The terms strategic planning and business plan are often used interchangeably, even though they are different. The strategic planning process is essentially the upfront activity related to generating a business model. It involves using the analytical strategic planning approaches discussed in Strategic Planning and Ten–Ten Planning, such as value chain analysis, Porter’s five-force model, the resource-based view of strategy, the technology life cycle, and SWOT analysis among others. 1 In The Ten-Ten Planning Process: Crafting a Business Story, we introduced an abbreviated approach to planning, called the Ten–Ten planning process that can be quickly implemented and assist in bringing focus and clarity to the entrepreneur’s vision. You are encouraged to complete the FAD template, Organizational and Industry Analysis template, Business Plan Overview template and to develop an executive summary using the material in earlier chapters before you develop a full-scale business plan. There are two reasons for this. The first reason is that the material developed during the Ten–Ten planning will be very useful in developing a focused, more complete, and better plan. The other reason for using the Ten–Ten process is that business models evolve very rapidly; sometimes it is better to let the idea incubate and to present the plan to a variety of audiences before committing and finalizing the full-blown plan.
In this section, we will present a more detailed approach for constructing a full-blown business plan. The expanded business plan provides additional focus by adding details on the what, why, how, when, and for whom a product or service will be produced. The business plan is an abbreviated description of the business model (see The Business Model: Important Business Model Decisions). The business plan is presented to the outside world through a business presentation and is accompanied by a business plan document.
The Business Model: Important Business Model Decisions
- What will the product features and product mix look like?
- How will the firm acquire market share, define market segments, and market the product mix?
- What type of pricing strategy will be used (menus, auctions, and bartering)?
- Where will the organization build core competencies and capabilities?
- With whom, when, and why will partnerships and alliances be formed?
- How and why are funding and resource decisions made?
- How will the supply chain work? This involves the when, who, and how tasks are performed.
- Should supply chain tasks be outsourced, off-shored, or in-tasked?
- How will employees be acquired and retained?
- What will the information technology look like in terms of hardware, software, and networking?
- How will product, process, and content innovation be carried out in terms of R&D?