STRATEGIC PLAN

The strategic plan structure we favor has five components:

The chart below shows the relationship among the five components of the strategic plan.

Mission

The starting point is the mission which describes the overall purpose of the business. Here are some examples of good mission statements:

Wal-Mart: save people money so they can live better.

Starbuck's: inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

Caterpillar: provide the best value in machines, engines and support services for customers dedicated to building the world's infrastructure and developing and transporting its resources.

Apple: committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

Dell: be the most successful computer company in the world at delivering the best customer experience in markets we serve.

Facebook: give people the power to share and make the world more open and connected.

Google: organize the world's information and make it universally accessible and useful.

Microsoft: enable people and businesses throughout the world to realize their full potential

A good mission statement really conveys what the business is about. Bad mission statements are a useless distraction. Here are two actual bad mission statements from major corporations:

Continually exceed our customers' increasing expectations

...we will deliver operational excellence in every corner of the Company and meet or exceed our commitments to the many constituencies we serve.

These contains nothing about the purpose of the business and why it should exist. They provide only meager guidance for strategic planning.

Make the mission statement meaningful.

Vision

The vision describes how the organization will carry out the mission in the future. For example, Wal-Mart's vision would describe where and how the company will expand over the next 3-5 years to provide more low-price goods to more people around the world.

The vision also describes what the organization should become at some point in the future.

The time horizon for the vision should be chosen carefully. It should be far enough in the future to provide enough time to make significant progress. But it should not be so distant that possible future conditions become lost in the fog of uncertainty.

Long-Term Goals

Long-term goals are derived from the vision. They are chosen so that their achievement equals achievement of the vision.

Value Proposition

The value proposition is a translation of the mission statement into a description of the specific type of distinctive value to be provided.
The value proposition is the heart of the growth strategy. To craft a graphic, compelling, clear, and clearly superior value proposition is a key step toward a successful strategic plan.

Strategy

The strategy drives the organization toward the long-term goals by leveraging the full potential of the value proposition. The strategy…
(1) enables the organization to create and deliver the promised exceptional value to its customers consistently and efficiently,
(2) builds the right image and relationships with customers,
(3) counters effectively competitor and supplier threats,
(4) focuses on the best markets.

See our Better Strategies and Better Business Growth pages for suggestions on how to build a good growth strategy.

Strategy Development

It is best to set the mission, vision, long-term goals, and value proposition first, then define the strategy.

For a better strategic plan, develop each part of the strategic plan explicitly with the entire top-management team. Participants should make sure they agree on the first four components of the strategic plan before trying to define the strategy.

Performance will suffer if the entire strategic plan is not developed explicitly and documented. Every component of the strategic plan is important.

Consider these examples:

See our Strategic Planning Process page for a good approach to use to develop your strategic plan.


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