The strategic thinking process is used to examine and identify factors that lead to sustainable success. It is used to translate ideas and thoughts into a strategic plan.
This process can be carried out individually or collaboratively. However, organizations habitually carry out this process collaboratively. Undergoing this process collectively creates more value and enables a creative dialogue that’s proactive. More importantly, by collaborating on this document, you can effectively implement your marketing strategy.
What is Strategic Thinking?
Strategic thinking is a cognitive activity in which goals are pursued through study, research, and examination. It helps individuals or businesses identify solutions for complex problems.
What is the definition of strategic thinking?
Strategic thinking is the act of synthesizing both material and physiological data to examine futuristic possibilities. This involves using analytical tools to scan external and internal elements. Consequently, you can discover future scenarios or probable future situations.
When it comes to the strategic management process, strategic thinking is critical. It helps you boost market awareness and gain deep insights. The strategic thinking process also helps you shape the vision of your organization. It enables you to identify opportunities and discover insights.
In 1994, Mintzberg wrote, “the strategic thinking process is more about synthesis (i.e., “connecting the dots”) than analysis (i.e., “finding the dots”)”.
Connecting the dots enables you to develop strategic foresight for your organization. Strategic foresight is a process in which you study and predict the future of your organization. It involves examining data, scanned inputs, forecasts, feedback, and alternate future investigations. You can predict the capacity of your organization with your findings.
At the end of the day, the strategic thinking process helps you allocate resources to map out the future of your organization. You can use this cognitive activity to define your marketing goals and objectives, determine the capacity of your organization, more importantly, formulate and implement your strategy.
Strategic Thinking Steps
The strategic thinking process is an important phase of business development. As already mentioned, this process has an impact on the success of the company. Therefore, it’s vital to get the most out of this cognitive activity. The stage of strategic thinking involves the following activities;
- Complete a risk assessment
- Business environment analysis
- Core competencies evaluation
- Generic strategy analysis
- Geographic scope analysis
- Portfolio management assessment
As mentioned earlier, the strategic thinking process involves brainstorming and planning to formulate a strategy. Particularly, strategic thinking entails extracting data and information utilizing strategic analysis tools and techniques. Therefore, you’ll need strategic thinkers with strong strategic thinking skills.
1. Risk Assessment
The risk assessment examines and identifies future events that could negatively impact your business environment. This includes any factors that impinge the company’s ability to move forward. The process involves making decisions about risks your business can tolerate vs risks your organization can’t tolerate.
The primary activities of the value chain are inbound logistics, operations, outbound logistics, marketing/sales, and service. The supporting activities for your organization are departments that cover your company’s infrastructure, human resources, technological development, and procurement.
2. Business Environment Analysis
The analysis of the business environment examines external factors. These are factors that organizations can’t control, i.e., trends, economics, technology, etc.
This examination helps organizations identify components that facilitate organizational growth. By the same token, the environment analysis points out elements that impede business development.
3. Core Competencies Evaluation
Core competencies are multiple resources and skills that create a competitive advantage for organizations. In other words, core competencies help distinguish a company from its competitors. Usually, companies achieve this by creating valuable products and services.
The following criteria must be fulfilled to develop core competencies:
1. The product or service must be complicated to duplicate.
2. Customers must perceive the product as beneficial.
3. You must provide potential access to various markets.
4. Generic Strategy Analysis
The generic strategy addresses how you plan on pursuing a competitive advantage in your respective marketplace.
In other words, what concept will you use to outperform your competitors? Will you use pricing strategies to differentiate from rivals. Or will you use product strategies to differentiate yourself from rivals?
5. Geographic Scope Analysis
The geographic scope refers to the location in which you will concentrate. Therefore, you should ask yourself if your organization can gain advantages in the marketplace locally or globally?
6. Portfolio Management Assessment
Normally, the portfolio manager is responsible for enlarging a company’s funds, making safe investments, and leveraging assets. Their job is discovering and determining wise investments.
Typically, companies designate a portfolio manager to carry out investment activities on behalf of the company. In addition, companies hire an analysis to examine and review the manager’s data.
Managers have the final say-so concerning the companies’ assets, i.e., budgets, divestitures, risk, taxes, etc. In other words, the portfolio manager specializes in understanding the grand scheme financially.
More often than not, managing portfolios is too much of a responsibility for two. Under those circumstances, portfolio managers work with a team of analysts and researchers to establish investment strategies, identify safe investments, and utilize investment funds.