Strategic planning is the process of devising a plan of both offensive and defensive actions intended to maintain and build competitive advantage over the competition through strategic and organizational innovation.
At a minimum, for strategic planning to yield competitive advantage, it must address three key questions:
• “What do we do?”
• “Who are our customers?”
• “How do we do what we do better than our competitors?”
What do we do?
While it may sound almost silly to suggest that organizations should expend effort during strategic planning defining what it is that they do, but it is not as unproductive as it may seem. If an organization cannot succinctly explain what they do, how will their marketplace understand it? Furthermore, this line of analysis during the planning process often uncovers misperceptions on the part of leadership’s understanding of core lines of business and market focus.
Strategic planning begins with getting leadership on the same page about the mission of the organization and the core offerings the business provides.
Additionally, in strategy development, the question of “what should we do” is a corollary to the “what we do” question.
This perspective relates to building competitiveness in your offering and exploring tangential markets that might be exploited, provided that the barriers to entry are not too high and organizational capabilities match the opportunities being evaluated. Truly gauging core competencies is key to this analysis, not just from leadership, but down through the organization.