Strategic planning models are as numerous as the various proponents to it. A quick check at a list of the greatest management thinkers and their ideas places the list at more than thirty. This does not include other management thinkers who have had ideas that are put to use but are not acknowledged by the academe.
Our scope is limited to a strategic planning model that we have named as the strategic square. It is a group of four strategic planning models, corresponding to the four sides of a square. One can actually reposition it, so it basically means that all are important but that when you place a model with the face upfront, you are actually placing your emphasis in it.
The Organizational Planning Model
The first strategic planning model is the organizational planning model. It is a planning model with the emphasis on the organization and how it affects strategy. Organization based strategy is a crucial element in the strategic planning model. After all, organizations are made up of people and it is someone on the organization who does the strategic planning.
How does one create the organizational planning model? What is the initial step? The organization has to look at the outside of the organization and then look inside. What is happening in the marketplace? What are the customer needs, demands, and peculiarities? After answering these, organizations start the planning model by answering the question how. How can the organization design itself to fit the marketplace and business environment?
Several characteristics typify the marketplace: it is fast, fickle, and similar to fashion. These call for an organizational model that can adapt to this kind of environment. In order to be fast, organizational planning has to come up with an organization that is small, smart and mobile.
To wit, small not probably in numbers as in composition, smart in order to outthink the competition and mobile in order to follow the constant movement in the marketplace. To create a strategic advantage, the organizational planning model must be speedier, brainier and smaller.
The Marketing Planning Model
A second strategic planning model is the marketing planning model. Goods and services would be of no economic value unless it is introduced and sold to the end-users. The marketing planning model uses a different criterion. While generally the marketplace is fast, fickle and fashionable, the marketing planning model must focus on certain other factors or areas.
These areas are: product or service introduction, product or service positioning and product or service entrenchment. The marketing planning model seeks to design a marketing methodology in order to introduce a product or service.
After identifying customer needs, wants and expectation, it seeks to discover the most appropriate and cost effective method of introduction. Many products and services never made it past the product introduction stage due to faulty marketing planning.
Product introduction should pave the way to product positioning. A product position in the market will dictate deviations in the marketing planning strategy. A product might be positioned for the C market but after the introduction, it may work well with the B market. Such things can happen in the marketplace.
Product positioning then should determine product entrenchment. A well-positioned product has to be well entrenched in the marketplace. When marketing planning decides to entrench, it must be up to par with the expected opposition.
Industry leaders might wage a wiping out campaign in order to dislodge the product from its position and entrenchment. Marketing planning must brace itself to a long, protracted price war, display war, advertising war and so on. The marketing planning model must include such an eventuality.
The Tech-Product Planning Model
A third but nevertheless important strategic planning model is the technology-product model. A product or a service is composed basically of two elements: mass and mind that is also referred to as hard and soft.
What it means is that products have visible qualities, like the raw materials and product also possess invisible qualities, the thinking, design and man-hours that have been accumulated into it. An important paradigm shift concerns the ratio of mass and mind in the product. This is an important aspect in the strategic planning model.
When customers where not so discriminating, there was more mass than mind in the product. The terminology mass product fits well into the description. But in an environment fueled by individualism, where individual tastes and preferences become market factors, these ratios have been reversed. There is now more mind than mass in products and services.
The technology-product planning model after taking this basic premise into consideration seeks to plan strategically for the right sourcing, outsourcing and production of these products. A miscalculation can easily tip the delicate balance and may render the product undesirable in the marketplace. Factors such as quality, timely delivery, workmanship and price can easily tip the delicate balance and may throw the product out of its position.
The sourcing, outsourcing and production of materials in accordance with proper marketing planning must take into consideration the technological factor in production. It must seek its sourcing, outsourcing and production from companies that have invested and utilized its technological strength relative to competition. This will add muscle to the marketing planning model.
Other factors that have to be in consideration in the technological-production planning model are outsource production facilities “are they compatible with the strategic model; and production delivery speed “are they at par with expectations; and production quality “does it pass industry standards.
The Financial Planning Model
Money is the bloodline of business. The financial planning model takes into account this factor up front and tackles it directly. The source of disruption in business or organizations has always been a problem in the cash flow. There may be little or no more funds to continue on with operations.
The financial planning model seeks to provide a solution to this perennial problem. It seeks to identify a reliable, reputable and cheap source. At the same time, it seeks to manage and control the application of the funds. The plan is basically that of sourcing and applying funds relative to the strategic plan. This concept may be simple but will entail much difficulty in the application.
Strategic planning must include the financial consideration in all the decision that business or organizations make. Every decision it always tied up to the financial. Every decision affects the company finances. A cost reduction improves the cash position but a cost increase has the double effect of decreasing the cash position and increasing expenditures.
Business or organizations that do not employ a financial planning model often grope for answers and make disastrous decisions. A sudden depletion of the cash reserves may send executives begging financial institutions for a loan or a credit line. Financial institutions can provide but with so much documentation and requirements precious time may be lost. So business or organizations utilize the free market that charge interests way beyond what is commonplace and legal. This will eat up on the company profit margins.
Only a well-prepared plan using the fund sourcing and application financial model will save business or organization from imminent financial ruin. It does not take a storm to sink a large ship. Small holes can do the job even better, accumulating water until it is too late.