Strategic Plan Outline

I. Executive SummaryA one- to three-page synopsis of the plan providing highlights of the current situation, objectives, strategies, principal actions programs, and financial expectations.

II. Company Mission The mission of a company is the unique purpose that sets it apart from other companies of its type and identifies the scope of its operations. The mission describes the company’s product, market, and technological areas of emphasis in a way that reflects the values and priorities of the strategic decision makers.A. Define the core business

1. Basic product or service2. Primary market3. Principal technology for production or delivery

III. Company Profile The company profile depicts the quantity and quality of the company’s financial, human, and physical resources. It also assesses the strengths and weaknesses of the company’s management and organizational structure. Finally, it contrasts the company’s past successes and traditional concerns with the company’s current capabilities in an attempt to identify the company’s future capabilities.A. SWOT Analysis Template: Company Situation AnalysisForm: SWOT Analysis Checklist

1. Internal Strengths and Weaknessesa. Marketingb. Financial and Accounting

(1) Ratio analysisTemplates: Ratios

Comparative Ratios (2) Sources and uses of funds

Templates: Calculating the Cash BudgetRatios Cash Flows Working Paper: Direct Method Cash Flows Working Paper: Indirect Method

c. Production, Operations, Technicald. Human Resources e. Quality Management f. Information Systemsg. Organization and General Management

2. External Opportunitiesa. Serve additional customer groups or expand into new markets

or segments b. Expand product line c. Transfer skills to new products or businessesd. Integration

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(1) Forward(2) Backward

e. Foreign marketsf. Emerging new technologies

3. External Threatsa. Low barriers to entryb. Availability of substitute products or servicesc. Slower market growthd. Costly regulatory requirements e. Growing bargaining power of customers or suppliesf. Changing buyer needs and tastes

B. Strategic Cost and Price Analysis 1. Value chain approach: Primary activities

Template: Value chain activities and cost a. Inbound logisticsb. Operationsc. Outbound logisticsd. Sales and Marketinge. Service

2. Value chain approach: Support activitiesa. Procurementb. Technologyc. Human resources d. Infrastructure of the firm

C. Current Competitive PositionForm: Signs of Strengths and Weaknesses in a Company’s Competitive

Position Templates: Company Situation Analysis

Competitive Strength Assessment 1. Comparison with past performance2. Stage of industry evolution3. Comparison with competition

Form: Categorizing the Objectives and Strategies of Competitors4. Comparison with success factors in the industry

Form: Types of Key Success Factors

IV. External EnvironmentA firm’s external environment consists of all the conditions and forces that affect its strategic options but are typically beyond its control.A. Remote environment

1. Economic2. Social/Cultural3. Political/Regulatory4. Technological5. Ecological

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B. Industry analysis1. Industry attractiveness analysis Template: Industry Attractiveness Factors

a. Market factors:(1) Size(2) Growth(3) Cyclicity(4) Seasonality

b. Industry factors: (1) Capacity(2) New product entry prospects(3) Rivalry(4) Power of suppliers(5) Power of buyers(6) Threat of substitutes

C. Operating environment1. Driving forces

a. Changes in the long-term industry growth rateb. Changes in who buys the product and how they use it c. Product innovationd. Technological changee. Marketing innovation f. Entry or exit of major firmsg. Diffusion of technical know-howh. Increasing globalization of the industry I. Changes in cost and efficiencyj. Emerging buyer preferences for differentiated products

instead of a commodity product k. Regulatory influences and government policy changes l. Changing societal concerns, attitudes and lifestyles m. Reductions in uncertainty and business risks

2. Strengths and Weaknesses of Competitors 3. Customer Profiles4. Role of suppliers

V. Objectives Setting objectives converts the strategic vision and directional course into target outcomes and performance milestones.A. Long-termB. Short-termC. Financial

1. Faster revenue growth?2. Faster earnings growth?3. Higher dividends?

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4. Wider profit margins?5. Higher returns on invested capital?6. Stronger bond and credit ratings?7. Bigger cash flows?8. A rising stock price?9. Recognition as a “blue chip” company?10.A more diversified revenue base?11.Stable earnings during recessionary periods?

D. Strategic1. A bigger market share?2. A higher, more secure industry rank?3. Higher product quality?4. Lower costs relative to key competitors?5. Broader or more attractive product line?6. A stronger reputation with customers?7. Superior customer service?8. Recognition as a leader in technology and/or product

innovation?9. Increased ability to compete in international markets?10.Expanded growth opportunities?11.Total customer satisfaction?

VI. Grand (Organizational or Business) Strategy Form: Matching Strategy to the Situation An articulation of the formal strategy based on the analysis preceding this step. The grand strategy identifies the overall goals of the organization.A. Concentration (increasing use of existing products in present markets)B. Market development (existing products in new markets)C. Product development (new products for present markets) D. InnovationE. Horizontal IntegrationF. Vertical IntegrationG. Concentric Diversification H. Conglomerate DiversificationI. Turnaround J. Divestiture K. Liquidation L. Joint VenturesM. Strategic Alliances

VII. Functional StrategiesAlthough this may also be a part of the “Grand Strategy,” it is critical that the organization’s overall strategy be used a framework within which each division or business function sets its own strategic plan of action.

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A. Production/Operations1. Manufacturing 2. Materials 3. Capital

B. Marketing1. Advertising 2. Selling

C. Finance and Accounting 1. Cash flow 2. Capital

D. Research and DevelopmentE. Human Resource Management

VIII. Implementing the StrategyNow that strategies have been defined for the organization as a whole and for the individual divisions or functions, a plan for implementing the strategy needs to be articulated.A. Build a capable corporation B. Policies and procedures to support the strategy C. Support systems D. Strategy-supporting reward systems E. Strategy-supporting corporate culture F. Strategic leadership

IX. Control and EvaluationAn implemented strategy must be monitored to determine the extent to which its objectives are achieved. A. Strategic controls

1. Monitor assumptions and predictions2. Monitor implementation3. Strategic surveillance of internal and external environments

B. Operational controls1. Budgets

a. Profit and loss Templates: Cost, Volume and Profits

Multiple-step Income Statement For a Corporation

Work sheet and Financial Statements for a Manufacturing Corporation

b. Capital budgets Templates: Master Budgets

c. Cash flow Templates: Calculating the Cash Budget

Ratios Cash Flows Working Paper: Direct Method Cash Flows Working Paper: Indirect Method

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2. Schedules3. Key success factors

Form: Types of Key Success Factors Template: Competitive Strength Assessment

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