9 Essential Strategic Planning Models Every Manager Needs to Know

Strategic planning models are designed to help organizations develop an action plan to achieve their goals. There are a lot of strategy models out there, which is why we pulled together a list of 9 of the most popular ones and describe the scenario that they are most useful.

A strategic planning model is a structure designed to help organizations develop an action plan to achieve their goals. This entails using various strategic planning models to guide the organization toward effective strategy implementation and goal realization, tailored to specific scenarios where they are most effective.

Essentially, it serves as a blueprint that organizations follow to map out their strategic direction and actions required to achieve their objectives.

To learn which strategic planning models are most effective, we interviewed ClearPoint’s co-founder and managing partner, Ted Jackson (TJ). Ted has decades of experience helping organizations in a variety of industries operate more strategically. This is what he had to say:

Q: When Do Organizations Need a Strategic Planning Model?

TJ: If you identify with any of these scenarios, then the list in this article will be helpful to you:

• The strategy at your organization is nonexistent, and you’re assigned to find a strategic planning model so that you can kick off your strategic planning
• Your company-wide strategy is in place, but is ineffective or confusing—and you have a hunch that using a proven strategic planning model (and strategy software) will make a big difference.
• Your organization-wide strategy is fine, but there’s one area in your business environment (or internal process) that needs to be realigned with your strategy.
• Everyone in your organization talks about strategy, but they all use different terminology and you want to find something that all departments can align around.

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Q: Is One Strategic Planning Model Better Than the Others?

TJ: That’s a great question—and the answer isn’t cut and dried. Some of these strategic planning models have been around longer than others or have been used in various case studies in different ways. And sometimes managers are more comfortable with one over another, for any number of reasons.

I recommend determining which of these strategy models applies most to your organization’s way of thinking. For example, if you still need to work out your vision statement, it may be wise to begin with the VRIO framework and then move to something like the Balanced Scorecard to track and manage your ongoing strategy.

If you are set on pitching a particular strategic planning model to management, be prepared to give your boss or board of directors an example of another successful company that has implemented that particular model. An actual demonstration of success will make a somewhat abstract concept become more concrete.

If you are evaluating different approaches, I would recommend thinking about both creating your strategic plan and also executing on your plan. It doesn’t do you any good to have a strategic plan and not put it to use.

Q: Is There Ever a Need to Switch Strategic Planning Models?

TJ: Yes. As your organization grows and changes, the models you use to manage your strategy will change too.

There are a lot of options out there—and it’s reasonable to expect that the model you use today won't necessarily match your organization’s needs 10 or even five years from now.

The added complexities of a growing business may make it necessary to rethink your approach to strategy planning. For example, the Balanced Scorecard might work well for tracking organizational and departmental plans, but you may eventually want a system that easily extends to the individual level. For that, you might add OKRs to your management framework.

I also tell our customers that you can also combine strategic planning models. Some organizations use elements of two or more frameworks to create a custom approach. Every organization is different; your planning model should reflect your approach.

Models change often enough in organizations that we built some features in ClearPoint to allow you to shift elements from one approach to the other quickly and easily. This helps our clients not miss a beat when they change their planning approach.

See ClearPoint Strategy in action! Click here to watch a quick DEMO on the software.

Q: What Strategic Planning Models Do You Think Are the Most Effective?

TJ: There are 9 strategic planning models I recommend as a starting point for most organizations and I’ve listed them below.

1. Balanced Scorecard

The Balanced Scorecard is a strategy management model created by Drs. Robert Kaplan and David Norton (who the founders of ClearPoint, Ted and Dylan, worked with for over 10 years). It takes into account your:

• Objectives, which are high-level organizational goals.
• Measures, which help you understand if you’re accomplishing your objective strategically.
• Initiatives, which are key action programs that help you achieve your objectives.

At a glance, you can tell what the RAG status of each objective, measure, or initiative is. (Green indicates everything is going as planned, while yellow and red indicate that there are various degrees of trouble with whatever is being looked at.)

All in all, a Balanced Scorecard is an effective, proven way to get your team on the same page with your strategy. Read more about the BSC in our blog on A Full & Exhaustive Balanced Scorecard Example.

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2. SWOT Analysis

A SWOT analysis (or SWOT matrix) is a high-level strategic planning model used at the beginning of an organization’s strategic planning. It is an acronym for “strengths, weaknesses, opportunities, and threats.” Strengths and weaknesses are considered internal factors, and opportunities and threats are considered external factors.

Using a SWOT analysis as part of your strategic business model helps an organization identify where they’re doing well and in what areas they can improve. It is typically used at the beginning of a planning process or between planning cycles, but is not used for ongoing management.

With ClearPoint Strategy, you can use AI to perform a SWOT analysis on your company. Try our SWOT AI tool here.

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3. PEST Model

Like SWOT, PEST is also an acronym—it stands for Political, Economic, Sociocultural, and Technological.” Each of these factors is used to look at an industry or business environment, and determine what could affect an organization’s health.

The PEST strategy model is often used in conjunction with the external factors of a SWOT analysis. You may also run into Porter’s Five Forces (see #6 below), which is a similar take on examining your business from various angles.

You’ll occasionally see the PEST model with a few extra letters added on. For example, PESTEL (or PESTLE) indicates an organization is also considering “environmental” and “legal” factors. STEEPLED is another variation, which stands for “sociocultural, technological economic, environmental, political, legal, education, and demographic.”

Claim your FREE eBook on 8 effective strategic planning templates here

4. Blue Ocean Strategy

Blue Ocean Strategy is a strategic planning model that emerged in a book by the same name in 2005. The book—titled “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant”—was written by W. Chan Kim and Renée Mauborgne, professors at the European Institute of Business Administration (INSEAD).

The idea behind Blue Ocean Strategy is for organizations to develop in “uncontested market space” (e.g. a blue ocean) instead of a market space that is either developed or saturated (e.g. a red ocean). If your organization is able to create a blue ocean, it can mean a massive value boost for your company, its buyers, and its employees.

For example, Kim and Mauborgne explain via their 2004 Harvard Business Review article how Cirque du Soleil didn’t attempt to operate as a normal circus, and instead carved out a niche for itself that no other circus had ever tried

5. Porter’s Five Forces

Porter’s Five Forces is an older strategy framework model (created by Michael Porter in 1979) built around the forces that impact the profitability of an industry or a market. The five forces it examines are:

1. The threat of entry: Could other companies enter the marketplace easily, or are there numerous entry barriers they would have to overcome?
2. The threat of substitute products or services: Can buyers easily replace your product with another?
3. The bargaining power of customers: Could individual buyers put pressure on your organization to, say, lower costs?
4. The bargaining power of suppliers: Could large retailers put pressure on your organization to drive down the cost?
5. The competitive rivalry among existing firms: Are your current competitors poised for major growth? If one launches a new product or files a new patent—could that impact your company?

The amount of pressure on each of these forces can help you determine how future events will impact the future of your company.

See a strategic planning model that fits your business? Claim your FREE eBook on 8 effective strategic planning templates here.

6. VRIO Framework

The VRIO framework is an acronym for “value, rarity, imitability, organization.” This strategic planning model relates more to your vision statement than your overall strategy. The ultimate goal in implementing the VRIO model is that it will result in a competitive advantage in the marketplace.

Here’s how to think of each of the four VRIO components:

• Value: Are you able to exploit an opportunity or neutralize an outside threat using a particular resource?
• Rarity: Is there a great deal of competition in your market, or do only a few companies control the resource referred to above?
• Imitability: Is your organization’s product or service easily imitated, or would it be difficult for another organization to do so?
• Organization: Is your company organized enough to be able to exploit your product or resource?

Once you answer these four questions, you’ll be able to formulate a more precise vision statement to help carry you through all the additional strategic elements in your plan.

Want to use the VRIO Framework? Download a FREE set of strategic planning templates here.

7. OKRs (Objectives and Key Results)

The OKR framework is one of the more straightforward strategy model tools. It’s designed to create alignment and engagement around measurable goals by clearly defining:

• Objectives: What you want to achieve. Choose three to five objectives that are brief, inspiring, and time-bound.
• Key Results: How you’ll measure progress toward your achievements. Set three to five key results (they must be quantitative) per objective.

The strategic planning model of choice for many businesses—including Google, Intel, Spotify, Twitter, LinkedIn, and many other Silicon Valley successes— the OKR framework is also effective because goals are continually set, tracked, and re-evaluated so organizations can quickly adapt when needed.

This is a fast-paced, iterative approach that flips the traditional top-down strategic models. The RACI matrix is a helpful visual for defining the role each person in your organization has for projects and processes, ensuring it aligns with their OKRs.

Want to try out OKRs? Take the OKR Test Drive and let our AI Assistant help you draft your OKRs.

8. Hoshin Planning

The Hoshin Planning approach aligns your strategic goals with your projects and tasks to ensure that efforts are coordinated. This strategic management model is less focused on measures and more on goals and initiatives.

Some sources cite up to seven steps in the Hoshin Planning model, but the four most critical are:

1. Identify key goals: Ideally you’d focus on three to five goals.
2. Play “catchball”: Share goals from top to bottom of your organization to obtain buy-in.
3. Gather intel through “gemba”: Track the execution of your key goals and gather feedback from employees, using a defined process.
4. Make adjustments: Initiate change based on feedback and repeat the steps of catchball and gemba.

You visualize your objectives, measures and targets, measure programs, and action items in a Hoshin Planning matrix. Four directional quadrants (north, south, east, west) inform each other and demonstrate alignment.

See a strategic planning model that fits your business? Claim your FREE eBook on 8 effective strategic planning templates here.

9. Ansoff Matrix

The Ansoff Matrix was developed to help organizations plan their strategies for growth. It is a 2x2 matrix with product on one axis and markets on the other axis. Depending on the box you are in, you may choose a different strategy for growth:

• Market penetration: Expand sales of an existing product in an existing market
• Product development: Introduce a new product into an existing market
• Market development: Introduce an existing product into an entirely new market
• Diversification: Introduce a new product into a new market

The level of risk increases with each strategy, with market penetration being the least risky and diversification being the riskiest.

As a strategic planning model, the Ansoff Matrix is useful for organizations that are actively trying to grow. Not only does it help you analyze and clarify your current strategy, but it also helps evaluate the risks associated with moving to a new strategy.

SWOT and PEST are often used in combination with the Ansoff Matrix; business strengths and weaknesses as well as external factors should all play into your choice of growth strategy.

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Using ClearPoint Strategy to Create and Track Your Strategic Planning Models

Planning models—and even strategies themselves—are flexible, but what’s not flexible is the need for software to track your performance. Tracking is the only way to know if your strategic plan is working—if the data shows your actions aren’t making an impact, you need to make a change. While most organizations understand that tracking itself is a necessity, they’re using the wrong tools to do it.

See ClearPoint Strategy in action! Click here to schedule a FREE 1:1 demo.

The most common alternative to strategy software is Excel. Excel may be a familiar and affordable tool, but it was built for numbers—it wasn’t built to easily show analysis and recommendations or real-time data. As a result, decision makers aren’t getting all the information they need to make strategic decisions. Plus, strategy and reporting teams spend a tremendous amount of time manually updating spreadsheets, which results in errors and version control issues.

There is a better way—software exists that automates strategy planning, as well as data collection and updating. This keeps your strategy and reporting in one place for faster and better decision-making. Strategy software like ClearPoint was built exclusively for strategic planning and strategy performance reporting. So not only does it solve the above issues but it actually improves the likelihood of executing your strategy successfully.

We have built AI Assistants into ClearPoint to help you experiment with, leverage, and deploy the strategic planning models above. Our AI will ask you questions and walk you through the framework, so that you can have your first strategy drafted in minutes not months.