15 common strategic planning models (with definitions)

By Indeed Editorial Team

Published 13 April 2022

If the project strategy at a company is non-existent or ineffective, a strategic planning model can help to start the process and guide necessary decision-making. Companies use strategic models to create more useful plans that align their goals and initiatives. There are several types of strategy models to choose from, and it's important to understand the characteristics of these models so you know how different businesses can use them. In this article, we outline what a strategic planning model is and the different types.

Related: What is strategic thinking (definition and how to develop)

What are strategic planning models?

Strategic planning models are planning structures that help businesses develop their action plans to achieve their short- and long-term goals. Otherwise known as strategic planning tools, they can improve operational efficiency and boost productivity in the workplace. Companies can modify strategic planning models to suit their needs. Strategic planning models require companies to identify what the company wants and what daily operations they can perform to achieve this. Once a company has identified its goals, it can work backwards to determine how to get there.

Related: What is strategy and why is it important in business?

Types of strategic planning models

There are several strategic planning models you can choose to implement at work. Since each one takes a different approach to helping plan and prepare for projects, it's important to select the one most appropriate for the task. Here are 15 different strategic planning tools:

1. Objectives and key results (OKRs)

The OKR framework is a simple strategic planning tool that helps businesses align and continually track their measurable goals. It's a bottom-up approach that focuses on what employees can do to achieve business goals before focusing on higher management. This model requires you to define your objectives and key results. The former refers to what you want to achieve, and it's important that the objectives are attainable and time-bound.

The key results are the quantitative methods that measure progress towards these objectives. You can use this method to determine whether they're on target to meet your goals through key results and re-evaluate your project methods where necessary.

2. Baldrige framework

This framework is most appropriate for businesses that want to innovate and improve upon their existing methods. You can create a questionnaire to assess the business needs and distribute the questionnaire to employees to gain more qualitative feedback or to base their answers on quantitative and measurable data. This framework considers several factors to help identify areas of achievement and improvement. These areas include:

  • customers

  • leadership

  • workforce

  • process

  • results

  • planning and strategy

  • measurement, analysis and knowledgeable management

3. Goal-based planning

This approach is the reverse of issue-based planning, as it involves working backwards from the future to the present. This means it starts with the company's vision before defining time frames to achieve that goal. Goal-based planning is useful to actualise forward-thinking and aspirational visions by setting short-term, specific and measurable goals. Since goals come after the actualisation of a vision, they're more likely to align with one another. This approach is most applicable when long-term planning where time frames extend between three and five years.

4. Blue ocean strategy

The blue ocean strategy model helps businesses develop in an uncontested market space‚ otherwise known as a blue ocean, before competitors enter it with similar products or services. A blue ocean is the opposite of a red ocean, which refers to a market space that is saturated or already developed. Creating a blue ocean strategy allows you to find your niche in the market and capitalise on it to boost sales and profitability. This approach is useful for companies with new and unique ideas.

Related: What is a corporate-level strategy? A step-by-step guide

5. VRIO framework

VRIO stands for value, rarity, imitability and organisation. This strategic planning model helps businesses create a vision statement to base their overall strategy on. When using this method, determine what you have of value that gives you a competitive advantage in the marketplace. This can help you determine whether there's a lot of competition in the market you plan to operate in and whether your valued resource is rare amongst competitors. Then, consider whether your product or service is easy for competitors to imitate and whether the company's organised enough to meet the requirements for this new product or service.

6. Alignment model

The alignment model assists with the development of a strategy that syncs business operations with strategic goals to increase internal efficiency. You can use the alignment model to first identify a goal before assessing what resources or operations you require to meet that goal. This strategic model can also help you evaluate what operations are working and what needs changing in the long term. You can then propose these changes to departments and teams to achieve strategic alignment. The alignment model is useful for identifying what operations are blocking progress or for ensuring greater internal efficiency.

7. Gap planning

Gap planning compares a company's present position to where it wants to be. You can then use this information to identify specific internal deficiencies and bridge the gap between the present and future. You may also use shift charts or a change agenda to plot your present position and future ideal along the various axis.

8. PEST or PESTLE analysis

PEST is an acronym that stands for political, economic, sociocultural and technological. Companies use these factors to evaluate an industry or business environment and recognise elements that could affect the health of the company. PESTLE is an extended version of this acronym for companies also considering environmental and legal factors when it comes to strategic planning. This model is useful if you want to examine external factors rather than internal operations that affect company goals.

9. Hoshin planning

The Hoshin planning approach helps businesses coordinate their strategic goals with daily projects and tasks. You can use this model to identify your goals and share them with various employees and departments to gain professional feedback. Using the 'catch-ball' approach, employees and management can continually pass the goals back and forth before coming to a consensus. Management can then make the proposed changes to these goals and review them every month, quarter and annum.

10. Porter's Five Forces

This strategic process model has existed since 1979 and focuses on the five different areas of external competition and internal business operations. These areas include the threat of new competitors entering the market, the threat of substitute products or services, the bargaining power of suppliers and customers and the level of competition between existing firms on the market. Porter's Five Forces ensures businesses create goals that account for these concerns and prevent them from affecting the business negatively. It involves creating mitigation strategies and forecasting risk.

11. Issue-based strategic planning

This strategic model focuses on present operations and projects in the future. This planning method can help you assess the challenges you're currently experiencing so you can overcome them before expanding or shifting strategies. It's most applicable to new businesses and those looking to incorporate short-term strategic plans. You may also use this method to address budget allocations, organisational structures or employee productivity as a means to improve current operations. Once identifying and resolving problems, you can then move onto a more complex planning model with reassurance that the business has a solid base.

12. Balanced scorecard

This strategy management framework considers a company's objectives, measures and initiatives. It involves creating objectives and initiatives that focus on four key performance factors that can impact a company's success. These are:

  • customer opinion

  • internal processes improvements

  • financial potential

  • organisational capacity adaptation

Companies can use spreadsheet software to create a scorecard in which they determine appropriate objectives, measures and initiatives for each factor.

13. SWOT analysis

SWOT stands for strengths, weaknesses, opportunities and threats. Companies conduct a SWOT analysis at the beginning of their strategic planning to assess both internal and external factors that contribute towards success. For instance, strengths and weaknesses refer to internal operations, whilst opportunities and threats consider external factors. Considering these factors helps businesses determine the strategic positioning of the organisation and create competitive business plans.

14. Constraints analysis

Constraints analysis works on the assumption that clear obstacles are preventing a company from executing its strategic goals. Performing a constraints analysis allows companies to eliminate any obstacles or weak links within the business to achieve better results. It first involves identifying the factor that limits success or acts as a constraint on the business and then working to remove or reduce it. If there is more than one problem area, it's best to focus on one before moving on to another.

15. 7s model

The 7s model is useful for businesses that want to ensure greater internal consistency and efficiency. This is because it focuses on aligning all internal business elements with the overall strategy. The seven internal elements it considers are staff, structure, strategy, system, skill and shared values. This strategic planning model first examines the interconnectedness of these elements in current business operations, so it's then possible to create synergies to better support strategies based on weak relationships between certain elements. For instance, it may be that a lack of staff training impacts the workflow systems.

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