Plan vs. strategy

Plan vs. strategy

A strategy determines what an organization needs to do to meet business objectives. A plan outlines how the strategy will be executed. It may take the form of an outline, scheme, program, blueprint, or layout.

Understanding strategies

At the most fundamental level, strategies determine how a business will achieve its goals.

The best strategies are robust, flexible, and adaptable when circumstances change. Effective strategies allow the business to build critical momentum and secure a competitive advantage.

Strategies are often prepared when collaboration, innovation, and creativity are of the utmost importance.

They tend to facilitate healthy debate from both sides of the argument and clarify how a company will further its mission and vision.

Some of the key components of a good strategy include:

  1. Asking the right questions.
  2. Learning lessons from the past.
  3. Future predictions.
  4. Committing to change.
  5. Evolving when necessary.
  6. Determining how to integrate, and
  7. Analyzing potential pathways. 

Note that every company should have an overarching strategy and not a set of strategies, plural.

Strategy encompasses a set of choices that determine where the company wants to be, how it intends to get there, and the skills, expertise, and systems that will allow it to win.

Tesla’s ambitions to become the most compelling car company in the world and accelerate the shift toward affordable, sustainable vehicles have been supported by one strategy.

The company entered the EV market at the premium end and is progressively reaching more price-conscious consumers via higher unit volume and lower prices.

Understanding plans

Plans dictate how certain goals are achieved and tend to be final. In other words, an unsuccessful plan is more likely to be scrapped and a new plan devised.

Since plans are more difficult to adjust, they tend to take longer to develop because organizations work harder to ensure every detail is correct. 

Most plans include detailed information on the following:

  • The tasks and activities that need to be executed.
  • Roles and responsibilities.
  • A task and activity schedule, and
  • Clarification on how the strategy can be performed on time and within budget. This incorporates risk, quality, resource, stakeholder, change, and financial management, among other disciplines.

Plans are useful when efficiency and timelines are important. They provide a coherent framework that enables the organization to move in the same direction and establish certain milestones that must be met along the way.

Plans also eliminate false confidence at the organizational level and increase transparency at the employee level as they leave no room for assumptions.

Various types of plans can support different parts of the strategy. These include financial, tactical, contingency, succession, and operational plans.

Key takeaways:

  • A strategy determines what an organization needs to do to meet business objectives, while plans clarify how the strategy will be carried out.
  • The best business strategies are robust, flexible, and adaptable when circumstances change. They are prepared when collaboration, innovation, and creativity are of the utmost importance.
  • Plans dictate how certain goals are achieved and are more concrete in nature. Unlike a strategy that can be adjusted over time, plans need to be correct from the outset and if unsuccessful, it is better to move to Plan B than make alterations to Plan A.

FourWeekMBA Business Toolbox

Business Engineering

business-engineering-manifesto

Tech Business Model Template

business-model-template
A tech business model is made of four main components: value model (value propositions, missionvision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

Web3 Business Model Template

vbde-framework
A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.

Asymmetric Business Models

asymmetric-business-models
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Business Competition

business-competition
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.

Technological Modeling

technological-modeling
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Transitional Business Models

transitional-business-models
A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.

Minimum Viable Audience

minimum-viable-audience
The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.

Business Scaling

business-scaling
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Market Expansion Theory

market-expansion
The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.

Speed-Reversibility

decision-making-matrix

Asymmetric Betting

asymmetric-bets

Growth Matrix

growth-strategies
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Revenue Streams Matrix

revenue-streams-model-matrix
In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.

Revenue Modeling

revenue-model-patterns
Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.

Pricing Strategies

pricing-strategies
A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.
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