Editor’s note: this guest post is the third in a short series by Ankit Khandelwal, a prolific student of online courses. This article covers free and inexpensive online resources for developing expertise in business strategy outside of a traditional degree program.
Continuation from the previous post
So far we have seen how to develop your strategic planning skills using easily available information. We have also seen how to build a theoretical framework and strategic toolkits using open online courses, books, and other resources available to you. In this post we will move slightly further and apply strategic planning to a real problem.
As I said in my last post, strategic planning may involve external factors. For example, let’s take real life decisions. When you make them, you generally assume that some things will remain constant (like the bus schedule or the weather). If any of these assumed external conditions change, you may be forced to change your planning, too. Of course, it all depends on the area of the problem you are planning for — politics, international relations, policy formulation, public opinion, national security. The list goes on. My suggestion is that you keep external factors in mind while planning your strategy. I will get back to this later when we solve our hypothetical problem.
Here I have outlined a basic process for strategic planning. Feel free to use it as a reference or to develop your own based on your interests and experience.
1. Select a problem
Select a problem based on your own interests or a problem suggested by someone else. For this strategic planning exercise I chose a news headline about a company with plummeting stocks, but you can feel free to choose any company and start preparing a strategic plan for the next year. In this post I have developed a strategic plan for the following hypothetical problem:
You just heard on the news that a major textile company, ‘X,’ has lost revenues over three consecutive quarters and this may be a concern since you are an investor in this company. You have decided to do a strategic analysis of this problem to figure out how the company can stop losing revenue.
2. Define the problem
Consider your objective in doing this analysis. What do you want to get out of this? What is your time frame? Think about it over coffee or tea, or read an article on the issue. Then try to define your problem. In this case, a definition of our hypothetical problem would be something like, “develop a plan to reduce company losses next quarter.”
Since you have followed this sector for a long time, you are aware of most of the market trends. But doing even more research will bring an even better perspective, especially about the external factors. After doing extra research, these are a few of the external factors you have discovered:
- A few of the company’s major markets are still unable to recover from the financial crisis. Therefore, it is understandable that the company needs to reduce their operation in those markets.
- The company is making less profit due to a spike in oil prices, which in turn raises transportation costs.
- The company’s management has had conflicts with labor unions over the issue of entering into emerging markets. Other competitors, however, have already moved to these markets.
- More and more people are shopping for textiles online.
4. Quantify the problem & Prepare strategic toolkits
Now that you have gathered your information it is time to prepare your strategic toolkits. Remember, these toolkits are there to help you to understand, analyze, and then solve a problem — not solve your problem immediately. SWOT analysis will not always end with “Eureka!”
Thanks to our research into our hypothetical problem, we can take what we know and begin to develop a potential course of action. In this case, we know more people are going online — this can be used as an opportunity. We also know there have been labor disputes, which can be interpreted as threats or weakness within the union, or within the company. We can also do competitor analysis to determine whether to enter the emerging markets. Since economic conditions are not good in mature markets, this can be an opportunity to scale down operations. Additionally, you can use CAGE, Environment Entry, Competitor Matrix or other toolkits to study the problem.
5. Identify the problem
This is the trickiest part of any analysis. You have consulted newspaper reports and analysis, as well as your experience . Now you need to identify the main problem. Is it the union dispute? Or is it the spike is oil price?
6. Suggesting solution(s)
As I have said, strategic planning for business is like planning in your personal life. In both you think about different options and weigh the pros and cons. By using your toolkits you lay out different options in front of you and all that remains is for you to think about which options are best. This is the time to use your months of reading business newspapers and annual reports to draw conclusions about what worked and what didn’t.
Making a presentation is optional and only necessary if you are doing analysis for someone else. It can be great to do this for your own personal records, too.
If you can’t get enough of strategic planning
This has been a very basic overview of strategic planning. If you want even more practice, just look around and pick a problem. From improving sales of street vendors to finding new business opportunities for big corporations, there’s certainly no shortage of problems to investigate and solve. I have chosen many such scenarios and have a lot of fun with strategic thinking every day. I hope you enjoy it, too!
Now that you are a strategic planning champion — or at least a theoretical strategic planning champion! — let me tell you something I have learned from many people: there is no right or wrong answer in strategy, only good or bad choices. What does that mean? It means no plan is perfect until it is tested in real situations. How can you test your strategic planning in real situations? I’ll share the answers with you in my next and final blog post of this series.
My name is Ankit Khandelwal. I am from India and a master’s graduate in Chemical engineering from Technical University of Denmark. From May 2012 to June 2014, I worked on my ‘Envisioning 21st century global manager’ project. It was my own invented project, drafted after careful analysis of my interests, future market trends and required skills set to become a global manager/leader in the 21st century. As part of this project, I have taken courses from MIT-OCW (Open Courseware), OEC (Open Education Consortium), OYC (Open Yale Courses), OLI-CMU (Open Learning Initiative- Carnegie Mellon University), as well as from other organizations and MOOC providers (WTO, Copenhagen Business Center, Alison, Coursera, edX, NovoEd, Open2study). Over the past two years, this was my full time work, comprising 20+ courses from different universities (covering general management disciplines as well as interdisciplinary aspects such as trade negotiations, urban planning, public policy, environmental law, functioning of non governmental organizations and EU, design thinking, disaster preparedness, and self-study in three foreign languages, etc.). I have extensively studied newspapers from different world regions to get regular updates on business and market trends while expanding my networks through projects and other outreach. Equally important has been my study of different cultures to grasp local social and political characteristics in my effort to prepare myself for negotiating/working in a multicultural global environment.