every level be shared with management.

The ideal outcomes set according to this model are also conceived of by committee to a certain extent. Hoshin Planning involves management hearing and considering feedback from subordinates to come up with reasonable, realistic, and mutually understood goals.

The model is typically partitioned into seven steps:

• establishing a vision
• developing breakthrough objectives
• developing annual objectives
• deploying annual objectives
• implementing annual objectives
• conducting monthly and quarterly reviews
• conducting an annual review.

Note: The first three steps are referred to as the “catchball process.” It's where company leadership sets goals and establishes strategic plans to send down the food chain for feedback and new ideas. That stage is what really separates Hoshin Planning from other models.

Example of Hoshin Planning

For this example, let‘s imagine a company that manufactures commercial screen printing machines. The business has seen success with smaller-scale, retail printing operations, but realizes that selling almost exclusively to that market won’t make for long-term, sustainable growth.

Leadership at the company decides that it's interested in making an aggressive push to move up-market towards larger enterprise companies. However, before they can establish that vision, they want to ensure that the entire company is willing and able to work with them to reach those goals.

Once they‘ve set a tentative vision, they begin to establish more concrete objectives and send them down the management hierarchy. One of the most pressing activities they’re interested in pursuing is a near-comprehensive product redesign to make their machines better suited for higher volume orders.

They communicate those goals throughout the organization and ask for feedback along the way. After the product team hears their ideal plans, it relays that the product overhaul that leadership is looking into isn‘t viable within the timeframe they’ve provided. Leadership hears this and adjusts their expectations before doling out any sort of demands for the redesign.

Once both parties agree on a feasible timeline, they begin to set more definitive objectives that suit both the company‘s ambitions and the product team’s capabilities.

Strategic Plan Example

The strategic plan above is for a fictitious shoe company and outlines the way in which it'll differentiate itself within the market. It effectively uses each step in the strategic planning model framework and is written in a way to give a brief overview of how the company will enter the market and sustain longevity.

If you're working on a strategic planning model for an existing business, your plan will look similar, but have a few tweaks to the goals, including more goals about improving sales and processes. When drafting the action plan and evaluation parts of the plan, be sure to think tactically about the actions that will help you achieve the goals, and use your mission, vision, and values to guide the choices you make.

Strategic Planning Tools

There are additional resources you can use to support whatever strategic planning model you put in place. Here are some of those:

1. SWOT Analysis

SWOT analysis is a strategic planning tool and acronym for strengths, weaknesses, opportunities, and threats. It's used to identify each of these elements in relation to your business.

This strategic planning tool allows you to determine new opportunities and which areas of your business need improvement. You'll also identify any factors or threats that might negatively impact your business or success.

2. Porter's Five Forces

Use Porter‘s Five Forces as a strategic planning tool to identify the economic forces that impact your industry and determine your business’ competitive position. The five forces include:

• Competition in the industry
• Potential of new entrants into the industry
• Power of suppliers
• Power of customers
• Threat of substitute products

To learn more, check out this comprehensive guide to using Porter's Five Forces .

3. Visioning

Visioning is a goal-setting strategy used in strategic planning. It helps your organization develop a vision for the future and the outcomes you'd like to achieve.

Once you reflect on the goals you‘d like to reach within the next five years or more, you and your team can identify the steps you need to take to get where you’d like to be. From there, you can create your strategic plan.

4. PESTLE Analysis

The PESTLE analysis is another strategic planning tool you can use. It stands for:

• P: Political
• E: Economic
• T: Technological
• E: Environmental

Each of these elements allow an organization to take stock of the business environment they're operating in, which helps them develop a strategy for success. Use a PESTLE Analysis template to help you get started.

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Strategic Planning Process: Why Is Strategic Planning Important for Organizations in 2024?

What to read next:

Playing chess without a strong opening is a guaranteed way to disadvantage yourself. Just like in chess, organizations without an adequate strategic planning process are unlikely to thrive and adapt long-term. 

The strategic planning process is essential for aligning your organization on key priorities, goals, and initiatives, making it crucial for organizational success.   

This article will empower you to craft and perfect your strategic planning process by exploring the following:  

• What is strategic planning
• Why strategic planning is important for your business  
• The seven steps of the strategic planning process   

Strategic planning frameworks

• Best practices supporting the strategic planning process  

By the end of this article, you’ll have the knowledge needed to perfect the key elements of strategic planning. Ready? Let’s begin.  

What is strategic planning?

Strategic planning charts your business's course toward success. Using your organization’s vision, mission statement , and values — with internal and external information — each step of the strategic planning process helps you craft long-term objectives and attain your goals with strategic management.  

The key elements of strategic planning includes a SWOT analysis, goal setting , stakeholder involvement, plus developing actionable strategies, approaches, and tactics aligned with primary objectives.  

In short, the strategic planning process bridges the gap between your organization’s current and desired state, providing a clear and actionable framework that answers:   Where are you now?   Where do you want to be?   How will you get there?

7 key elements of strategic planning 

The following strategic planning components work together to create cohesive strategic plans for your business goals. Let’s take a close look at each of these:  

• Vision : What your organization wants to achieve in the future, the long-term goal  
• Mission : The driving force behind why your company exists, who it serves, and how it creates value  
• Values : Fundamental beliefs guiding your company’s decision-making process  
• Goals : Measurable objectives in alignment with your business mission, vision, and values  
• Strategy : A long-term strategy map for achieving your objectives based on both internal and external factors  
• Approach : How you execute strategy and achieve objectives using actions and initiatives   
• Tactics : Granular short-term actions, programs, and activities  

Why is the strategic planning process important?

Just as a chess player needs a gameplan to reach checkmate, a company needs a solid strategic plan to achieve its goals.   

Without a strategic plan, your business will waste precious time, energy, and resources on endeavors that won’t get your company closer to where it needs to be.   

Your ideal plan should cover all key strategic planning areas, while allowing you to stay present by measuring success and course-correcting or redefining the strategic direction when necessary. Ultimately, enabling your company to stay future-proof through the creation of an always-on strategy that reflects your company's mission and vision.   

An always-on strategy involves continuous environmental scanning even after the strategic plan has been devised, ensuring readiness to adapt in response to quick, drastic changes in the environment.

Let’s dive deeper into the steps of the strategic planning process.  

What are the 7 stages of the strategic planning process?

You understand the overall value of implementing a strategic planning process — now let’s put it in practice. Here's our 7-step approach to strategic planning that ensures everyone is on the same page:  

• Clarify your vision, mission, and values  
• Conduct an environmental scan  
• Define strategic priorities  
• Develop goals and metrics  
• Derive a strategic plan  
• Write and communicate your strategic plan  
• Implement, monitor, and revise   

1. Clarify your vision, mission, and values 

The first step of the strategic planning process is understanding your organization’s core elements: vision, mission, and values. Clarifying these will align your strategic plan with your company’s definition of success. Once established, these are the foundation for the rest of the strategic planning process.   

Questions to ask:

• What do we aspire to achieve in the long term?
• What is our purpose or ultimate goal?
• What do we do to fulfill our vision?
• What key activities or services do we provide?
• What are our organization's ethics?
• What qualities or behaviors do we expect from employees?

Read more: What is Mission vs. Vision  

2. Conduct an environmental scan

Once everyone on the same page about vision, mission, and values, it's time to scan your internal and external environment. This involves a long-term SWOT analysis, evaluating your organization’s strengths, weaknesses, opportunities, and threats.  

Internal factors 

Internal strengths and weaknesses help you understand where your organization excels and what it could improve. Strengths and weaknesses awareness helps make more informed decisions with your capabilities and resource allocation in mind.  

External factors

Externally, opportunities and threats in the market help you understand the power of your industry’s customers, suppliers, and competitors. Additionally, consider how broader forces like technology, culture, politics, and regulation may impact your organization.   

• What are our organization's key strengths or competitive advantages?
• What areas or functions within our organization need improvement?
• What emerging trends or opportunities can we leverage?
• How do changes in technology, regulations, or consumer behavior impact us?

3. Define strategic priorities

Prioritization puts the “strategic” in strategic planning process. Your organization’s mission, vision, values, and environmental scan serve as a lens to identify top priorities. Limiting priorities ensures your organization intentionally allocates resources.  

These categories can help you rank your strategic priorities:  

• Critical : Urgent tasks whose failure to complete will have severe consequences — financial losses, reputation damage, or legal consequences  
• Important : Significant tasks which support organizational achievements and require timely completion  
• Desirable : Valuable tasks not essential in the short-term, but can contribute to long-term success and growth  
• How do these priorities align with our mission, vision, and values?
• Which tasks need to be completed quickly to ensure effective progress towards our desired outcomes?
• What resources and capabilities do we need to pursue these priorities effectively?

4. Develop goals and metrics

Next, you establish goals and metrics to reflect your strategic priorities. Purpose-driven, long-term, actionable strategic planning goals should flow down through the organization, with lower-level goals contributing to higher-level ones.  

One approach that can help you set and measure your aligned goals is objectives and key results (OKRs). OKRs consist of objectives, qualitative statements of what you want to achieve, and key results, 3-5 supporting metrics that track progress toward your objective.  

OKRs ensure alignment at every level of the organization, with tracking and accountability built into the framework to keep everyone engaged. With ambitious, intentional goals, OKRs can help you drive the strategic plan forward.  

• What metrics can we use to track progress toward each objective?
• How can we ensure that lower-level goals and metrics support and contribute to higher-level ones?
• How will we track and measure progress towards key results?
• How will we ensure accountability?

Get an in-depth look at OKRs with our Ultimate OKR Playbook

5. Derive a strategic plan

The next step of the strategic planning process gets down to the nitty-gritty “how” — developing a clear, practical strategic plan for bridging the gap between now and the future.   

To do this, you’ll need to brainstorm short- and long-term approaches to achieving the goals you’ve set, answering a couple of key questions along the way. You must evaluate ideas based on factors like:  

• Feasibility : How realistic and achievable is it?  
• Impact : How conducive is it to goal attainment?  
• Cost : Can we fund this approach, and is it worth the investment?  
• Alignment : Does it support our mission, vision, and values?  

From your approaches, you can devise a detailed action plan, which covers things like:  

• Timelines : When will we take each step, and what are the deadlines?  
• Milestones : What key achievements will ensure consistent progress?  
• Resource requirements : What’s needed to achieve each step?  
• Responsibilities : Who's accountable in each step?  
• Risks and challenges : What can affect our ability to execute our plan? How will we address these?  

With a detailed action plan like this, you can move from abstract goals to concrete steps, bringing you closer to achieving your strategic objectives.  

6. Write and communicate your strategic plan

Writing and communicating your strategic plan involves everyone, ensuring each team is on the same page. Here’s a clear, concise structure you can use to cover the most important strategic planning components:  

• Executive summary : Highlights and priorities in your strategic overview   
• Introduction : Background on your strategic plan  
• Connection : How your strategic plan aligns with your organization’s mission, vision, and values  
• Environmental scan : An overview of your SWOT analysis findings  
• Strategic priorities and goals : Informed short and long-term organizational goals  
• Strategic approach : An overview of your tactical plan   
• Resource needs : How you'll deploy technology, funding, and employees  
• Risk and challenges : How you’ll mitigate the unknowns if and when they arise  
• Implementation plan : A step-by-step resource deployment plan for achieving your strategy  
• Monitoring and evaluation : How you’ll keep your plan heading in the right direction  
• Conclusion : A summary of the strategic plan and everything it entails  
• What information or context do stakeholders need to understand the strategic plan?
• How can we emphasize the connection between the strategic plan and the overall purpose and direction of the organization?
• What initiatives or strategies will we implement to drive progress?
• How will we mitigate or address risks?
• What are the specific steps and actions we need to take to implement the strategic plan?
• Any additional information or next steps we need to communicate?

7. Implement, monitor, and revise performance 

Finally, it’s time to implement your strategic plan, making sure it's up to date, creating a persistent, always-on strategy that doesn't lag behind. As you get the ball rolling, keep a close eye on your timelines, milestones, and performance targets, and whether these align with your internal and external environment.   

Internally, indicators like completions, issues, and delays provide visibility into your process. If any bottlenecks, inefficiencies, or misalignment arises, take corrective action promptly — adjust the plan, reallocate resources, or provide additional training to employees.  

Externally, you should monitor changes such as customer preferences, competitive pressures, economic shifts , and regulatory changes. These impact the success of your strategic action plan and may require tweaks along the way.   

Remember, implementing a strategic plan isn’t a one-time task — continual evaluation is essential for an always-on strategy. It involves extending beyond planning stages and contextualizing the strategy in real-time, allowing for swift adaptations to changing circumstances to ensure your plan remains relevant.

• Are there any bottlenecks, inefficiencies, or misalignments we need to address?
• Are we monitoring and analyzing external factors?
• Are we prepared to make necessary tweaks or adaptations along the way?
• Are we agile enough to promptly correct deviations from our strategic plan while maintaining an "always-on" strategy for continual adjustments?

You can use several frameworks to guide you through the strategic planning process. Some of the most influential ones include:

• Balanced scorecard (BSC) : Takes an overarching approach to strategic planning, covering financial, customer, internal processes, and learning and growth, aligning short-term operational tasks with long-term strategic goals.
• SWOT analysis : Highlights your business's internal strengths and weaknesses alongside external opportunities and threats to enable informed decisions about your strategic direction.
• OKRs : Structures goals as a set of measurable objectives and key results. They cascade down from top-level organizational objectives to lower-level team goals, ensuring alignment across the entire organization. Get an in-depth look at OKRs here . 
• Scenario planning : Involves envisioning and planning for various possible future scenarios, allowing you to prepare for a range of potential outcomes. It's particularly useful in volatile environments rife with uncertainties.
• Porter's five forces : Evaluates the competitive forces within your industry — rivalry among existing competitors, bargaining power of buyers and suppliers, threat of new entrants, and threat of substitutes — to shape strategies that position the organization for success.

Common problems with strategic planning and how to overcome them

While strategic planning provides a roadmap for business success, it's not immune to challenges. Recognizing and addressing these is crucial for effective strategy implementation. Let's explore common issues encountered in strategic planning and strategies to overcome them.

Static nature

Traditional strategic planning models often follow a linear, annual, and inflexible process that doesn't accommodate quick changes in the business landscape. Strategies formulated this way may quickly become outdated in today's fast-paced environment.

To overcome the rigidity of traditional strategic planning, your organization should integrate continuous environmental scanning processes. This includes monitoring market changes, competitor actions, and technological advancements, ensuring real-time insights inform strategic decision-making. Additionally, adopting agile methodologies allows for iterative planning, breaking down strategies into smaller, manageable components reviewed and adjusted regularly, ensuring adaptability in today's fast-paced landscape.

Disconnect between strategic plan and execution

There's often a significant gap between the strategic objectives and their actual implementation, leading to misalignment, confusion, and inefficiency within the organization.

To bridge the gap, ensure accountability, alignment, and feedback-driven processes across the business. Linking team roles and responsibilities to lower-level objectives can fosters alignment and accountability, whereas aligning these with overarching strategic objectives ensure coherence in execution. To ensure goals are optimized on an ongoing basis, implement a feedback mechanism that continuously evaluates progress against goals, enabling regular adjustments based on market feedback and internal insights.

Lack of real-time insights

Traditional planning models rely on historical data and periodic reviews, which might not capture real-time changes or emerging trends accurately. This can result in misaligned strategies unsuitable for the current business landscape.

Leverage advanced analytics tools and AI-driven technologies. Invest in technologies that offer real-time tracking and reporting of key performance indicators, with dashboards and monitoring systems that provide up-to-date insights. These allow you to gather, process, and interpret real-time data for proactive decision-making that aligns with the current business landscape. 

Failure to close the feedback loop

The absence of a feedback loop between strategy formulation, execution, and evaluation can impact learning and improvement. Companies might therefore struggle to refine their strategies based on real-time performance insights.

Establish a structured feedback loop encompassing strategy formulation, execution, and evaluation stages. Encourage employees to actively contribute insights on strategy execution, fostering a culture of continuous improvement and adaptation.

Best practices during the strategic planning process

Navigating strategic planning goes beyond overcoming challenges. A successful strategic plan requires you to embrace a set of guiding best practices, helping you navigate the development and implementation of your strategic planning process.   

1. Keep the planning process flexible

With ever-changing business environments, a one-and-done approach to strategic planning is insufficient. Your strategic plan needs to be adaptable to ensure its relevancy and its ability to weather the effects of changing circumstances.  

2. Pull together a diverse group of stakeholders

By including voices from across the organization, you can account for varying thoughts, perspectives, and experiences at each step of the strategic planning process, ensuring cross-functional alignment .  

3. Document the process

Continuous documentation of the strategic management process is crucial in capturing and communicating the key elements of strategic planning. This keeps everyone on the same page and your strategic plan up-to-date and relevant.  

4. Make data-driven decisions

Root your decisions in evidence and facts rather than assumptions or opinions. This cultivates accurate insights, improves prioritization, and reduces biased (flawed) decisions.  

5. Align your company culture with the strategic plan 

Your strategic plan can only be successful if everyone is on board with it — company culture supports what you’re trying to achieve. Behaviors, rules, and attitudes optimize the execution of your strategic plan.  

6. Leverage AI 

Using AI in strategic planning supports the development of an always-on strategy — amplifying strategic agility, conducting comprehensive environmental scans, and expediting planning phases. It can streamline operations, facilitate data-driven decision-making, and provide transparent insights into progress to drive accountability, engagement, and alignment with the strategic plan.

The strategic planning process in a nutshell

Careful strategy mapping is crucial for any organization looking to achieve its long-term goals while staying true to its mission, vision, and values. The seven steps in the strategic planning process outlined in this article provide a solid framework your organization can follow — from clarifying your organization’s purpose and developing a strategic plan, to implementing, monitoring, and revising performance. These steps will help your company meet goal measurements and create an always-on strategy that's rooted in the present. 

It’s important to remember that strategic planning is not a one-time event. To stay effective and relevant, you must continuously monitor and adapt your strategy in response to changing circumstances. This ongoing process of improvement keeps your organization competitive and demonstrates your commitment to achieving your goals.  

Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.  

As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy from a static plan to a feedback-driven engine for growth.  

Whether you’re a visionary start-up, a mid-market business looking to conquer, or a large enterprise facing disruption, Quantive keeps you ahead — every step of the way. For more information, visit www.quantive.com . 

Additional resources

Strategy execution in 4 steps: keys to successful strategy, how top companies are closing the strategy execution gap, 7 best practices for strategy execution, why your business needs strategy execution software, subscribe for our newsletter.

More Like this

Internal & external analysis, what is an internal and external analysis.

An internal and external strategic analysis refers to reviewing your organization’s current state from an internal and external perspective. The output of completing an internal and external analysis – also known as a strategic analysis – is to have a clear picture of your organization’s current state.

How does a strategic analysis fit into strategic planning?

Before any organization jumps into the core of strategic planning process, it’s vital to clearly understand where your organization is today . Without clearly defining where you are today (your current state), you can’t define your bold destination of the future (vision) or create the roadmap to get there (your annual strategic plan).

Completing an internal and external analysis lays the groundwork and foundation for the bones of your strategic plan, influencing everything from your competitive advantages, growth strategy, and major themes that influence your entire strategic plan’s framework.It also helps you better understand the gaps you need to overcome to reach your future goals.

Pro Tip: DO NOT SKIP THIS STEP IN PLANNING! It may seem tempting to skip things like your SWOT, completive analysis, and strategic market analysis, but don’t do it! Build a plan that helps you go from where you are today to a bold place in the future.

What is the output of an internal and external analysis?

The result or output from this work should be a fully fleshed-out current state analysis for your organization’s growth. This should include:

• What you’re best at, and what you need to improve upon.
• Your clearly defined competitive advantages.
• Areas of market opportunity or growth opportunity to pursue.
• A clear understanding of your competitors and what they’re best at.
• Strategic themes to use as the framework for your plan.

Analyzing Your Internal Factors

What is an internal analysis.

An internal analysis examines your organization’s core competencies today that are influenced by internal factors – factors that are not driven by external market dynamics. This analysis would look at the organization’s strengths and weaknesses in meeting the needs of your customers or stakeholders

As you dive deeper into an internal analysis process, you will examine internal factors that give an organization advantages and disadvantages in meeting the needs of its market, customers, partners, and even employees. Any analysis of company strengths should be market-oriented/customer-focused because strengths are only meaningful when they assist the firm in meeting customer needs.

Internal Factors to Consider

An internal analysis can look at all internal factors affecting a company’s business performance. Here are the three most common factors to consider as you conduct your internal analysis:

Your Organization’s Resources

A good starting point to identify resources is to look at tangible and intangible resources available to your organization.

Tangible resources are the easiest to identify and evaluate financial resources, and physical assets are identified and valued in the firm’s financial statements.

Intangible resources are largely invisible, but over time become more important to the firm than tangible assets because they can be a main source of competitive advantage. Such intangible resources include reputational assets (brands, images, etc.) and technological assets (proprietary technology and know-how).

Your Organization’s Capabilities

Organizational capabilities are used to refer to a firm’s capacity for undertaking a particular productive activity. Our interest is not in capabilities per se but in capabilities relative to other firms. We will use the functional classification approach to identify the firm’s capabilities. A functional classification identifies the organizational capabilities of each of the principal functional areas.

Your Human Resources (Employees)

Technically, this could fall underneath your organization’s resources, but it’s worth separating human resources into its own category. After all, without your organization’s human capital, you wouldn’t exist!

Data to Use in an Internal Analysis

Before you conduct your internal analysis, we recommend collecting the following as references:

Employee Surveys

What do your employees say your organization does well, and where must you improve? Surveys need to be from within the previous 12 months!

Customer Surveys

What do customers love most about your organization, product, or service? How do you best meet their needs? Again, these surveys must be from within at least the previous 12 months.

Business Strategy of Record + Current Performance

Having your previous strategic plan and performance data to reference is always helpful as you complete your strategic internal analysis process.

List of Resources

Your tangible and intangible resources may directly influence your internal strategic strengths, weaknesses, problems, constraints, and uncertainties.

A List of Capabilities

Capabilities [or lack of capabilities] are helpful to reference and identify internal strategic strengths, weaknesses, problems, constraints, and uncertainties.

Questions to Consider for Your Internal Analysis

• What do you do best?
• What do we do best?
• What do our customers value most from our organization?
• How do we uniquely serve our customers?
• What are our company resources – assets, intellectual property, and people?
• How are we using our resources well?
• Where do we need to be more efficient?
• How do our employees or shareholders perceive us?
• How are we meeting our employees’ needs?
• What are our organization’s core capabilities?
• What do we need to improve upon?

Tools to Conduct Your Internal Analysis

Swot analysis.

Conducting a SWOT analysis is easily the most common approach to completing an internal analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. The internal component of a SWOT analysis specifically looks at your organization’s core strengths (S) and weaknesses (W).

Pro Tip: A SWOT’s S and W portion is directly influenced by your organization’s internal factors – meaning factors you can directly influence. You can check out our full post on SWOT analysis here and download the free SWOT analysis guide here .

VRIO Framework

The VRIO framework is an internal analysis tool designed to help you identify your organization’s competitive advantages.

The VRIO analysis too helps you evaluate if a core strength, capability, or resource is a competitive advantage by assessing if that strength is valuable to your market, rare in competition, hard to copy, and organized to act upon.

Pro Tip: The VRIO framework evaluates internal strengths but needs external strategic analysis of your competition. So, it uses internal and external factors to help you identify your competitive advantages.

Download our Free VRIO Template and Examples!

What is the Output of an Internal Analysis?

There are a few important outputs from an internal analysis that help create the foundation of your business strategy formulation and direction:

• Output #1: A clear list of internal strengths and internal weaknesses of an organization.
• Output #2: Strategic issues to address (from an internal perspective).
• Output #3: A list of strengths to use as fodder for your competitive advantages (you’ll need to use these paired with a competitive analysis to identify competitive advantages).
• Output #4: Themes to use in your strategic framework and strategic planning objectives.

Analyzing Your External Factors

An external analysis examines the external factors and forces that impact your organization’s operating environment. External factors, by nature, exist beyond the walls of your organization and internal environment. They are forces and dynamics beyond your control, but still, impact your organization level and position in the marketplace.

Pro Tip: A helpful way to think about external forces is to ask, “would this be an issue or opportunity even if our organization did not exist?” If yes, it is an issue that is an external force.

The goal of these exercises is to identify external opportunities, threats, trends, and strategic uncertainties.

External Factors to Consider

An external analysis can be used to look at all external factors affecting a company. Here are the three most common factors to consider as you conduct your external analysis:

Market Trends

Market-level data, including overall size, projected growth, profitability, entry barriers, cost structure, distribution system, trends, and key success factors in your competitive market.

Industry Data and Trends

This data looks at what’s happening in your industry, including factors like vendors, suppliers, competitors, and buyers’ power.

Operating Environment Trends

This looks at global forces, demographic changes, political winds, ecological and natural issues, technological trends, economic factors, and social/cultural shifts. This is most often completed using a PESTLE analysis.

Data to Use in External Analysis

Industry and market reports.

What are important and potentially important markets? What are their size and growth characteristics? What markets are declining? What are the driving forces behind sales trends? Who competes in your market, and what is their market share?

Market Profitability Projections

For a holistic strategic analysis of your major market, consider the following factors: Is this a business where the average firm will make money? How intense is the competition among existing firms? Evaluate the threats from potential entrants and substitute products. What is the bargaining power of suppliers and customers? How attractive/profitable is the market now and in the future?

Cost Structure

What are the major cost and value-added components for various types of competitors?

Supplier and Distribution Data

What’s happening in your supply chain market? What are the alternative channels of distribution? How are they changing?

Operating Environment Factors

The interest is in environmental analysis and events that have the potential to affect strategy. This analysis should identify such trends and events and estimate their likelihood and impact. When conducting these types of strategic analysis, it is easy to get bogged down in an extensive, broad survey of trends. It is necessary to restrict the analysis to areas relevant enough to impact strategy significantly.

• Economic: What economic trends might have an impact on business activity? (Interest rates, inflation, unemployment levels, energy availability, disposable income, etc)
• Technological: To what extent are existing technologies maturing? What technological developments or trends are affecting or could affect our industry?
• Legal Forces: What changes in regulation are possible? What will their impact be on our industry? What tax or other incentives are being developed that might affect strategy development? Are there political or governmental stability risks?
• Sociocultural: What are the current or emerging lifestyle, fashion, and culture trends? What are their implications? What demographic trends will affect the market size of the industry? (i.e. growth rate, income, population shifts) Do these trends represent an opportunity or a threat?

Questions to Consider for Your External Analysis

Assessing Your Marketing (External Factors):

• What is happening externally and internally that will affect our company?
• Who are our customers?
• What are the strengths and weaknesses of each competitor?
• What are the driving forces behind sales trends?
• What are important and potentially important markets?
• What is happening in the world that might affect our company?

Assess Your Competition (External Factors):

• How are we different from the competition?
• How are our competitors winning?
• How are our competitors losing?
• What does our competition do better than us?
• How do we best serve our market/customers?
• What competitive moves can we make against our competitors?

Tools to Conduct Your External Analysis

Pestle analysis.

A PESTLE analysis is an external analysis tool that helps you determine how your business or organization stands up against external, macro-level external environment factors that could impact your business. It is an acronym for Political, Economic, Sociological, Technological, and Environmental factors. These are the core areas in the operating environment that could affect the success of an organization the most.

However, it is not enough to just name the external factors that could impact your organization. You must determine whether these factors will primarily pose an opportunity or a threat to your organization’s growth.

Download our Free PESTLE Template and Examples!

As we said earlier, a SWOT analysis is the most common approach to finishing your external analysis. To complete the external analysis portion of the SWOT, you’ll examine Opportunities (O) and Threats (T).

Pro Tip: A SWOT’s O and T portion is directly influenced by your organization’s external factors – meaning factors you can’t directly influence. You can check out our full post on SWOT analysis here and download the free SWOT analysis guide here .

Competitor Analysis-

Your competitor analysis will look at three different types of competitors:

• Direct competitors (those in your direct market space and always listed with you in a customer shortlist).
• Indirect competitors (those who aren’t quite in your same market sphere, but who you should still watch out for as indirect competitors could become direct).
• Substitutes or new entrants (those who may have alternative products or who are not quite at your level as to be considered direct competition).

Identify Competitors

• Against whom do we compete?
• Who are our most intense competitors? Less intense?
• Makers of substitute products?
• Can these competitors be grouped into strategic groups based on assets, competencies, or strategies?
• Who are potential competitive entrants?
• What are their barriers to entry?

Evaluate Your Competitors

• What are their objectives and strategies?
• What is their cost structure? Do they have a cost advantage or disadvantage?
• What is their image and positioning strategy?
• Which are the most successful/unsuccessful competitors over time? Why?

What is the Output of an External Analysis? Why is it Important in Strategic Planning?

Completing an external analysis helps your organization identify opportunities, headwinds, and tailwinds as you build your organization’s core strategy, approach to growth, and moves you can make against your competitors.

Here are the four common outputs from completing an external analysis.

• Output #1: Clear market opportunities to use as part of your growth strategy.
• Output #2: Identify areas of headwinds that will work against your organization.
• Output #3: Your competitive advantages.
• Output #4: Competitive moves you could make against your competition.

Strategic Analysis Process: Pulling Together Your Internal and External Analysis

After you finished analyzing your internal and external environments, it’s important to pull it all together as a final product for your strategic plan.

A complete strategic analysis looks like this:

• Synthesized internal strengths and weaknesses.
• Identified competitive advantages.
• Competitive moves you can make against your competition.
• Headwinds and tailwinds for your market.
• External forces that might impact your organization.
• A clear set of opportunities to use in your growth strategy.

Pulling together a Current State Summary

Once you’ve completed your internal and external analysis, pulling together a current state summary is helpful. This summary captures your current state of the organization and is usually about 3-4 sentences long.

It’s designed to create an objective summary of your organization – where you are today – to include external environment and internal forces impacting your performance.

Quality Check – How You Know You Got it Right

A complete strategic analysis should meet the following requirements:

• Are there clear key components or themes from the SWOT that capture where we are today?
• What are the key shifts we have seen over the past few years (internally or externally) that define our current state?
• What have we learned from the internal and external analysis that is critical to address in the strategic plan?

SWOT – The Most Common Internal and External Analysis Tool

We’ve already mentioned this, but completing a SWOT is the most common exercise to complete both an internal and external analysis. Check out the video, SWOT analysis post, and the free downloadable guide .

An internal analysis looks at the factors that are happening internally in your organization. They evaluate your company’s strengths and weaknesses, taking into account things like resource management and employee performance.

An external analysis would look at the things surrounding your macro- and micro-operating environment such as a competitor analysis and a PESTLE analysis.

You could use one or the other, but it won’t give you the full picture of what your organization is up against or the moves you need to make to ensure you’re shoring up your strengths and fixing your weaknesses. Doing both an internal and external analysis, even in the form of a SWOT matrix, will help you get a full picture of your position in your market. It is highly recommended you do both by utilizing at least one internal analysis tool and one external analysis tool.

Conducting an internal and external analysis is important to conduct and organize before you begin your strategy planning as it allows you to identify and assess your own strengths, weaknesses, and competitive advantages, as well as identify the external factors that may become obstacles in your strategic growth or opportunities for strategic growth.

16 Comments

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Why Is Strategic Planning Important?

• 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

Here’s a look at what strategic planning is and how it can benefit your organization.

Access your free e-book today.

What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

• The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
• Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
• Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

About the Author

The 5 steps of the strategic planning process

Starting a project without a strategy is like trying to bake a cake without a recipe — you might have all the ingredients you need, but without a plan for how to combine them, or a vision for what the finished product will look like, you’re likely to end up with a mess. This is especially true when working with a team — it’s crucial to have a shared plan that can serve as a map on the pathway to success.

Creating a strategic plan not only provides a useful document for the future, but also helps you define what you have right now, and think through and outline all of the steps and considerations you’ll need to succeed.

What is strategic planning?

While there is no single approach to creating a strategic plan, most approaches can be boiled down to five overarching steps:

• Define your vision
• Assess where you are
• Determine your priorities and objectives
• Define responsibilities
• Measure and evaluate results

Each step requires close collaboration as you build a shared vision, strategy for implementation, and system for understanding performance.

Related: Learn how to hold an effective strategic planning meeting

Why do I need a strategic plan?

Building a strategic plan is the best way to ensure that your whole team is on the same page, from the initial vision and the metrics for success to evaluating outcomes and adjusting (if necessary) for the future. Even if you’re an expert baker, working with a team to bake a cake means having a collaborative approach and clearly defined steps so that the result reflects the strategic goals you laid out at the beginning.

The benefits of strategic planning also permeate into the general efficiency and productivity of your organization as a whole. They include: 

• Greater attention to potential biases or flaws, improving decision-making 
• Clear direction and focus, motivating and engaging employees
• Better resource management, improving project outcomes 
• Improved employee performance, increasing profitability
• Enhanced communication and collaboration, fostering team efficiency 

Next, let’s dive into how to build and structure your strategic plan, complete with templates and assets to help you along the way.

Before you begin: Pick a brainstorming method

There are many brainstorming methods you can use to come up with, outline, and rank your priorities. When it comes to strategy planning, it’s important to get everyone’s thoughts and ideas out before committing to any one strategy. With the right facilitation , brainstorming helps make this process fair and transparent for everyone involved.  

First, decide if you want to run a real-time rapid ideation session or a structured brainstorming . In a rapid ideation session, you encourage sharing half-baked or silly ideas, typically within a set time frame. The key is to just get out all your ideas quickly and then edit the best ones. Examples of rapid ideation methods include round robin , brainwriting , mind mapping , and crazy eights . 

In a structured brainstorming session, you allow for more time to prepare and edit your thoughts before getting together to share and discuss those more polished ideas. This might involve brainstorming methods that entail unconventional ways of thinking, such as reverse brainstorming or rolestorming . 

Using a platform like Mural, you can easily capture and organize your team’s ideas through sticky notes, diagrams, text, or even images and videos. These features allow you to build actionable next steps immediately (and in the same place) through color coding and tagging. 

Whichever method you choose, the ideal outcome is that you avoid groupthink by giving everyone a voice and a say. Once you’ve reached a consensus on your top priorities, add specific objectives tied to each of those priorities.

Related: Brainstorming and ideation template

1. Define your vision

Whether it’s for your business as a whole, or a specific initiative, successful strategic planning involves alignment with a vision for success. You can think of it as a project-specific mission statement or a north star to guide employees toward fulfilling organizational goals. 

To create a vision statement that explicitly states the ideal results of your project or company transformation, follow these four key steps: 

• Engage and involve the entire team . Inclusivity like this helps bring diverse perspectives to the table. 
• Align the vision with your core values and purpose . This will make it familiar and easy to follow through. 
• Stay grounded . The vision should be ambitious enough to motivate and inspire yet grounded enough to be achievable and relevant.
• Think long-term flexibility . Consider future trends and how your vision can be flexible in the face of challenges or opportunities. 

For example, say your vision is to revolutionize customer success by streamlining and optimizing your process for handling support tickets. It’s important to have a strategy map that allows stakeholders (like the support team, marketing team, and engineering team) to know the overall objective and understand the roles they will play in realizing the goals. 

This can be done in real time or asynchronously , whether in person, hybrid, or remote. By leveraging a shared digital space , everyone has a voice in the process and room to add their thoughts, comments, and feedback. 

Related: Vision board template

2. Assess where you are

The next step in creating a strategic plan is to conduct an assessment of where you stand in terms of your own initiatives, as well as the greater marketplace. Start by conducting a resource assessment. Figure out which financial, human, and/or technological resources you have available and if there are any limitations. You can do this using a SWOT analysis.

What is SWOT analysis?

SWOT analysis is an exercise where you define:

• Strengths: What are your unique strengths for this initiative or this product? In what ways are you a leader?
• Weaknesses: What weaknesses can you identify in your offering? How does your product compare to others in the marketplace?
• Opportunities: Are there areas for improvement that'd help differentiate your business?
• Threats: Beyond weaknesses, are there existing potential threats to your idea that could limit or prevent its success? How can those be anticipated?

For example, say you have an eco-friendly tech company and your vision is to launch a new service in the next year. Here’s what the SWOT analysis might look like: 

• Strengths : Strong brand reputation, loyal customer base, and a talented team focused on innovation
• Weaknesses : Limited bandwidth to work on new projects, which might impact the scope of its strategy formulation 
• Opportunities : How to leverage and experiment with existing customers when goal-setting
• Threats : Factors in the external environment out of its control, like the state of the economy and supply chain shortages

This SWOT analysis will guide the company in setting strategic objectives and formulating a robust plan to navigate the challenges it might face. 

Related: SWOT analysis template

3. Determine your priorities and objectives

Once you've identified your organization’s mission and current standing, start a preliminary plan document that outlines your priorities and their corresponding objectives. Priorities and objectives should be set based on what is achievable with your available resources. The SMART framework is a great way to ensure you set effective goals . It looks like this:  

• Specific: Set clear objectives, leaving no room for ambiguity about the desired outcomes.
• Measurable : Choose quantifiable criteria to make it easier to track progress.
• Achievable : Ensure it is realistic and attainable within the constraints of your resources and environment.
• Relevant : Develop objectives that are relevant to the direction your organization seeks to move.
• Time-bound : Set a clear timeline for achieving each objective to maintain a sense of urgency and focus.

For instance, going back to the eco-friendly tech company, the SMART goals might be: 

• Specific : Target residential customers and small businesses to increase the sales of its solar-powered device line by 25%. 
• Measurable : Track monthly sales and monitor customer feedback and reviews. 
• Achievable : Allocate more resources to the marketing, sales, and customer service departments. 
• Relevant : Supports the company's growth goals in a growing market of eco-conscious consumers. 
• Time-bound : Conduct quarterly reviews and achieve this 25% increase in sales over the next 12 months.

With strategic objectives like this, you’ll be ready to put the work into action. 

Related: Project kickoff template

4. Define tactics and responsibilities

In this stage, individuals or units within your team can get granular about how to achieve your goals and who'll be accountable for each step. For example, the senior leadership team might be in charge of assigning specific tasks to their team members, while human resources works on recruiting new talent. 

It’s important to note that everyone’s responsibilities may shift over time as you launch and gather initial data about your project. For this reason, it’s key to define responsibilities with clear short-term metrics for success. This way, you can make sure that your plan is adaptable to changing circumstances. 

One of the more common ways to define tactics and metrics is to use the OKR (Objectives and Key Results) method. By outlining your OKRs, you’ll know exactly what key performance indicators (KPIs) to track and have a framework for analyzing the results once you begin to accumulate relevant data. 

For instance, if our eco-friendly tech company has a goal of increasing sales, one objective might be to expand market reach for its solar-powered products. The sales team lead would be in charge of developing an outreach strategy. The key result would be to successfully launch its products in two new regions by Q2. The KPI would be a 60% conversation rate in those targeted markets.  

Related: OKR planning template  

5. Manage, measure, and evaluate

Once your plan is set into motion, it’s important to actively manage (and measure) progress. Before launching your plan, settle on a management process that allows you to measure success or failure. In this way, everyone is aligned on progress and can come together to evaluate your strategy execution at regular intervals.

Determine the milestones at which you’ll come together and go over results — this can take place weekly, monthly, or quarterly, depending on the nature of the project.

One of the best ways to evaluate progress is through agile retrospectives (or retros) , which can be done in real time or asynchronously. During this process, gather and organize feedback about the key elements that played a role in your strategy. 

Related: Retrospective radar template

Retrospectives are typically divided into three parts:

• What went well.
• What didn’t go well.
• New opportunities for improvement.

This structure is also sometimes called the “ rose, thorn, bud ” framework. By using this approach, team members can collectively brainstorm and categorize their feedback, making the next steps clear and actionable. Creating an action plan during a post-mortem meeting is a crucial step in ensuring that lessons learned from past projects or events are effectively translated into tangible improvements. 

Another method for reviewing progress is the quarterly business review (QBR). Like the agile retrospective, it allows you to collect feedback and adjust accordingly. In the case of QBRs, however, we recommend dividing your feedback into four categories:

• Start (what new items should be launched?).
• Stop (what items need to be paused?).
• Continue (what is going well?).
• Change (what could be modified to perform better?).

Strategic planners know that planning activities continue even after a project is complete. There’s always room for improvement and an action plan waiting to be implemented. Using the above approaches, your team can make room for new ideas within the existing strategic framework in order to track better to your long-term goals.

Related: Quarterly business review template

Conclusions

The beauty of the strategic plan is that it can be applied from the campaign level all the way up to organizational vision. Using the strategic planning framework, you build buy-in , trust, and transparency by collaboratively creating a vision for success, and mapping out the steps together on the road to your goals.

Also, in so doing, you build in an ability to adapt effectively on the fly in response to data through measurement and evaluation, making your plan both flexible and resilient.

Related: 5 Tips for Holding Effective Post-mortems

Why Mural for strategic planning

Mural unlocks collaborative strategic planning through a shared digital space with an intuitive interface, a library of pre-fab templates, and methodologies based on design thinking principles.

Outline goals, identify key metrics, and track progress with a platform built for any enterprise.

Learn more about strategic planning with Mural.

About the authors

Bryan Kitch

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The strategy-analytics revolution

Over the past decade, advances in digital analytics have transformed the way businesses operate. From marketing and pricing to customer service and manufacturing, advanced analytics is now central to many corporate functions. The same, however, cannot be said for strategy—at least not yet.

While strategy development will always require creative and thoughtful executives to set aspirations and make bold choices, analytics tools can give you an edge. Advanced analytics can be used to accomplish the following:

• Reduce bias in decisions by calibrating the likelihood of your strategy succeeding before you allocate resources.
• Unearth new growth opportunities by complementing traditional brainstorming methods to reveal hidden pockets of growth.
• Identify early-stage trends by painting a real-time picture of how your business context is unfolding so that you can trigger big moves before your competitors do.
• Anticipate complex market dynamics by generating proprietary insights about the combined impact of myriad forces.

Each of these applications can sharpen business leaders’ views of the competitive arena and how they can position themselves to win. But that requires putting advanced analytics front and center in the strategy process.

Reduce bias in decisions

When Daniel Kahneman and Amos Tversky 1 Daniel Kahneman and Amos Tversky, “Intuitive prediction: Biases and corrective procedures,” TIMS Studies in Management Science , 1979, Volume 12, pp. 313–27. observed that even experienced planners tend to underestimate the cost and time required to complete projects, they termed the phenomenon “planning fallacy.” They argued that this tendency results from people making forecasts based on the specifics of the case at hand combined with their personal experience and intuition (commonly referred to as “the inside view”), without taking into account the distribution of outcomes of similar cases (“ the outside view ”). 2 The terms “inside view” and “outside view” were proposed by Daniel Kahneman and Dan Lovallo in “Timid choices and bold forecasts: A cognitive perspective on risk taking,” Management Science , January 1993, Volume 39, Number 1, pp. 17–31. As a result, many forecasts are overly optimistic. The two collaborators went on to propose a corrective procedure called “reference class forecasting” that involves complementing the inside view with data on real-world outcomes, or “base rates,” from a reference class of similar cases.

In the past 20 years, the use of this technique has gathered impressive momentum, with hundreds of articles highlighting the methodology’s application in both academic and practical settings. To date, such calibrations have been limited largely to the field of project management, but forecasts made during strategic planning confront similar challenges. Strategic plans, too, involve estimating the future costs and benefits of investments, making an outside view just as valuable in informing those decisions.

In our recent book Strategy Beyond the Hockey Stick (Wiley, February 2018), we introduced the idea of using data analytics to bring an outside view to strategy. By embracing the outside view, you can estimate your strategy’s odds of success before you allocate resources to that strategy. For example, if your target is to grow economic profit by $100 million per year in the next decade, would it not be helpful to know that only 35 percent of large companies managed to achieve that over a decade? And if we told you that companies which implemented programmatic-M&A 3 Many small deals that accrue to a meaningful amount of market capitalization over multiple years instead of episodic, “big-bang” transactions. For more, see Jeff Rudnicki, Kate Siegel, and Andy West, “ How lots of small M&A deals add up to big value ,” McKinsey Quarterly , July 12, 2019. strategies and reached the top quintile in productivity improvements were 1.5 times more likely to achieve that profit target, would you not consider prioritizing those two areas in your strategic efforts (Exhibit 1)?

We have often applied this methodology to calibrate strategies and performance aspirations against data from thousands of publicly listed companies. The approach can be used to motivate bold strategic moves while, in some cases, demonstrating that an ambition is unlikely to be achieved without exceedingly strong execution. For example, when shown this approach, an energy company realized that their planned strategy had achieved the financial performance they were targeting in only 10 percent of historical cases. The strategy was simply too timid. This led the company to reassess the plan and include bigger, bolder strategic moves that would improve their odds of achieving desired gains. At the other extreme, a materials-industry company set a strategy that only 5 percent of companies in a database had managed to execute successfully. Highlighting the stretch of this ambition helped demonstrate the importance of establishing a rigorous execution- and performance-management infrastructure for the plan’s delivery, helping to lower the risk in $8 billion worth of investment.

Unearth new growth opportunities

Advanced analytics can also enhance strategic planning by unearthing growth opportunities that would otherwise be hard to spot, be they attractive industry segments and acquisition targets, ideas for new products or services, or even new applications for existing offerings. The most effective of these algorithms use sophisticated network analysis and natural-language processing to parse and find connections among hundreds of disparate text data sources such as company descriptions, patent filings, M&A data, and academic papers.

For example, a company that specializes in producing brominated compounds (largely used in commodity-chemicals segments such as detergents) scanned all publicly available information on such compounds, including more than 120 million patents and 100 million academic publications, to identify hundreds of potential new applications for its products. The organization prioritized 30 higher-margin applications, such as in niche medical devices, which ended up collectively contributing $50 million of revenue to its growth plan. Similarly, when another company specializing in performance materials wanted to analyze growth opportunities within the gasket and insulation space, it used a text-clustering algorithm and network analysis to pinpoint 45 potential growth areas within five clusters, each with a shortlist of acquisition prospects (Exhibit 2).

Identify early-stage trends

State-of-the-art artificial intelligence engines can analyze, in real time, publicly available information spanning billions of web pages, patent filings, news sources, clinical-trials reports, earnings-call transcripts, and more. By finding patterns in these disparate data sources, they can help executives identify emerging trends by, for example, measuring the change in the frequency of a term appearing in the data.

Take the example of a manufacturing company trying to decide which electric-vehicle battery technology to invest in. This is not a trivial decision—the capital expenditure alone would run into billions of dollars and likely lock the manufacturer into a specific technology for many years. Executives in this company would benefit from knowing how associated trends are evolving and when a specific technology is likely to have a clear advantage. They could gain these insights through near real-time tracking of patent and academic-publication momentum, announcements, and investments across different technologies. They could also track relevant regulatory changes such as zero-emission-vehicle mandates that stimulate demand for electric vehicles or local ownership rules in countries where lithium supply is concentrated (Exhibit 3).

Some of these real-time tools can also perform “sentiment analysis,” which uses trained algorithms to classify news and social-media content based on the event or topic, the companies involved, and the positive or negative sentiment associated with each company. Quantitative investors seeking short-term market inefficiencies use this type of data to inform their trades. Companies developing strategies can similarly tap such analyses for timely perspectives on customer sentiment or reputational risk.

In a world of increasing uncertainty, companies need to be dynamic in how they set and manage their strategic plans . That requires combining no-regret moves that work in any condition and can be executed immediately with a few bigger, bolder bets that would be executed once the executive team is comfortable a conducive scenario is unfolding. By using advanced analytics to track emerging trends, you can trigger these contingent moves before your competitors do.

Anticipate complex market dynamics

By approximating real-world behavior, mathematical modeling and simulation can be used to highlight important trade-offs and assumptions associated with various strategic choices, forecast market demand under different scenarios, and help managers understand and predict competitive responses or customer behaviors. The modeling methods currently available include system dynamics, agent-based simulations, Monte Carlo analyses, and a range of machine-learning approaches. Models are especially helpful in assessing complex market and competitive situations where managerial intuition is insufficient to fully account for the implications of many interdependent parties’ actions.

Consider the experience of an electric-power-grid operator that used a detailed power-flow model to create a capital-spending strategy based on different scenarios for the future energy mix (wind, solar, nuclear). The model considered more than 10,000 variables, including all grid assets, current and future generation capacities and their profiles, expected load distributions and their profiles, and import and export capacities. The probabilistic-optimization engine then ran 40 million iterations that enabled the utility to determine how to deploy billions of dollars of capital in a way that would minimize downtime and cost while ensuring reliable capacity in the grid. The resulting savings reached an estimated $500 million.

Models can be particularly useful in analyzing systems with many independent entities, where behavior cannot be anticipated at the aggregate level because it evolves in unpredictable ways from the interactions and choices of the numerous agents, such as customers or competitors. In such situations, strategists can turn to so-called agent-based modeling and simulation. These tools assign each agent a set of decision-making rules and then simulate their choices based on the information available to each agent. Behavior “emerges” from the system in ways that often could not have been predicted using more traditional top-down models.

While commonly used to model dynamic social behavior, epidemics and natural systems, agent-based modeling is not yet widely applied in strategy. However, companies operating in markets with many customers, competitors, or suppliers, such as e-commerce and digital ecosystems, can find such models valuable. For example, a consumer-goods company used this approach to develop an integrated market model that captured the behaviors of its customers, suppliers, and competitors. It then used the model to understand the impact that new product launches and competitor-pricing strategies would have on demand for its products.

Relative to most corporate functions, strategy has not yet captured the benefits of advanced analytics, missing out on potentially critical insights. By tapping these technologies to complement the creativity of your team, you can materially improve your strategic outcomes.

Chris Mulligan is a partner in McKinsey’s New York office; Nicholas Northcote is strategy and corporate finance director in the Brussels office; Tido Röder is a solution associate partner in the Munich office; and Sasha Vesuvala is a solution associate partner in the Mumbai office.

The authors wish to thank Anchal Aggarwal and Felipe Gonzalez for their contributions to this article.

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The Ultimate List of Business Analysis Models | With Editable Templates

Updated on: 5 January 2023

The business analysis models come into play when understanding the requirements of stakeholders in every organization whilst identifying opportunities for growth and problem-areas which needs attention. While there are many areas to look at, it would consume more time unless you have the correct tools at hand.

In this guide, we have compiled a list of business analysis models that you can use during a strategic, tactical or operational business analysis. They are as follow,

Analyzing Organizational Strengths and Weaknesses

Organizational charts.

Organizational charts help to visualize the hierarchy of your organization and the reporting relationships among employees. Org charts are useful when planning a project, allocating resources, planning for future projects or organizational developments.

Any change you want to make to your organizational structure should start with an organizational chart template like the one below.

Organogram Template (Click on the template to edit it online)

More Organizational Chart Templates

MOST Analysis

Business analysts use the MOST analysis to plan and analyze organizational activities and make sure that they are centered around your business goals.

How to do it

MOST stand for,

Mission – Mission is basically what your organization wants to accomplish or its purpose. It should be centered around your stakeholders and benefits.  Write down your mission statement in the Mission box of your MOST analysis template.

Objectives – These are the individual goals that will help you complete your mission.

Strategy – This section includes the different tasks you have to do to reach your objectives.

Tactics – Here you need to identify and list down the specific tactics you need to get your activities done.

Once you’ve filled out the template, you can get a quick overview of how you need to plan your organizational strategies.

MOST analysis template ( click on the image to edit this online )

PESTLE Analysis

PESTLE analysis is a tool that is used to identify and examine the external factors that affect a business. These macro environmental factors the analysis try to identify are

• Political factors such as government policies, trading policies or elections
• Economic factors such as economic trends, taxes, or import/export ratios
• Social factors such as demographics, lifestyles, or ethnic issues
• Technological factors like advancing technology or technology legislation
• Legal factors such as employment laws or health and safety regulations
• Environmental factors such as climate change or environmental regulations

PESTLE Analysis for Business Analysis (Click on the template to edit online)

More PESTLE Diagram Templates

SWOT Analysis

SWOT analysis can be used to identify both internal and external factors that may affect a business. These are Strengths, Weaknesses, Opportunities and Threats.

Refer to our post on SWOT Analysis: What, Why and How to Use Them Effectively to learn about the technique in more detail.

SWOT Analysis for Business Analysis (Click on the template to edit online)

Check out our post on Marketing Strategy Planning Tools to learn about more useful tools and techniques for business analysts.

Analyzing Competitors and the Market Trends

A competitive analysis lets you identify what makes your product or service unique from that of your competitors and develop strategies to attract your competitors.

There are many competitor analysis techniques like Porter’s Five Forces, value proposition canvas, radar chart etc. to conduct a research on your competitors. Refer to our post on Visual Techniques to Conduct a Competitive Analysis to learn about these techniques in detail.

Analyzing Products and Services

Product roadmap.

Product roadmaps are a great way to analyze the development or the evolution of a product over time. They highlight the goals, milestones, and deliverables of your product development project.

They can also be used

• To communicate product related details to stakeholders and customers
• As a guiding document for strategic planning
• To coordinate the product development process
• To track your progress in achieving your objectives

How to create it

Step 1: Decide the duration of your roadmap and who you are designing it for. While you need to tailor your roadmap for your audience (i.e. if it is for your product development team the map should detail all specific tasks and features and dates), the timeframe should be reasonable.

Step 2: Collect the information you need to create the roadmap . These include goals, tasks, deadlines, key milestones etc.

Step 3: Using a product roadmap template like the one below, you can easily visualize these details for quick reference

Product Roadmap (Click on the template to edit it online)

More Roadmap Templates

Mind Map of Product Features

The initial phase of a product development process or any other project usually make up of brainstorming sessions. There are a lot of ideas and opinions shared and requests made. Business analysts can use mind maps to capture and organize these ideas shared.

Product Feature Mind Map (Click on the template to edit online)

Analyzing Systems and Processes

Activity diagrams.

Activity diagrams visualize use cases at a more detailed level. Business analysts can use them to illustrate the flow of events in a business process, or the flow activities through a system.

How to use it

Step 1: Identify the various steps in your business process or the activities in your system

Step 2: Identify the actors involved in the process. If you know who they are, it would be easier for you to decide the steps performed by them

Step 3: Find the order in which each order the process steps flow

Step 4: Add swimlanes to your activity diagram to highlight the responsible actors

To learn about activity diagrams in more detail, refer to our Easy Guide to Activity Diagrams .

Activity Diagram Templates

Use Case Diagrams

Use case diagrams let you identify the different roles in a system and how they interact with it. These come in handy when you want to communicate how a system functions to your stakeholders etc.

Here’s our use case diagram tutorial to learn how to draw a use case diagram.

Use Case Diagram for Business Analysis (Click on the template to edit online)

Use Case Diagram Templates

Navigation Map

The website navigation map helps you design your wireframes and UI mockups. It basically outlines how the user interface flows, or how your customer would interact with your website.

To draw a navigation map, you need to know the touchpoints your ideal website visitor would interact with upon visiting your site. You can use a customer journey map to identify these touchpoints and then use the following navigation map template to outline the website journey of your visitors.

Website Navigation Flow for Business Analysis (Click on the template to edit online)

Wireframe and UI Mockup Templates

User Interface Wireframes

Wireframes present a blueprint of your website or application screen. It will help you define the information hierarchy of your design and in turn letting you plan your website or app in a user-friendly way.

Step 1: Decide on all the details you want to add to your design.

Step 2: Create the layout by drawing boxes on the grid. It would be easier for you if you start adding information from top to bottom and left to right. Or you can simply select a wireframe like the one below from the Creately UI mockup and wireframe templates to get a head start.

Step 3: Add text to define the information hierarchy. Here you can use different font sizes to see how it would look.

User Interface Wireframe for Business Analysis (Click on the template to edit online)

Process Maps

With process maps , it’s easier to understand processes and identify bottlenecks and blockers that might be slowing your business processes, as they visualize a process step-by-step.

You can use a current-state process map and future-state process map to identify gaps in your processes and communicate how your work gets done to your stakeholders.

Check out our process map tutorial to learn how to draw a process map. Our post on process map improvement techniques covers 9 process improvement methodologies that you can use to streamline your business processes.

Analyzing Stakeholders and Their Interests

Stakeholder map.

When planning a project, it’s important to know who the stakeholders are and why the project is important to them. It helps identify stakeholder roles and responsibilities.

Step 1: Identify the stakeholders of your project. These are the people who may be affected by your project directly or indirectly. Remember to consider those who come from outside your company as well.

Step 2: Based on the stake they have in your project, group and prioritize them.

Step 3: Using a stakeholder map, categorize your stakeholders.

Stakeholder Map (Click on the template to edit online)

Threats and Opportunity Matrix for Stakeholders

Threats and opportunity matrix is used by business analysts to examine how project stakeholders will be affected by implementing and not implementing a proposed solution. It helps to make better decisions with regard to your stakeholders as it helps you look at things from their perspective.

Step 1:  Get a list of stakeholders and have a look at your project charter

Step 2: List down the reasons for the change you want to implement. Then list down the threats of not implementing the change, and the opportunities you can gain by implementing the change.

Step 3: Think of the reaction of stakeholders who would not like the change and list down the threats of implementing the change and opportunities of not making any changes.

Step 4: Get together your team and discuss the results. Arrive at a conclusion that won’t negatively affect your key stakeholders.

Threats and Opportunity Matrix for Stakeholders (Click on the template to edit online)

MoSCoW Method

MoSCoW method is used to understand priorities. With it, you can quickly decide which to prioritize when it comes to your customer requirements, projects, project tasks, and products etc.

While the o’s are added to make pronunciation easier the rest of the letters stand for

M – Must Have (a requirement you must have to meet a business need)

S – Should Have (a requirement you should have if possible)

C – Could Have (a requirement you could have if it doesn’t affect other project activities negatively)

W – Would Have (a requirement that you would like to have later)

By categorizing your requirements with a matrix like below, you can decide which requirements to prioritize, which you can do later and which to exclude.

MoSCoW method template (Click on the image to edit this online )

Managing and Dealing with Change

In the context of business, implementing change is never easy, especially as it may affect so many aspects. By using the correct tools, you can make sure that you adapt to new changes seamlessly.

In our Guide to Change Management Tools , we discuss change management techniques that you can use to plan ahead for the changes in your organization.

Add to the List of Business Analysis Models

Whether planning a project, developing strategies, or improving business processes, you can use the business analysis models in this list, for quick solutions.  These are just a few business analysis techniques from those that are out there.

What other business analysis models do you use in your organization? Do add them in the comment section below so we can expand this list.

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How to Write a SWOT Analysis for a Business Plan

• March 21, 2024
• Business Plan , How to Write

Navigating the complexities of business requires a clear understanding of your strategic position, and a SWOT analysis is an essential tool to help you achieve this clarity. It’s a straightforward method that breaks down into Strengths, Weaknesses, Opportunities, and Threats, providing a snapshot of where your business stands and guiding your future strategic moves.

With this guide, you’ll learn how to leverage your advantages, address challenges, seize new opportunities, and guard against potential threats. Let’s dive into the process together and set a strong foundation for your business’s strategic planning. Let’s dive in!

What is a SWOT Analysis?

A SWOT analysis is a strategic planning tool used to identify and understand the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning. This method helps organizations in assessing both internal and external factors that could impact their objectives.

• Strengths : Positive attributes internal to the organization and within its control. Strengths are resources and capabilities that can be used as a basis for developing a competitive advantage.
• Weaknesses : Factors that are within an organization’s control but detract from its ability to attain the desired goal. These are areas the business needs to improve to remain competitive.
• Opportunities : External chances to improve performance in the environment. Opportunities reflect the potential you can leverage to grow your business or project.
• Threats : External challenges to the business’s performance or project’s success. Threats might stem from various sources, such as economic downturns, increased competition, or changes in regulatory landscapes.

Why Use a SWOT Analysis?

We use a SWOT analysis for several important reasons in business and strategic planning:

• Strategic Overview : It provides a concise and comprehensive overview of the current strategic position of the business or project. By examining internal and external factors, stakeholders can get a clear picture of their situation.
• Decision Making : SWOT analysis aids in decision-making by highlighting the strengths to leverage, weaknesses to address, opportunities to pursue, and threats to mitigate. It helps in prioritizing actions based on the analysis.
• Opportunity Identification : SWOT analysis is instrumental in identifying new opportunities for growth and expansion. Opportunities might come from market trends , economic shifts, or changes in technology.
• Risk Management : By identifying threats, organizations can develop strategies to address or mitigate these risks before they become significant issues. It’s a proactive approach to managing potential external challenges.
• Resource Allocation : Understanding the organization’s strengths and weaknesses helps in the effective allocation of resources. Resources can be directed to areas where they are needed most or where they will have the highest impact.
• Competitive Advantage : It helps businesses identify unique features and capabilities that give them a competitive edge in the market. Recognizing these strengths can guide marketing strategies and business development.

How to Write a SWOT Analysis

Writing a strength in a SWOT analysis involves identifying and articulating the internal attributes and resources of a business or project that contribute to its success and competitive advantage. Here’s how to effectively write a strength in a SWOT analysis:

• Identify Internal Positive Attributes : Focus on internal factors that are within the control of the business. These can include resources, skills, or other advantages relative to competitors. Consider areas like strong brand reputation, proprietary technology, skilled workforce, financial resources, strategic location, and efficient processes.
• Be Specific and Relevant : General statements like “we have a good team” are less helpful than specific ones like “our team includes industry-recognized experts in X field.” The more precise you are, the more actionable your analysis will be. Ensure that the strengths are directly relevant to achieving the business’s goals and objectives.
• Use Quantifiable Data When Possible : Whenever you can, back up your strengths with quantifiable data. For example, “a customer satisfaction rate of 95%” or “a 20% lower production cost than industry average” provides concrete evidence of your strengths.
• Compare to Competitors : Strengths are often relative to the competition. Identify areas where your business outperforms competitors or fills a gap in the market. This might involve superior product quality, a unique service model, or a more extensive distribution network.

Example: Instead of simply stating “Experienced management team” as a strength, you could write: “Our management team has over 50 years of combined experience in the tech industry, including a track record of successful product launches and market expansions. This depth of experience provides us with strategic insights and operational expertise that have consistently resulted in market share growth and above-industry-average profitability.”

Writing a weakness in a SWOT analysis involves acknowledging and detailing the internal factors that limit or challenge your business or project’s ability to achieve its goals. Here’s a structured approach to effectively articulate weaknesses in a SWOT analysis:

• Identify Internal Limitations : Focus on internal attributes that are within the control of the organization but currently act as disadvantages. Weaknesses might include insufficient resources, lack of expertise, outdated technology, poor location, limited product range, or inefficiencies in processes.
• Be Specific and Honest : It’s important to be honest and specific about your organization’s weaknesses. Vague statements won’t help in addressing these issues. For instance, rather than saying “we need to improve our marketing,” specify “our current marketing strategy does not effectively reach our target demographic of 18-25-year-olds on digital platforms.”
• Use Internal Comparisons and Feedback : Compare your performance, processes, and resources against your own past performance or industry benchmarks. Utilize customer feedback, employee insights, and performance data to identify areas of weakness.
• Keep it Constructive : While it’s crucial to be honest about weaknesses, frame them in a way that focuses on potential for improvement. Consider each weakness as an area for development and growth.

Example: Instead of a broad statement like “Inadequate online presence,” a more effective description would be: “Our business currently lacks a robust online presence, reflected in our outdated website and minimal engagement on key social media platforms. This limits our ability to attract younger demographics who predominantly discover and interact with brands online. Improving our online visibility and engagement could enhance brand awareness and customer acquisition.”

Opportunities

Writing opportunities in a SWOT analysis involves identifying and articulating external factors that your business or project could exploit to its advantage. Opportunities are elements in the environment that, if leveraged effectively, could provide a pathway for growth, improvement, or competitive advantage. Here’s how to systematically approach writing opportunities in your SWOT analysis:

• Spot External Trends : Focus on the trends and changes outside your organization that could be beneficial. These might include technological advancements, shifts in consumer behavior, market gaps, regulatory changes, or economic trends.
• Be Relevant and Actionable : Ensure that the opportunities you identify are relevant to your business and actionable. They should align with your business’s strengths and capabilities, allowing you to take practical steps toward capitalizing on them.
• Use Market Research : Base your identification of opportunities on solid market research. Understand your target market , industry trends, and the competitive landscape to pinpoint where the real opportunities lie.
• Detail Potential Benefits : Clearly articulate how each opportunity could benefit your business. Whether it’s entering a new market, launching a new product line, or adopting new technology, explain the potential impact on your business growth and success.

Example: Rather than vaguely stating “New market segments,” a more strategic description of an opportunity could be: “With increasing consumer interest in sustainable living, there’s a growing market segment for eco-friendly products. Our business’s strong commitment to sustainability and existing lineup of environmentally friendly products positions us well to capture this emerging market. Expanding our product range to include more items that cater to eco-conscious consumers can tap into this trend, potentially opening up new revenue streams and enhancing our brand’s reputation as a leader in sustainability.”

Writing threats in a SWOT analysis involves identifying external challenges that could pose risks to your business or project’s success. These are factors outside your control that have the potential to harm your operations, financial performance, or strategic positioning. Addressing threats effectively in a SWOT analysis requires a focused approach:

• Identify External Challenges : Start by pinpointing the external factors that could negatively impact your business. This can include new competitors entering the market, changes in consumer preferences, technological advancements that render your product less desirable, regulatory changes, or economic downturns.
• Be Precise and Realistic : Clearly define each threat in specific terms, avoiding vague descriptions. Being realistic about the level of risk each threat poses is crucial; not every external challenge is a dire threat, but understanding the potential impact is key for strategic planning.
• Assess the Impact : For each threat identified, evaluate how it could impact your business. Consider the worst-case scenario and more likely outcomes to gauge the potential severity of the threat. This helps in prioritizing which threats need immediate attention and strategic response.
• Use Reliable Sources : Base your identification of threats on solid, reliable information. This might include industry reports, economic forecasts, and news sources that provide insights into market dynamics and external conditions.
• Consider Your Weaknesses : Link potential threats to your identified weaknesses. Understanding how external threats could exploit your vulnerabilities offers valuable insights for fortifying your business against these challenges.

Example: Instead of broadly stating “Economic uncertainty,” a more actionable description of a threat would be: “The looming economic downturn poses a significant threat to discretionary consumer spending. Given our business’s reliance on non-essential luxury products, a reduction in consumer spending could directly impact sales. This economic uncertainty requires us to diversify our product offerings and identify more value-oriented options to maintain customer engagement and spending during tighter economic conditions.”

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Free Scenario Analysis Templates

By Courtney Patterson | March 31, 2024

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We’ve compiled the most insightful scenario analysis templates for strategic planners, business analysts, project managers, and executive decision-makers. Utilize these templates to guide your strategic foresight and long-term planning.  Included on this page, you’ll find a  scenario analysis presentation template , a  financial scenario analysis template , an  operational risk scenario analysis template , and more. You’ll also learn about the different  types of scenario analysis templates — including when to use each — and  how to do a scenario analysis .

Excel Simple Scenario Analysis Spreadsheet Template

Download the Sample Simple Scenario Analysis Spreadsheet Template for Excel  

Download the Blank Simple Scenario Analysis Spreadsheet Template for Excel  

When to Use This Template:  This simple scenario analysis spreadsheet template, with or without sample data, is ideal when you need a quick assessment of straightforward scenarios. It's perfect for team leaders and small business owners who are in the early stages of project planning or dealing with time-sensitive, smaller-scale projects.  Notable Template Features:  This template stands out for its user-friendly design and focus on the essential elements of a scenario analysis — without overcomplicating the process. Key features include easy-to-fill sections for scenario description, impact assessment, and outcome visualization, making it an accessible tool for quick decision-making.  Explore these free scenario planning templates and examples to systematically evaluate and prepare for potential futures, enhancing your strategic decision-making process.

Simple Scenario Analysis Presentation Template

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PowerPoint | Google Slides  

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When to Use This Template:  Opt for this simple scenario analysis presentation template when you need to communicate straightforward scenario analyses to your team or stakeholders. With or without sample data, the template is particularly useful for team leaders and small business owners who must present basic scenario outcomes clearly during meetings or strategy sessions.  Notable Template Features:  This template offers a streamlined format perfect for presentations. Key features include intuitive slide layouts for outlining scenarios and their impacts, along with visual aids to enhance understanding. The template is designed to convey scenario analysis effectively without overwhelming your audience.

Business Analysis Scenario Template

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When to Use This Template: Employ this business analysis scenario template with or without sample data to present a detailed assessment of complex business scenarios, such as shifts in market dynamics or competitive landscapes, to your team or stakeholders. It's particularly useful for business analysts and corporate strategists who need to convey business environment analyses during strategic planning meetings or executive briefings.  Notable Template Features: This template features comprehensive slide layouts that facilitate a clear, thorough exploration of various business scenarios. Its standout attributes include dedicated sections for detailing market trends, competitive analysis, and strategic implications, complemented by engaging visual elements.  To prioritize tasks and projects efficiently, download one of these  free priority matrix templates , tailored to help you align your focus with your most impactful activities.

Financial Scenario Analysis Template

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Excel | Google Sheets

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When to Use This Template:  Utilize this financial scenario analysis template with or without sample data when you need to examine the impact of different market conditions or economic trends on your company's financial standing. It's particularly beneficial for financial analysts and CFOs engaged in critical financial planning and forecasting.  Notable Template Features:  This template is equipped with detailed slides to help you develop diverse financial outcomes. It features specialized sections for analyzing changes in revenue, costs, and profitability under different scenarios, with graphical elements to represent financial data. The design facilitates clear communication of complex financial forecasts, making it a valuable tool for presentations. 

Operational Risk Scenario Analysis Template

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When to Use This Template:  This operational risk scenario analysis template with or without sample data is best for risk managers and operations managers who need to identify and assess risks that could disrupt daily operations. It’s an essential tool during risk assessment meetings or operational planning sessions.  Notable Template Features:  This template is designed to help you systematically outline and analyze operational risks. It includes sections for assessing the likelihood and potential impact of each risk, as well as for planning mitigation strategies. The template’s structured format aids in creating actionable contingency plans, making it an indispensable tool for comprehensive operational risk management.  To plan for your team's future needs, explore these  free workforce planning templates , designed to help your organization strategically manage and optimize its human resources.

Scenario Analysis Axis Template

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Microsoft Word | PowerPoint

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When to Use This Template:  Turn to this scenario analysis axis template when you need a visual tool to compare and contrast different scenarios. With or without sample data, the template is particularly useful for strategic planners and project managers who need to present options to stakeholders and evaluate them based on factors such as risk and reward.  Notable Template Features:  This template stands out for its two-dimensional axis system, which enables users to plot scenarios intuitively. It allows you to compare different outcomes based on key variables, enhancing the clarity of strategic discussions. Its straightforward visual design facilitates deeper understanding and more informed decision-making in complex project environments.  Utilize one of these  free decision matrix templates to streamline your decision-making process, ensuring your team effectively evaluates and prioritizes options based on critical criteria.

Analysis Scenario Planning Template

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Excel | PowerPoint  

When to Use This Template:  This analysis scenario planning template is ideal for senior executives and strategic planners when crafting long-term strategies. It is particularly valuable in strategy sessions focused on mapping out the future direction of the business, taking into account diverse potential scenarios that could unfold.  Notable Template Features:  This template is tailored to facilitate the exploration of scenarios with the potential to affect the business's long-term trajectory. It helps senior decision-makers visualize various scenarios and their impacts to understand the full range of possible outcomes. The layout is structured to encourage comprehensive and forward-thinking strategy development, making it a key asset for high-level strategic planning. 

Scenario Analysis XY Axis Template

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Excel | Google Sheets  

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When to Use This Template:  Data analysts and strategic planners, in particular, should select this scenario analysis XY axis template for in-depth comparative analysis. This template, with or without sample data, is an effective tool for examining scenarios based on specific, distinct variables, enhancing the depth of strategic insights and risk assessments.  Notable Template Features:  Characterized by its dual-axis system, this template compares scenarios based on two key variables. Its design offers clear visual representations that aid in understanding complex strategic relationships and risks. The template is especially beneficial for translating sophisticated data into accessible, actionable insights. 

Types of Scenario Analysis Templates

The types of scenario analysis templates that businesses use vary, depending on their needs. They include simple templates for quick assessments and specialized templates focusing on financial outcomes, what-if situations, and long-term planning. These tools help businesses make strategic decisions.  Here's a breakdown of the different types of scenario analysis templates:  

• Simple Scenario Analysis Template: This user-friendly template assists in basic scenario planning, suitable for small-scale or introductory assessments.
• Simple Scenario Analysis Presentation Template: Formulated to effectively communicate and visualize the potential impacts of straightforward future scenarios, this template aids in decision-making and strategic planning discussions.  
• What-If Scenario Analysis Template: Focusing on hypothetical situations, this template enables businesses to walk through various possible futures and their impacts.  
• Business Analysis Scenario Template: Tailored for comprehensive scenario planning in business contexts, this detailed template incorporates market, competitive, and strategic factors.  
• Financial Scenario Analysis Template: An essential tool for financial analysts and CFOs, this template examines how different scenarios impact revenue, costs, and the overall financial health of the business.  
• Operational Risk Scenario Analysis Template: This template helps users identify and analyze risks to business operations under various scenarios.  
• Scenario Analysis Axis Template: With a two-axis layout to plot and compare different scenarios, this template is often used for visual and comparative analysis.  
• Analysis Scenario Planning Template:  Designed for long-term strategic planning, this template helps businesses prepare for and adapt to future scenarios.  
• Scenario Analysis XY Axis Template:  For nuanced comparative analysis, this template plots scenarios according to two distinct variables that might be scaled differently, such as risk versus reward. 

Each type of scenario analysis template serves a unique purpose, from straightforward assessments to complex strategic planning, helping businesses prepare for various outcomes.

How to Do a Scenario Analysis

Perform a scenario analysis by developing a range of possible events and using a template to understand their impacts on your business. A scenario analysis template enables you to organize your data, visualize different outcomes, and make rational decisions. Scenario analysis is a strategic planning method used to make flexible long-term plans. Here's how to conduct a scenario analysis:  

• Define Objectives Start by clarifying what you want to achieve with the scenario analysis. This could be understanding the impact of a new product launch, market expansion, or changes in the regulatory environment on your business.
• Identify Key Drivers for Change Determine the external forces that could impact your objectives. These might include technological advancements, economic trends, legislative changes, or social dynamics. 
• Gather Data  Collect relevant data on each key driver. This includes historical data, current trends, and expert forecasts. The quality of your scenario analysis depends significantly on the accuracy and relevancy of the data you use.
• Develop Scenarios Using the identified drivers, construct a range of plausible future scenarios. Typically, you should create at least three: one positive (optimistic), one negative (pessimistic), and one neutral (most likely) scenario.

Use a Template to Capture Your Findings  Use a template, such as this article’s simple scenario analysis spreadsheet template to structure your findings. A template helps you organize your scenarios, drivers, and data into a clear format that enables you to visualize different outcomes. It can display key metrics on an easy-to-read dashboard to help with your analysis. 

Enter Your Data  In the template’s Scenario Analysis Data Table , enter your data and select the corresponding scenario condition from the drop-down menu to populate the charts in the Scenario Analysis Dashboard section. 

Analyze Impacts  For each scenario, evaluate the potential impacts on your business by checking the Calculations section of the template. Consider how each scenario could affect your strategic objectives, operations, financial performance, and competitive position.  

• Develop Strategies and Contingency Plans Based on the analysis, devise strategies that would succeed across multiple scenarios. Prepare contingency plans for specific scenarios to mitigate risks or capitalize on opportunities.
• Monitor and Update Scenario analysis is not a one-time activity. Regularly monitor the external environment for signs that a particular scenario might be unfolding. Update your scenarios and plans as necessary to remain aligned with the changing landscape.

By following these steps and utilizing a structured template, you can perform a comprehensive scenario analysis that helps your business navigate uncertainties with greater confidence and strategic agility.

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SWOT Analysis of a Human Resources (HR) department 

A Human Resources (HR) department manages an organization’s workforce and fosters a positive work environment. Here’s an overview of the primary functions and responsibilities of an HR department:

Core Functions of HR:

• Recruitment and Staffing : HR is responsible for attracting, hiring, and onboarding new employees. This includes crafting job descriptions, posting job openings, screening candidates, conducting interviews, and selecting the best candidates for the organization.
• Training and Development : HR departments manage employee development programs to enhance skills, improve performance, and ensure employees are equipped to meet their job requirements. This includes organizing training sessions, workshops, and continuing education opportunities.
• Compensation and Benefits : HR determines appropriate compensation structures and packages that align with industry standards and organizational goals. This includes salary, health insurance, retirement plans, and other perks that help attract and retain talent.
• Performance Management : HR oversees employee performance evaluation, working with managers to assess and manage worker productivity and setting performance standards and goals. This function is crucial for identifying high performers, providing feedback, and addressing areas where employees may need improvement.
• Employee Relations : HR plays a key role in maintaining a healthy, ethical, and productive workplace. They handle employee grievances, mediate disputes, and ensure a fair and respectful working environment. This also involves developing and enforcing company policies that comply with legal standards.
• Compliance with Laws and Regulations : HR ensures that the organization complies with all relevant employment laws and regulations, which can vary widely from one jurisdiction to another. This includes employment standards, health and safety issues, and anti-discrimination laws.
• Workforce Planning and Retention : HR departments are involved in strategic planning to ensure the organization has the right mix of skills and staffing levels to meet current and future business needs. This involves succession planning, turnover management, and workforce analytics.
• Diversity and Inclusion : Many HR departments lead initiatives to promote diversity and inclusion within the workplace. This includes developing policies that promote equal opportunities and creating programs that enhance cultural competency within the team.

Strategic Role of HR:

Increasingly, HR is seen as a strategic partner in the organization rather than just an administrative or support function. This strategic role involves aligning HR policies and practices with the overall business strategy to improve performance, productivity, and profitability. HR professionals are expected to provide insights and data that support business decisions, help manage change, and foster organizational culture.

In summary, an HR department is integral to nurturing a company’s human capital, aligning employee goals with organizational objectives, and ensuring compliance with laws and regulations. The effectiveness of HR can significantly impact an organization’s overall success.

Here is the SWOT analysis for  Human Resources (HR) department 

A SWOT analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats of a business, project, or individual. It involves identifying the internal and external factors that can affect a venture’s success or failure and analyzing them to develop a strategic plan. In this article, we do a SWOT Analysis of the Human Resources (HR) department.

SWOT Analysis: Meaning, Importance, and Examples

• Expertise in Recruitment and Talent Management : HR is central to attracting and retaining top talent. A strong HR department excels in designing recruitment strategies that fill positions quickly and ensure a good fit between the candidates and the company culture. This helps in building a skilled and committed workforce.
• Employee Development and Training : HR departments often lead the way in employee development, providing training programs that enhance skill sets and increase productivity. By investing in employee growth, HR can directly impact the organization’s efficiency and effectiveness.
• Enhanced Employee Satisfaction and Engagement : HR plays a crucial role in employee relations by ensuring a positive work environment, addressing grievances effectively, and maintaining high levels of employee engagement. This can lead to lower turnover rates, higher job satisfaction, and a more motivated workforce.
• Strategic Workforce Planning : HR’s ability to forecast and plan for future workforce needs based on the organization’s strategic direction is invaluable. By aligning the workforce strategy with organizational goals, HR can ensure that the company has the right people in the right roles at the right time.
• Regulatory Compliance and Risk Management : HR helps the organization comply with labor laws and employment standards, reducing legal risks and protecting the organization from potential lawsuits and regulatory sanctions.
• Cultural Stewardship : HR is often seen as the guardian of company culture, promoting core values and ensuring they are integrated into every aspect of the organization. A strong company culture can enhance employee morale and productivity and differentiate the company in the market.
• Cost Management : Through effective benefits management, salary structure design, and control over labor costs, HR can contribute to the financial health of the organization, making it a key player in overall business success.
• Resource Constraints : HR departments are often required to manage a wide range of responsibilities with limited resources. Budget constraints can lead to understaffing in HR teams, which may result in delays and inefficiencies in handling employee needs, recruitment, and training programs.
• Resistance to Change : HR departments can sometimes be slow to adapt to changes in the business environment or advances in HR technology. This resistance can hinder the implementation of more efficient systems and processes that could benefit the organization.
• Lack of Strategic Integration : HR may not be fully integrated into the strategic planning process in some organizations. This can lead to a disconnect between the company’s business goals and HR strategies, potentially affecting the overall alignment and effectiveness of the organization.
• Overemphasis on Administration : HR departments can sometimes become too focused on administrative functions such as processing payroll and managing employee records. While these tasks are important, overemphasizing them can divert attention from more strategic HR functions like talent management and employee development.
• Compliance and Legal Challenges : Navigating the complex landscape of employment law can be challenging for HR professionals. A lack of expertise or up-to-date knowledge on legal matters can expose the organization to risks of non-compliance and potential legal issues.
• Ineffective Communication : Poor communication within the HR department and with other departments can lead to misunderstandings and misalignment of goals. Ineffective communication can also impact employee satisfaction if employees feel their concerns are not addressed properly.
• Data Management Issues : With data becoming increasingly important in HR decision-making, a lack of proper systems to handle data can be a significant weakness. Inadequate data management can make tracking employee performance, forecasting workforce needs, and analyzing HR metrics difficult.

Opportunities

• Technology Integration : Adopting advanced HR technologies like AI-driven analytics, machine learning for data processing, and automated systems for routine tasks can greatly enhance efficiency. These tools can help in better talent management, predictive analytics for turnover rates, and more personalized employee engagement strategies.
• Strategic Leadership Role : HR can expand its influence by taking on a more strategic role in organizational planning. This involves participating in high-level decision-making processes, aligning HR strategies with business goals, and contributing to the company’s overall direction.
• Employee Wellness Programs : With increasing awareness of the importance of mental health, HR departments can implement comprehensive wellness programs that support employees’ physical, mental, and emotional health. This can improve employee satisfaction, reduce absenteeism, and create a more productive workforce.
• Talent Development and Lifelong Learning : HR can create employee growth and development opportunities through continuous learning and development programs. This could include career development plans, upskilling courses, and leadership training, which help retain top talent and prepare employees for future organizational roles.
• Diversity and Inclusion Initiatives : There is a growing need for workplaces to be more inclusive and diverse. HR departments can lead the way in crafting policies and practices that promote diversity, equity, and inclusion. These initiatives can enhance the company’s image, attract a diverse workforce, and improve employee engagement and innovation.
• Global Talent Acquisition : As businesses expand globally, HR departments can look to broaden their recruitment efforts to include international talent. This fills skills gaps and brings new perspectives and ideas to the organization, enhancing creativity and problem-solving.
• Enhancing Employee Engagement : HR can leverage data and employee feedback to develop more effective engagement strategies. This might involve tailored benefits, flexible working conditions, and recognition programs that directly address the desires and needs of the workforce.
• Compliance and Risk Management : As regulations evolve, particularly in areas like data protection (GDPR) and labor laws, HR departments can strengthen their role in compliance management. Being proactive in this area can prevent legal issues and ensure the organization operates within the law.
• Technological Disruption : Advances in AI and automation technologies are reshaping many traditional HR functions. Automation of routine tasks like payroll, benefits administration, and initial recruitment phases can threaten HR roles, pushing the department to evolve and adopt new skills focused more on strategic planning and employee engagement.
• Economic Uncertainty : Economic downturns and budget cuts can significantly impact HR operations, forcing the department to do more with fewer resources. These conditions can lead to layoffs, reduced training and development opportunities, and decreased employee engagement and morale.
• Compliance and Regulatory Changes : HR departments must stay current with labor laws and employment regulations, which can vary widely by region and change frequently. Non-compliance can result in fines, legal issues, and damage to the company’s reputation.
• Data Security Risks : With HR departments managing a significant amount of sensitive employee data, they are a prime target for cyber threats. A breach can lead to severe data loss, compromising employee privacy and leading to legal repercussions.
• Talent Management Challenges : In a highly competitive job market, retaining top talent and recruiting skilled workers are constant challenges for HR. The inability to effectively manage talent can lead to a skills gap in the organization, affecting overall productivity and innovation.
• Changing Workforce Demographics and Expectations : As workforce demographics shift and employee expectations change, HR must adapt its policies and strategies to meet these new demands. This includes managing a multi-generational workforce, accommodating flexible work arrangements, and implementing diversity and inclusion initiatives.
• Remote Work Dynamics : The rise of remote work has created new challenges for HR regarding engagement, performance management, and maintaining company culture. Adapting to these changes while ensuring seamless communication and collaboration is crucial.

Check out the SWOT Analysis of Global Businesses

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