MAJOR COMPONENTS OF STRATEGIC BUSINESS PLAN

While there are various methods of building a Strategic Business Plan there are various models and methods that we can use
.

The various elements that a Strategic Plan must contain are

1. The Competitive advantage or the differentiator that the company has to acquire and retain the customer
2. The Product or Service that the company wants to sell and the process of manufacturing and/or procuring the same.
3. The Market segment in terms of geography , pricing and place of meeting with customer and channels for distribution .
4. The Organization structure and Hierarchy
5. The systems and Policies for Operating on a day to day basis
6. The Common value , Vision and Mission which is the Ventral theme around which all the organization decisions should be taken
7. The Financial Model generally for 5 years ( also sometimes for 3 years )
8. The list of DOs and DONTs
9.  The Marketing Strategy
10. The communication Strategy
11. The Sales Channel and Distribution Strategy
12.The Broad Policy on Human Resources



One example is the McKinsey 7-S model .

The McKinsey 7-S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:

Hard Elements	Soft Elements
Strategy Structure Systems	Shared Values Skills Style Staff

"Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.
The way the model is presented in Figure 1 below depicts the interdependency of the elements and indicates how a change in one affects all the others.

Let's look at each of the elements specifically:

• Strategy: the plan devised to maintain and build competitive advantage over the competition.
• Structure: the way the organization is structured and who reports to whom.
• Systems: the daily activities and procedures that staff members engage in to get the job done.
• Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.
• Style: the style of leadership adopted.
• Staff: the employees and their general capabilities.
• Skills: the actual skills and competencies of the employees working for the company.

The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change.
Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration

The Classic 4-Step Approach to Strategic Planning

Here we introduce a very useful structured approach to strategic and change management planning, which was developed from work done initially by Price Waterhouse (accountants) back in the
1980s.                                
The 4-Step approach is a simple structure that helps us to look both holistically and in detail at the drafting and development as well as the implementation of our Plan:

• STEP 1: Where are we now?
• STEP 2: Where do we want to get to?
• STEP 3: How are we going to get there?
• STEP 4: How will we know when we have got there?

FIVE FORCES & VLAUE CHAIN BY MICHAEL PORTER

Michael Porter, the other main modern-day strategist, adopted a particular focus on organizational and governmental competence and competitiveness and has written several popular books on business strategy; he has also developed a number of
often-used tools and techniques, two of which, his 'Five Forces'  & " Value Chain"

VALUE CHAIN

The value that's created and captured by a company is the profit margin:

Value Created and Captured – Cost of Creating that Value = Margin

FIVE FORCES

Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are:

1. Supplier Power
2. Buyer Power
3. Competitive Rivalry
4. Threat of Substitution
5. Threat of New Entry