Editing Strategic planning (section)

==Process==
[[File:Strategic Management Framework.png|thumb|300px|Strategic management processes and activities]]

===Overview===
Strategic planning is a process and thus has inputs, activities, outputs and outcomes. This process, like all processes, has constraints. It may be formal or informal and is typically iterative, with feedback loops throughout the process. Some elements of the process may be continuous and others may be executed as discrete projects with a definitive start and end during a period. Strategic planning provides inputs for [[strategic thinking]]: these are best seen as distinct but complementary activities.<ref>Uni Futures Network, [https://web.archive.org/web/20070324050523/http://www.universityfutures.org/rethinking_strategic_planning Rethinking Strategic Planning], archived 24 March 2007, accessed on 23 March 2025</ref> Strategic thinking guides the actual strategy formation. Typical strategic planning efforts include the evaluation of the organization's mission and strategic issues to strengthen current practices and determine the need for new programming.<ref name="book 1">{{cite book |last1=Ingram |first1=Richard |title=Ten basic responsibilities of nonprofit boards |date=2015 |publisher=BoardSource |location=Washington D.C. |isbn=978-1-58686-148-3 |page=42 |edition=third}}</ref> The end result is the organization's strategy, including a diagnosis of the environment and competitive situation, a guiding policy on what the organization intends to accomplish, and key initiatives or action plans for achieving the guiding policy.<ref name="Rumelt2011">{{cite book
| last = Rumelt
| first = Richard P.
| year = 2011
| title = Good Strategy / Bad Strategy
| publisher = Crown Business
| isbn = 978-0-307-88623-1
| url-access = registration
| url = https://archive.org/details/goodstrategybads00rume
}}</ref>

[[Michael Porter]] wrote in 1980 that formulation of competitive strategy includes consideration of four key elements:
#Company strengths and weaknesses;
#Personal values of the key implementers (i.e., management and the board); 
#Industry opportunities and threats;
#Broader societal expectations.<ref name="Porter1980">{{cite book
| last = Porter
| first = Michael E.
| author-link = Michael Porter
| year = 1980
| title = Competitive Strategy | publisher = Free Press
| isbn = 978-0-684-84148-9| title-link = Competitive Strategy
}}</ref>
The first two elements relate to factors internal to the company (i.e., the internal environment), while the latter two relate to factors external to the company (i.e., the external environment).<ref name="Porter1980"/> These elements are considered throughout the strategic planning process.

===Inputs===
Data is gathered from various sources, such as interviews with key executives, review of publicly available documents on the competition or market, primary research (e.g., visiting or observing competitor places of business or comparing prices), industry studies, reports of the organization's performance, etc. This may be part of a [[competitive intelligence]] program. Inputs are gathered to help establish a baseline, support an understanding of the competitive environment and its opportunities and risks. Other inputs include an understanding of the values of key stakeholders, such as the board, shareholders, and senior management. These values may be captured in an organization's [[vision statement|vision]] and [[mission statement|mission]] statements.

===Activities===
{{quote box|width = 300px|quote=The essence of formulating competitive strategy is relating a company to its environment.|source=[[Michael Porter]]<ref name="Porter1980"/>}}
Strategic planning activities include meetings and other communication among the organization's leaders and personnel to develop a common understanding regarding the competitive environment and what the organization's response to that environment should be. A variety of strategic planning tools may be completed as part of strategic planning activities.

The organization's leaders may have a series of questions they want to be answered in formulating the strategy and gathering inputs.<ref name="Mintzberg and Quinn 1996" /><ref name="Drucker1954">{{cite book
| last = Drucker
| first = Peter
| author-link = Peter Drucker
| year = 1954
| title = The Practice of Management | url = https://archive.org/details/practiceofmanage00druc
| url-access = registration
| publisher = Harper & Row
| isbn = 978-0-06-091316-8}}</ref>

===Outputs===
The output of strategic planning includes documentation and communication describing the organization's strategy and how it should be implemented, sometimes referred to as the strategic plan.<ref>Mintzberg, H., Ahlstrand, B., & Lampel, J. (1999). "Strategy Safari: A Guided Tour through The Wilds of Strategic Management", *Work Study*, Vol. 48 No. 2. [https://doi.org/10.1108/ws.1999.07948bae.002 doi:10.1108/ws.1999.07948bae.002]</ref> The strategy may include a diagnosis of the competitive situation, a guiding policy for achieving the organization's goals, and specific action plans to be implemented.<ref name="Rumelt2011"/> A strategic plan may cover multiple years and be updated periodically.

The organization may use a variety of methods of measuring and monitoring progress towards the '''strategic objectives''' and measures established, such as a [[balanced scorecard]] or [[strategy map]]. Organizations may also plan their financial statements (i.e., balance sheets, income statements, and cash flows) for several years when developing their strategic plan, as part of the goal-setting activity. The term ''operational [[budget]]'' is often used to describe the expected financial performance of an organization for the upcoming year. Capital budgets very often form the backbone of a strategic plan, especially as it increasingly relates to Information and Communications Technology (ICT).

===Outcomes===
While the planning process produces outputs, [[strategy implementation]] or execution of the strategic plan produces outcomes. These outcomes will invariably differ from the strategic goals. How close they are to the strategic goals and vision will determine the success or failure of the strategic plan. Unintended outcomes might also be an issue. They need to be attended to and understood for strategy development and execution to be a true learning process.