How to Build a Strategic Plan: A Step-by-Step Guide

Strategy is often regarded as the cornerstone of decision-making in business, but its true power lies in its ability to provide clarity—clarity about where you’re headed and how you plan to get there. This article is the first in a series that breaks down the process of building a strategy. We’ll introduce the foundational concepts, outline the key components of strategic development, and set the stage for deep dives into each of these components in subsequent articles.

At its core, strategy tells a story: a story of a destination (your vision) and the path you’ll take to get there (your plan). When combined with analytics, strategy is not just a creative exercise but a data-informed framework for action, making it both aspirational and grounded.

The Strategy Framework: An Overview

A well-constructed strategy answers two key questions:

1. Where are we headed? This is your vision—a clear articulation of your destination.

2. How will we get there? This is the plan, built through rigorous analysis, thoughtful prioritization, and actionable initiatives.

The process of building a strategy can be broken down into the following seven core components:

1. Vision: Defining the Destination

The vision is the North Star of your strategy. It describes the ultimate destination—the point on the horizon that your organization is working toward. A strong vision provides clarity, focus, and inspiration, ensuring that every decision aligns with the end goal.

Key Questions:

• What does success look like?

• How will we know when we’ve achieved it?

2. Market Sizing, Position, and Penetration

Before charting a course, you need to understand the landscape. Market sizing and positioning help you evaluate the opportunity ahead, your current standing within it, and your potential for growth.

Key Questions:

• How large is the market opportunity?

• Where do we stand relative to our competitors?

• What is our share of this opportunity today, and how can we grow it?

3. Competitive Assessment: Differentiators Relative to Competition

Strategy doesn’t exist in isolation—it exists in the context of competition. Identifying your unique strengths and weaknesses relative to competitors ensures that your strategy capitalizes on what sets you apart.

Key Questions:

• What differentiates us in the market?

• Where are we vulnerable?

• How do we compete today, and how can we gain an edge tomorrow?

4. Business-as-Usual (BAU) Financial Plan

Your baseline, or BAU financial plan, represents where you’re headed without strategic intervention. This provides a starting point—a view of the future if no major changes are made.

Key Questions:

• What is the trajectory of the business under current conditions?

• What are the strengths and limitations of our BAU plan?

5. Risks, Headwinds, and Tailwinds

Every plan exists within a dynamic environment. Identifying the risks, headwinds, and tailwinds that could influence your BAU trajectory provides the foundation for strategic thinking.

Key Questions:

• What risks could derail our plans?

• What external or internal headwinds could slow progress?

• What tailwinds could accelerate our momentum?

6. Strategic Initiatives

Strategic initiatives are the interventions that augment the BAU plan, mitigate risks, and enable step-change improvements. These initiatives are the levers you pull to go beyond “business as usual.”

Key Questions:

• What are the high-impact initiatives that will drive growth or efficiency?

• How can these initiatives offset risks and capitalize on opportunities?

• How will these initiatives differentiate us in the market?

7. Objectives: Bringing It All Together

The strategy culminates in a clear set of objectives: the initiatives you will deliver and the financial outcomes you expect as the BAU plan and strategic initiatives come to fruition.

Key Questions:

• What are the measurable objectives that align with our vision?

• How will we track progress toward these objectives?

Why Strategy and Analytics Go Hand in Hand

Strategy without analytics risks being untethered; analytics without strategy risks being irrelevant. Together, they create a powerful combination that allows organizations to dream big while staying grounded in data and insights.

The articles that follow will explore each component of this framework in depth, providing practical guidance, examples, and tools to help you build a comprehensive strategy. Whether you’re developing a strategy for a business unit, a new initiative, or an entire organization, this process will help you answer the critical questions:

• Where are we going?

• How will we get there?

Stay tuned for the next article in this series, where we’ll take a closer look at Vision: Defining the Destination.