April 29, 2013 – All too often, organizations rely on a combination of gut instinct and raw data analytics to develop strategy. While this approach can work, it can also leave undiscovered market opportunities and risk-mitigation issues that could impact the business – positively or negatively – in both the near and long term. By deploying one or more strategy development tools, executives can create more clarity about business operations, and, consequently, reduce losses and increase profitability. In essence, strategy development tools provide better insight into the organization and the market, which can help the company develop strategies to improve effectiveness and efficiency.
5 Powerful Strategy Development Tools

While there are dozens of strategy development tools you can use as part of the strategic planning process, the following five strategy development tools have proved remarkably successful in helping a company develop strategy:

  1. Mission and vision statements
  2. SWOT analysis
  3. PESTEL analysis
  4. Competitive analysis
  5. Scenario planning

Let us take a closer look at each one in turn.

Strategy Development Tools: Mission and Vision Statements

A mission statement will define the purpose of a company and why it exists. It is an internal way to measure the success of a business. It is designed to help the leaders of a company and the stockholders/stakeholders measure success. Although a vision statement may sound like a synonym, it is slightly different. This statement focuses on what the organization hopes to achieve. It is more about subjective criteria related to quality rather than objective criteria related to quantity. It guides employees and builds trust with customers. For in-depth information on mission and mission, download our white papers, Mission Statements: A How To and The Strategic Importance of Vision Statements.

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Strategy Development Tools: SWOT Analysis

As far back as the 1960s, Albert S. Humphrey invented the SWOT Analysis. It was useful then, and it remains useful now. In a leadership meeting, it can be used to either jump start the conversation or be used as a strategic planning tool in its own right. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. By analyzing these four criteria, a company can get a better understanding of how it interfaces with the marketplace. For this reason, it is sometimes referred to as an Internal-External Analysis tool, a SWOT Matrix, or an IE Matrix. Strengths and Weaknesses are internal and within the company’s control. Opportunities and Threats are external and beyond the company’s control. For more information on SWOTs, check out our tutorial, What is a SWOT Analysis?

Strategy Development Tools: PESTEL Analysis

Another acronym is PESTEL. The letters stand for Political, Economic, Social, Technological, Environmental, and Legal/Regulatory. Often used in conjunction with the SWOT Analysis, the PESTEL Analysis helps executives deliberate on external factors (the six categories) that could present external opportunities or threats.

Strategy Development Tools: Competitive Analysis

As the name implies, this is a tool for measuring how a business stacks up against competitors in the same industry. Like the SWOT, it measures strengths and weaknesses. It helps explore a way to create a unique position in the marketplace. In business, meaningful differentiation can mean the difference between mediocrity and soaring success.

Strategy Development Tools: Scenario Planning

Finally, scenario planning is a tool for forecasting. It is based on observing current trends and making projections. By extrapolating, a business may be able to prevent disaster or seize an untapped market opportunity.

Applying one or more of these strategy development tools will improve efficiency, reduce waste, and increase asset-building. In fact, these tools are powerful enough to help a struggling business thrive and a successful business move to a new level.

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Meagan M. Flores
Meagan M. Flores
Meagan M. Flores is the Vice President of Marketing for AchieveIt. A genuine 'problem-solver', when Meagan isn't nose-down in the Sunday Times crossword puzzle, you can find her leveraging her expertise spanning early stage startups to mature growth enterprises to comment trends and best practices related to strategy development and execution, leadership and revenue marketing.