Strategies differ from tactics in that they are more general and long-term. For example, you might create a strategy for increasing sales by changing your distribution methods. Your specific tactics to effect that strategy might include augmenting your online sales presence, starting a catalog, using a wholesaler, buying direct-response TV and radio ads or using direct mail. Creating a strategic plan requires assessing your operations, looking at new ways of generating revenues and running the numbers to see how any strategy shift might affect your income and expenses.
Review Your Business Plan
The first step in developing a strategic plan is to review your current business plan, if you have one. A business plan should explain your product’s unique selling benefit and the brand identity you’ve created around that. The plan should include an evaluation of your marketplace, including trends, analysis of your target customer and review of your competition. The plan also should justify your pricing and distribution strategies, include marketing communications plans, and contain a budget. If you don’t have a business plan, review all of these aspects of your current business.
Assess Your Current Situation
Compare the current results of your operations to your business plan goals. Try to assess what percent of your target market is buying your product or service. Look at your sales volumes, analyze which products are selling best and review how you compare to your competition. Review your budget to determine your profit margins for each product you sell. Survey your customer regarding their satisfaction with your products or services and their opinions of your competitors. Forbes magazine recommends getting external feedback, such as an outside auditor, to generate the most accurate self-evaluation during strategic planning.
List And Evaluate Potential Strategies
Write a list of the potential strategies you might pursue. Common strategies include:
Raising or lowering prices Expanding distribution channels Diversifying into new product lines or businesses Dropping existing products and focusing on core strengths Changing marketing communications Buying or merging with a competitor Centralizing or decentralizing operations of a multi-location business Outsourcing current in-house operations or vice versa.
Run The Numbers
Evaluate the costs and potential revenues and profits associated with each potential strategy. Look at the stresses each strategy might put on the various departments of your company, including budgets, physical capacities to do more work, and human resources issues. Bring in your department heads and have them analyze and tell you the impacts on their areas, such as marketing, finance, production and sales. Solicit input from your vendors and suppliers. Visit the websites of trade associations, government agencies, business analysts and academic institutions to find any trends in your industry that might affect your sales in the next three to five years. You might conduct a SWOT analysis that examines your industry’s strengths, weaknesses, opportunities and threats.
Choose Your Finalist Strategies
Once you’ve analyzed the various potential strategies you can implement, choose the ones you feel you can most likely execute successfully. Develop three-year projections that include the implementation costs for each, as well as the annual operating costs, sales and profits for each strategy you follow. For example, you might choose to lower prices to create barriers to entry for competitors and to take market share from your current competition. You might choose to start selling online in addition to brick and mortar stores. Set key performance indicators you will use to track your results on a quarterly basis. This will help you assess the performance of your strategic plan and allow you to respond to any problems or opportunities. Write your final plan, including your desired outcomes, the tactics you'll use to effect your strategies, the KPIs for measuring results and benchmarks you've set for success.
Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.