1.
© Operational Excellence Consulting. All rights reserved.
The guide serves as a framework for conducting a strategic business
planning study and to map out an actionable plan for the business.
Strategic Business Planning
Methodology
Step by step approach to strategic business
planning

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Introduction to
Strategic Business
Planning Methodology
§ The pace of change has accelerated considerably as organizations
enter the electronic age of the new economy. And because the
world changes constantly at a “click” rate, strategic planning is the
most essential and important part of a business cycle.
§ Strategic business planning is the process by which the guiding
members of an organization envision its future and develop the
necessary processes and operations to achieve that future.
§ The model of strategic business planning presented in this
methodology will help the organization to plan and create its future.
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About the Strategic Business Planning
Methodology
§ The Strategic Business Planning Methodology provides a
framework for conducting a strategic business planning study and to
map out an actionable plan for the business.
§ As digital technology is increasingly making an impact to modern
business models and value creation, IT transformation is an
essential foundation and prerequisite for the digital transformation of
the business. IT transformation planning is therefore integrated with
strategic business planning as one seamless entity.
§ The methodology is organized into four phases.

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Overview of the Strategic Business Planning
Methodology
Business
Strategy
Implementation
Business
Strategy
Formulation Business
Visioning
Strategic
Business
Review

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Strategic Business Planning Methodology
PHASE DESCRIPTION
Strategic Business
Review
To review the organization’s current state and external environment so
as to establish the position of the organization with respect to the
competition.
Business Visioning
To define the desired state of the organization so as to focus the
development and implementation of business strategies in achieving
the desired goals.
Business Strategy
Formulation
To formulate business strategies based on the organization’s strengths
and external opportunities to achieve desired state.
Business Strategy
Implementation
To define the IT architecture and develop a strategic business
implementation plan so as to serve as the blueprint for detailed
implementation.
The Four Key Phases of Strategic Business
Planning Methodology

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The strategic business planning methodology provides a
blueprint for achieving the organization’s future state vision
Strategic Business Planning Methodology
Strategic
Business
Review
Business
Visioning
Business
Strategy
Formulation
Business
Strategy
Implementation
§ Review current state
§ Identify areas of
competitive
advantage
§ Analyze industry
trends and
competition
§ Envision desired
state
§ Identify and screen
opportunities
§ Analyze opportunity
gaps
§ Benchmark and
make
recommendations
§ Define blueprint
§ Identify programs
§ Define
implementation plan

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Phase 1:
Strategic Business Review
1

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Strategic Business Planning Methodology
§ Review current
state
§ Identify areas of
competitive
advantage
§ Analyze industry
trends and
competition
Business
Strategy
Implementation
Business
Strategy
Formulation
Business
Visioning
Strategic
Business
Review

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Phase 1 – Objectives
§ To review the organization’s current state and external environment
so as to establish the position of the organization with respect to the
competition.

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1.1 Review Current State
§ Review the organization’s current vision and mission. The primary
questions to answer are:
• Why does the organization exist?
• What function does the organization perform? (What products or
services does it offer?)
• For whom does the organization perform this function?
• How does the organization go about fulfilling this function?
§ Identify the major forces driving the organization. Examples of
driving forces are products and services being offered (including
online), methods of distribution, the market being served, growth,
etc.

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1.1 Review Current State
§ Identify the organization’s distinctive competency – the quality or
attribute that makes the organization different from its competitors.
• For example, an organization may be the only educational institution to
provide management education after work and on weekends in its
geographical marketplace.
• What is the organization especially good at?
§ Review the organization’s current values through a values scan.
The 5 elements of a values scan are:
• Personal values
Ø Individual values of the executive and managers.

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1.1 Review Current State
• Organizational values
Ø Does the organization value profit more than growth, or how strongly
is customer and quality valued?
• Operating philosophy
Ø What are the published and unwritten operating philosophies that
employees understand? Are the assumptions in the operating
philosophy valid and relevant?
• Organizational culture
Ø Organization culture is made up of the personal values, the
organization values, the operating philosophies and the organization’s
assumptions about the way the world works. What is the assumption
upon which the organization culture is based and how has the
assumption determined its values and norms?

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1.1 Review Current State
• Stakeholders’ values
Ø Individuals or groups who believe that they hold a stake in the
organization’s future. Who are these people and how do they
influence the business direction and strategy?
§ Review the organization’s strategic goals.
• What are the organization’s strategic goals?
• Have all the strategic goals achieved the targets set?
• Understand why some targets could not be achieved and why others
have met or exceeded the set targets.

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1.1 Review Current State
§ Understand the organization’s current business model.
(a) Customers/Market
Ø Which markets are the organization targeting?
Ø How are they segmented?
Ø What are the key requirements for the various segments?
(b) Alliances
Ø Who are the organization’s alliances and partners?
Ø How committed and reliable are they?
(c) Products & Services
Ø What are the organization’s ranges of product and service offerings
(including online) for the various segments?

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1.1 Review Current State
(d) Financial Analysis
Ø What is the cost and pricing structure for the products and services?
Ø What is the revenue stream of the organization?
Ø Which segment contributes the highest revenue to the organization?
Which is the lowest?
Ø Which products and services are most profitable, marginally profitable
and not profitable?

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1.1 Review Current State
§ Analyze the following:
• Organization’s strengths, weaknesses, opportunities and threats (SWOT)
• Organization structure and functional units’ goals
• Critical success factors (CSFs)
§ Conduct an organizational audit of the organization’s IT capabilities.
• Review the existing processes, application systems and the IT
infrastructure.
Ø Internal perspective: business needs
Ø External perspective: customers’ needs
• Take inventory of the organization’s existing hardware and software.

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1.2 Identify Areas of Competitive Advantage
§ Identify the organization’s areas of competitive advantage by
conducting a competitive assessment of the target market:
• Who is the competition within this target market?
• Who are the direct competitors (i.e. those providing the same product or
service)?
• Who are the indirect competitors within the industry (i.e. those providing
similar alternative products or services which provide the same or similar
benefits)?

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1.2 Identify Areas of Competitive Advantage
• Who are the indirect competitors outside of the industry (i.e. those
providing totally different alternative products or services which provide
the same or similar benefits)?
• What are the strengths and weaknesses of these competitors?
• How does the organization compare on in terms of features/benefits of
importance to the target market?

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1.3 Analyze Industry Trends & Competition
§ In the identified areas of competitive advantage, identify the
data/information needed to detect trends and competition:
• Industry level – financial trends, industry leaders, industry statistics, etc.
• Organizational level – key customers, key competitors, key suppliers,
etc.
• Business process trends, changes, automation, etc.
• Technological trends

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1.3 Analyze Industry Trends & Competition
§ Determine the sources of data/information collection for monitoring
purposes, e.g.:
• Employees with outside contacts
• Suppliers and distributors
• Vendors and suppliers of technology
• Customers (current customers, former customers, competitors’
customers, prospective customers)
• External consultants
• Research organizations
• Internet
§ Collect and analyze industry data/information to determine industry
trends and competition.

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Phase 1 – Deliverables
§ Current State Report, consisting of :
• Current business model documentation
• Current process flow (high-level)
• IT architecture, including inventory of existing hardware, software and
network systems

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Phase 1 – Records
§ Record of review of current state
§ Record of competitive assessment and analysis

23.
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Operational Excellence Consulting is a management training and consulting
firm that assists organizations in improving business performance and
effectiveness. Based in Singapore, the firm’s mission is to create business
value for organizations through innovative design and operational excellence
management training and consulting solutions. For more information, please
visit www.oeconsulting.com.sg