What is strategy development and why is it important?
Strategy development, also known as strategic planning, is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue the strategy.
One of the key tools used to develop a strategy is a SWOT analysis, which is a study undertaken by an organization to identify its internal strengths and weaknesses, as well as its external opportunities and threats.
Strategy development is important because it provides a basis for organizational decision-making. For example, the first decision to be made is to determine whether achieving the organization’s mission (or objective) is even feasible, given the SWOTs. If not, refining the mission becomes the top priority.
If the SWOT analysis demonstrates that achieving the mission is feasible, it provides a sound basis for developing strategic objectives to fulfill the mission by: leveraging its strengths; exploiting its opportunities; addressing the weaknesses; and neutralizing or mitigating the threats.
How does Definitive help facilitate this process?
Strategy development is, by its very nature, a team sport. As such, the process must promote teamwork.
Definitive facilitates the strategic planning process, and in doing so, helps address a key criticism of the SWOT analysis – the lack of prioritization. Typically, a SWOT analysis results in a set of lists that are presented uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats. As such, Definitive will facilitate an accurate and efficient prioritization of all items in each list. The prioritization is necessary to determining the “strategic fit”, which is the degree to which the internal environment of the organization aligns with the external environment. Then, in a second pass, Definitive facilitates the development of a set of strategic objectives that address the prioritized set of strengths, weaknesses, opportunities and threats.
The result is a comprehensive strategic plan that can be used to guide the organization’s decision-making for the next year or more.
Example Decision Model
Definitive Pro™ enables the strategy development team to collaborate anytime, anywhere, using any device. By making it easier to participate, we: bring together representatives from business, technology and finance; promote teamwork; and improve cross-functional insight.
Definitive Pro™ uses the Analytic Hierarchy Process (AHP) to accurately prioritize the strengths, weaknesses, opportunities and threats. The consistent and transparent scoring process yields greater consensus and buy-in than other approaches.
Definitive Pro™ employs the Gurobi optimizer®, a state-of-the-art mathematical programming solver for optimizing the allocation of resources. The Gurobi optimizer quickly identifies the set of strategies that contribute most to the mission, while satisfying all dependencies and constraints.
Faster and better decisions — Justifiable decision rationale — Historical record of decisions
Definitive Pro™ also powers group decision support for:
- Budget Formulation
- Business Opportunity Selections
- Business Partner Selections
- IT Demand Management
- Merger & Acquisition Selections
- Organizational Cost Savings
- Personnel Selections
- Product and Feature Selections
- Requirements Prioritization
- Risk Assessments
- Strategic Investment Selections
- Surveys and Audience Response
- Vendor Selections