A good strategic planning process requires the utmost attention to the hows of executing a strategy. A robust strategy is not a compilation of numbers, nor is it a “crystal ball” forecast of extrapolated numbers for the next ten years. It must be an action plan that business leaders can rely on to reach their business objectives.
You need to identify and define the critical issues behind your strategy. You need to question the assumptions on which your strategy is based, and determine whether you have the organizational capability to execute the plan. You also need to link your strategy to your people process (to determine whether you have the right people in place to execute the strategy) and to your operating plan (to get your organization properly aligned to move forward).
Key Questions
A strong strategic plan must address several key questions:
1. What Is the Assessment of the External Environment? Every business operates within a shifting political, social and economic context. Your strategic plan must explicitly deal with those external forces and the assumptions they generate.
Examine everything from economic and demographic trends to new technologies and alliances between competitors, in order to anticipate changes that can affect your business.
2. How Well Do You Understand Existing Customers and Markets? People tend to look at their businesses from the inside out, choosing to focus so strongly on making and selling products and services that they lose awareness of the needs and buying behaviors of their customers.
Who makes purchasing decisions for your customers? It’s likely different from customer to customer. In large companies, for example, purchasing agents might do the buying, while at smaller companies, your buyer might be the CFO. Each requires a different approach, which you can only take if you have that intimate customer knowledge in hand.
3. What Is the Best Way to Grow the Business Profitably? What are the obstacles to growth? Does your business need to develop new products or does it need to take existing ones into new channels and to new customers? Does it need to acquire other businesses to meet key customer needs?
Finding your best growth opportunities is key to building on successes and staving off failure.
4. Who Is the Competition? Sometimes businesses miss the emergence of new competitors who have more attractive value propositions for their customers. 
Most often, companies underestimate the responses of competitors, or are so consumed by dealing with one set of competitors, they fail to see new competition come on the scene. Sometimes, however, they have the opposite problem — they overestimate the competition because they haven’t asked the right questions, and they miss valuable opportunities to gain advantage.
5. Can the Business Execute the Strategy? An astonishing number of strategies fail because leaders do not make a realistic assessment of whether their organization can execute the plan. That won’t be a problem if you’re intimately involved in your business’ three core processes. You should also be listening to your customers and suppliers, and encouraging your leaders to do the same.
6. Are the Short Term and Long Term Balanced? Strategy planning needs to be conducted in real time, connected to shifts in the competitive environment and the business’ own changing strengths and weaknesses, which means you must define your company’s mission in the short to medium term, as well as the long term.
By breaking down the plan in this manner, you bring reality to the plan and give your business an anchor for continued growth.
7. What Are the Critical Issues Facing the Business? Every business has a half dozen or so critical issues — the ones that can hurt it badly or prevent it from capitalizing on new opportunities or reaching its objectives.
8. How Will the Business Make Money on a Sustainable Basis? Every strategy must lay out clearly the specifics of the anatomy of a business — how it will make money now and in the future. This means understanding several key pieces of information — the drivers of cash, margin, velocity, revenue growth, market share, and competitive advantage. What pricing model will you follow, and are customers willing to pay a premium for your goods? How much cash do you require for working capital? What will your competitors’ reactions be? 

Dell Addresses The Future of the PC
In 2001, Dell Computer was beginning to face its critical issue — the dim long-term outlook for PCs. No matter how much market share Dell stood to gain, the market itself had no foreseeable heady growth. Initially, the company formed an alliance with EMC to market EMC’s storage equipment. An even stronger option was to expand into the adjacent segment — servers — where the growth potential dwarfs that of PCs.
But the question remains — can Dell’s low-margin, high-velocity model, which works so well for PCs, be effective with more technologically sophisticated servers? The jury, at this time, is still out.

 By Larry Bossidy and Ram Charan