Strategy development, also known as strategic planning, is fundamental to creating and running a business. Simply put, it’s a game plan that sets specific goals and objectives but like a game plan, it is capable of being changed in response to shifting market dynamics. Here are the basic steps to strategic planning.
Set your long-term goals. Where do you want the company to be in five years? These include such key objectives as product line up, growth objectives, sales and revenue goals, profit targets, and human resource plans, as well as broader brush goals.
Conduct a market and competitive analysis. You need to understand your target market’s dynamics, which includes demographics and the characteristics of your target audience (how, when and where do they buy the product or service you offer). In addition, analyze your competitors, gathering information on the 4P’s of marketing: pricing, product, promotion and placement. Know what you’re up against so you can plan your market and competitive strategy.
Assess where your company is now. Detail out exactly where your company stands on current profits and revenues. This helps you decide how to get where you’re going.
Do a SWOT analysis--Strength, Weaknesses, Opportunities and Threats. This enables you to honestly evaluate your firm’s strengths and weaknesses based on the market data you’ve gathered. You also will be forced to evaluate opportunities and threats.
Compare where you are now and where you want to be in five years. How big is the gap between the two? Determine what steps need to would need be taken to enable you to bridge this gap given what you’ve evaluated in your SWOT analysis. If the gap is too big, review and possibly reset your strategic goals.
Map out your strategic plan in writing, monthly for the first year, then quarterly, and finally annually for the later years. Meet regularly to review how you’re doing vs. goals. Share it not only with the management team, but with all your employees, and assign tasks at all levels so everybody is working towards the plan.
Be flexible. The market changes constantly, with new competition coming in, prices shifting, global economics impacting things. Your strategic plan should be reviewed at least once a year, preferably every six months, so you can update your game plan as new information becomes available.