Financial Management

8Strategic Analysis and Planning

Finance professionals can make a significant contribution to strategic planning. In some corporations, there is a strategic planning process in place, but finance may not be actively participating. Unfortunately, I hear many finance professionals complain that they “do not have a seat at the table.”

In other firms, typically smaller and mid-size companies, the finance team may play a role in introducing a systematic strategic planning process. In either situation, finance business partners must understand strategic analysis and planning. In this chapter, we will discuss core principles of strategic planning, how we can “earn a seat at the strategy table,” and the two ways we can assist in developing the firm's strategy, including strategic analysis and strategy development.

STRATEGIC PLANNING: CORE PRINCIPLES

Prior to rushing to join in strategic planning efforts, we should identify the objectives of strategic planning and invest time in learning the core principles of strategic planning. The objectives of strategic planning go far beyond the creation of the strategic plan document. A thorough process will provide an in-depth review of markets, competitors, and our competitive position in those markets. Recent historical performance trends should be reviewed to develop a context for evaluating performance and setting future direction. The organization will develop goals and objectives for the next three to five years. Possible alternative ...