Stated in simple terms, strategy is a complete plan designed specifically for attaining the objectives of the firm. The objectives indicate what the firm wants to achieve; the strategy provides the design for achieving them. It is the strategy that decides the success at the business unit level, which in turn decides the total corporation's success. The linkage between strategy and overall corporate success is indeed direct and vital. And in this linkage lies the significance of strategy.

Since realizing the objectives is the purpose of strategy, it is only logical that strategy takes its direction and cue from the objectives of the firm. Strategy is not a nebulous idea. It is a well-outlined game plan. And there are definite ways of formulating it. Basically, the formulation of a strategy consists of two steps: Selecting the target market and assembling the marketing mix.

The essence of the strategy of any firm can be grasped from the firm's target market and its marketing mix. The target market shows to whom the firm intends to sell the products; the marketing mix shows how the firm intends to sell. Together, they constitute the strategy platform of the firm.

To say that target market selection is a part of strategy development is an understatement. It does not fully bring out the import of the inseparable linkage between the two. When the selection of the target market is over, an important part of the strategy of the firm is already determined, defined and expressed. In effect, target market selection boils down to deciding- what parts of the market are we going to serve? What parts of the market do we choose not to serve? And, what is the logic of selecting a particular segment? In other words, it is basically a question of balancing the attractiveness of the various segments with the objectives of the firm and with the resources of the firm.

Business Strategy

A business strategy is formulated by selecting the target audience of the product and assembling the marketing mix. A firm can assemble marketing mix elements in many different ways so that the relative weightage of the different elements will be different in the different combinations. Because of this reality, business firms are employing an abundance of strategies and strategy stances. It is a relentless race to stay ahead of competition.

Basically, however, there are only two broad routes available for forging business strategies. They are the price route and the differentiation route. In other words, any strategy has to be ultimately either a price-based strategy or a differentiation-based strategy.

Companies taking the price route compete on the strength of their pricing and the price cushions they enjoy. Normally, those who resort to the price route and compete on price will enjoy substantial cost advantages, giving them flexibility in pricing and marketing. The differentiation route, on the other hand, revolves around elements other than price. The product with its innumerable features is one major source of differentiation. In fact, any of the ever-so-many activities performed by the business unit can constitute the nucleus for differentiation.

In other words, differentiation allows the company the freedom and flexibility to fight on the non-price front. Differentiation, therefore, is a crucial option for a firm in its search for a rewarding strategy. A good majority of business battles are in fact fought with a differentiation-based strategy rather than a price-based strategy.

As already mentioned, a business unit that opts for the price route in its competitive battle will enjoy certain flexibilities in the matter of pricing of its products, and use price as the main competitive lever. It will price its products to suit varying competitive demands. It will enjoy certain inherent cost advantages, which permit it to resort to a price-based fight.

Strategy Games

In the marketplace, different firms take different strategy stances. This is but natural. As long as their situational designs and consequently their specific requirements of strategy differ from each other, they will evidently follow different strategy stances. One firm may find it appropriate to have a direct confrontation with the market leader; another may find it appropriate to keep aloof for some time from the heat of competition; the third may find it relevant to chalk out a strategy of sheer survival. It is essential to understand that there is no universally valid strategy stance. It is so because the various firms do not share the same situational design.

Companies draw relevant elements and forge unique strategies to suit their unique situational design and relative position in the industry. Broadly, these strategy stances can be classified under three heads- offensive/ confrontation strategy, defensive strategy and niche strategy.

Offensive strategy, also known as confrontation strategy, is as the name indicates a strategy of aggression/confrontation. A firm that is not presently the leader, but aspires to leadership position in the industry, usually employs an offensive strategy. The crux is that the firm adopting an offensive strategy automatically assumes the position of the challenger; the leader, mostly, is its target of attack.

A defensive strategy is usually employed by the leader who has the compulsion to defend his position against the confrontation of powerful existing competitors or strong new entrants trying to dislodge the leader from his topmost position. The leader's concern is, how best can I defend my position? The leader cannot assume that its position in the industry is safe and its job easy. It has to maintain constant vigilance and defend its position against the attack of the challengers, because in any industry challengers keep appearing.

A firm practicing the niche strategy neither confronts others nor defends itself. It cultivates a small market segment for itself with unique products/services supported by a unique marketing mix. These segments will be too small to attract big competitors. Normally, smaller firms with distinctive capabilities adopt a niche strategy.

Strategic Planning

Strategic Planning entails the making of schemes to be adhered to by an entire organization. This pertains to the entire organization's achievement and progress over a certain period of time in the future. It also takes into account the way industry conditions change with the times - in areas such as technology and communications.

The particular nature of the organization, as brought out by its leadership, its culture, complexities in its environment, its size and other specific aspects prevalent there, determine its Strategic Planning mode. Thus, there arise a number of models, approaches and perspectives of Strategic Planning. These may be based on goals or issues or other criteria.

An organization's planners may well know the components of a Strategic Plan. Still, in order to clarify and elucidate the organization's plans and verify that the individual plans of the key persons concerned comply with the common plan, the Strategic Planning process is well worth considering. Strategic Planning serves many purposes:

*It helps cultivate a feeling of ownership of the plan among the participants in planning.

*It helps bring focus on the key priorities of the organization, and thereby ensures the most optimum effective use of the organization's available resources.

*It sets and establishes realistic and achievable goals for a period of time in keeping with the organization's capacity.

*It forwards such goals and objectives defined to every constituent of the organization. Following these, progress can be measured from time to time.

*It establishes a mechanism for informing about changes in goals and objectives, when made.

Strategic Business Planning

Strategic Business Planning generally focuses on a particular product, service or program. Chalking out, maintaining and upgrading a Strategic Business Plan is essential for any business (including successful and growing businesses).

Essentially, a Strategic Business Plan is, theoretically, a no-holds-barred, can-do approach to success. It calculates every imaginable variable, and accounts for it. It attempts to set in motion and monitor events ahead of time, so that the plan will always be updated with the current moment. This way, the company will not be caught unawares in an ever-changing economy, and won't end up using a tactic that might have worked yesterday, but will not work today.

Business planners of an organization, just like salespersons, should be aware of and remain updated about the features, utilities and feedback of any particular product or service or program provided by their organization.

The following should be presented while formulating a successful Strategic Business Plan:

*A summary providing a concise overview of the plans undertaken, together with the essential information about the company.

*Market analysis and position of products and services in the market, vis-à-vis those of others (competitors).

*A description of the company with its history and other noteworthy aspects.

*Organization of the company and its products/services/programs, and the management thereof.

*Information relating to marketing and sales management of the company's products and services, together with plans and strategies undertaken about their improvement.

*Information on the service or product line.

*Request for funding for the company in pursuance of implementation of plans and achieving goals.

*Financial information pertaining to the company and its business plan.

Strategic Planning Process

The Strategic Planning Process starts off with an evaluation of the organization's performance of business. The specific issues which are to be addressed by the plan identified. These may be the key areas of business, which are of utmost importance in the organization's functioning. Determination and clarification of the roles of every participant in the process must be made, and the information relevant to the process is to be provided at the very onset of planning.

Ascertaining the mission of the organization is the next step. Together, the vision on what the organization is hoped to become in future is also to be declared.

Next, the situation on the ground, as it is presently, is taken into consideration--the identification of the greatest areas of need in the organization is made using ratings. Priorities are established-- crucial 'value areas' where any improvement made would translate to significant results are determined.

Thereafter, the correct plan of action to work upon the identified area(s) is developed. Strategies, goals and objectives are formulated specifically for this purpose. Completion is achieved by summing up and putting down everything on paper- incorporating all the multiple strategies, goals and objectives set up.

Finally, implementation of the plan chalked out is of prime importance. Unless plans are actually carried out they become useless on paper. The monitoring and reviewing of the execution of plans and progress achieved is important too. After regular intervals of time the performance, based on the plan, should be scrutinized to indicate success and failure. Necessary modifications should be made to the plans if they are not delivering the desired results.

The Strategic Planning Process, if successful, will help an organization react more quickly to emerging opportunities and ensure faster decision-making than competitors, thereby keeping the organization leagues ahead of competitors.

Strategic Planning Software

Strategic Planning Software is designed for implementing, deploying and communicating strategic plans throughout the organization in an automated manner. The object is to bring about improved business results. Common purposes served by Strategic Planning Software include helping in the creation and reporting of an initial corporate scoreboard and delivering personalized information on performance measurements to specific individuals.

Strategic Planning provides support to the greater process of enterprise strategy execution, aiming at deriving the desired business results from the organizational strategy adopted. Suitable Strategic Planning Software aims at supporting the stages involved in the overall strategy execution process. Budgeting and forecasting are incorporated as a feature of such software, alongside Strategic Planning supports.

Strategic Planning Software saves much time involved in with strategy plan implementation. This time can be devoted to other valuable analysis work. Thus, the Strategic Planning Software pays for itself in the end. Also, the business performance of an organization is enhanced by the employment of Strategic Planning Software. The unwanted yet unavoidable errors which crop up from time to time in Strategic Planning work can be reduced, besides providing greater scrutiny of work at all levels of planning, from top-down to bottom-up.

Strategic Planning Software ensures greater speed and accuracy in the preparation of strategic plans, and is worth opting for by any organization intending to stay ahead of competitors. In fact, the whole idea of Strategic Planning is to be able to foresee events that have not yet come to pass. That is how Strategic Planning Software incorporates outlooks - with the use of calendars, reminders, and so on - into the overall business plan of the company.

Strategic Planning Workshops

Participative Strategic Planning Workshops have come up as a welcome endeavor. They help in maximizing organizational resources, alongside promotion of creativity and innovation emerging from the coming together of various groups with different ideas and plans. Thus, such interactive and participative Strategic Planning Workshops provide a thrust towards the proper implementation of strategic plans.

Workshops of this kind help pool resources for understanding the goals and objectives of the participants. This can be shared by the community at large, and prove to be useful. Participative workshops and community projects involving a wide range of participants who have an interest and stake in the project are likely to have a good chance of being successful.

The equality among participants serves as the key to collecting the most appropriate and effective community resources. A successful workshop leads to greater commitment from individual participants, who are owners of the project, too, in their own right.

Participation as a group involves adhering to a common program and strategy, and a commitment towards achieving commonly decided goals and targets. This gives a boost to group and community spirit, and instills a sense of pride in the participants. It is via workshops involving a wide range of views that more fruitful decision-making is made possible, and comprehensive programs are chalked out towards Strategic Planning. Since Strategic Planning is an ongoing process, these educational workshops are stimulating and prove invaluable when arranged from time to time. In addition, they keep employees updated as to what new events and conditions will be affecting the company and, by extension, their lives at the company.

Strategic Planning Consultant

Consultants are persons rendering help to others by enabling them to make profits or making them learn from their own experiences. In case an organization has little or no knowledge or experience or expertise in Strategic Planning then a consultant's help may be sought. It may also be that planning needs to be carried out on an urgent basis, so a consultant is required. It might also happen that the key members are continuously disagreeing upon various issues of planning and there is the need for a Strategic Planning Consultant to step in by providing expertise or facilitation skills to help the members come to a consensus. The very employing of a consultant often gives credibility to plans. Besides, a consultant has an objective perspective and is free from any bias about the organization's past and present concerns.

Strategic Planning consultants have many applications in many different industries. Professional associates like lawyers, facilitators, trainers, fundraisers, accountants and others may provide consultants. Non-profit organizations may also hire Strategic Planning Consultants.

Though the consultant is there for helping out in the entire planning process, organization members must not become completely dependent on the consultant's services. Again, instead of getting the consultant sanctioning recommendations by signing, it is advisable if the professional expert hired as a consultant is directly involved in implementing worthwhile recommendations.

One must not go by the fees of the consultants. Expertise should be the judging criteria.

Proper help and guidance must be provided to the Strategic Planning Consultant regarding the organization and its activities beforehand.

About the Author

Strategic Planning provides detailed information on strategic planning , non-profit strategic planning, strategic business planning, strategic media planning and more. Strategic Planning is affiliated with Strategy Games.


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Strategy - Article by Elizabeth Morgan