Strategic Planning Tools

STRATEGIC PLANNING TOOLS

Strategic planning may be characterized as a systematic effort to produce fundamental decisions and actions that shape and guide what a business organization is, what it does, and why it does it. The objective of strategic planning is to develop a map by which to manage an organization's positioning.

Although some would suggest that strategic planning has lost some of its effectiveness, most managers continue to recognize the need for effective strategic planning and implementation. While strategic planning requires a significant amount of time and can be quite frustrating, if done properly, it can enable a firm to recognize its most effective position within its industry.

There are a variety of perspectives, models and approaches used in strategic planning. The development and implementation of these different tools depend on a large number of factors, such as size of the organization, nature and complexity of the organization's environment, and the organization's leadership and culture.

Five strategic planning tools are presented below: the Boston Consulting Group Matrix; the GE Market Growth/Market Share Matrix; SWOT Analysis; Porter's Generic Competitive Strategies; and Porter's Five Forces Model.

BOSTON CONSULTING GROUP MATRIX

In the late 1960s the Boston Consulting Group, a leading management consulting company, designed a four-cell matrix known as BCG Growth/Share Matrix. This tool was developed to aid companies in the measurement of all their company businesses according to relative market share and market growth. The BCG Matrix made a significant contribution to strategic management and continues to be an important strategic tool used by companies today. The matrix provides a composite picture of the strategic position of each separate business within a company so that the management can determine the strengths and the needs of

Figure