Strategic Planning

Strategic Planning is a comprehensive process for determining what a business should become and how it can best achieve that goal. It appraises the full potential of a business and explicitly links the business's objectives to the actions and resources required to achieve them. Strategic Planning offers a systematic process to ask and answer the most critical questions confronting a management team—especially large, irrevocable resource commitment decisions.

How Strategic Planning works:

A successful Strategic Planning process should:

  • Describe the organization's mission, vision and fundamental values
  • Target potential business arenas and explore each market for emerging threats and opportunities
  • Understand the current and future priorities of targeted customer segments
  • Analyze the company's strengths and weaknesses relative to competitors and determine which elements of the value chain the company should make versus buy
  • Identify and evaluate alternative strategies
  • Develop an advantageous business model that will profitably differentiate the company from its competitors
  • Define stakeholder expectations and establish clear and compelling objectives for the business
  • Prepare programs, policies, and plans to implement the strategy
  • Establish supportive organizational structures, decision processes, information and control systems, and hiring and training systems
  • Allocate resources to develop critical capabilities
  • Plan for and respond to contingencies or environmental changes
  • Monitor performance
Related topics Bain capabilities

Companies use Strategic Planning:

  • Change the direction and performance of a business
  • Encourage fact-based discussions of politically sensitive issues
  • Create a common framework for decision making in the organization
  • Set a proper context for budget decisions and performance evaluations
  • Train managers to develop better information to make better decisions
  • Increase confidence in the business's direction

Selected references

Collis, Daniel J., and Michael G. Rukstad. "Can You Say What Your Strategy Is?" Harvard Business Review, April 2008, pp. 82-90.

Drucker, Peter F. Managing in a Time of Great Change. Harvard Business Press, 2009.

Goold, Michael, Andrew Campbell, and Marcus Alexander. Corporate-Level Strategy: Creating Value in the Multibusiness Company. John Wiley & Sons, 1994.

Gottfredson, Mark, and Steve Schaubert. Breakthrough Imperative: How the Best Managers Get Outstanding Results. Collins Business, 2008.

Hamel, Gary, and C.K. Prahalad. Competing for the Future. Harvard Business School Press, 1994.

Hrebiniak, Lawrence G. Making Strategy Work: Leading Effective Execution and Change. Wharton School Publishing, 2005.

Mankins, Michael C. "Stop Wasting Valuable Time." Harvard Business Review, September 2004, pp. 58-65.

Mintzberg, Henry. The Rise and Fall of Strategic Planning: Reconceiving Roles for Planning, Plans, Planners. Free Press, 1994.

Mintzberg, Henry, Joseph Lampel, and Bruce Ahlstrand. Strategy Safari: A Guided Tour Through The Wilds of Strategic Management. Free Press, 1998.

Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press, 1998.

Porter, Michael E. "What Is Strategy?" Harvard Business Review, November/December 1996, pp. 61-78.