1. Practical Strategic Planning
STRATEGIC BUSINESS SITUATION ANALYSIS
The situation analysis or audit, described as the ‘where are we now’, is the means by which a
company can identify its own strengths and weaknesses as they relate to external opportunities
and threats. It is thus a way of helping management to select a position in that environment
based on known facts. The external environment of a company covers many aspects. It is
suggested that the environment covers two main areas: the Macro-environment and the Micro-
environment. The Macro environment consists of forces such as social, cultural, legal,
economic, political and technological.
Within this factors such as demographics, green issues and larger societal and environmental
forces are included. The Micro-environment includes other environmental constraints such as
the structure of the market, the suppliers, customers, trends of the market, and competition.
Equally important is the internal environment incorporating the examination of the company's
Marketing mix (product, price, place, promotion) and service mix (people, process
management, physical evidence). An analysis of the internal environment also covers other
factors such as sales, profitability, market share and customer loyalty. Building competitive
advantage begins with a thorough strategic situation analysis that includes understanding both
the external and internal business environments. Using established business models as
investigative tools and linking them together to enhance their analytical value is proposed in
this paper as a method of progressing from strategic situation analysis to competitive
advantage. Moreover, internal analyses that result in the identification of distinctive
competencies and external investigations that uncover industry key success factors give
strategists the means to develop strategies that may achieve competitive advantage.
BUSINESS PERFORMANCE REVIEW
You should assess current organizational performance in terms of financial and human
resources (inputs), operating methods or strategies (processes), and results or outcomes
(outputs). If the organization does not have extensive objective measures of its outcomes,
perceived performance can be partially determined through asking clients and stakeholders.
Try to understand how key players or stakeholders in the broader community -- as well as
constituents or clients -- view the organization. Sometimes, brief written forms are sent to, or
interviews conducted with, key stakeholders; interviews are best conducted by a al consultant,
to assure frank and honest responses. Once you have this information, be sure to further
analyze the reasons -- in terms of inputs and processes -- for perceived weaknesses in
outcomes.
BUSINESS SITUATION ANALYTIC TOOLS
Models require analysts to examine more thoroughly the multitude of factors surrounding the
complexities of comprehensive internal and external analyses (Grant, 2008). When recognizable
business and strategic management models are not used to examine macro-environmental,

2. Practical Strategic Planning
industry, and firm information then analysts lean towards only considering the most superficial
evidence available. Not utilizing analytical tools may result is decisions with excessive reliance
on hunches and precedent. Strategic decisions must be based on both a thorough analysis and
the integration of various internal and external considerations. Methods used for strategic
situation analyses may include a variety of business fields from economics and finance to
leadership and marketing, and more. Fortunately, there are numerous well-known business
models for firm and industry analysis. An exhaustive macro-environmental analysis could
include any number of inquiries into fields of study that fall outside of the normal practice of
business. Indeed, the macro-environmental issues may involve an understanding of changes in
demographics, cultural differences, engineering and information technology, political and legal
issues, international relations, threats of civil unrest, and even climate change. Consequently,
the complexity of a strategic analysis is simplified by using structured business models and
models from other academic disciplines as analytical tools to both rationalize the process and
improve the results. Business models may be used as analytical tools throughout the entire
process of conducting strategic analyses. Analysts of internal factors have all the models from
the various business disciplines available for use as functional tools. Industry analysts are able
to utilize strategic management models and concepts, such as Porter’s Five Forces Model of
Competition, Driving Forces, Dominant Economic Factors, and others, to determine the critical
industry key success factor. Macro environmental analysts must make decisions concerning
what external issues have the most direct influence on the industry and hence, the individual
strategies of industry competitors.
Strategic Business Situation Analysis
The Internal environment
The S.W.O.T anaylsis
The External Environment
The Micro-Environment The Stakeholders Approach Using
Porters Five Forces Model
Competitive Analysis
The Macro-Environment The P.E.S.T. Analysis
Source: ConceptsLab Consulting Ltd, 2014.
SWOT ANALYSIS
A SWOT analysis can consist of a combination of individual interviews, surveys, focus groups,
research of relevant socioeconomic trends, and an internal organizational assessment of the
administrative and program-related capacities of the organization. The methods used by the

3. Practical Strategic Planning
organization to gather the information required for the SWOT analysis will be based on the
financial and human resources available. Firms must build appropriate resources and
capabilities to serve as the basis of business-level strategy and to create value for stakeholders
(Hitt, Ireland, and Hoskisson, 2009). These resources and abilities are easily identified by careful
analysis and from the input of experienced managers. Not all strengths of a firm are of equal
importance. A firm’s skills and resources in relation to the organization’s external
environment determine the importance of the resources to a firm’s success (O’Farrell,
Hitchens, & Moffat, 1993). Certain strengths and unique combinations of strengths that are
identified during the analysis will ultimately serve as the basis for strategic decision making.
However, determining firm weaknesses is also an important responsibility of strategic analysts
to help develop measures to effectively override such deficiencies for organizational efficacy. A
weakness may not always be the liability that some less experienced analysts often suggest
(Ghemawat, 1991).
SWOT Analysis Insights
Strengths
What do you do best?
What unique resources can you draw on?
What is our Unique Selling Proposition?
Weaknesses
What could you improve?
Where do you have fewer resources than
others?
What are others likely to see as
weaknesses?
Opportunities
What opportunities are open to you?
What trends could you take advantage of?
How can you turn your strengths into
opportunities?
Threats
What threats could harm you?
What is your competition doing?
What threats do your weaknesses expose
you to?
Source: ConceptsLab Consulting Ltd, 2014.
STRENGTHS AND CORE COMPETENCIES
A company’s resource strengths represent its competitive assets and determine whether its
competitive power in the marketplace will be impressively strong or disappointingly weak. A
company that is well endowed with potent resource strengths and core competencies normally
has considerable competitive power—especially when its management team skillfully utilizes
the company’s resources in ways that build sustainable competitive advantage.
Hr

4. Practical Strategic Planning
Rank: 5=very good; 3=satisfactory; 1=poor
Potential Resource Strengths and
Competitive Capabilities
R Potential Market Opportunities R
• Core competencies : Accreditations,
qualifications, certifications
• Serving additional customer groups or
market segments.
• A strong financial condition; ample
financial resources to grow the business.
• Expanding into new geographic
markets.
• Strong brand name image/company
reputation.
• Expanding the company’s product line
to meet a broader range of customer
needs.
• Economy of scale and/or learning and
experience curve advantages over rivals.
• Utilizing existing company skills or
technological know-how to enter new
product lines or new businesses.
• Proprietary technology/superior
technological skills/important patents.
• Falling trade barriers in attractive
foreign markets.
• Cost advantages over rivals. • Acquiring rival firms or companies
with attractive technological expertise
or capabilities
• Product innovation capabilities.
• Proven capabilities in improving
production processes.
• Good supply chain management
capabilities.
• Good customer service capabilities.
• Better product quality relative to rivals.
• Wide geographic coverage and/or
strong global distribution capability.
• Alliances/joint ventures with other firms
that provide access to valuable
technology, competencies, and/or
attractive geographic markets
Source: ConceptsLab Consulting Ltd, 2014.
WEAKNESS OR COMPETITIVE LIABILITY
A resource weakness or competitive liability is something a company lacks or does poorly or a
condition that puts it at a disadvantage in the marketplace. As a rule, strategies that place

5. Practical Strategic Planning
heavy demands on areas where the company is weakest or has unproven ability are suspect
and should be avoided.
hrRank: 5=very good; 3=satisfactory; 1=poor
Potential Resource Weaknesses and
Competitive Deficiencies
R Potential External Threats to a
Company’s Future Prospects
R
• No clear strategic direction. • Increasing intensity of competition
among industry rivals—may squeeze
profit margins.
• No well-developed or proven core
competencies.
• Slowdowns in market growth.
• A weak balance sheet; burdened with
too much debt.
• Likely entry of potent new
competitors.
• Higher overall unit costs relative to key
competitors.
• Growing bargaining power of
customers or suppliers.
• A product/service with features and
attributes that are inferior to those of
rivals.
• A shift in buyer needs and tastes
away from the industry’s product.
• Too narrow a product line relative to
rivals.
• Adverse demographic changes that
threaten to curtail demand for the
industry’s product.
• Weak brand image or reputation. • Vulnerability to unfavorable industry
driving forces.
• Weaker dealer network than key rivals. • Restrictive trade policies on the part
of foreign governments.
• Behind on product quality, R&D, and/or
technological know-how.
• Costly new regulatory requirements.
• Lack of management depth.
• Short on financial resources to grow the
business and pursue promising initiatives.
• Inferior or unproven skills, expertise, or
intellectual capital in competitively
important areas of the business.
• Deficiencies in competitively important
physical, organizational, or intangible
assets.
• Missing or competitively inferior
capabilities in key areas.
Source: ConceptsLab Consulting Ltd, 2014.

6. Practical Strategic Planning
THE VALUE OF A SWOT ANALYSIS
A SWOT analysis involves more than making four lists. The most important parts of SWOT
analysis are:
1. Drawing conclusions from the SWOT listings about the company’s overall situation.
2. Translating these conclusions into strategic actions to better match the company’s strategy
to its resource strengths and market opportunities, correcting problematic weaknesses, and
defending against worrisome external threats.
PEST ANALYSIS
Pest analysis assesses a business from the standpoint of the political, economical, social, and
technological trends of a particular market/ industry.
Consider the following factors and carefully consider the impact of the factors on your
business.
Considerable:
• Statutory insights
International legislation&
pressure groups
Domestic market pressure
groups
• Regulatory bodies
and processes
Accreditations &Affiliations
• Government term
and Change in
policies
• Funding, grants and
Initiatives
• Wars and conflict
Political Economical
Considerable:
• Business Economy
System
Regularisation and
Commercialisation Policy
• Taxation
• Market/trade cycles
• Specific industry
factors
• Customer/end-user
drivers
• Interest/ exchange
rates

7. Practical Strategic Planning
Considerable:
• Lifestyle trends
• Demographics
Birthrate
Mobility rate
• Brand image and
Consumer attitudes
and Opinions
• Media views Social
factors
• Major events and
Influences
• Buying access and
trends
• Ethnic/religious
belief
Social Technological
Considerable:
• Competing technology
Development
• Operational
Technological
Improvement/Replace
ment
• Industry Information&
Communications
Mechanisms/technolo
gy
• Technology legislation
• Innovation potential
• Technology access,
Licencing, patents and
Intellectual property issues
• Global
communications
Source: ConceptsLab Consulting Ltd, 2014.
A proper application of this macro environment analytical tool will avail businesses the ability to
maneuver external forces by having them catered for in their plan so as to underline directions
for operations in the business year.

8. Practical Strategic Planning
STAKEHOLDERS APPROACH USING PORTER’S FIVE FORCES OF
COMPETITIVE POSITION
Source: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York:
Free Press, 1980); and Michael E. Porter, “Strategy and the Internet” Harvard Business Review (March, 2001), 63–78.
Competitive
Rivalry, eg:
•Number and size of firms
• Industry size and trends
• Fixed variable cost bases
• Product/service ranges
• Differentiation strategy
Product and
Technology
Development,
eg:
•Alternatives price/quality
• Market distribution changes
• Fashion and trends
• Legislative effects
New Market
Entrants, eg:
•Entry ease/barriers
•Geographical factors
• Incumbents resistance
• New entrant strategy
• Routes to market
Buyer Power,
eg:
•Buyer choice
• Buyers size/number
• Change cost/frequency
• Product/service importance
• Volumes, JIT scheduling
Supplier Power,
eg:
•brand reputation
•geographical coverage
• product/service level quality
•relationships with customers
•bidding processes/capabilities

9. Practical Strategic Planning
COMPETITIVE ANALYSIS
Doyle stresses the importance of analyzing direct competitors, known as the strategic group, as
they focus on the same target market segments and will pursue similar strategies. It is also
important to be aware of incidental competitors providing products, as they can pose a major
threat to the brand. One salient truth about identified and unidentified competitors is that they
compete with your business for the market share of your target market segment and
disposable income.
There is a high number of competing businesses within the market, which can be categorized
into four types as illustrated below.
Similar PRODUCTS Different
Similar
CUSTOMER
Different
DIRECT
COMPETITORS
INDIRECT
COMPETITORS
PRODUCT
COMPETITORS
IMPLICIT
COMPETITORS
Source: Doyle (1998)
1. Direct Competitors – other businesses in the industry that sell or offer the same brand
of products (goods and services) to the same market segment as your business.
Elementary schools Vs Elementary Schools
2. Indirect Competitors – other businesses in the industry that sell or offer different or
complementary products (goods and services) to the same market segment as your
business. Secondary schools vs Private Tutors
3. Product Competitors – other businesses in the industry that sell or offer the same brand
of products (goods and services) to a market segment other than that of your business.
Elementary Schools vs Secondary Schools

10. Practical Strategic Planning
4. Implicit Competitors – other businesses in the industry that sell or offer different
products (goods and services) competing for the same share of the market segment and
their disposable income. Elementary Schools vs Beverage stores
Brand
Assets &
Competencies
Your
Business
Direct
competitor
Indirect
competitor
Product
competitor
Implicit
competitor
Critical Success Factors
Product quality/range
Brand
Awareness/Loyalty
Advertising/Promotion
Skills
Product Differentiation
Secondary Factors
Growth of target
Segment
Financial Capability
Cost Minimization
Positioning
• Rate: Strong – 5 Average – 3 Weak – 1
Source: ConceptsLab Consulting Ltd, 2014.

11. Practical Strategic Planning
UNDERSTANDING THE STRATEGIC PLANNING CONCEPT
There is broad agreement among nonprofit leaders and experts that planning is a critical
component of good management and governance. Planning helps assure that an organization
remains relevant and responsive to the needs of its community (customers), and contributes to
organizational stability and growth. It provides a basis for monitoring progress, and for
assessing results and impact. It facilitates new program development. It enables an organization
to look into the future in an orderly and systematic way. From a governance perspective, it
enables the Board to set policies and goals to guide the organization, and provides a clear focus
to the Executive Director and staff for program implementation and agency management.
Strategic planning is the process by which leaders of an organization determine what it intends
to be in the future and how it will get there. To put it
another way, they develop a vision for the
organization's future and determine the necessary
priorities, procedures, and operations (strategies) to
achieve that vision. Included are measurable goals
which are realistic and attainable, but also challenging;
emphasis is on long-term goals and strategies, rather
than short-term (such as annual) objectives. Strategic
planning assumes that certain aspects of the future can
be created or influenced by the organization. Strategic
planning is ongoing; it is "the process of self-
examination, the confrontation of difficult choices, and the establishment of priorities" (Pfeiffer
et al., Understanding Applied Strategic Planning: A Manager's Guide). Strategic planning
involves "charting a course that you believe is wise, then adjusting that course as you gain more
information and experience" (Wilder Foundation, Strategic Planning Workbook).
Strategic planning should not be confused with other planning processes such as business
planning, program planning or community planning, also referred to as neighborhood planning.
Although closely related, strategic planning focuses on establishing your organizational
direction, setting priorities and identifying obstacles and opportunities that may limit or enable
you to carry out your mission.
While closely related to long-range planning, strategic planning is generally considered to place
a greater emphasis on strategies – on how the organization will achieve its vision – while long-
range planning places greater emphasis on determining the vision.
Strategic planning focuses on
establishing your
organizational direction,
setting priorities and
identifying obstacles and
opportunities that may limit
or enable you to carry out
your mission.

12. Practical Strategic Planning
STRATEGIC PLANNING PROCESS
• VALUE PROPOSITION
• VISION CONCEPTION
• MISSION DESIGN
• SMART GOALS
• OBJECTIVES DERIVATION
• PORTFOLIO PLANNING
• SCENERIO PLANNING
• COMPETENCY PLANNING
VALUE PROPOSITION
Over the years many business have failed because of their inability
to identify their comfort zone/ strength. The unique selling
proposition of every business is what helps it to build a world of its
own in business rather than adapting in a world that was created
by other market forces.
Core values form the basis for our beliefs about life, us and those
around us, and the human potential of ourselves and others.
Values and beliefs form our attitudes and guide our behavior. The
behaviors we engage in are what people around us see, along with
our skills and actions. Our outer or public shell of behaviors and
skills can change rapidly and dramatically through our lives,
influenced by our environment and guided by our more stable core
values and beliefs.
A company’s value proposition is that distinction it wishes to
evolve and sustain over time in the course of its business. This
however becomes a source to its other organizational culture.
Even though we frequently talk about mission and vision first, the basic underlying foundation
for both is our core value. Core values are the principles and standards at the very center of our
character, and from which we will not budge or stray.
Core values are extremely stable and change only very slowly over long periods of time.
Core values are so close to the center of who we are that they tend to be very protected and
not shared with others until a personal relationship has been established. The fact that these
values are so central to what’s important to us individually, makes it all the more important to
Considering Japan’s Fuji Photo Film
Company, the company had its value
proposition to be affordability so as to
be a low-cost provider to compete
with Kodak. Fuji’s relentless internal
cost-cutting enabled the company to
offer customers lower prices and
gradually gain market share over the
giant U.S. firm.
Larfarge Wapco cement in previous
years sought to develop a new core
value proposition which will enable it
survive in its own industry. The
company adopted a prioritized safety
value proposition as well as quality
product composition from which it has
newly developed cost minimization
value that will all lend credence to its
profitability.

13. Practical Strategic Planning
think about them first as a basis for establishing sound and meaningful mission, vision and goals
in our business.
The vision of a business is that destination which the organization has conceived, agreed and
committed its competency and time to achieve.
Consider the following values that can help you develop realistic and business visions for your
planning process in the planning year. Rank them in order of their importance to YOUR
business as guiding principles in YOUR business
Work slowly and think carefully. If you change your mind, feel free to change your numbers.
The end results should show your business ideology. Add values that are important to your
business but missing from the list.
VALUES CHARACTERISTICS
_____Low Price Affordable prices that are relatively lower than
that of competitors
_____Consumer Satisfaction Customer needs and behavior are foremost and
guiding precept for business decisions.
_____Product Quality Geared effort towards process and total quality
of output.
_____Staff proficiency Competency and efficiency of human capital is
paramount.
_____Cost Minimization Cost avoidance and reduction is the business
ideology.
• VISION CONCEPTION
It is a business and personal development axiom that “you don’t miss a target that you didn’t
set.” Therefore the saliency of vision cannot be less emphasized as it is a quintessential priority
in the strategic planning process.
Nothing was ever created without a vision. It guides us, gives us direction and purpose, and can
serve as a powerful motivator for those around us and ourselves. In order to truly guide and
motivate a vision must:
1. Be aligned with the core values of both the individuals and the business.
2. Be effectively communicated to and accepted by everyone involved in the business, mostly
those have roles to play in actualizing it.

14. Practical Strategic Planning
THE VISION CONSTRUCT
Community Vision – your vision for the community; it might be viewed as your image of what
the community you serve would be like if your values were shared and practiced by everyone in
the community in the business year.
Organizational Vision -- this is a vision of where the organization wants to be at the end of the
business year or planning period. This is a connection that has interacted with all the internal
constituent interests (Top management level, middle level management and lower
management level) to formulate an agreed beneficial projection. The development of a shared
vision is usually best done with both Board and staff involvement. For a small organization, a
joint Board-staff process may be practical. For a large organization, a two-stage process might
be useful, with staff first working together on a vision, then having the Board and key staff
participate in a similar process, in which they review and incorporate the staff vision with their
own.
VISION
CORE VALUE
ORGANISATIONAL
VISION
MISSION
GOALS
OBJECTIVES
COMMUNITY
VISION

15. Practical Strategic Planning
Staff Interest Staff Vision Org. Vision Org. Interest
Physiological Profitability
Job Satisfaction Productivity
Career development Market share
Self actualization Wealth creation
An effective integration of these two interests
will ensure a collaborative participation in the
actualization of the set vision.
MISSION INSIGHT
A mission statement broadly outlines the
organizations future direction and serves as a
guiding concept for what the organization is to do and to become. Overriding premise in line
with the values or expectations of stakeholders.
This is the stated purpose for your organization’s existence; it might be viewed as your
organization’s public statement of the contribution it promises to make to help accomplish the
community vision.
The mission describes the approach the organization will take to achieve the vision. To
articulate your mission, board members should
answer the following questions: What will the
organization do to accomplish the vision?
What types of services or products will the
organization provide (housing counseling,
housing construction and rehabilitation, educational services, economic development services,
etc.)?
Who will be the primary beneficiaries of these activities?
Sample Mission Statement:
Increase the amount of affordable housing and home
ownership in Ifo, Ogun state and help those residents
achieve better lives through serene environment.
STRATEGIC MISSION
What is our business?

16. Practical Strategic Planning
Mission Statement
Combine concepts from your value proposition, vision statement to create your personal
mission statement.
MISSION STATEMENT
VISION STATEMENT
VALUE PROPOSITION

17. Practical Strategic Planning
SMART GOALS
Develop a series of goals or organizational status statements which describe the organization in
a specified number of years – assuming it is successful in addressing its mission.
It is usually a short step from the vision to goals – sometimes the statements describing the
vision are essentially goal statements. It is extremely valuable to transform the vision into a
series of key goals for the organization, preferably in the form of status statements describing
the organization. For example, goals might cover a variety of categories, stated as follows:
Source: Based on Mossaica 2001, “strategic planning, 10 step guide.”
Program:
•will provide comprehensive services to youth from pre-school through college age
•Goal :
Resources:
• will have a budget of 3 million and a staff of 40
•Goal :
Status :
• will be the largest and most respected nonprofit housing development corporation in Lake County
•Goal :
Institutional
Development:
• will own its own headquarters building, which will also have space for rent to other community-based
organizations and a fully computerized financial management and management information system, with all
staff connected through a network
•Goal :
Relationships:
•will be represented on major coalitions in its program areas and on the Boards of at least three major
mainstream organizations
•Goal:
Governance:
•will establish three active working committees – Programs, Finance, and Resource Development – which will
meet bimonthly and consistently have quorums.
•Goal:

18. Practical Strategic Planning
Thus these goals must be framed and presented in such a way that they are:
S – Specific
M – Measurable
A – Ambitious
R – Realistic
T – Time-Bound
OBJECTIVES DERIVATION
This is the nigh relation of the organizational goals to the motives of the beneficiary. It involves
stating the benefits of accomplishing each of the set and stated organizational goals. This is no
hard task as all it takes is just the idenfication of the beneficiaries of each goals and stating their
benefits.
For example: if the organizational resources goal is to have 40 staffs in 2015; the underlying
objectives will include:
 To increase productivity
 To increase profitability
 To promote current subordinates to become superior officers
 To increase production capacity.
It is however a planning function through objective derivation to identify the beneficiaries of
set goals of the organization in pursuance of its mission to realize its vision while upholding its
core value.
PORTFOLIO PLANNING
After concerted efforts have been geared towards determining the destination of the firm, it
becomes another r saddled responsibility on the strategic planning function to determine the
company it needs to keep in the short or long run. The task of planning the portfolio is
determining the range and type of business at the needed extent that the business needs to
engage in profitably in relation to its unique selling point.
This is determining the various services or products which in the planning period the enterprise
is going to venture into to ensure profitability and focus. Portfolio planning earns for business
the leverage it needs to survive and compete. It include the levels of business integration.

19. Practical Strategic Planning
For a school business, it can choose to concern itself with several other business that are
required by its market segment.
Source: conceptslab consults, 2014.
However, the choice of auxiliary business or core business should be carefully planned and
integrated into the whole business so as to be able to evaluate indifferent contributions of the
various units of the business. One very good analytical planning tool for portfolio planning is the
“make or buy” decision which considers the profitability impact of each business decisions.
school
business
educational
services
elementary secondary tutorial
auxilliary
services
books sales
uniform
sales
laundry
services
hostel
facilities

20. Practical Strategic Planning
SCENERIO PLANNING
Six-Step Scenario-based Approach to Strategic Planning
Source: Center for Scenario Planning – Roland Berger Research Unit,2010.
The use of scenarios in strategic decision making and corporate planning was pioneered by the
Royal Dutch/Shell Company during the 1970s. The method is best suited to organisations and
industries which are extremely sensitive to external factors beyond their control and where
time frames are relatively long.
Scenario planning is a strategic planning tool or method for improving decision making against
a background of possible future environments. In simple terms, a scenario is an internally
consistent account of how the business environment, the external environment, in which an
organisation operates, might develop and change over time.
Scenarios are however instruments for ordering people’s perceptions about alternative futures
in which decisions made today might play out. A scenario embodies a plausible view or
perception of the future in a given year linked to conditions in the present via an internally
consistent sequence of events. A scenario could be described as a road map from the present
to the future.

21. Practical Strategic Planning
According to Schwartz (1991, p.144), 'in most good scenarios, plot lines intersect, just as a
good film often includes several sub-plots'. A scenario planner is like an author or script writer.
The planner considers the converging forces in the plots and attempts to understand how and
why they might intersect. From that analysis and understanding, coherent pictures of
alternative futures are constructed. These are the scenarios.
To summarise, scenarios address:
 issues, trends and events in the current environment that are of concern to the
organisation's decision makers;
 elements in the environment that are somewhat certain or predictable – referred to
as predetermined events or variables; and
 elements in the environment that are more uncertain such as:
• trend breakers that affect a system in unpredictable ways, but with
understandable dynamics
• turning points or discontinuities in the business environment, which may
be identifiable in the present although often as weak signals of change
(factors that should be monitored)
• previously encountered events such as new technologies or natural
disasters.
SCENERIO BUILDING
The scenario building approach presented in this paper can be used for all three purposes
explained above. Nevertheless, it is mostly applicable to the third purpose as its holistic
approach aims at utilizing scenario planning for a company’s continuous strategic planning
activities. Establishing a common understanding, we see scenarios as a plausible description of
how the future may develop based on a coherent and internally consistent set of assumptions
about key relationships and driving forces (Metz, Davidson, Bosch, Dave and Meyer, 2007).
Scenarios in the context of our approach are not meant as a forecast or precise prediction nor
do they state a desired future (Lindgren and Bandhold, 2009). Rather they produce a picture or
a story describing a possible future which, as explained in the previous paragraph, supports
organizational learning and readiness for unforeseen events. In the sense of this manual,
scenarios provide different views on the nature of the future (van der Heijden, Bradfield, Burt,
Cairns and Wright, 2002). Put differently, scenarios try to answer so-called ‘What if…?’
questions, evidently bringing risks as well as opportunities to an organization’s attention, rather
than concealing them (Lindgren and Bandhold, 2009). In the six-step scenario-based approach
to strategic planning, scenarios go even one step further by answering ‘What if, then…!’
questions and hence giving strategic recommendations for a specific course of action to be
undertaken by organizations in the four scenarios (Liebl, 2002). This aspect however, will not be

22. Practical Strategic Planning
examined in this paper, but in the subsequent one focusing on the ‘Strategy Adotion and
Implementation Phases
THE ‘SCENARIO MATRIX’ TOOL
The ‘Scenario Matrix’ tool described in this paper follows an approach which was first
introduced by van der Heijden (2005). The scenario matrix is a deductive method useful for
constructing and describing scenarios in uncertain and volatile situations. Deductive scenario
methods are perceived as the most analytical and exhaustive ways of building scenarios from
an outside-in perspective (van der Heijden , 2005).
The scenario matrix builds and visualizes four scenarios based on two key uncertainty factors.
Four is regarded as the maximum number of scenarios that decision makers are still able to
manage (Wack, 1985b; van der Heijden, 2005).
Source: van der Heijden, K. (2005): Scenarios – The Art of Strategic Conversation, 2nd Ed., JohnWiley & Sons: Chichester, 2005.

23. Practical Strategic Planning
COMPETENCY PLANNING
Competency is said to be the state or quality of being able and qualified to undertake successfully a given
task. Competency being the ability to perform efficiently and as expected for the realization of a pre-
determined goal requires the management function of planning. Competency planning is the process of
determining the needed fortification and resources which a business needs to achieve it set goals and realize
its pictured vision.
Competency planning is an estimation of what is and what will be needed to accomplish the mission of the
organization. Majorly the resources of a company poses and levels it competency in achieving its goals.
Therefore, when goals are set, resources should be planned to have an overview of when and where they will
be required in the process of accomplishing the goals.
Organization resources have been identified to be the major production inputs, they are:
• Man (skills, Knowledge, Behaviour), Machine, Materials, Money, Time, Information
These resources should be planned in line with the predetermined goal. With special emphasis on the human capital
requisition; this is a salient input in the production process, the human capital should not only be estimated based on
quantitative requirement alone but also the qualitative requirement (skills, Knowledge, Behaviour) , the implication
of this deficiency can be very devastating to the business.
Consider the worksheet, input goals and estimate resources required:
Goals Resources
Program Goal • Man -
Skills-
Knowledge-
Behaviour-
• Machine -
• Materials-
• Money-
• Time-
• Information -
Status Goal • Man -
Skills-
Knowledge-
Behaviour-
• Machine -
• Materials-
• Money-
• Time-
• Information -
Goals Resources

24. Practical Strategic Planning
Resources Goal • Man -
Skills-
Knowledge-
Behaviour-
• Machine -
• Materials-
• Money-
• Time-
• Information -
Relationship Goal • Man -
Skills-
Knowledge-
Behaviour-
• Machine -
• Materials-
• Money-
• Time-
• Information -
Institutional Development Goal • Man -
Skills-
Knowledge-
Behaviour-
• Machine -
• Materials-
• Money-
• Time-
• Information -
Governance Goal • Man -
Skills-
Knowledge-
Behaviour-
• Machine -
• Materials-
• Money-
• Time-
• Information -
Source: Conceptslab Consult,2014.

25. Practical Strategic Planning
STRATEGY ADOPTION AND IMPLEMENTATION PHASES
THE CONCEPT OF STRATEGY
Ansoff (1965) defines strategy as the common thread among the organization’s activities and
product-markets that defines the essential business that the organization was planned to be
in the future. Stokes (1997:223) defines strategy as a plan or pattern that brings together an
enterprise’s major objectives, policies and activities into a cohesive whole. More so, the
Institute of Strategic Management Nigeria defined strategy as a coherent pattern of decisions,
actions and approaches, which if properly formulated, implanted, implemented and
controlled, will enable an organization build capability, manage change, build competitive
advantage and achieve sustainable successful performance. Glueck (1972) defines strategy as
a unified, comprehensive and integrated plan designed to assure that the basic objectives of
the enterprise are achieved. However, Mintzberg (1987) asserts that there is a distinction
between deliberate/intended strategy and emergent (process) strategy and as such defined
strategy as a pattern in a stream of decisions and actions. Mintzberg (1994) argues that only
open and creative strategic thinking will lead to the emergence of those innovative strategies
that lay the basis for superior performance.
Thus, a synthesis is needed that combines the flexibility and openness of a typical strategic
thinking with the clear frameworks and application-orientation of strategic planning
(Whittington and Cailluet, 2008; Grant, 2003). Frameworks for strategy creation need to follow
a systematic process which incorporates specific strategy tools and they need to be adaptable
to environmental changes (Ghobadian et al., 2008).
Overall, frameworks for strategy creation which integrate the planning and the process
perspectives of strategy have to fulfill four major requirements:
Multiple options: An integrative strategy framework needs to explicitly consider different
strategy options in order to account for environmental turbulence and prepare the company
for the diversity of possible future developments.
Multiple perspectives: An integrative strategy framework needs to consider viewpoints and
information from diverse stakeholders in order to challenge existing assumptions and
overcome inertia.
Systematic, tool-based process: An integrative strategy framework needs to be based on a
clear process for which specific strategy tools are defined so that an easy and quick application
to practice is possible.
Flexibility: An integrative strategy framework needs to be adaptable to different environmental
conditions in order to ease application.

26. Practical Strategic Planning
PURPOSE OF STRATEGY
Within the overall grand strategy of an organization, executives define an explicit strategy,
which is the plan of action that describes resource allocation and activities for dealing with the
environment and attaining the organization’s goals. The essence of formulating strategy is
choosing how the organization will be different. Managers make decisions about whether the
company will perform different activities or will execute similar activities differently than
competitors do. Strategy necessarily changes over time to fit environmental conditions, but to
remain competitive, companies develop strategies that focus on core competencies, develop
synergy, and create value for customers.
WHAT IS STRATEGY FORMULATION?
Strategy adoption/ formulation is the stage of strategic management that involves the planning
and decision making that lead to the establishment of the organization’s goals and of a specific
strategic plan.
STRATEGY FORMULATION DIMENSIONS
GRAND STRATEGY: is the general plan of major action by which a firm intends to achieve its
long-term goals. Grand strategies fall into three general categories: growth, stability, and
retrenchment.
STABILITY: The stability dimension of strategy is also referred to as pause
strategy, which helps an organization to remain the same size or grow slowly and in a controlled
fashion.
RETRENCHMENT: This dimension of strategy helps an organization go through a
period of forced decline by either shrinking current business units or selling off or liquidating
entire businesses. The organization may have experienced a precipitous drop in demand or
patronage of its products or services, prompting managers to order overall cuts in personnel
and expenditures.
GROWTH: This dimension of strategy helps an organization to gain a
sustainable increment in resources and market presence. The growth strategy can be adopted
internally by investing in expansion or externally by acquiring additional business divisions.
Internal growth can include development of new or changed products, External growth typically
involves diversification, which means the acquisition of businesses that are related to current
product lines or that take the corporation into new areas. Another strategy for international

27. Practical Strategic Planning
growth is the formation of a joint venture. An efficient tool for this dimension of strategy is the
Ansoff’s Growth Strategy Matrix
The Ansoff Matrix was designed by Igor Ansoff to classify and explain different growth
strategies adoptable by a company. This matrix is used by companies which have a growth
target or a strategy of specialization.
This tool facilitates growth decision making by crossing products and markets of a company.
E
EXISTING
MARKET
NEW
EXISTING PRODUCT NEW
Penetration
New Existing
Sell more of your product to
existing customers of that
product. Attract customers
from your competitors with
new and improved features, a
lower price, or increase in
service.
How can you update or
upgrade your existing
products to increase your
market share?
Product Development
Develop a new product for
customers already loyal to
your brand. This entails
additional product
development costs, but
eliminates the cost of
acquiring new customers.
What new product can you
offer your customers who are
already loyal to your brand?
Market Development
Introduce your existing
product or service to a
completely new market or
segment. This could include a
new region, country, or
demographic group.
What markets could benefit
from your products if given
the chance to purchase
them?
Diversification
Enter a new market with a
completely new offering.
Doing this entails significant
costs and risk, but can be
extremely rewarding.
Is there a market with a need
your company or brand can
satisfy with the right new
product or service?
Source: H.I. Ansoff, New Corporate Strategy (New York: Wiley, 1988), p. 109.

28. Practical Strategic Planning
STRATEGY FORMULATION/ ADOPTION LEVEL
Source: Conceptslab Consult,2014.
CORPORATE LEVEL STRATEGY “What business are we in?”
Corporate-level strategy concerns itself with the organization as a whole and the combination
of business units and product lines that make up the corporate
entity. It is the determination of the nature of business which
the business will venture into in the planning year in view. This
is the same in the context of portfolio planning which relates
with ascertaining the various businesses that the business will
embark on.
Strategic actions at this level usually relate to the acquisition of
new businesses; additions or divestments of business units,
plants, or product lines; and joint ventures with other
corporations in new areas.
One strategic tool for making this decision is the BCG matrix
BCG MATRIX
A concept developed by the Boston Consulting Group that
evaluates SBUs with respect to the dimension of business
growth rate and market share.
CORPORATE
STRATEGY
WHAT IS OUR BUSINESS?
BUSINESS-LEVEL
STRATEGY
HOW DO WE COMPETE?
FUNCTIONAL
STRATEGY
HOW DO WE SUPPORT
THE BUSINESS-LEVEL
COMPETITIVE STRATEGY?
An example of corporate-
level strategy is Cisco
Systems, which bought 71
companies between the years
of 1993 and 2000 to
complement the company’s
core business of selling
hardware and software for
the Internet. Rather than
pouring money into research,
Cisco managers’ strategy has
been to buy companies that
make products that will round
out Cisco’s existing product
line and move the company
into new markets.

29. Practical Strategic Planning
The BCG matrix aligns businesses along two dimensions—business
growth rate and market share. Business growth rate depicts how
fast the entire industry is increasing. Market share defines
whether a business unit has a larger or smaller share than
competitors. The combinations of high and low market share and
high and low business growth provides four categories for a
corporate portfolio.
Source: Boston Consulting Group
THE STAR has a large market share in a rapidly growing industry.
The star is important because it has additional growth potential,
and profits should be plowed into this business as investment for
future growth and profits. The star is visible and attractive and will
generate profits and a positive cash flow even as the industry
matures and market growth slows.
THE CASH COW exists in a mature, slow-growth industry but is a
dominant business in the industry, with a large market share.
Because heavy investments in advertising and plant expansion are
no longer required, the corporation earns a positive cash flow. It
can milk the cash cow to invest in other, riskier businesses.
THE QUESTION MARK exists in a new, rapidly growing industry
but has only a small market share. The question mark business is
risky: it could become a star, or it could fail. The corporation can
BUSINESSGROWTHRATE
HIGH MARKET SHARE LOW
STARS
Rapid growth and
expansion.
QUESTION MARKS
New ventures. Risky—a
few become stars, others
are divested.
CASH COWS
Milk to finance question
marks and stars.
DOGS
No investment. Keep if
some profit. Consider
divestment.
LOW LOW
The most famous cash cow in
Gillette’s portfolio is the shaving
division, which accounts for more
than half of the company’s profits
and holds a large share of a stable
market. Gillette’s razors hold a
commanding share of the U.S.
market, and sales in other countries
are also strong. The Oral-B division
with its steady stream of new
products has also been a cash cow,
although sales have slowed in
recent years.
The Braun subsidiary has star
status, and managers are pumping
money into research and
development of new electric
toothbrushes, personal diagnostic
equipment, and other products. The
Duracell division is a question mark.
When Gillette purchased the division
in 1996, it hoped Duracell would be
a vehicle for rapid growth, becoming
a star and eventually as big a cash
cow as razors and blades. However,
so far, the heavy investment in
batteries is not paying off. Rivals
Energizer and Rayovac have
pummeled Duracell’s new high-
priced, long-lasting batteries with
price cuts and special promotions.
Rather than charging up Gillette’s
bottom line, Duracell has proven to
be a serious drain on company
profits. The toiletries division is also
a question mark. A line of women’s
toiletries aimed at the European
market failed, and products such as
Right Guard and Soft & Dri
deodorant have enjoyed only cyclical
success. A new line of men’s
toiletries, including a gel-based
deodorant, a gel shaving cream, and
a new body wash, has had only
limited success. Some critics believe
the division is a dog, but Gillette is
still trying to come up with some new
products to save it from the fate of
the Cricket disposable lighter several
years ago. Bic dominated the
disposable lighter line so completely
that Gillette had to recognize Cricket
as a dog and put it out of its misery
through liquidation. Gillette is
investing heavily in its question
marks, particularly Duracell, to
ensure that its portfolio will continue
to include stars and cash cows in the
future.
William C. Symonds, with Carol Matlack,
“Gillette’s Edge,” Business Week (January 19,
1998), 70–77; William C. Symonds, “Would
You Spend $1.50 for a Razor Blade?” Business
Week (April 27, 1998), 46; Barbara Carton,
“Gillette

30. Practical Strategic Planning
invest the cash earned from cash cows in question marks with the goal of nurturing them into
future stars.
THE DOG is a poor performer. It has only a small share of a slow-growth market. The dog
provides little profit for the corporation and may be targeted for divestment or liquidation if
turnaround is not possible.
BUSINESS LEVEL STRATEGY - “How do we compete?”
Business-level strategy pertains to each business unit or product line. It focuses on how the
business unit competes within its industry for customers. Strategic decisions at the business
level concern amount of advertising, direction and extent of research and development,
product changes, new-product development, equipment and facilities, and expansion or
contraction of product lines.
After a careful analysis has been done in section two using the porters’ five forces model and
the competitive analytical model, the next line of action regards the business level strategy is
turn to strategy formulation within the strategic business unit, in the context of how to
compete. The same three generic strategies— growth, stability, and retrenchment—apply at
the business level, but they are accomplished through competitive actions rather than the
acquisition or divestment of business divisions.
COMPETITIVE STRATEGIES : In finding its competitive edge within these five forces, Porter
suggests that a company can adopt one of three strategies: Differentiation, Cost Leadership,
And Focus. Companies can use the Internet to support and strengthen the strategic approach
they choose.
Strategy Definition Tools
Differentiation A type of competitive
strategy with which the
organization seeks to
distinguish its products or
services from
competitors’.
• Acts in a flexible, loosely knit way, with strong
coordination among departments.
• Strong capability in basic research distinctive
product features.
• Creative flair, thinks "out of the box,
exceptional ".
• Strong marketing abilities(advertising,
branding)
• Rewards employee innovation.
• Corporate reputation for quality or
technological leadership.

31. Practical Strategic Planning
Cost
Leadership
A type of competitive
strategy with which the
organization aggressively
seeks efficient facilities,
cuts costs, and employs
tight cost controls to be
more efficient than
competitors.
• Strong central authority; tight cost controls
• Maintains standard operating procedures
• Easy-to-use manufacturing technologies
• Highly efficient procurement and distribution
systems
• Close supervision; finite employee
empowerment
• Frequent, detailed control reports
Focus A type of competitive
strategy that emphasizes
concentration on a specific
regional market or buyer
group.
• May use combination of above policies directed
at particular strategic target
• Values and rewards flexibility and customer
intimacy
• Measures cost of providing service and
maintaining customer loyalty
• Pushes empowerment to employees with
customer contact
SOURCES: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: The Free Press, 1980); Michael
Treacy and Fred Wiersema, “How Market Leaders Keep Their Edge, ”Fortune, February 6, 1995, 88–98; and Michael A. Hitt, R. Duane Ireland, and Robert E.
Hoskisson, Strategic Management (St. Paul, Minn.: West, 1995), 100–113.
PARTNERSHIP STRATEGY
An alternative approach to business-level strategy emphasizes collaboration. In some
situations, companies can achieve competitive advantages by cooperating with other firms
rather than competing. Partnership strategies are becoming increasingly popular as firms in all
industries join with other organizations to promote innovation, expand markets, and pursue
joint goals. Partnering was once a strategy adopted primarily by small firms that needed greater
marketing muscle or international access. Today, however, it has become a way of life for most
companies, large and small. The question is no longer whether to collaborate, but rather where,
how much, and with whom to collaborate. Competition and cooperation often exist at the
same time.
FUNCTIONAL STRATEGY – “how do we support the business-level competitive strategy?”
Functional-level strategies are the action plans adopted by major departments to support the
execution of business-level strategy. Major organizational functions include marketing,
production, finance, human resources, and research and development. Senior managers in
these departments adopt strategies that are coordinated with the business-level strategy to
achieve the organization’s strategic goals.

32. Practical Strategic Planning
BUSINESS-LEVEL STRATEGY RELATIVE FUNCTIONAL STRATEGY
Differentiation Strategy • The human resources department which would mean
recruiting additional personnel and training middle managers
for movement into new positions.
• The marketing department should undertake test marketing,
aggressive advertising campaigns, and consumer product
trials.
• The finance department should adopt plans to borrow
money, handle large cash investments, and authorize
construction of new production facilities
Low-Cost Strategy And Focus
Strategy
• The human resources department should develop strategies
for retaining and developing a stable work force, including
transfers, advancements, and incentives for efficiency and
safety.
• Marketing should stress brand loyalty and the development
of established, reliable distribution channels.
• Production should maintain long production runs, production
routines and cost reduction.
• Finance should focus on net cash flows and positive cash
balances.
Source: ConceptsLab Consults, 2014.
STRATEGY IMPLEMENTATION
Strategy implementation is the most difficult and important part of strategic planning. No
matter how creative the strategic plan is, the organization will not benefit if it is incorrectly
implemented. In practice, there is an increasing recognition of the need for more dynamic
approaches to formulating as well as implementing strategies. Strategy is a dynamic and
analytical process; it requires vision, intuition, and employee participation. Strategy
implementation involves using several tools—parts of the firm that can be adjusted to put
strategy into action. Once a new strategy is selected, it is implemented through changes in
leadership, structure, information and control systems, and human resources. For strategy to
be implemented successfully, all aspects of the organization need to be in congruence with the
strategy. Implementation involves regularly making difficult decisions about doing things in a
way that supports rather than undermines the organization’s chosen strategy.

33. Practical Strategic Planning
SOURCE: Adapted from Jay R. Galbraith and Robert K. Kazanjian, Strategy Implementation: Structure, Systems, and
Process, 2d ed. (St. Paul, Minn.: West, 1986), 115.
CRITICAL PATH ANALYSIS APPROACH TO STRATEGIC PLANNING
As with Gantt Charts, Critical Path Analysis (CPA) helps you to lay out all tasks that must be
completed as part of a project. They act as the basis both for preparation of a schedule, and of
resource planning. During strategic planning, they allow you to schedule and monitor progress
and achievement of organizational goals. They help you to see much focus and where remedial
action needs to be taken to actualize a proposed plan.
The benefit of using CPA in strategic planning is that Critical Path Analysis formally identifies
tasks which must be completed on time for the whole plan to be completed on time, and also
identifies which tasks can be delayed for a while if resource needs to be reallocated to catch up
on missed tasks. It was developed in the 1950s by the US Navy, originally, the critical path
method considered only logical dependencies between terminal elements of a plan. Since then,
it has been expanded to allow for the inclusion of resources related to each activity, through
processes called activity-based resource assignments and resource leveling.
The essential technique for using CPM is to construct a model of the strategic plan into a
project that includes the following: A list of all activities required to complete the strategic plan
(also known as Work Breakdown Structure) the time (duration) that each activity will take to
completion and the dependencies between the activities.
Leadership
•Use persuasive communication
•Proper motivation
•Organisational culture& value shappening
Structure
•Design an organogram
•Team formation
•Determine centralisation and decentralisation
•Job and facility design/ arrangement
Human
Resources
•Staffing
•Training and development
•Lay off and recalls
Information and
Control Systems
•Revise renumeration
•Change budget allocation
•Efficient information system (feedbak and reply)
•Rules and procedure application

34. Practical Strategic Planning
CPM calculates
• The longest path of planned activities to the end of the strategic plan
• The earliest and latest that each activity can start and finish without making the strategic plan
actualization lapse longer.
• Determines “critical” activities (on the longest path)
• Prioritize activities for the effective management and to shorten the planned critical path of a
project by:
o Pruning critical path activities
o “Fast tracking" (performing more activities in parallel)
o “Crashing the critical path" (shortening the durations of critical path activities by adding
resources)
Float (slack) - amount of time that a task can be delayed without causing delay to subsequent tasks
(free float) strategic plan completion date (total float)
Critical path is the sequence of activities which add up to the longest overall duration. It is the shortest
time possible to complete the projects in the strategic plan. Any delay of an activity on the critical path
directly impacts the planned project completion date (there is no float on the critical path). A strategic
plan project can have several, parallel, near critical paths. An additional parallel path through the
network with the total durations shorter than the critical path is called a sub-critical or non-critical path.
Critical activity – activity with zero float
Resource leveling – iterative process of assigning crews to activities in order to calculate their
duration
CRITICAL PATH ANALYSIS PROCESS
Source: Adapted from CRITICAL PATH METHOD (CEE 320 – VDC SEMINAR), 2009. Jesse Santiago & Desirae Magallon
PHASE I
•Break strategic plan
into operations
necessary for
completion
•Determine
sequential
relationship of
operations
•Every operation
must have event to
mark
commencement –
i.e. completion of
preceding
operation
•Can operations
overlap?
PHASE II
•Create time
estimates for each
operation
•Determine earliest
possible start date,
earliest possible
finish date , latest
start & finish.
•Determine “free
float” and “total
float”
•Revise free float
and total float
after completion of
Phase III
PHASE III
•Establish time-cost
relationship
•Establish scheduling
variations
•Determine most
favorable balance
between time-cost
•Normal Start –
normal time, least
cost
•All-Crash Start –
least time, higher
cost