THEORIES OF

STRATEGIC
PLANNING
JOSEPH RONILLO VIRAY
DEM STUDENT
PUP OPEN UNIVERSITY
Every organization or
institution wants to
achieve long-term
success. If this is the
case, we must be like
a skilled navigator
that charts its
course through
turbulent waters.
 Understanding different
Strategic planning is crucial
theories helps
for organizations to achieve
organizations choose the
their goals and adapt to
most appropriate approach
changing environments.
for their specific context.
Explore the origin and evolution Delve into the classical approach
of strategic planning. to strategic planning.

Discuss more contemporary

approaches to strategic planning
Jumping Board

Walmar t's success stor y is a testament to its innovative business

strategies and relentless focus on delivering value to customers.
Founded by Sam Walton in 1962, Walmar t began as a single
discount store in Arkansas but rapidly expanded across the United
States and internationally. At the hear t of Walmar t's strategy is its
commitment to off ering Ever yday Low Prices (EDLP). By leveraging
economies of scale and effi cient supply chain management, Walmar t
ensures that it can off er a wide range of products at prices lower
than many competitors, attracting a vast customer base.
One of Walmart's key strategies has been its expansion into
Supercenters, which combine discount stores with full grocery
stores. This move not only provides customers with a one-stop
shopping experience but also signifi cantly increases Walmart's
market share. Additionally, Walmart has aggressively pursued
international expansion, entering markets in Latin America, Asia,
and Europe. However, international success has varied, with
challenges such as local competition and cultural diff erences.
In recent years, Walmart has prioritized technological innovation
and e-commerce. It acquired Jet.com and other online retailers
to bolster its online presence and introduced omnichannel
strategies like click-and-collect and same-day delivery. This
move towards e-commerce refl ects Walmart's recognition of
changing consumer behavior and the need to adapt to stay
competitive.
Despite its success, Walmart has faced criticism and challenges.
Labor issues, including low wages and limited benefi ts for
employees, have sparked protests and negative publicity.
Moreover, Walmart faces intense competition from both
traditional retailers and e-commerce giants like Amazon.
Regulatory challenges and concerns, such as antitrust issues and
labor laws, also pose risks to the company.
Wa l m a r t e m p l o y s s e v e ra l d o m i n a n t s t ra t e g i c p l a n n i n g s t ra t e g i e s t h a t h a v e b e e n
instrumental in its success:

E v e r y d a y L o w P r i c e s ( E D L P ) : C e n t ra l t o Wa l m a r t ' s s t ra t e g y i s i t s c o m m i t m e n t t o
o ff e r i n g E v e r y d a y L o w P r i c e s . T h i s s t ra t e g y a i m s t o a t t ra c t c u s t o m e r s b y e n s u r i n g
t h e y r e c e i v e v a l u e e v e r y t i m e t h e y s h o p a t Wa l m a r t . B y c o n s i s t e n t l y o ff e r i n g l o w e r
p r i c e s t h a n c o m p e t i t o r s , Wa l m a r t b u i l d s c u s t o m e r l o y a l t y a n d i n c r e a s e s c u s t o m e r
t ra ffi c .

E c o n o m i e s o f S c a l e : Wa l m a r t l e v e ra g e s i t s m a s s i v e s i z e t o n e g o t i a t e l o w e r p r i c e s
f r o m s u p p l i e r s . B y b u y i n g g o o d s i n b u l k , Wa l m a r t c a n s e c u r e b e t t e r d e a l s , a l l o w i n g i t
t o m a i n t a i n i t s l o w - p r i c e s t ra t e g y w h i l e s t i l l a c h i e v i n g h e a l t h y p r o fi t m a r g i n s . T h i s
s t ra t e g y a l s o h e l p s Wa l m a r t k e e p i t s c o s t s d o w n , c o n t r i b u t i n g t o i t s c o m p e t i t i v e n e s s .
E ffi c i e n t S u p pl y C h a i n M a n a g e m e n t : Wa l m a r t i s r e n o w n e d f o r i t s e ffi c i e n t
s u p p l y c h a i n m a n a g e m e n t . I t i nve st s h e av i l y i n t e c h n o l o g y a n d l o g i s t i c s t o
o pt i m i z e i t s su pp l y c h a i n p r o c e s s e s. B y c l o s e l y m o n i t o r i n g i nve n t o r y l e ve l s ,
r e du c i n g l e a d t i m e s, a n d s t r e a m l i n i n g d i s t r i bu t i o n n e t w o r k s , Wa l m a r t e n s u r e s
t h a t i t s s t o r e s a r e w e l l - s t o c ke d w i t h t h e r i g h t p r o d u c t s a t t h e r i g h t t i m e ,
m i n i m i z i n g o u t- o f- s t o c k s i t u a t i o n s a n d r e d u c i n g c o s t s .

E x pa n s i o n i n t o S u p e r c e n t e r s : Wa l m a r t ' s e x pa n s i o n i n t o S u p e r c e n t e r s , w h i c h
c o m b i n e a d i s c o u n t st o r e w i t h a f u l l g r o c e r y s t o r e , i s a ke y s t ra t e g i c m ove .
S u p e r c e n t e r s o ff e r c u s t o m e r s a c o nve n i e n t o n e - s t o p s h o p p i n g e x pe r i e n c e ,
a l l o w i n g t h e m t o f u l fi l l a l l t h e i r n e e ds i n o n e l o c a t i o n . T h i s s t ra t e g y i n c r e a s e s
Wa l m a r t ' s m a r ke t s h a r e b y c a p t u r i n g a l a r g e r p o r t i o n o f c o n s u m e r s p e n d i n g .
International Expansion: Walmart aggressively expands into
international markets, seeking growth opportunities outside the
United States. This strategy allows Walmart to diversify its
revenue streams and tap into emerging markets with high
growth potential. However, international expansion requires
careful adaptation to local cultures, regulations, and consumer
preferences.
E - c o m m e r c e a n d O m n i c h a n n e l Re t a i l i n g : Re c o g n i z i n g t h e i m p o r t a n c e o f e - c o m m e r c e ,
Wa l m a r t h a s h e a v i l y i n v e s t e d i n i t s o n l i n e p l a t f o r m . A c q u i r i n g o n l i n e r e t a i l e r s l i k e
J e t . c o m a n d i m p l e m e n t i n g s t ra t e g i e s s u c h a s c l i c k- a n d - c o l l e c t a n d s a m e - d a y d e l i v e r y,
Wa l m a r t a i m s t o p r o v i d e c u s t o m e r s w i t h a s e a m l e s s o m n i c h a n n e l s h o p p i n g
e x p e r i e n c e . T h i s s t ra t e g y e n a b l e s Wa l m a r t t o r e a c h c u s t o m e r s b e y o n d i t s p h y s i c a l
stores and compete with e-commerce giants like Amazon.

C o m m u n i t y E n g a g e m e n t a n d C o r p o ra t e S o c i a l Re s p o n s i b i l i t y ( C S R ) : Wa l m a r t
e m p h a s i z e s c o m m u n i t y e n g a g e m e n t a n d C S R a s p a r t o f i t s s t ra t e g i c p l a n n i n g . I t
i nv o l v e s i t s e l f i n va r i o u s c o m m u n i t y i n i t i a t i v e s , i n c l u d i n g d i s a s t e r r e l i e f e ff o r t s ,
e d u c a t i o n , a n d e nv i r o n m e n t a l s u s t a i n a b i l i t y p r o g ra m s . T h i s n o t o n l y e n h a n c e s
Wa l m a r t ' s r e p u t a t i o n b u t a l s o s t r e n g t h e n s i t s b o n d w i t h c u s t o m e r s a n d c o m m u n i t i e s .
Origin and Evolution
of Strategic Planning

1. Military Origins:

The military origins of strategic

planning are deeply rooted in ancient
texts such as Sun Tzu's "The Art of
War" and Clausewitz's "On War."
2 . Early Business Applications:

The early 20th century saw the first

applications of strategic planning in
business, particularly in large
corporations like General Motors.

Alfred Sloan's use of systematic

planning processes at General Motors
set the stage for formal strategic
management practices.

Early academic research at institutions

like Harvard Business School laid the
groundwork for the development of
strategic management principles.
3. Post-World War II Era:

Following World War II, strategic planning gained

momentum as businesses sought to manage growth
and complexity.

The introduction of strategic planning frameworks such

as SWOT analysis and the BCG Growth-Share Matrix
helped organizations assess their internal capabilities
and external environment.

Planning departments became commonplace in large

corporations, responsible for setting long-term
objectives and coordinating activities.
4. Rise of Corporate Strategy:

In the 1960s and 1970s, scholars like Igor Ansoff and Michael Porter
contributed to the development of corporate strategy.

Ansoff introduced the concept of strategic management and growth

strategies, emphasizing the importance of innovation and
diversification.

Porter's frameworks, including Porter's Five Forces and value chain

analysis, provided tools for analyzing industry structure and
competitive advantage.
5. Emergence of Strategic Management:

The formalization of strategic management as a field of study

occurred in the 1980s and 1990s.

Henry Mintzberg's work challenged the notion of formal strategic

planning, emphasizing the role of emergent strategies and the
importance of intuitive thinking.

Peter Drucker and Gary Hamel introduced concepts such as core

competencies and strategic intent, highlighting the importance of
organizational capabilities and vision.
The digital age brought new challenges and
opportunities for strategic planning.

6.
Agile methodologies and lean startup
principles emerged as responses to the rapid
Evolution in
pace of technological change and market
disruption.

the Digital
Digital tools and data analytics revolutionized
the planning process, enabling real-time
Age:
monitoring, predictive analytics, and scenario
planning.
7. Contemporary Trends:

In the 21st century, strategic planning continues to evolve in

response to globalization, sustainability concerns, and changing
consumer expectations.

Concepts such as sustainability, corporate social responsibility (CSR),

and purpose-driven strategy gain prominence.

Strategic planning becomes more inclusive and iterative, involving

stakeholders from across the organization and beyond to foster
innovation and agility.
 Synthesis

The evolution of strategic planning

refl ects a journey from its military
origins to a multidisciplinary fi eld that
encompasses diverse concepts and
methodologies. It continues to evolve
to meet the challenges of a rapidly
changing business environment,
emphasizing adaptability, innovation,
and strategic thinking.
CLASSICAL
APPROACH

The classical approach in strategic

planning emphasizes formal,
structured processes and analytical
techniques to develop and implement
strategies. Here are some examples of
the classical approach in strategic
planning:
SWOT Analysis:
S W OT ( S t r e n g t h s , We a k n e s s e s , O p p o r t u n i t i e s ,
Threats) analysis is a classic tool used to
assess the internal and external factors
a ff e c t i n g a n o r g a n i z a t i o n .

Strengths and weaknesses are internal factors,

while opportunities and threats are external
factors.

E x a m p l e : A r e t a i l c o m p a ny c o n d u c t s a S W OT
analysis to identify its strengths (strong
b ra n d , l o ya l c u s t o m e r b a s e ) , w e a k n e s s e s
( l i m i t e d o n l i n e p r e s e n c e , h i g h e m p l o ye e
t u r n o ve r ) , o p p o r t u n i t i e s ( e x p a n d i n g i n t o n e w
m a r ke t s , t e c h n o l o g i c a l a d va n c e m e n t s ) , a n d
threats (intense competition, economic
downturns).
Porter's Five Forces
Analysis:
D e v e l o p e d b y M i c h a e l Po r t e r, t h i s f ra m e w o r k
a n a l y z e s t h e c o m p e t i t i ve f o r c e s w i t h i n a n
i n d u s t r y t o d e t e r m i n e i t s a t t ra c t i v e n e s s a n d
p r o fi t a b i l i t y.

T h e fi ve f o r c e s i n c l u d e : t h r e a t o f n e w
e n t ra n t s , b a r g a i n i n g p o w e r o f b u y e r s ,
bargaining power of suppliers, threat of
s u b s t i t u t e p r o d u c t s o r s e r v i c e s , a n d r i va l r y
among existing competitors.

E x a m p l e : A n a i r l i n e c o m p a ny u s e s Po r t e r ' s
F i ve Fo r c e s t o a s s e s s t h e a i r l i n e i n d u s t r y,
c o n s i d e r i n g f a c t o r s l i ke t h e p o w e r o f s u p p l i e r s
( a i r c ra f t m a n u f a c t u r e r s ) , t h r e a t o f s u b s t i t u t e s
( o t h e r m o d e s o f t ra n s p o r t a t i o n ) , a n d i n t e n s i t y
o f r i va l r y a m o n g a i r l i n e s .
BCG Growth-Share Matrix:

The Boston Consulting Group's

m a t r i x c a t e g o r i z e s a c o m p a ny ' s
portfolio of products or businesses
b a s e d o n m a r ke t g r o w t h ra t e a n d
m a r ke t s h a r e .

I t c l a s s i fi e s p r o d u c t s / b u s i n e s s e s
i n t o f o u r q u a d ra n t s : s t a r s ( h i g h
g r o w t h , h i g h m a r ke t s h a r e ) ,
question marks (high growth, low
m a r ke t s h a r e ) , c a s h c o w s ( l o w
g r o w t h , h i g h m a r ke t s h a r e ) , a n d
d o g s ( l o w g r o w t h , l o w m a r ke t
share).

E x a m p l e : A t e c h n o l o g y c o m p a ny
uses the BCG matrix to allocate
resources among its product lines,
i nve s t i n g i n s t a r s w i t h h i g h g r o w t h
p o t e n t i a l w h i l e d i ve s t i n g f r o m d o g s
with low growth prospects.
Ansoff Matrix:

The Ansoff Matrix helps organizations

decide their growth strategy by analyzing
market penetration, market development,
product development, and diversifi cation.

It provides a framework for assessing risk

and selecting appropriate growth
strategies.

Example: A food company uses the Ansoff

Matrix to decide whether to introduce
new products (product development) or
expand into new markets (market
development) based on its current market
position and growth objectives.
New Strategic Planning Theories:

Design Thinking Platform Strategy

Blue Ocean Strategy Resilience Planning

Agile Strategic Planning Cultural Intelligence (CQ):

Lean Startup Methodology Field Theory

Dynamic Capabilities Theory

Open Strategy
Design Thinking:

Design thinking is a human-centered

approach to innovation and problem-
solving, emphasizing empathy,
creativity, and rapid prototyping.
Blue Ocean
Strategy:

This strategy focuses on

creating new market spaces
rather than competing in
existing ones, emphasizing
innovation and
diff erentiation.
Agile Strategic
Planning:

Applying agile methodologies to

strategic planning, this approach
emphasizes fl exibility, adaptability,
and rapid iterations over traditional
long-term planning cycles.
Dynamic
Capabilities
Theory:
This theor y focuses on an
organization's ability to
adapt and innovate in
response to changing
environments, emphasizing
fl exibility, learning, and
resource reconfi guration.
Open Strategy:

Open strategy involves involving a

broader range of stakeholders in the
strategic planning process, fostering
transparency, collaboration, and co-
creation of strategy.
Platform
Strategy:
This strategy involves
creating digital platforms
that facilitate interactions
between producers and
consumers, leveraging
network eff ects to create
value.
Resilience Planning:

Resilience planning focuses on

building organizational resilience to
withstand and recover from
disruptions, emphasizing adaptability,
redundancy, and risk mitigation.
Cultural
Intelligence
(CQ):
C Q i s the ca pa b i l i ty to
f uncti on eff ecti vel y i n
cul tura l l y d i ver se
env i r onm ents, g ui d i ng
or g a ni za ti ons i n devel op i ng
stra teg i es tha t r eso na te wi th
d i ver se cul tura l co ntexts.
Field Theory (Force
Field Analysis):

Field theory, applied through force

fi eld analysis, helps organizations
identify and analyze the forces driving
or restraining change within the
organization.
Commonalities of New
Strategic Planning
Flexibility and Adaptability:

Focus on Innovation and Creativity:

Customer-Centricity:

I n t e g r a t i o n o f Te c h n o l o g y :

Cross-Functional Collaboration:

Sustainability and Corporate Social Responsibility (CSR):

Risk Management and Resilience:

F o c u s o n Ta l e n t a n d C u l t u r e :

Continuous Learning and Improvement:

Purpose and Meaning: