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Coupling Strategy to Operating Plans
Successful strategic planning requires a thorough knowledge of operational resources. Managers can take five steps to forge effective links between a new strategy and operating plans: determine a functional overload does not exist before embarking on a new strategy; insulate portions of the business from strategic shock waves; pay personal attention to major "coupling" issues between strategy and operational planning; ensure that the strategic planning team has charted comprehensive follow-through actions; and focus on downward, not just upward, communication within the corporation. -
Impact of Strategic Planning on Profit Performance
The profit impact of market strategies (PIMS) project is a study of 57 North American corporations representing 620 diverse businesses. The three factors in the PIMS profit model that substantially influence the return on investment (ROI) in a corporation are market share, investment intensity, and company factors. The market share of a corporation relates to its profitability; corporations with a large market share and a superior quality product average the highest return on investment. Investment intensity (the ratio of total investment to sales), also relates directly to profitability. A high ratio of investment to sales results in a low ROI. Company factors, such as size and diversity, also influence ROI.