Strategic Planning should not be a one-and-done business process.
As a rule, your organization should conduct annual strategic planning even though it’s time horizon is typically multiple years. Why, you ask? Isn’t a strategic plan valid for more than one year?
No, for a number of reasons.
First, if the rate of change in your competitive environment is rapid. Second, if there is room for improvement in your strategic competency. Third, if you have potential to avoid or beat the competition with unbeatable innovation.
What will your competition be doing while you are basking in the short-term results of your strategies? How strong a position do you have in the market place? Are you dominant, or are you a strong number two? If not, what impact can you make as a relatively smaller player?
How are you responding to the developments that occur in your immediate competitive environment or supply chain? If the rate of change in your marketplace is quick, will a static strategic plan enable you to maintain or grow market share? Or will it leave you losing market share as the market evolves beyond your current products and services?
The basis for sustainable competitive advantage is significant and sustainable differentiation that is very valuable to customers.
This competitive advantage is founded on your strategic competency. You must continuously enhance and exploit your strategic competency. A significant part of this could be your on-going efforts to innovate. On-going innovation processes should be a significant part of your annual strategic planning.
Hence, many factors will influence the results and longevity of your strategic plan.
The level and intensity of your competition will have a strong impact on how long your strategies will be appropriate and effective. Furthermore, the rate of change in the technologies found in your products and services can slow or accelerate the need for reviewing and updating your annual strategic plan. Consequently, how will you incorporate changes in technologies, materials, features and benefits into your products and services without adjusting your plan?
The reasons to revisit and update your annual strategic plan can be many.
First of all, if you are a dominant player in your markets, what will you do to maintain your strong position? Alternatively, if you are chasing the leader, will you need to skillfully change your approach to the market as the leader introduces changes? Can you compete in a rapidly changing environment if you are still using an old strategy to guide your efforts?
Much of this depends on what markets you are in and how strong a competitor you are.
How rapidly do your markets evolve? Are the technologies involved mostly fundamental or are they changing rapidly? Are there new entries into your markets which are capable of destabilizing your position? This could include both domestic and foreign players and indirect competitors.
You should also pay continuous attention to innovation.
Good innovation will give you ongoing competitive advantages in your marketplace and potentially in new markets. Always be on the lookout for ways to further leverage your strategic competency.
Can annual strategic planning help you improve your competitive position?
You bet! It is a business discipline necessary to keep your competitive position strong and effective. It increases your agility in the competitive world and helps you improve sales, profits and market share. Involving up-and-comers in your strategic plan updates provides you with an excellent means of helping develop their strategic thinking capabilities. In addition, opportunities and threats can pop up at any time. By including them in your regular reviews, you can take advantage of new opportunities more rapidly. You can also respond to threats as they arise instead of waiting for them to impact your company. These factors will help you be as effective as possible in the market place and in your internal operations. By reviewing and updating your strategic plan regularly, your organization should improve your market share resulting in higher profitability.
If you would like to discuss your competitive position with us, please call 616-575-3193 or email me at firstname.lastname@example.org. We can help you remain or gain in your competitive position. Based on our long history of guiding organizations to more effective strategies and results, we can help you. Simplified Strategic Planning is a great place to start. Consider holding a one-day workshop on Simplified Strategic Planning.
Dana Baldwin is Senior Strategist with the Center for Simplified Strategic Planning, Inc. He can be reached by email at email@example.com.