Strategic planning process according to the PDCA cycle
A marketing strategist has an important role in a strategic planning process because he/she can provide input in various sub-areas. Think about the mission and vision (strategic starting point), the external analysis (opportunities and threats), the internal analysis (strengths and weaknesses), the confrontation (formulating strategic opportunities), the strategic choices (which strategy and growth strategy) and design and business transformation (how looks like the business model). In my Handbook of Management Models, for Continuous Improvement in Organizations, I discuss the strategic planning process according to the Plan-Do-Check-Act (PDCA) cycle. This enables you as an organization to continuously adapt to a changing environment. In other words, it is central to this that organizations can continually improve.
Take the automotive industry as an example when it comes to strategy development
The automotive industry has been in flux for some time now. It is in fact in a revolutionary transition from fuel vehicles to electric vehicles. For organizations in this sector, this means anticipating change in order to remain viable. Renault is such a good example of a brand that responds to change and is also aware of this in its strategic plan. In a press release dated 14 January 2021 from the Renault Group Media Centers came the news that Groupe Renault presented its new strategic plan “Renalution”. Which is reflected in the realignment of quantities towards value creation.
Access to strategic planning process
The first step is the strategic starting point.
Here you set the framework within which you want to review the steps in the strategic planning process. As an organization, pay attention to the (re)formulation of a clear mission and vision, because they form the basis for an organization’s strategy. In addition to formulating a mission and vision, it is also important to communicate this well within your own organization, which ensures attention and support. Renault has also been aware of this, because on Thursday 6 May 2021, Luca de Meo, CEO of Renault and his team presented the shared vision for the brand. This resulted in the following strategy: Renault operates as a leader in energy transition, on the one hand at the intersection of technology and services, and on the other as part of a more sustainable business model. In addition, Renault gives an extra meaning to this revolutionary strategy with the name ‘Renaulution’. An important goal pursued by Renault is that it will be the ‘greenest’ brand in Europe by 2030. In this case, nine out of every ten Renault models sold must be electrified. What we see here is that a new vision has been devised and that this has also been communicated well to the stakeholders involved. In other words, ‘using storytelling to convey a clear message to the stakeholders involved’.
The second step is the external analysis.
As a marketing strategist, you often look outside to scan external developments at the macro and meso level. The macro environment relates to factors over which an organization has no influence. Think about the DESTEP factors. The meso-environment relates to factors with which an organization can not directly but indirectly respond to the environment. Think of Porter’s five forces model, or the industry in which an organization is active. Back to Renault. For example, Renault is responding to the energy transition by continuing to focus on electrification, by putting more electric Renault models on the market. In addition, Renault wants to deliver more electrified models in the higher segments. The marketing strategist here gives substance to Segmentation-Targeting-Positioning.
The third step is the internal analysis.
A marketing strategist must also look inward, in other words look at his own organization. Particular emphasis can be placed on strategy and business model and on systems, processes, structure, culture (attitude and behaviour), competences etc. Renault has also looked at its own organisation. The Renaulution plan will be implemented by a new organization.
The fourth step is the confrontation analysis.
Here you relate strengths and weaknesses to the opportunities and threats. A marketing strategist formulates the strategic options together with other stakeholders from the organization. Groupe Renault has also formulated strategic options based on the strategic plan. One of these is to accelerate mobility services and services related to energy and data.
The fifth step is strategic choices.
As a marketing strategist, you have an important role in thinking about how you as an organization should make strategic choices. Consider, for example, the choice of one of the value disciplines of Treacy and Wiersema or Porter’s competitive strategies. Determine here the strategic direction for your own organization, the organizational strategy, the marketing strategy and the growth strategy. Also ensure that the organization tests and weighs the strategic choices based on different criteria. Renault has made a clear choice to enter higher segments with its new electric models. From Ansoff (1957) one can think of diversification. In other words, sales of new electric models in previously unserved markets.
The sixth step is design and business transformation.
As a marketing strategist, you must therefore think like an entrepreneur. In this case, you must translate the devised strategy into a business model. That way you can operationalize a strategy. So make sure you come up with a business model with which you can operationalize your (new) strategy. The Renaulution plan states that the organization will shift its focus from volume to value creation. This requires a thorough transformation of its business model. Ultimately, a good business model enables you as an organization to create value for your customers and your own organization.
The seventh step is change strategy and implementation.
As a Marketing Strategist, you also have an important role in choosing the right change strategy. For example, is it a ‘revision of a strategy necessary’ (reactive change) or is it expansion based on ambition (proactive change). Make sure you inform people properly and involve them in changes and make sure you make choices as an organization. At Renault, it was decided to have the new Renaulution plan implemented by a new organization. That means: a new composition of people who can implement this change.
The eighth step is operationalization and results books.
We talked about the business model before. As a Marketing Strategist, ensure that you also have an eye for the organization of activities (read processes), systems, knowledge and skills and possibly who you can collaborate with. Ultimately, a well-developed business model must lead to the desired results. Based on the results, Renault has set a target of achieving an operating margin of more than 3% by 2023.
The ninth step is the evaluation.
We just say here ‘to measure is to know’. As a marketing strategist, you also want to measure the organization’s performance after the implementation of a (new) strategy. Make sure that you in the organization pay attention to formulating relevant and concrete Key Performance Indicators (KPIs) and that you formulate, communicate and implement goals. Think about customer satisfaction, sales growth, profit, profitability per customer, processes (effective and efficient business operations), knowledge, innovation capacity, employee satisfaction, etc. One of Renault’s targets was the operating margin target, which was set at more than 3% in 2023, but with 3.6% in 2021, this had already been reached earlier . So you see that it is important to measure the performance of the organizations.
The tenth step is alignment.
As mentioned before: a Marketing Strategist must think like an entrepreneur and therefore remember to implement continuous improvements in organizations. Using the Plan-Do-Check-Act (PDCA) cycle, you can implement continuous improvements.
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