The strategic planning process, SWOT analysis and strategic plans: WACE BME Unit 4
“Explain the strategic planning process, use a SWOT analysis to assess a business's position, and describe the key features of a strategic plan”
Strategic planning sets long-term direction through six steps: vision and mission, environmental analysis, SMART objectives, strategies, implementation, and monitoring and control. A SWOT analysis sorts internal strengths and weaknesses and external opportunities and threats, and is useful only when it drives decisions. A strategic plan contains the vision, analysis, objectives, strategies, resources, KPIs, timelines and evaluation methods.
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What this dot point is asking
Unit 4's Management content focuses on how a business operates strategically. You need to explain the strategic planning process, carry out and use a SWOT analysis, and describe what a strategic plan contains. Study resources built on the syllabus list the planning process, SWOT and the key features of strategic plans; check your school's course outline for the exact syllabus wording.
The answer
Strategic, tactical and operational planning
- Strategic: long term (three to five years or more), whole business, senior managers.
- Tactical: medium term (one to two years), departments, middle managers.
- Operational: short term (days to months), daily tasks, supervisors and teams.
The strategic planning process
- Vision and mission: where the business wants to go and why it exists.
- Environmental analysis: internal and external analysis (SWOT, Porter's five forces, PEST).
- Objectives: SMART long-term goals.
- Strategies: choose how to reach the objectives.
- Implementation: resources, responsibilities, budgets, timelines and communication.
- Monitoring, evaluation and control: measure results, compare with objectives, take corrective action.
The process is a cycle: evaluation feeds back into the next round of planning.
SWOT analysis
| Helpful | Harmful | |
|---|---|---|
| Internal | Strengths | Weaknesses |
| External | Opportunities | Threats |
A SWOT is only useful if the business acts on it: build on strengths, fix or work around weaknesses, pursue opportunities that match its strengths, and prepare for threats. Its limitations include being a snapshot in time, being subjective, and listing points without ranking their importance.
Key features of a strategic plan
- Vision, mission and values.
- Summary of the environmental analysis.
- Long-term SMART objectives.
- Strategies to achieve them.
- Resources, budgets and responsibilities.
- Timelines and key performance indicators (KPIs).
- Monitoring, evaluation and contingency plans.
A Perth software company sets a strategic objective: "increase recurring revenue from Asian customers from $2 million to $5 million within three years."
- Environmental analysis: strengths (reliable product, strong support team); weakness (no Asian sales staff); opportunity (digitisation of small businesses in Southeast Asia); threat (low-cost local competitors).
- Strategy: open a sales office in Singapore and form an alliance with a regional reseller.
- Implementation: a budget for two regional sales managers, translated product versions within 12 months.
- Monitoring: quarterly KPIs such as new customers, recurring revenue and customer churn.
- Putting external factors under strengths or weaknesses
- Strengths and weaknesses are internal.
- Writing vague objectives
- "Grow sales" is not SMART; add a measure and a timeframe.
- Stopping at the SWOT list
- Examiners reward using the SWOT to justify strategies.
Practice questions
Original practice questions graded from foundation to exam level, each with a full worked solution. Try them before revealing the solution.
foundation4 marksGive one example each of a strength, weakness, opportunity and threat for a regional WA tourism operator.Show worked solution →
- Strength: unique access to a natural attraction (for example a reef or gorge) and experienced local guides.
- Weakness: small marketing budget and reliance on seasonal staff.
- Opportunity: growing international visitor numbers and online booking platforms.
- Threat: extreme weather, rising fuel costs or new competitors.
Marking guide: 1 mark per correctly classified example.
core5 marksExplain the steps of the strategic planning process.Show worked solution →
- Set the vision and mission: the long-term direction and purpose of the business.
- Analyse the environment: internal (strengths, weaknesses) and external (opportunities, threats) analysis, often using SWOT and tools such as Porter's five forces.
- Set objectives: SMART long-term goals, such as increasing market share by 5% in three years.
- Develop and choose strategies: decide how to achieve the objectives (for example new markets, cost leadership or differentiation).
- Implement: allocate resources, assign responsibilities and communicate the plan.
- Monitor, evaluate and control: compare results with objectives and take corrective action.
Marking guide: 1 mark per step explained, up to 5 marks.
exam10 marksAn Australian craft brewery with a strong local following plans to export to Singapore and Japan. Conduct a SWOT analysis and use it to recommend strategic objectives and strategies.Show worked solution →
A strong response:
SWOT
- Strengths: award-winning products, loyal local customers, strong "Australian craft" brand story.
- Weaknesses: limited production capacity, no export experience, small marketing budget.
- Opportunities: growing demand for premium craft beer in Asia, free trade agreements with Singapore and Japan lowering barriers, online and specialty distribution.
- Threats: large global brewers, high alcohol taxes and strict labelling rules, exchange rate changes, shipping costs.
- Using the SWOT
- match strengths to opportunities (use the brand story to target premium bars), fix weaknesses that block opportunities (expand capacity or contract brewing, hire an export manager), and reduce threats (hedging, compliance advice).
- SMART objectives
- for example, secure distribution in 30 Singapore venues within 18 months; achieve export sales of 10% of revenue within three years.
- Strategies
- partner with a local importer or distributor (strategic alliance); standardise the core brand but adapt labels and pack sizes; begin with Singapore (English speaking, simpler entry) before Japan.
- Monitoring
- track venue numbers, sales and margins quarterly and adjust.
Marking guide: 4 marks for a SWOT with relevant points in each quadrant, 2 marks for using the SWOT to link strategies, 2 marks for SMART objectives, 2 marks for justified strategies and monitoring.