levels of business planning

Levels of Business Planning

• Small Business
• Business Planning & Strategy
• Elements of Business Plans
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What Is an A-Level Manager?

Business leadership structure, organizational structure for a catering company.

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Planning is vital to the continued success of small businesses. Business planning is performed at various levels in an organization, often in a hierarchical fashion, with each level drafting plans to achieve the goals set in the level directly above. Planning at various stages involves nearly everyone in an organization, from the business owner who crafts a strategic vision to front-line employees who plan their daily tasks to meet individual performance goals.

Strategic Planning

The owner of a small business, or the company's senior executives, develop strategic plans. This level of planning crafts the overall direction of the company over the long term. Company officials create vision and mission statements at this level, setting wide-reaching goals. Decisions made at this level concerning organizational structure, company values and business philosophies can influence company culture directly.

At this stage, managers define what business the company is in, exactly what the company does and what makes the company distinct from its competitors. These goals should be the basis for creating all other organizational plans.

“To be the No. 1 producer of organic pasta” is an example of a strategic level vision statement for a small business.

Company-Wide Goals

Company-wide goals are a bit more pragmatic than an overarching strategic vision; planning at this stage is concerned with making the grand vision of top executives a reality. Managers set performance goals for all departments, including financial goals, production-oriented goals such as cost control and goals for market share growth and new market penetration.

Plans made at this stage develop the core competencies needed to achieve the company's mission and vision. Plans to develop and grow the effectiveness of operations over time are paired with plans to grow the company's reputation in the marketplace and in its industry.

To realize the pasta company's vision, executives may set goals of achieving 15 percent market share growth per year, cutting production costs by 5 percent per year and aggressively growing a national network of local suppliers.

Departmental Goals

Planning within each department is highly practical, and is mainly concerned with bringing the objectives set at the company level to realization. Middle and front-line managers, who set performance goals for groups and individual employees, perform department planning activities. Innovation in business process design is encouraged at this level, and strict time lines are set for meeting company objectives.

To cut production costs by 5 percent per year, as mentioned in the pasta company example, production managers may plan to implement new ongoing best-practices training programs and alter incentive structures to favor cost-cutting activities, such as material conservation.

Operational Objectives

The lowest level of business planning has to do with setting goals and creating implementation plans for small groups and individual employees. At this level, employees put plans into place to achieve their contribution to the department-specific goals. Operational objectives are concerned with such things as efficiency, reduction of mistakes and reorganization of personal work processes.

To implement the training program in the pasta company example, managers could create specific training curricula, set aside time for training and communicate training attendance requirements to all employees.

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David Ingram has written for multiple publications since 2009, including "The Houston Chronicle" and online at Business.com. As a small-business owner, Ingram regularly confronts modern issues in management, marketing, finance and business law. He has earned a Bachelor of Arts in management from Walsh University.

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The Levels of Planning in Business

by Audra Bianca

Published on 1 Aug 2019

A new small business will not require many levels of business planning right away. However, a business owner may begin with an initial business plan and need to use different levels of business planning as the company grows. In the growth years of a business, new departments or functions will need to be created to meet customer needs, and these units will require goals that support the overall goals of the firm.

Firm-Level Planning

A business owner has to choose a model of planning, such as strategic planning, that will guide the entire business. Planning is about setting goals that can be timed and measured to determine if a company meets the desired level of performance. Without a strategic plan, a business owner will make more reactive decisions in response to the market. With a strategic plan, all of the firm's employees will know what direction to take.

Department-Level Planning

Once a business has grown to a certain point, a business owner or manager will begin to organize employees into departments, teams or business functions. Employees will support a specific product, perform a specific function or serve customers in a defined market. At this level, regardless of business size, a department or team manager must collaborate with the owner or company manager and determine what part of the firm's goals will require his department's tactical plan. This should be a two-way process so that the staff will buy into goal setting and give their input.

Operational and Tactical Planning

It used to be that middle-level managers created a tactical plan - how the different units of the company will implement the goals in a broad sense - and that lower-level managers created operational goals. Now, many organizations do not have middle-level managers.

Therefore, department-level managers end up doing tactical and operational planning. This level of planning requires that a manager consider which employee or group will be responsible for each department goal at the operational level. This will include looking at the specific activities that employees perform and how they interlace to support the department's goals.

Employee-Level Planning

At the direction of their manager, individuals can write goals to illustrate specifically how they will help achieve operational goals. These should be as specific, measurable, achievable, relevant and timed as the goals at the other levels of planning.

Individuals are also a good source of information about the product or service they support. They can suggest ways for the company to match the strengths of the business with current opportunities in the market.

17.3 Types of Plans

• Identify different types of plans and control systems employed by organizations.

From an activity perspective, organizations are relatively complex systems, as they are involved in numerous activities. Many of these activities require management’s attention from both a planning and controlling perspective. Managers therefore create different types of plans to guide operations and to monitor and control organizational activities. In this section, we introduce several commonly used plans. The major categories are hierarchical, frequency-of-use (repetitiveness), time-frame, organizational scope, and contingency. Table 17.1 provides a closer look at many types of plans that fall in each of these categories.

Hierarchical Plans

Organizations can be viewed as a three-layer cake, with its three levels of organizational needs. Each of the three levels—institutional, administrative, and technical core—is associated with a particular type of plan. As revealed in Table 17.1 , the three types of hierarchical plans are strategic, administrative, and operating (technical core). The three hierarchical plans are interdependent, as they support the fulfillment of the three organizational needs. In the organization’s hierarchy, the technical core plans day-to-day operations.

Strategic Plans

Strategic management is that part of the management process concerned with the overall integration of an organization’s internal divisions while simultaneously integrating the organization with its external environment. Strategic management formulates and implements tactics that try to match an organization as closely as possible to its task environment for the purpose of meeting its objectives.

Strategic plans address the organization’s institutional-level needs. Strategic plans outline a long-term vision for the organization. They specify the organization’s reason for being, its strategic objectives, and its operational strategies—the action statements that specify how the organization’s strategic goals are to be achieved.

Part of strategic planning involves creating the organization’s mission, a statement that specifies an organization’s reason for being and answers the question “What business(es) should we undertake?” The mission and the strategic plan are major guiding documents for activities that the organization pursues. Strategic plans have several defining characteristics: They are long-term and position an organization within its task environment; they are pervasive and cover many organizational activities; they integrate, guide, and control activities for the immediate and the long term; and they establish boundaries for managerial decision-making.

Operating plans provide direction and action statements for activities in the organization’s technical core. Administrative plans work to integrate institutional-level plans with the operating plans and tie together all of the plans created for the organization’s technical core.

Frequency-of-Use Plans

Another category of plans is frequency-of-use plans. Some plans are used repeatedly; others are used for a single purpose. Standing plans , such as rules, policies, and procedures, are designed to cover issues that managers face repeatedly. For example, managers may be concerned about tardiness, a problem that may occur often in the entire work force. These managers might decide to develop a standing policy to be implemented automatically each time an employee is late for work. The procedure invoked under such a standing plan is called a standard operating procedure (SOP).

Single-use plans are developed for unique situations or problems and are usually replaced after one use. Managers generally use three types of single-use plans: programs, projects, and budgets. See Table 17.1 for a brief description of standing and single-use plans.

Time-Frame Plans

The organization’s need to address the future is captured by its time-frame plans. This need to address the future through planning is reflected in short-, medium-, and long-range plans. Given the uniqueness of industries and the different time orientations of societies—study Hofstede’s differentiation of cultures around the world in terms of their orientation toward the future—the times captured by short, medium, and long range vary tremendously across organizations of the world. Konosuke Matsushita’s 250-year plan, which he developed for the company that bears his name, is not exactly typical of the long-range plans of U.S. companies!

Short-, medium-, and long-range plans differ in more ways than the time they cover. Typically, the further a plan projects into the future, the more uncertainty planners encounter. As a consequence, long-range plans are usually less specific than shorter-range plans. Also, long-range plans are usually less formal, less detailed, and more flexible than short-range plans in order to accommodate such uncertainty. Long-range plans also tend to be more directional in nature.

Organizational Scope Plans

Plans vary in scope. Some plans focus on an entire organization. For example, the president of the University of Minnesota advanced a plan to make the university one of the top five educational institutions in the United States. This strategic plan focuses on the entire institution. Other plans are narrower in scope and concentrate on a subset of organizational activities or operating units, such as the food services unit of the university. For further insight into organizational scope plans, see Table 17.1 .

Contingency Plans

Organizations often engage in contingency planning (also referred to as scenario or “what if” planning). You will recall that the planning process is based on certain premises about what is likely to happen in an organization’s environment. Contingency plans are created to deal with what might happen if these assumptions turn out to be wrong. Contingency planning is thus the development of alternative courses of action to be implemented if events disrupt a planned course of action. A contingency plan allows management to act immediately if an unplanned occurrence, such as a strike, boycott, natural disaster, or major economic shift, renders existing plans inoperable or inappropriate. For example, airlines develop contingency plans to deal with terrorism and air tragedies. Most contingency plans are never implemented, but when needed, they are of crucial importance.

Concept Check

• Define and describe the different types of plans defined in Table 17.1 and how organizations use them.

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Module 9: Management

Introduction to planning, what you’ll learn to do: identify the types of planning and decision making managers engage in, and explain how these help organizations reach their goals.

In this section, we’ll introduce the concept of planning, including the foundational documents—vision and mission—that need to be in place prior to developing a plan. We will identify the three levels of planning—strategic, tactical, and operational (plus contingency)—and the role of each in achieving the business goals and objectives. This section also introduces the SWOT Analysis, a planning tool that provides a framework for analyzing an organization’s strengths, weaknesses, opportunities, and threats.

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Business Planning

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on June 08, 2023

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Table of contents, what is business planning.

Business planning is a crucial process that involves creating a roadmap for an organization to achieve its long-term objectives. It is the foundation of every successful business and provides a framework for decision-making, resource allocation, and measuring progress towards goals.

Business planning involves identifying the current state of the organization, determining where it wants to go, and developing a strategy to get there.

It includes analyzing the market, identifying target customers, determining a competitive advantage, setting financial goals, and establishing operational plans.

The business plan serves as a reference point for all stakeholders , including investors, employees, and partners, and helps to ensure that everyone is aligned and working towards the same objectives.

Importance of Business Planning

Business planning plays a critical role in the success of any organization, as it helps to establish a clear direction and purpose for the business. It allows the organization to identify its goals and objectives, develop strategies and tactics to achieve them, and establish a framework of necessary resources and operational procedures to ensure success.

Additionally, a well-crafted business plan can serve as a reference point for decision-making, ensuring that all actions taken by the organization are aligned with its long-term objectives.

It can also facilitate communication and collaboration among team members, ensuring that everyone is working towards a common goal.

Furthermore, a business plan is often required when seeking funding or investment from external sources, as it demonstrates the organization's potential for growth and profitability. Overall, business planning is essential for any organization looking to succeed and thrive in a competitive market.

Business Planning Process

Step 1: defining your business purpose and goals.

Begin by clarifying your business's purpose, mission, and long-term goals. These elements should align with the organization's core values and guide every aspect of the planning process.

Step 2: Conducting Market Research and Analysis

Thorough market research and analysis are crucial to understanding the industry landscape, identifying target customers, and gauging the competition. This information will inform your business strategy and help you find your niche in the market.

Step 3: Creating a Business Model and Strategy

Based on the insights from your market research, develop a business model that outlines how your organization will create, deliver, and capture value. This will inform the overall business strategy, including identifying target markets, value propositions, and competitive advantages.

Step 4: Developing a Marketing Plan

A marketing plan details how your organization will promote its products or services to target customers. This includes defining marketing objectives, tactics, channels, budgets, and performance metrics to measure success.

Step 5: Establishing Operational and Financial Plans

The operational plan outlines the day-to-day activities, resources, and processes required to run your business. The financial plan projects revenue, expenses, and cash flow, providing a basis for assessing the organization's financial health and long-term viability.

Step 6: Reviewing and Revising the Business Plan

Regularly review and update your business plan to ensure it remains relevant and reflects the organization's current situation and goals. This iterative process enables proactive adjustments to strategies and tactics in response to changing market conditions and business realities.

Components of a Business Plan

Executive summary.

The executive summary provides a high-level overview of your business plan, touching on the company's mission, objectives, strategies, and key financial projections.

It is critical to make this section concise and engaging, as it is often the first section that potential investors or partners will read.

Company Description

The company description offers a detailed overview of your organization, including its history, mission, values, and legal structure. It also outlines the company's goals and objectives and explains how the business addresses a market need or problem.

Products or Services

Describe the products or services your company offers, emphasizing their unique features, benefits, and competitive advantages. Detail the development process, lifecycle, and intellectual property rights, if applicable.

Market Analysis

The market analysis section delves into the industry, target market, and competition. It should demonstrate a thorough understanding of market trends, growth potential, customer demographics, and competitive landscape.

Marketing and Sales Strategy

Outline your organization's approach to promoting and selling its products or services. This includes marketing channels, sales tactics, pricing strategies, and customer relationship management .

Management and Organization

This section provides an overview of your company's management team, including their backgrounds, roles, and responsibilities. It also outlines the organizational structure and any advisory or support services employed by the company.

Operational Plan

The operational plan describes the day-to-day operations of your business, including facilities, equipment, technology, and personnel requirements. It also covers supply chain management, production processes, and quality control measures.

Financial Plan

The financial plan is a crucial component of your business plan, providing a comprehensive view of your organization's financial health and projections.

This section should include income statements , balance sheets , cash flow statements , and break-even analysis for at least three to five years. Be sure to provide clear assumptions and justifications for your projections.

Appendices and Supporting Documents

The appendices and supporting documents section contains any additional materials that support or complement the information provided in the main body of the business plan. This may include resumes of key team members, patents , licenses, contracts, or market research data.

Benefits of Business Planning

Helps secure funding and investment.

A well-crafted business plan demonstrates to potential investors and lenders that your organization is well-organized, has a clear vision, and is financially viable. It increases your chances of securing the funding needed for growth and expansion.

Provides a Roadmap for Growth and Success

A business plan serves as a roadmap that guides your organization's growth and development. It helps you set realistic goals, identify opportunities, and anticipate challenges, enabling you to make informed decisions and allocate resources effectively.

Enables Effective Decision-Making

Having a comprehensive business plan enables you and your management team to make well-informed decisions, based on a clear understanding of the organization's goals, strategies, and financial situation.

Facilitates Communication and Collaboration

A business plan serves as a communication tool that fosters collaboration and alignment among team members, ensuring that everyone is working towards the same objectives and understands the organization's strategic direction.

Business planning should not be a one-time activity; instead, it should be an ongoing process that is continually reviewed and updated to reflect changing market conditions, business realities, and organizational goals.

This dynamic approach to planning ensures that your organization remains agile, responsive, and primed for success.

As the business landscape continues to evolve, organizations must embrace new technologies, methodologies, and tools to stay competitive.

The future of business planning will involve leveraging data-driven insights, artificial intelligence, and predictive analytics to create more accurate and adaptive plans that can quickly respond to a rapidly changing environment.

By staying ahead of the curve, businesses can not only survive but thrive in the coming years.

Business Planning FAQs

What is business planning, and why is it important.

Business planning is the process of setting goals, outlining strategies, and creating a roadmap for your company's future. It's important because it helps you identify opportunities and risks, allocate resources effectively, and stay on track to achieve your goals.

What are the key components of a business plan?

A business plan typically includes an executive summary, company description, market analysis, organization and management structure, product or service line, marketing and sales strategies, and financial projections.

How often should I update my business plan?

It is a good idea to review and update your business plan annually, or whenever there's a significant change in your industry or market conditions.

What are the benefits of business planning?

Effective business planning can help you anticipate challenges, identify opportunities for growth, improve decision-making, secure financing, and stay ahead of competitors.

Do I need a business plan if I am not seeking funding?

Yes, even if you're not seeking funding, a business plan can be a valuable tool for setting goals, developing strategies, and keeping your team aligned and focused on achieving your objectives.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

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• Business strategy |
• 7 strategic planning models, plus 8 fra ...

7 strategic planning models, plus 8 frameworks to help you get started

Strategic planning is vital in defining where your business is going in the next three to five years. With the right strategic planning models and frameworks, you can uncover opportunities, identify risks, and create a strategic plan to fuel your organization’s success. We list the most popular models and frameworks and explain how you can combine them to create a strategic plan that fits your business.

A strategic plan is a great tool to help you hit your business goals . But sometimes, this tool needs to be updated to reflect new business priorities or changing market conditions. If you decide to use a model that already exists, you can benefit from a roadmap that’s already created. The model you choose can improve your knowledge of what works best in your organization, uncover unknown strengths and weaknesses, or help you find out how you can outpace your competitors.

In this article, we cover the most common strategic planning models and frameworks and explain when to use which one. Plus, get tips on how to apply them and which models and frameworks work well together. 

Strategic planning models vs. frameworks

First off: This is not a one-or-nothing scenario. You can use as many or as few strategic planning models and frameworks as you like. 

When your organization undergoes a strategic planning phase, you should first pick a model or two that you want to apply. This will provide you with a basic outline of the steps to take during the strategic planning process.

During that process, think of strategic planning frameworks as the tools in your toolbox. Many models suggest starting with a SWOT analysis or defining your vision and mission statements first. Depending on your goals, though, you may want to apply several different frameworks throughout the strategic planning process.

For example, if you’re applying a scenario-based strategic plan, you could start with a SWOT and PEST(LE) analysis to get a better overview of your current standing. If one of the weaknesses you identify has to do with your manufacturing process, you could apply the theory of constraints to improve bottlenecks and mitigate risks. 

Now that you know the difference between the two, learn more about the seven strategic planning models, as well as the eight most commonly used frameworks that go along with them.

1. Basic model

The basic strategic planning model is ideal for establishing your company’s vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

If it’s your first strategic planning session, the basic model is the way to go. Later on, you can embellish it with other models to adjust or rewrite your business strategy as needed. Let’s take a look at what kinds of businesses can benefit from this strategic planning model and how to apply it.

Small businesses or organizations

Companies with little to no strategic planning experience

Organizations with few resources 

Write your mission statement. Gather your planning team and have a brainstorming session. The more ideas you can collect early in this step, the more fun and rewarding the analysis phase will feel.

Identify your organization’s goals . Setting clear business goals will increase your team’s performance and positively impact their motivation.

Outline strategies that will help you reach your goals. Ask yourself what steps you have to take in order to reach these goals and break them down into long-term, mid-term, and short-term goals .

Create action plans to implement each of the strategies above. Action plans will keep teams motivated and your organization on target.

Monitor and revise the plan as you go . As with any strategic plan, it’s important to closely monitor if your company is implementing it successfully and how you can adjust it for a better outcome.

2. Issue-based model

Also called goal-based planning model, this is essentially an extension of the basic strategic planning model. It’s a bit more dynamic and very popular for companies that want to create a more comprehensive plan.

Organizations with basic strategic planning experience

Businesses that are looking for a more comprehensive plan

Conduct a SWOT analysis . Assess your organization’s strengths, weaknesses, opportunities, and threats with a SWOT analysis to get a better overview of what your strategic plan should focus on. We’ll give into how to conduct a SWOT analysis when we get into the strategic planning frameworks below.

Identify and prioritize major issues and/or goals. Based on your SWOT analysis, identify and prioritize what your strategic plan should focus on this time around.

Develop your main strategies that address these issues and/or goals. Aim to develop one overarching strategy that addresses your highest-priority goal and/or issue to keep this process as simple as possible.

Update or create a mission and vision statement . Make sure that your business’s statements align with your new or updated strategy. If you haven’t already, this is also a chance for you to define your organization’s values.

Create action plans. These will help you address your organization’s goals, resource needs, roles, and responsibilities. 

Develop a yearly operational plan document. This model works best if your business repeats the strategic plan implementation process on an annual basis, so use a yearly operational plan to capture your goals, progress, and opportunities for next time.

Allocate resources for your year-one operational plan. Whether you need funding or dedicated team members to implement your first strategic plan, now is the time to allocate all the resources you’ll need.

Monitor and revise the strategic plan. Record your lessons learned in the operational plan so you can revisit and improve it for the next strategic planning phase.

The issue-based plan can repeat on an annual basis (or less often once you resolve the issues). It’s important to update the plan every time it’s in action to ensure it’s still doing the best it can for your organization.

You don’t have to repeat the full process every year—rather, focus on what’s a priority during this run.

3. Alignment model

This model is also called strategic alignment model (SAM) and is one of the most popular strategic planning models. It helps you align your business and IT strategies with your organization’s strategic goals. 

You’ll have to consider four equally important, yet different perspectives when applying the alignment strategic planning model:

Strategy execution: The business strategy driving the model

Technology potential: The IT strategy supporting the business strategy

Competitive potential: Emerging IT capabilities that can create new products and services

Service level: Team members dedicated to creating the best IT system in the organization

Ideally, your strategy will check off all the criteria above—however, it’s more likely you’ll have to find a compromise. 

Here’s how to create a strategic plan using the alignment model and what kinds of companies can benefit from it.

Organizations that need to fine-tune their strategies

Businesses that want to uncover issues that prevent them from aligning with their mission

Companies that want to reassess objectives or correct problem areas that prevent them from growing

Outline your organization’s mission, programs, resources, and where support is needed. Before you can improve your statements and approaches, you need to define what exactly they are.

Identify what internal processes are working and which ones aren’t. Pinpoint which processes are causing problems, creating bottlenecks , or could otherwise use improving. Then prioritize which internal processes will have the biggest positive impact on your business.

Identify solutions. Work with the respective teams when you’re creating a new strategy to benefit from their experience and perspective on the current situation.

Update your strategic plan with the solutions. Update your strategic plan and monitor if implementing it is setting your business up for improvement or growth. If not, you may have to return to the drawing board and update your strategic plan with new solutions.

4. Scenario model

The scenario model works great if you combine it with other models like the basic or issue-based model. This model is particularly helpful if you need to consider external factors as well. These can be government regulations, technical, or demographic changes that may impact your business.

Organizations trying to identify strategic issues and goals caused by external factors

Identify external factors that influence your organization. For example, you should consider demographic, regulation, or environmental factors.

Review the worst case scenario the above factors could have on your organization. If you know what the worst case scenario for your business looks like, it’ll be much easier to prepare for it. Besides, it’ll take some of the pressure and surprise out of the mix, should a scenario similar to the one you create actually occur.

Identify and discuss two additional hypothetical organizational scenarios. On top of your worst case scenario, you’ll also want to define the best case and average case scenarios. Keep in mind that the worst case scenario from the previous step can often provoke strong motivation to change your organization for the better. However, discussing the other two will allow you to focus on the positive—the opportunities your business may have ahead.

Identify and suggest potential strategies or solutions. Everyone on the team should now brainstorm different ways your business could potentially respond to each of the three scenarios. Discuss the proposed strategies as a team afterward.

Uncover common considerations or strategies for your organization. There’s a good chance that your teammates come up with similar solutions. Decide which ones you like best as a team or create a new one together.

Identify the most likely scenario and the most reasonable strategy. Finally, examine which of the three scenarios is most likely to occur in the next three to five years and how your business should respond to potential changes.

5. Self-organizing model

Also called the organic planning model, the self-organizing model is a bit different from the linear approaches of the other models. You’ll have to be very patient with this method. 

This strategic planning model is all about focusing on the learning and growing process rather than achieving a specific goal. Since the organic model concentrates on continuous improvement , the process is never really over.

Large organizations that can afford to take their time

Businesses that prefer a more naturalistic, organic planning approach that revolves around common values, communication, and shared reflection

Companies that have a clear understanding of their vision

Define and communicate your organization’s cultural values . Your team can only think clearly and with solutions in mind when they have a clear understanding of your organization's values.

Communicate the planning group’s vision for the organization. Define and communicate the vision with everyone involved in the strategic planning process. This will align everyone’s ideas with your company’s vision.

Discuss what processes will help realize the organization’s vision on a regular basis. Meet every quarter to discuss strategies or tactics that will move your organization closer to realizing your vision.

6. Real-time model

This fluid model can help organizations that deal with rapid changes to their work environment. There are three levels of success in the real-time model: 

Organizational: At the organizational level, you’re forming strategies in response to opportunities or trends.

Programmatic: At the programmatic level, you have to decide how to respond to specific outcomes or environmental changes.

Operational: On the operational level, you will study internal systems, policies, and people to develop a strategy for your company.

Figuring out your competitive advantage can be difficult, but this is absolutely crucial to ensure success. Whether it’s a unique asset or strength your organization has or an outstanding execution of services or programs—it’s important that you can set yourself apart from others in the industry to succeed.

Companies that need to react quickly to changing environments

Businesses that are seeking new tools to help them align with their organizational strategy

Define your mission and vision statement. If you ever feel stuck formulating your company’s mission or vision statement, take a look at those of others. Maybe Asana’s vision statement sparks some inspiration.

Research, understand, and learn from competitor strategy and market trends. Pick a handful of competitors in your industry and find out how they’ve created success for themselves. How did they handle setbacks or challenges? What kinds of challenges did they even encounter? Are these common scenarios in the market? Learn from your competitors by finding out as much as you can about them.

Study external environments. At this point, you can combine the real-time model with the scenario model to find solutions to threats and opportunities outside of your control.

Conduct a SWOT analysis of your internal processes, systems, and resources. Besides the external factors your team has to consider, it’s also important to look at your company’s internal environment and how well you’re prepared for different scenarios.

Develop a strategy. Discuss the results of your SWOT analysis to develop a business strategy that builds toward organizational, programmatic, and operational success.

Rinse and repeat. Monitor how well the new strategy is working for your organization and repeat the planning process as needed to ensure you’re on top or, perhaps, ahead of the game. 

7. Inspirational model

This last strategic planning model is perfect to inspire and energize your team as they work toward your organization’s goals. It’s also a great way to introduce or reconnect your employees to your business strategy after a merger or acquisition.

Businesses with a dynamic and inspired start-up culture

Organizations looking for inspiration to reinvigorate the creative process

Companies looking for quick solutions and strategy shifts

Gather your team to discuss an inspirational vision for your organization. The more people you can gather for this process, the more input you will receive.

Brainstorm big, hairy audacious goals and ideas. Encouraging your team not to hold back with ideas that may seem ridiculous will do two things: for one, it will mitigate the fear of contributing bad ideas. But more importantly, it may lead to a genius idea or suggestion that your team wouldn’t have thought of if they felt like they had to think inside of the box.

Assess your organization’s resources. Find out if your company has the resources to implement your new ideas. If they don’t, you’ll have to either adjust your strategy or allocate more resources.

Develop a strategy balancing your resources and brainstorming ideas. Far-fetched ideas can grow into amazing opportunities but they can also bear great risk. Make sure to balance ideas with your strategic direction. 

Now, let’s dive into the most commonly used strategic frameworks.

8. SWOT analysis framework

One of the most popular strategic planning frameworks is the SWOT analysis . A SWOT analysis is a great first step in identifying areas of opportunity and risk—which can help you create a strategic plan that accounts for growth and prepares for threats.

SWOT stands for strengths, weaknesses, opportunities, and threats. Here’s an example:

9. OKRs framework

A big part of strategic planning is setting goals for your company. That’s where OKRs come into play. 

OKRs stand for objective and key results—this goal-setting framework helps your organization set and achieve goals. It provides a somewhat holistic approach that you can use to connect your team’s work to your organization’s big-picture goals.  When team members understand how their individual work contributes to the organization’s success, they tend to be more motivated and produce better results

10. Balanced scorecard (BSC) framework

The balanced scorecard is a popular strategic framework for businesses that want to take a more holistic approach rather than just focus on their financial performance. It was designed by David Norton and Robert Kaplan in the 1990s, it’s used by companies around the globe to: 

Communicate goals

Align their team’s daily work with their company’s strategy

Prioritize products, services, and projects

Monitor their progress toward their strategic goals

Your balanced scorecard will outline four main business perspectives:

Customers or clients , meaning their value, satisfaction, and/or retention

Financial , meaning your effectiveness in using resources and your financial performance

Internal process , meaning your business’s quality and efficiency

Organizational capacity , meaning your organizational culture, infrastructure and technology, and human resources

With the help of a strategy map, you can visualize and communicate how your company is creating value. A strategy map is a simple graphic that shows cause-and-effect connections between strategic objectives. 

The balanced scorecard framework is an amazing tool to use from outlining your mission, vision, and values all the way to implementing your strategic plan .

You can use an integration like Lucidchart to create strategy maps for your business in Asana.

11. Porter’s Five Forces framework

If you’re using the real-time strategic planning model, Porter’s Five Forces are a great framework to apply. You can use it to find out what your product’s or service’s competitive advantage is before entering the market.

Developed by Michael E. Porter , the framework outlines five forces you have to be aware of and monitor:

Threat of new industry entrants: Any new entry into the market results in increased pressure on prices and costs. 

Competition in the industry: The more competitors that exist, the more difficult it will be for you to create value in the market with your product or service.

Bargaining power of suppliers: Suppliers can wield more power if there are less alternatives for buyers or it’s expensive, time consuming, or difficult to switch to a different supplier.

Bargaining power of buyers: Buyers can wield more power if the same product or service is available elsewhere with little to no difference in quality.

Threat of substitutes: If another company already covers the market’s needs, you’ll have to create a better product or service or make it available for a lower price at the same quality in order to compete.

Remember, industry structures aren’t static. The more dynamic your strategic plan is, the better you’ll be able to compete in a market.

12. VRIO framework

The VRIO framework is another strategic planning tool designed to help you evaluate your competitive advantage. VRIO stands for value, rarity, imitability, and organization.

It’s a resource-based theory developed by Jay Barney. With this framework, you can study your firmed resources and find out whether or not your company can transform them into sustained competitive advantages. 

Firmed resources can be tangible (e.g., cash, tools, inventory, etc.) or intangible (e.g., copyrights, trademarks, organizational culture, etc.). Whether these resources will actually help your business once you enter the market depends on four qualities:

Valuable : Will this resource either increase your revenue or decrease your costs and thereby create value for your business?

Rare : Are the resources you’re using rare or can others use your resources as well and therefore easily provide the same product or service?

Inimitable : Are your resources either inimitable or non-substitutable? In other words, how unique and complex are your resources?

Organizational: Are you organized enough to use your resources in a way that captures their value, rarity, and inimitability?

It’s important that your resources check all the boxes above so you can ensure that you have sustained competitive advantage over others in the industry.

13. Theory of Constraints (TOC) framework

If the reason you’re currently in a strategic planning process is because you’re trying to mitigate risks or uncover issues that could hurt your business—this framework should be in your toolkit.

The theory of constraints (TOC) is a problem-solving framework that can help you identify limiting factors or bottlenecks preventing your organization from hitting OKRs or KPIs . 

Whether it’s a policy, market, or recourse constraint—you can apply the theory of constraints to solve potential problems, respond to issues, and empower your team to improve their work with the resources they have.

14. PEST/PESTLE analysis framework

The idea of the PEST analysis is similar to that of the SWOT analysis except that you’re focusing on external factors and solutions. It’s a great framework to combine with the scenario-based strategic planning model as it helps you define external factors connected to your business’s success.

PEST stands for political, economic, sociological, and technological factors. Depending on your business model, you may want to expand this framework to include legal and environmental factors as well (PESTLE). These are the most common factors you can include in a PESTLE analysis:

Political: Taxes, trade tariffs, conflicts

Economic: Interest and inflation rate, economic growth patterns, unemployment rate

Social: Demographics, education, media, health

Technological: Communication, information technology, research and development, patents

Legal: Regulatory bodies, environmental regulations, consumer protection

Environmental: Climate, geographical location, environmental offsets

15. Hoshin Kanri framework

Hoshin Kanri is a great tool to communicate and implement strategic goals. It’s a planning system that involves the entire organization in the strategic planning process. The term is Japanese and stands for “compass management” and is also known as policy management. 

This strategic planning framework is a top-down approach that starts with your leadership team defining long-term goals which are then aligned and communicated with every team member in the company. 

You should hold regular meetings to monitor progress and update the timeline to ensure that every teammate’s contributions are aligned with the overarching company goals.

Stick to your strategic goals

Whether you’re a small business just starting out or a nonprofit organization with decades of experience, strategic planning is a crucial step in your journey to success. 

If you’re looking for a tool that can help you and your team define, organize, and implement your strategic goals, Asana is here to help. Our goal-setting software allows you to connect all of your team members in one place, visualize progress, and stay on target.

Related resources

Solve your tech overload with an intelligent transformation

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Unmanaged business goals don’t work. Here’s what does.

How Asana uses work management to effectively manage goals

What Is A Business Level Strategy? How To Create It + Examples

Many leaders put a lot of effort into strategic planning, but their grand strategies fall short. More often than not, the issue lies not in the strategy they formulate, but in the strategy they overlook—the business level strategy. 

This strategy concentrates on the execution of initiatives tailored specifically to a business unit. It's like “the middle level” of strategy and as it often happens with middle-level things, it remains overlooked in the shadow of the bigger picture.

Gartner’s survey shows that 67% of key functions at a company are not aligned with business units and corporate strategies. It also shows that 67% of employees do not understand their role when new growth initiatives are launched. These findings suggest that most companies focus primarily on their overarching, high-level strategies, neglecting how these strategies translate to lower levels and functions.

Thinking in terms of strategy levels is a good way of breaking down your overall strategy into manageable parts. This approach makes it easier to understand who's responsible for what and how the strategy should be carried out.

In this article, we'll walk you through the components of a strategy at a business level. We'll show you how to write a perfect strategic plan for your business and then apply it, ensuring all the pieces fit together seamlessly.

🎁BONUS: Download Your Strategy Levels eBook. It's a comprehensive guide that covers all three levels of strategy and will show you how to create both corporate and business strategies.

What Is A Business Level Strategy?

Business level strategy is a sum of the strategic planning and implementation activities that set and steer the direction of an individual business unit. These activities will generally include how to gain a competitive advantage and create customer value in the specific market the business unit operates in.

As a result, organizations with only one distinct business will often combine business strategy with corporate strategy as a single strategy level.

Benefits Of A Business Strategy

Before we dive deeper into business strategy, let's quickly discuss why you should have it regardless of your business model or company size. A well-defined business strategy:

• Provides a clear roadmap and purpose, guiding decision-making and resource allocation .
• Helps align the efforts of different departments and teams, fostering coordination and synergy.
• Enhances competitive advantage by identifying unique value propositions and differentiation opportunities.
• Aids in identifying and capitalizing on market opportunities while mitigating potential strategic risks .
• Improves organizational efficiency, promotes innovation, and enables effective measurement and performance evaluation.

Ultimately, a well-planned and executed business strategy can lead to sustainable growth, profitability, and long-term success.

Difference Between Corporate Level Strategy And Business Level Strategy

There seems to be a lot of confusion surrounding the difference between corporate level strategy and business level strategy, so let’s clear things up and get our definitions straight.

A corporate level strategy comes into play when an organization has multiple businesses operating in different markets. It sets the overall direction for the entire organization . It decides which markets to compete in, how to allocate resources across the organization, and similar big-picture things.

On the other hand, a business level strategy zooms in on a specific business within the organization . It focuses on creating a game plan tailored specifically for that business unit to achieve success in its corner of the market.

To reiterate, a corporate level strategy is about steering the entire organization, while a business level strategy is about guiding a specific business unit to thrive in its market.

To help make the difference between the two levels clearer, let’s look at the example of a bank below and how they use strategy levels in their organization.

Types Of Business Level Strategies With Examples 

To better understand how business level strategy differs from other strategy levels, it’s useful to look at some business level strategy examples . 

When organizations are deciding on the best strategy for a specific business level, they typically consider five types. Let's take a closer look at each of them and see what kind of competitive advantage they offer:

Cost Leadership

A cost leadership strategy is all about offering products at a lower price than your competitors. To become cost leaders, businesses employ economies of scale and various tactics such as improving facilities, investing in tools, reducing overhead costs, and minimizing expenses related to R&D and POS operations. The ultimate goal is to achieve the lowest cost for your product or service.

Differentiation

Rather than focusing on lower costs and passing the savings onto customers, differentiation strategies emphasize the development and marketing of products in a manner that provides greater value to customers and focuses on unique features that warrant a higher price point.

The most famous example of differentiation is Apple , which applies this strategy across all business units (laptops, smartphones, tablets, etc.). Apple has heavily invested in R&D, customer service, and marketing, successfully carving a niche that allows them to charge a premium price for their products without compromising market share.

💡If you're considering pursuing a differentiation strategy, McKinsey's Three Horizons of Growth is a great framework to use.

Focused cost leadership

Businesses can concentrate their efforts by targeting a niche market or even a subset of that niche to further reduce costs.

For instance, a tool manufacturer might choose to focus their cost leadership strategy solely on the professional tradesperson market. 

By narrowing their focus, companies can better understand their customers' needs and create value more efficiently.

Focused differentiation

A focused differentiation strategy involves standing out from competitors while concentrating efforts on a smaller subset of their customer base.

This might seem counterintuitive, but deeply understanding a smaller customer segment allows businesses to anticipate customers’ needs more accurately, making value creation a smoother process.

Integrated low-cost/differentiation

Some businesses find success by combining a low-cost strategy and differentiation.

A great example is the rise of "premium fast food" restaurants, which offer the low prices associated with traditional fast-food chains while providing a differentiated range of offerings. The combination provides just enough uniqueness to cater to a particular market. The success of such restaurants is a testament to the effectiveness of this type of strategy.

📚 If you're struggling to determine the best business strategy for your business unit, consider exploring the Value Disciplines framework . It has guided many successful businesses in the right direction.

How To Write A Business Level Strategic Plan 

Once you've decided on the type of business strategy you want to pursue, you need to write a strategic plan that outlines the actions your business unit will take to achieve its vision.

If you need guidance on how to write a strategic plan , we've covered it in detail before. But it can’t hurt to quickly go over the process anyway.

1. Analyze where you currently stand

First, you need to gather and analyze key information about your business's present state and performance. 

This can include reviewing KPIs, doing a SWOT analysis , evaluating the competitive landscape , reviewing financial performance, gathering customer feedback, considering internal capabilities, and analyzing risks and challenges. 

Such an analysis will help you develop a fact-based understanding of your current position that should your strategic direction and choices. 

2. Prioritize focus areas

Identify the key areas you'll be focusing on when working towards your vision . Your analysis from the previous step should help. These focus areas should be more specific than your vision statement , but not as detailed as having particular metrics or deadlines attached to them.

3. Define strategic objectives

Strategic objectives represent what you want to accomplish . These objectives are relatively high-level but should still have a deadline associated with them. Make sure your strategic objectives align with one or more of your focus areas. Typically, you'll have 3-6 objectives for each focus area.

4. Assign KPIs

KPIs are values that help you measure progress toward your strategic objectives.  It's important to develop KPIs that directly contribute to achieving specific goals or objectives. Otherwise, you run the risk of diverting attention, time, and resources away from crucial KPIs.

5. Create projects

Projects describe what you will do to accomplish your objectives. Projects need to be specific, including clear deadlines and a description of the actions you'll take. 

Each project should align with at least one strategic objective and outline how it will contribute to achieving that objective. Typically, you'll have multiple projects for each strategic objective.

💡 Pro tip: When writing your strategic plan , it’s helpful to keep in mind that business level strategy decisions are typically based on analyzing two main factors: customers and core competencies.

👉 How Cascade can help:  

Cascade’s Planner makes it easier to create, share and execute strategic plans. To make things even simpler, you can use our template which will help break down your high-level plan into executable outcomes.

👉🏻 Get your free business strategy template here.  

More related business level strategy templates: 

• Business Growth Strategy Template
• Business Development Strategy Template
• Business Continuity Plan Template
• Business Expansion Plan Template
• Business Action Plan Template

‍ 💡Don't see what you're looking for? Explore our strategy template library with over 1,000 templates catered to different business units and industries.

The Key Focus Areas For Business Level Strategies

Now that we understand how to structure a business strategy, let's dive into the actual content that should be included. 

While the specifics will vary depending on the organization, there are generally two key elements that should be addressed in your business level strategy.

Core Competencies

In business level strategy, the concept of core competencies is key. 

Core competencies are the unique elements of a business that set it apart in the market and provide value to customers.

Identifying and leveraging these competencies to gain a competitive advantage is a major aspect of business level strategy.

If you're struggling to identify your business's core competencies or competitive advantages, a VRIO analysis is a great starting point that should help you out. 

👉 Grab your free VRIO strategy template here.

Understanding your customers is another essential aspect of business level strategy. 

You need to know who your current and potential customers are and how they interact with your business. 

To develop this understanding, consider the following who, what, and how questions:

Who are the customers?

Look at demographic descriptors and consumption patterns to paint a clear picture of your customer base. 

Unlike corporate strategists, business level strategists often have a precise understanding of their customers. That allows them to tailor strategic decisions in a way that just isn’t feasible at a corporate level.

What are the products that customers need?

Understanding the wants and needs of your customers is vital for developing and maintaining a competitive advantage. 

Successful businesses are the ones that fulfill customer needs and create value. That’s why you want to understand your target customers to the point where you can forecast changes in customer needs as well as anticipate fluctuations in demand. 

How can the business satisfy customer needs?

Finally, organizations need to leverage core competencies, resources, and their understanding of their target audience to ensure customer satisfaction. Businesses need to create a solution to a pressing problem and create a product or service that’s perceived as valuable in the eyes of the target market segment.

Putting it all together

Now that you have a solid understanding of your core competencies and the customers you serve, you have a powerful foundation for developing strategies that foster competitive advantage and drive value. This is the ultimate goal of the business level strategy.

How To Cascade Business Level Strategy To Functional Level Strategy

Once you've crafted your business strategy, it's important to ensure that it’s effectively communicated and translated into actionable plans at the functional level . 

This process, known as cascading, enables each department to align its efforts with the overall strategic objectives of the organization. Here’s how you do it:

• Share the business level strategy with department heads.
• Identify relevant objectives and projects for each department.
• Define focus areas based on the identified objectives and projects.
• Develop department-specific strategies and tactics. Address specific actions each department will take.
• Align efforts and coordinate among departments.

By following these steps, you can effectively cascade your business strategy to all key departments, coordinate efforts and achieve strategic objectives.

👉 How Cascade can help: 

With Cascade's Alignment & Relationships feature , you can see every plan in your workspace and how they connect to each other from a bird's eye view. Using a simple tree structure, you'll be able to see how every plan is aligned with each other and progressing across your organization.

Final Thoughts

Business level strategy is where abstract strategic directions from the corporate level translate into tangible initiatives that generate real-world value.

Together with a strategy execution platform like Cascade , it can help you achieve great strategic feats. The combination of the right approach and the right software empowers you to:

• Create simple yet impactful strategies

Our most successful customers have used Cascade to zoom in on certain parts of their business, identify their core competencies, and prepare suitable objectives. Instead of overcomplicating strategies, they kept it simple and actionable.

• Reverse engineer your strategy

Cascade enables you to see where your initiatives stand today and provides data as well as the wider context. These strategic insights will help you design metric-based strategies rooted in reality, rather than relying on disconnected numbers, outdated tactics, and irrelevant industry benchmarks.

• Adapt quickly and effectively

You can monitor the impact of a particular approach on a smaller, business level scale, recognize what’s working, and either change course or double down. 

These benefits and everything mentioned in the article make a business level strategy combined with a strategy execution platform immensely valuable. Good and iterative strategic planning at the business level will radically impact outcomes for any organization—from the very small right up to the very large one.

Business Level Strategy FAQs

Should a business level strategy change over time if so, why .

Yes, business level strategies should change over time to adapt to evolving markets, competition, customer needs, and internal capabilities.

The ability to adapt also reflects that the business is monitoring its current performance, the impact of its strategic decisions, and is proactively thinking about improvements. The ability to adapt is crucial for sustainable success.

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Levels of planning, page actions.

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There are several levels of planning , including:

• Strategic planning : This involves setting long-term goals and objectives for an organization , and determining the best course of action to achieve them.
• Tactical planning : This involves developing specific plans and actions to implement the strategic goals and objectives.
• Operational planning : This involves the day-to-day management and execution of plans and actions to achieve the tactical goals.
• Contingency planning : This involves developing plans and procedures to respond to unexpected events or emergencies that could disrupt operations.
• Emergency planning : This involves developing plans and procedures to respond to an imminent threat or crisis that could have a significant impact on an organization.
• 1 Levels of planning in relation to organizational structure
• 2 Levels of planning in relation to time horizon
• 3 Example structure of plans in a company
• 4 Strategic, tactical, operational planning in detail
• 5 Contingency and emergency planning in detail
• 6 References

Levels of planning in relation to organizational structure

In a corporate structure, the levels of planning can be related to different functional areas and levels of management . These can include:

• Corporate-level planning : This involves setting overall strategic goals and objectives for the entire organization, and determining the best course of action to achieve them.
• Business-unit level planning : This involves developing specific plans and actions for individual business units or divisions within the organization to implement the corporate-level strategic goals.
• Functional-level planning : This involves developing plans and actions for individual functional areas within the organization, such as finance, marketing , or operations, to support the business-unit level goals.
• Operational-level planning : This involves the day-to-day management and execution of plans and actions to achieve the functional and business-unit level goals.
• Contingency and emergency planning : This involves developing plans and procedures to respond to unexpected events or emergencies that could disrupt operations, both at the corporate and functional levels.

Levels of planning in relation to time horizon

The levels of planning can also be related to different time horizons, such as:

• Long-term planning : This involves setting goals and objectives for a time horizon of several years or more, and determining the best course of action to achieve them.
• Medium-term planning : This involves developing specific plans and actions for a time horizon of one to three years to implement the long-term goals.
• Short-term planning : This involves developing specific plans and actions for a time horizon of one year or less to implement the medium-term goals.
• Operational planning : This involves the day-to-day management and execution of plans and actions to achieve the short-term goals.
• Contingency and emergency planning : This involves developing plans and procedures to respond to unexpected events or emergencies that could disrupt operations, regardless of the time horizon.

It's worth noting that different organizations might have different time horizons for their planning, and the specific labels and time frames may vary.

Example structure of plans in a company

The structure of plans in a company can vary depending on the organization's size, industry , and specific needs . However, a typical structure of plans in a company might include the following:

• Corporate-level plans : These plans set the overall strategic direction and goals for the entire organization, and may include a corporate mission statement, vision, values, and long-term strategic objectives .
• Business-unit level plans : These plans provide specific strategic direction and goals for individual business units or divisions within the organization, such as product lines, customer segments, or geographic regions.
• Functional-level plans : These plans provide specific direction and goals for individual functional areas within the organization, such as finance, marketing, or operations.
• Operational plans : These plans describe the day-to-day activities and processes that will be used to achieve the strategic, business-unit, and functional-level goals.
• Contingency and emergency plans : These plans provide procedures and protocols for dealing with unexpected events or emergencies that may disrupt the normal operations of the organization.
• Project plans : These plans provide specific steps and actions to achieve specific goals within a specific time frame, usually for a one-time project or a specific initiative.

All of these plans should be aligned, and work together to achieve the organization's goals and objectives. The structure of plans can also be supported by policies, procedures, and guidelines that provide specific instructions and guidelines for employees to follow.

Strategic, tactical, operational planning in detail

Strategic, tactical, and operational planning are three different levels of planning that organizations use to achieve their goals and objectives.

• Strategic planning : Strategic planning is the process of setting long-term goals and objectives for an organization, and determining the best course of action to achieve them. This level of planning typically involves high-level decision-making and is focused on the overall direction and vision of the organization. It is often done by top management and stakeholders , and it can take into account both internal and external factors that may impact the organization's success.
• Tactical planning : Tactical planning is the process of developing specific plans and actions to implement the strategic goals and objectives. This level of planning is typically focused on a time horizon of one to three years and involves a more detailed analysis of the resources and capabilities needed to achieve the strategic goals. It is often done by middle management and is focused on the specific steps and actions that need to be taken to achieve the strategic goals.
• Operational planning : Operational planning is the process of the day-to-day management and execution of plans and actions to achieve the tactical goals. This level of planning is focused on the short-term and is often done by front-line managers and employees. It involves the management of resources, such as people, equipment, and materials, and the coordination of activities to achieve the tactical goals. This level of planning is often called "business as usual" and is focused on the day-to-day operations of the organization.

It's worth noting that the levels of planning are not always distinct and separate, and there's often overlap and interaction between them. The main goal is to have a clear and aligned set of plans and actions that will help the organization achieve its goals and objectives.

Contingency and emergency planning in detail

Contingency and emergency planning are related but distinct types of planning that organizations use to prepare for and respond to unexpected events or emergencies.

• Contingency planning : Contingency planning is the process of developing plans and procedures to respond to unexpected events or disruptions that could impact the normal operations of an organization. This type of planning is focused on identifying potential risks and vulnerabilities, and developing plans to mitigate or manage them. The goal of contingency planning is to minimize the impact of an unexpected event on the organization and its stakeholders, and to ensure a quick and efficient recovery.
• Emergency planning : Emergency planning is the process of developing plans and procedures to respond to an imminent threat or crisis that could have a significant impact on an organization. Emergency planning is focused on ensuring the safety and well-being of employees, customers, and other stakeholders, and on minimizing damage to the organization's assets and reputation. The goal of emergency planning is to minimize the impact of an emergency on the organization and its stakeholders, and to ensure a quick and efficient recovery.

Both contingency and emergency planning involve identifying potential risks and hazards, developing plans and procedures to respond to them, and conducting training and exercises to test and improve the plans. It also involves involving the right stakeholders, such as employees, customers, and other key partners, in the planning process .

• Dzurik, A.A., Theriaque, D.A., (2003). Water Resources Planning , Rowman & Littlefield.
• Grenning, J. (2002). Planning poker or how to avoid analysis paralysis while release planning . Hawthorn Woods: Renaissance Software Consulting , 3, 22-23.
• Pandey, A.K., (1990). Local Level Planning and Rural Development , Mittal Publications.
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Levels of Strategy in Diversified Companies: Corporate, Business, and Functional

• September 20, 2023
• Business Strategy & Innovation

In the vast landscape of diversified companies, strategic planning takes on many forms, each with its own purpose and scope.

From the lofty heights of corporate strategy to the granular details of functional planning, these levels of strategy intertwine to shape the direction and success of a company.

This article explores the significance of corporate planning, delves into the intricacies of business planning, and uncovers the role of functional planning in the ever-evolving world of diversified companies.

Prepare to embark on a journey through the levels of strategy, where innovation meets analysis and structure breeds innovation.

Table of Contents

Key Takeaways

• Corporate planning involves establishing objectives and goals for the entire organization and determining the resources needed to achieve them.
• Business planning focuses on defining the scope of a division’s activities and setting objectives within that area.
• Functional planning involves developing action programs for each department to implement the division’s strategy.
• The three levels of strategy (corporate, business, and functional) interact with each other to some extent.

Importance of Corporate Planning in Diversified Companies

Corporate planning plays a crucial role in diversified companies by determining the objectives and goals for the entire organization and allocating resources accordingly. This process is essential for implementing business strategy and ensuring the success of the company.

The benefits of corporate planning are numerous. Firstly, it provides a clear direction for the organization, allowing all departments and employees to align their efforts towards common goals. It also helps in identifying opportunities and potential risks, allowing the company to make informed decisions and adapt to changes in the market.

By allocating resources effectively, corporate planning ensures that the company’s various business units are adequately supported and can achieve their objectives. Additionally, it promotes coordination and collaboration between different departments, enhancing efficiency and innovation within the organization.

Understanding Business Planning in Diversified Companies

The process of determining the scope of a division’s activities and setting objectives within that area is an important aspect of business planning in diversified companies. Business planning in these companies helps in defining the specific goals and objectives for each division, which contributes to the overall success of the organization.

There are several benefits of business planning in diversified companies. Firstly, it ensures that each division has a clear direction and purpose, leading to improved focus and efficiency. Secondly, it facilitates better resource allocation and coordination among different divisions, resulting in improved collaboration and synergy.

However, implementing business planning in diversified companies can also pose challenges. These challenges include the complexity of managing and aligning the strategies of multiple divisions, the need for effective communication and coordination among different teams, and the potential for conflicts of interest among divisions.

Overcoming these challenges requires strong leadership, effective communication channels, and a robust planning process that accounts for the unique needs and dynamics of diversified companies.

The Role of Functional Planning in Diversified Companies

Effective coordination and clear objectives are essential in implementing functional planning within diverse organizations. When it comes to executing functional plans in diversified companies, there are several challenges that need to be addressed.

These challenges include:

Communication: Ensuring effective communication across different departments and teams is crucial in executing functional plans. Without clear and open lines of communication, there can be confusion and misalignment in the implementation process.

Resource allocation: Diversified companies often have limited resources that need to be allocated strategically. Allocating resources in a way that supports the execution of functional plans can be a challenge, especially when there are competing priorities and objectives.

Resistance to change: Implementing functional plans often requires changes in processes, systems, and even organizational culture. Overcoming resistance to change can be difficult, as employees may be comfortable with the status quo and reluctant to embrace new ways of doing things.

In order to overcome these challenges and implement functional plans effectively, organizations need to foster a culture of collaboration, provide adequate resources, and actively manage change.

Interactions Between Corporate, Business, and Functional Strategies

To ensure successful implementation of strategies, it is important for organizations to understand how corporate, business, and functional strategies interact with each other.

In diversified companies, aligning corporate and business strategies is crucial for maintaining a cohesive and integrated approach towards achieving organizational goals. Corporate strategies determine the overall direction and scope of the company, while business strategies focus on the specific objectives and activities of each division. By aligning these strategies, companies can ensure that their various businesses are working towards a common purpose.

Additionally, it is essential to balance functional strategies with corporate and business goals. Functional strategies, such as marketing, production, finance, and research, need to support and contribute to the broader strategic objectives of the organization.

This alignment and balance between strategies at different levels are vital for achieving innovation and driving success in diversified companies.

Formal Planning Processes in Diversified Corporations

Large, diversified corporations require a formal planning process in order to facilitate decentralized decision-making and coordinate actions among multiple managers. This process, known as formal planning, involves several techniques that help clarify thinking and provide a structured approach to strategic decision-making.

The use of formal planning techniques allows for a more efficient and effective allocation of resources, as well as the identification of potential risks and opportunities. It also promotes innovation and creativity by encouraging managers to think critically and explore new ideas.

Decentralized decision-making, which is a key component of formal planning, empowers managers at all levels to make decisions that align with the overall corporate strategy and objectives. This approach fosters a culture of innovation and encourages employees to take ownership of their decisions and actions.

Key Aspects of Corporate Planning and Strategy

Acquiring the necessary resources and allocating them among different businesses are key components of corporate planning and strategy. In diversified companies, corporate planning plays a crucial role in achieving long-term success and sustaining growth.

There are several benefits of corporate planning in diversified companies. Firstly, it helps in ensuring that the company’s objectives are aligned with the overall organizational goals. By setting clear objectives and defining the scope of each business, corporate planning enables effective decision-making and resource allocation.

Secondly, it allows for better coordination and integration among different businesses, leading to synergies and economies of scale. However, implementing business planning in diversified companies can also pose challenges. These challenges include managing conflicts of interest among different business units, ensuring effective communication and coordination, and adapting to changing market conditions.

Despite these challenges, effective corporate planning and strategy are crucial for the success of diversified companies. They enable them to leverage their strengths and seize new opportunities in the market.

Components of Business Planning and Strategy

Effective business planning involves defining the scope of a division’s activities and establishing objectives within that area. This process is essential for strategic decision making and ensuring that the division’s efforts align with the overall goals of the organization.

When it comes to business planning and strategy, there are several key components to consider:

Identifying consumer needs: Understanding the needs and preferences of the target market is crucial for developing a business strategy that effectively meets customer demands.

Setting division objectives: Clearly defining the objectives and goals of the division helps guide decision making and focus efforts towards achieving desired outcomes.

Establishing policies: Developing policies that support the division’s objectives and align with the overall corporate strategy is crucial for making informed and effective strategic decisions.

Developing Effective Functional Plans in Diversified Companies

Developing feasible action programs for each department is a crucial aspect of functional planning in diversified organizations. To effectively implement the division’s strategy, it is important to align department objectives with the overall goals of the organization.

This requires developing effective functional plans that outline the specific actions that each department needs to take. By aligning department objectives with the division’s strategy, the organization can ensure that all departments are working towards a common goal and that resources are allocated appropriately.

Developing effective functional plans involves setting clear objectives and goals for each department, and determining the sequence of actions that need to be taken to achieve these goals. It also involves selecting the right programs and initiatives to execute, ensuring that they are feasible and aligned with the overall strategy of the organization.

Frequently Asked Questions

How does the process of formal planning benefit executives in smaller companies or situations that permit informal planning.

The process of formal planning benefits executives in smaller companies or situations that permit informal planning by providing a structured approach to strategic decision-making, clarifying thinking, and facilitating coordinated action among managers.

What Are the Specific Steps Involved in the Formal Planning Process?

The specific steps involved in the formal planning process include clarifying thinking, setting objectives, allocating resources, and establishing policies. This structured approach to strategic planning helps executives in smaller companies or situations that permit informal planning make more informed decisions.

How Do Corporate Objectives Differ From Business Objectives in Diversified Companies?

Corporate objectives in diversified companies encompass the long-term size, scope, and style of the enterprise, while business objectives focus on the division’s activities within a defined area. Strategic alignment ensures that both objectives work together to achieve overall success.

How Does Business Planning Determine the Scope of a Division’s Activities to Satisfy Consumer Needs?

Business planning determines the scope of a division’s activities by analyzing consumer needs and aligning them with the division’s capabilities. Through a structured process, it formulates strategies to satisfy these needs and drive consumer satisfaction.

What Is the Role of Functional Planning in Implementing Division Strategy in Diversified Companies?

Functional planning plays a crucial role in implementing division strategy in diversified companies. It involves collaboration between different departments to ensure divisional alignment and the successful execution of objectives and goals.

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Business Plan: What It Is + How to Write One

Discover what a business plan includes and how writing one can foster your business’s development.

What is a business plan? 

Think of a business plan as a document that guides the journey to start-up and beyond. Business plans are written documents that define your business goals and the strategies you’ll use to achieve those goals. In addition to exploring the competitive environment in which the business will operate, a business plan also analyses a market and different customer segments, describes the products and services, lists business strategies for success, and outlines financial planning.  

How to write a business plan 

In the sections below, you’ll build the following components of your business plan:

Executive summary

Business description 

Products and services 

Competitor analysis 

Marketing plan and sales strategies 

Brand strategy

Financial planning

Explore each section to bring fresh inspiration and reveal new possibilities for developing your business. Depending on your format, you may adapt the sections, skip over some, or go deeper into others. Consider your first draft a foundation for your efforts and one you can revise, as needed, to account for changes in any area of your business.  

1. Executive summary 

This short section introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, development goals, and why it will succeed. If you are seeking funding, summarise the basics of the financial plan. 

2. Business description 

Use this section to provide detailed information about your company and how it will operate in the marketplace. 

Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, and your customers? 

Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, licence fees, and more. 

Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.  

Legal structure: If you’ve incorporated your business, include the legal structure here and the rationale behind this choice. 

3. Competitor analysis 

This section will assess potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following: 

Value proposition: What outcome or experience does this brand promise?

Products and services: How does each solve customer pain points and fulfill desires? What are the price points? 

Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?  

Sales: What sales process or buyer’s journey does this brand lead customers through?

4. Products and services

Use this section to describe everything your business offers to its target market. For every product and service, list the following: 

The value proposition or promise to customers, in terms of how they will experience it

How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives

The features or outcomes that make the product better than those of competitors

Your price points and how these compare to competitors

5. Marketing plan and sales strategies 

In this section, you’ll draw from thorough market research to describe your target market and how you will reach it. 

Who are your ideal customers?   

How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)? 

What are their daily lives like? 

What problems and challenges do they experience? 

What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?  

What messaging will present your products as the best on the market? How will you differentiate messaging from competitors? 

On what marketing channels will you position your products and services?

How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?

6. Brand strategy 

In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience. 

What are the values that define your brand?

What visual elements give your brand a distinctive look and feel?

How will your marketing messaging reflect a distinctive brand voice, including tone, diction, and sentence-level stylistic choices? 

How will your brand look and sound throughout the customer journey? 

Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand? 

7. Financial planning  

In this section, you will explore your business’s financial future. Suppose you are writing a traditional business plan to seek funding. In that case, this section is critical for demonstrating to lenders or investors you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how to invest resources and generate revenue [ 1 ].  

To begin your financial planning, use past financials and other sections of this business plan, such as your price points or sales strategies. 

How many individual products or service packages do you plan to sell over a specific period?

List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.

What is your break-even point or the amount you must sell to cover all expenses?

Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast

Quantify how much capital you have on hand.

When writing a traditional business plan to secure funding, you may append supporting documents, such as licences, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.

Business plan key takeaways and best practices

Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors. 

Keep these best practices in mind:

Your business plan should evolve as your business grows. Return to it periodically, such as quarterly or annually, to update individual sections or explore new directions your business can take.

Make sure everyone on your team has a copy of the business plan, and welcome their input as they perform their roles. 

Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success. 

Start your business with Coursera 

Ready to start your business? Watch this video on the Lean approach from the Entrepreneurship Specialisation on Coursera: 

Article sources

Inc. “ How to Write the Financial Section of a Business Plan ,   https://www.inc.com/guides/business-plan-financial-section.html.” Accessed April 15, 2024.

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An A–Z of business planning for APC

Planning ahead is an essential requirement for any successful business. What do you need to know about the Business planning competency when completing your APC?

• Jen Lemen FRICS

24 February 2023

Commercial property

Corporate real estate

Running your business

Valuation of business and intangible assets

Business planning, a mandatory competency for all APC candidates, requires an understanding of the principles and tools used when devising a business plan, as well as how the process contributes to achieving corporate objectives.

But in addition to this general understanding, you should appreciate the importance of business planning and processes at the firm where you work, as detailed below.

Analysis: analysing a business is a key part of planning for it. This can involve the analysis needed to set up a new business, to manage change in an existing one, or to identify areas for growth or investment. Among the many tools that can be used is a strengths, weaknesses, opportunities and threats (SWOT) analysis. This is a framework that can be applied to any business, helping to identify internal and external factors that affect its performance and to understand current and future potential (see Figure 1).

Figure 1: Example SWOT analysis matrix for a new surveying business

Business types: businesses have a variety of structures, including sole traders, limited companies and partnerships, and understanding the type is important when planning ahead. Being a sole trader is a very simple way to set up a business, but you are then personally liable for its debts. To avoid such liability, you could form a limited company or limited liability partnership (LLP), each of which has its advantages and disadvantages. For example, both are treated very differently for tax purposes, with the former paying corporation tax, and the partners in a latter being taxed individually on their share of the profits. Advice from a tax specialist is always recommended when business planning or considering company structure.

Competition: typically occurring between similar companies serving a similar target market, competition could still come more widely from the same industry or sector. Therefore, analysing who your competitors are and how they are performing can help to inform your business planning, including identifying areas for growth or expansion, or where competition may otherwise be eroding profitability or opportunities.

Debtors and creditors: another part of business planning is understanding who owes money to a business – its debtors – or to whom the business itself owes money – its creditors. For example, a business may have taken a loan, in which case the lender is its creditor; alternatively, it may be owed payment of an invoice by a customer, who would be its debtor. Maintaining good payment practices and being aware of when sums become due is essential for business planning to maintain a good relationship with creditors. Likewise, understanding the amount that debtors owe and recognising any red flags that they are not able to pay can help avoid cash-flow issues and keep the business running smoothly.

Related article

An A–Z of accounting practice for APC

Elements: a business plan will typically include some or all of the following elements:

• an executive summary
• a business description
• a market analysis and strategy
• a marketing and sales plan
• an analysis of the competition, including their services
• an operating plan
• detail of company structure
• financial analysis
• objectives or goals
• summary of the strategy.

There is no fixed format or structure to a business plan, however, as this will be tailored to the specific business in question. You should still have read and be familiar with your firm's business plan.

Forecasting: this is an essential part of business planning, allowing consideration of what may happen in the future. However, as business planning can be akin to gazing into a crystal ball, it is often impossible to predict accurately. Using a variety of business planning tools and accurate, up-to-date data will help you make forecasting as useful as possible. You may for instance use work-in-progress schedules or forecast planned billing for instructions on which you are currently working.

Goals: these are what a business wants to achieve in the short, medium and long term, and could include improving service quality or profitability, or simply completing a project on time. Goals are most effective when they are specific, measurable, achievable, relevant and time-bound (SMART). For example, a goal of delivering reports within seven days of instruction is SMART whereas one that requires reports 'as quickly as possible' is not; the former is measurable and will be far more effective than the latter when considering whether the business has achieved its goals or not.

Horizons: businesses should plan to short-, medium- and long-term horizons, as their goals will apply not only to tomorrow but to longer periods as well – for instance, five to ten years. Planning over these different time horizons will help to keep a business on track and ensure that it is not just focusing on short-term gain – which often results in long-term pain.

Investment: at some stage in its journey, a business will need investment to grow. This could be financial, in the form of a loan or equity finance from a creditor, or it could be investment in training, service development or resourcing, such as hiring more staff or buying better equipment. Planning will identify the investment needs of a business and help develop a strategy to fund and resource these appropriately over the correct time horizon.

Joint ownership: most businesses will be jointly owned, with directors, shareholders or partners – depending on the business type – having a variety of views and goals. Being able to balance the needs of these joint owners will be key to success: a business that is being pulled in more than one direction or facing volatile management and leadership is unlikely to be successful. Having a clearly written plan that aligns the owners' interests to the goals and strategy of the business is therefore essential.

Key performance indicators (KPIs): these are quantifiable measures of performance over time for a specific objective, such as delivering reports within seven days or achieving a certain level of sales per department. Measuring KPIs consistently helps a business to track progress and identify trends, or to put plans in place where the indicators are not met. They can also keep a business focused on the right goals and avoid it becoming side-tracked. KPIs are typically monitored in a monthly report using a bespoke spreadsheet or database, shared with key staff.

'As business planning can be akin to gazing into a crystal ball, it is often impossible to predict accurately. Using a variety of business planning tools and accurate, up-to-date data will help you make forecasting as useful as possible'

Liquidity: this is a measure of how quickly a business can convert assets into cash, thus being able to meet short-term financial obligations. Lacking liquidity can be a problem when payments such as VAT or tax are due. However, holding too much money in liquid sources such as cash can limit a business's capital growth. In contrast, investing in property can make funds particularly illiquid – although this might be a good strategy for capital growth and supporting business strategy.

Market research: this is essential for a business, whether it is at the start-up stage or more mature, to understand the market in which it operates and its trends, as well as potential threats and opportunities. Market research is not just something to do once; it is a continuous process because markets are dynamic, and changes to interest rates, tax or competitors, for example, may dramatically affect business strategy. Any research completed should be summarised in the business plan, and the source documents kept on file for future reference.

Net profit: there is a popular saying that turnover is vanity, profit is sanity and cash is reality. Business health is important to consider when planning ahead and a key measure of this is net profit, also known as the bottom line. This is calculated by deducting operating, interest and tax expenses from growth profit. Net profit gives a good indication of business health and available funds, whereas turnover can mask the actual cost of operations: knowing both figures is essential to robust business planning.

Objectives: when planning, it is essential to align a business's goals with its wider corporate objectives. These are usually developed from the mission statement and set by those at the top of an organisation. Departmental-level objectives can be developed from the main corporate ones, and this helps to align the organisation's work. If a business strategy does not support these objectives, you could question whether it is the right strategy for the business.

Political, economic, sociological, technological, legal and environmental (PESTLE): this is another form of business analysis, based on the six named external factors. A business can consider these to assess the context in which it is operating for planning purposes. For example, what wider economic factors are affecting business performance? What technological innovations might help make the business more effective? And what environmental concerns does the business need to consider?

'Planning will identify the investment needs of a business and help develop a strategy to fund and resource these appropriately over the correct time horizon'

Quantitative and qualitative: business analysis tools can be both quantitative and qualitative. The former are based on facts and figures, whereas the latter use non-numerical data such as opinions or statements. Combining these forms of data can inform more robust business planning: for example, measuring performance data from a variety of sources and then discussing this with the staff or management involved to better understand their thinking.

Ratios: measuring financial ratios, such as working capital, debt and equity, profit margin and current ratio, can help to analyse a business's performance and inform planning. Using these ratios helps when trying to understand how efficient a business is, either by comparing past and present performance or its own performance with the ratios of competitors. These ratios could be included in the financial analysis section of a business plan.

Structure: understanding the structure of an organisation is key to successful business planning. There are various possible business structures, such as vertical, vertical and horizontal – or matrix – and open-boundary. A vertical structure could be functional, with a president at the top and roles such as head of HR and head of finance immediately beneath them. A vertical structure could also be divisional, with divisions beneath the president then split under various heads. Matrix structures have dual command, with employees reporting to two managers: say, one who is head of HR and another who is head of a division. Finally, open-boundary structures are varied and flexible, with connections where they are most effective between teams. There are many other types of organisational structure, though, and you should be sure you are able to explain how your firm operates.

Types of business plan: these include corporate, or top-level; departmental, at a lower level; strategic, with a specific function or service and a longer-term horizon; and operational, concerning how things work on a day-to-day basis. A business may therefore have more than one business plan: it is likely to have an overall corporate plan and then separate lower-level plans for departments, teams or specific services. The lower-level plans should align to the wider corporate business plan, however.

Unique selling point (USP): a USP helps define a business and the way it differentiates itself in the market. This should be included in the business plan, marketing campaigns and in the values set out by the business. Some firms may focus on a high-priced, high-quality product, while others may focus on low-cost, volume services, for example.

Variability: a business's fortunes and prospects will vary from year to year and with business cycles. It is vital, therefore, to monitor and update the business plan on an ongoing basis to help a business remain stable and avoid too variable a performance. All businesses will not only experience but also require change. However, if this can be planned and managed well, a business can remain profitable and efficient.

Working capital: this represents the funds available for a business to meet its current, short-term obligations. The amount of working capital required is calculated by dividing current assets by current liabilities, with the ideal ratio being between 1.5 and 2. This would suggest that a business is healthy and can meet its obligations in the short term.

X-ray: taking an X-ray approach means exploring all data about a business, speaking with relevant personnel and leaving no stone unturned. This will help to ensure that business plans are relevant and offer the best chance of success. While no one can predict the future, having good data available will still help you to manage change when required.

Year-end: knowing when a company's financial year ends can help when business planning, including managing tax payments and staff bonuses. Its year-end may differ to the end of the tax year, which falls on 5 April. Business plans may run on the company year-end, the tax year-end or on calendar years, depending on when a business was registered. Tax advice should be sought on whether staggering year ends may be beneficial, but this will depend on the specific circumstances.

Zenith: the Oxford English Dictionary defines this as 'the time or period at which something is at its best, most successful [or] most powerful'. A plan will help a business to project itself towards its zenith, and aiming realistically high will give it the best chance of reaching this point.

As an example of the aspects of business planning discussed in this article, all candidates should read and be familiar with the current RICS Business Plan . This includes the organisation's corporate objectives, market plans, risks and strategy for the years ahead.

'All businesses will not only experience but also require change. However, if this can be planned and managed well, a business can remain profitable and efficient'

Jen Lemen FRICS is co-founder of Property Elite Contact Jen: Email

Related competencies include : Business planning

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Everyone deserves to succeed. But today, for too many Canadians, especially Millennials and Gen Z, your hard work isn’t paying off like it did for previous generations. Your paycheque doesn’t go as far as costs go up, and saving enough seems harder and harder. It doesn’t have to be this way. Every generation should get a fair chance to get ahead.

One of the biggest pressures on people right now is housing. Young Canadians are renting more than ever and being priced out of their communities. Families are finding it difficult to get a good place to settle down. The cost to build homes is too high, and the time it takes to finish projects is too long. We need to build more homes in Canada, and we need to build them by the millions.

The Prime Minister, Justin Trudeau, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, and the Minister of Housing, Infrastructure and Communities, Sean Fraser, today unveiled the federal government’s ambitious housing plan, Solving the housing crisis: Canada’s Housing Plan , supported by new investments from the upcoming Budget 2024. At the heart of this plan lies a commitment to make housing affordable. No hard-working Canadian should have to spend more than 30 per cent of their income on housing costs. No Canadian should have to live without knowing they have a safe and affordable place to live.

The plan lays out a bold strategy to unlock 3.87 million new homes by 2031. This includes a minimum of 2 million net new homes, on top of the Canada Mortgage and Housing Corporation’s forecast of 1.87 million being built anyway by 2031. Federal actions in this plan, in Budget 2024, and taken in fall 2023 will support at least 1.2 million new homes, and we call on all orders of government to build at least 800,000 more homes by 2031.

Here’s what we’re doing:

Building more homes by bringing down the costs of homebuilding, helping cities make it easier to build homes at a faster pace, changing the way Canadian homebuilders manufacture homes, and growing the workforce to ensure we get the job done. This includes:

• A Public Lands for Homes Plan to lead a national effort to build affordable housing on federal, provincial, territorial, and municipal lands across the country. We will partner with homebuilders and housing providers to build homes on every possible site across the public portfolio and ensure long-term affordability.
• $15 billion in additional loans for the Apartment Construction Loan Program to build a minimum of 30,000 new rental apartments, in big cities, small towns, and rural communities alike, will be proposed in Budget 2024. With this additional financing, the program is on track to build over 131,000 new apartments by 2031-32.
• Launching Canada Builds, a Team Canada approach to building affordable homes for the middle class on under-utilized lands across the country. Canada Builds combines federal low-cost loans with provincial and territorial investments to scale up construction on rental homes for the middle class, from coast to coast to coast.
• Supporting Indigenous Peoples in urban, rural, and northern areas . We will also provide additional distinctions-based investments for Indigenous housing to be delivered by Indigenous governments, organizations, housing, and service providers.

Making it easier to own or rent a home by ensuring that every renter or homeowner has a home that suits their needs, and the stability to retain it. We’re putting measures to protect tenants against unfairly rising rent payments, leverage rental payment history to improve credit scores, increase the Home Buyers’ Plan withdrawal limit, extend mortgage amortizations for first-time home buyers buying newly built homes, and more:

• Launching a Tenant Protection Fund to provide funding to legal services and tenants’ rights advocacy organizations to better protect tenants against unfairly rising rent payments, renovictions, or bad landlords.
• Leveraging rental payment history to improve credit scores, helping you qualify for a mortgage and better rates.
• Increasing the Home Buyers’ Plan withdrawal limit by $25,000 and extending the grace period to repay by an additional three years.
• Extending mortgage amortizations for first-time buyers buying newly built homes . Mortgage insurance rules will be amended to allow 30-year mortgage amortizations exclusively for first-time home buyers purchasing new builds.

Helping Canadians who can’t afford a home by creating more affordable and rental housing – including for students, seniors, persons with disabilities, and equity-deserving communities – and eliminating chronic homelessness in Canada. This includes:

• Providing $1 billion for the Affordable Housing Fund to build affordable homes and launching a permanent Rapid Housing Stream to build on the success of the previous three rounds of the Rapid Housing Initiative.
• Launching a $1.5 billion Canada Rental Protection Fund to protect and expand affordable housing.

The Prime Minister also announced new measures included in Canada’s Housing Plan to attract, train, and hire the skilled-trade workers Canada needs to build more homes.

• $90 million for the Apprenticeship Service , creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers.
• $10 million for the Skilled Trades Awareness and Readiness program to encourage high school students to enter the skilled trades – creating more jobs and opportunities for the next generation of workers to build Canada up.
• $50 million in the Foreign Credential Recognition Program , with a focus on residential construction to help skilled trades workers get more homes built. Like our previous $115 million investment, this funding will remove barriers to credential recognition, so workers spend less time dealing with red-tape and more time getting shovels in the ground.

Transforming our housing system and solving the housing crisis will take a Team Canada effort. No one level of government, home builder, not-for-profit, or community can do it alone. We need every partner pulling in the same direction to build the homes Canadians need.

This is about realizing Canada’s promise of affordable housing for every generation – and it’s just one of the things that we are going to be doing in Budget 2024. Alongside these measures, we’re getting healthy food on kids’ plates, delivering stronger public health care, making life more affordable, and creating good jobs to make sure every generation can get ahead.

“We are changing the way we build homes in Canada. In our housing plan and Budget 2024, we are delivering ambitious action and investments to build more homes, make it easier to rent or own, and help the most vulnerable with stable housing. This is about restoring fairness for every generation, and housing is at the heart of that.” The Rt. Hon. Justin Trudeau, Prime Minister of Canada

“We are announcing today real, tangible measures that are going to help more younger Canadians get those first keys of their own. We are using every tool at our disposal to deliver housing without delay – because we want to make the dream of homeownership a reality for younger Canadians.” The Hon. Chrystia Freeland, Deputy Prime Minister and Minister of Finance

“Canada can and will solve the housing crisis, and we’re going to do it by getting every home builder, not-for-profit, mayor, city councillor, and premier pulling in the same direction to build the homes Canadians need.” The Hon. Sean Fraser, Minister of Housing, Infrastructure and Communities

Quick Facts

• The Prime Minister today also announced the creation of a new Deputy Minister of Public Lands and Housing position within the Privy Council Office. The Deputy Minister will oversee and report on federal efforts to build more homes for Canadians through the use of public lands, providing a single point of accountability within the public service. An appointment to this position will be announced later today.
• Since 2015, the federal government has helped almost two million Canadians find a place to call home.
• Restore generational fairness for renters, particularly Millennials and Gen Z, by taking new action to protect renters’ rights and unlock pathways for them to become homeowners. Learn more .
• Launch a new $6 billion Canada Housing Infrastructure Fund to accelerate the construction or upgrade of essential infrastructure across the country and get more homes built for Canadians. Learn more .
• Top-up the Apartment Construction Loan Program with $15 billion, make new reforms so it is easier to access, and launch Canada Builds to call on all provinces and territories to join a Team Canada effort to build more homes, faster. Learn more .
• Support renters by launching a new $1.5 billion Canada Rental Protection Fund to preserve more rental homes and make sure they stay affordable. Learn more .
• Change the way we build homes in Canada by announcing over $600 million to make it easier and cheaper to build more homes, faster, including through a new Homebuilding Technology and Innovation Fund and a new Housing Design Catalogue. Learn more .
• The Apartment Construction Loan Program , a $40 billion initiative that will be topped up with an additional $15 billion in Budget 2024 to boost the construction of new rental homes by providing low-cost financing to homebuilders. Since 2017, the Apartment Construction Loan Program has committed over $18 billion in loans to support the creation of more than 48,000 new rental homes. With our recently announced measures , the Apartment Construction Loan Program is now on track to help build over 131,000 new rental homes across Canada by 2031-32.
• The  Affordable Housing Fund , a $14+ billion initiative that supports the creation of new market and below-market rental housing and the repair and renewal of existing housing. It is designed to attract partnerships and investments to develop projects that meet a broad spectrum of housing needs, from shelters to affordable homeownership. As of December 31, 2023, the Fund has committed $8+ billion to repair or renew over 150,000 homes and support the construction of more than 32,000 new homes.
• The Housing Accelerator Fund , a $4 billion initiative that will be topped up with an additional $400 million in Budget 2024 to encourage municipalities to incentivize building by making transformative changes, such as removing prohibitive zoning barriers. To date, the federal government has signed 179 Housing Accelerator Fund agreements which, combined, will fast-track an estimated total of over 750,000 housing units across the country over the next decade.
• The Rapid Housing Initiative , a $4 billion fund that is fast-tracking the construction of 15,500 new affordable homes for people experiencing homelessness or in severe housing need by 2026. The Rapid Housing Initiative also supports the acquisition of existing buildings for the purpose of rehabilitation or conversion to permanent affordable housing units, focusing on the housing needs of the most vulnerable, including people experiencing or at risk of homelessness, women fleeing domestic violence, seniors, Indigenous Peoples, and persons with disabilities.
• Progress on these and other programs and initiatives under Canada’s National Housing Strategy are updated quarterly at  www.placetocallhome.ca . The Housing Funding Initiatives Map  shows housing projects that have been developed.
• On November 9, 2023, we signed a historic Housing Accelerator Fund agreement with the Province of Quebec.
• Building on the success of the 2023 agreement, the federal government will continue to work closely with Quebec to build more homes for Quebecers, including by delivering additional funding through the Housing Accelerator Fund and the new Canada Housing Infrastructure Fund.
• The Government of Canada’s Budget 2024 will be tabled in the House of Commons by the Deputy Prime Minister and Minister of Finance on Tuesday, April 16, 2024.
• Save more young families money and help more moms return to their careers by building more affordable child care spaces and training more early childhood educators across Canada. Learn more .
• Create a National School Food Program to provide meals to about 400,000 kids every year and help ensure every child has the best start in life, no matter their circumstances. Learn more .
• Secure Canada’s AI advantage through a $2.4 billion package of measures that will accelerate job growth in Canada’s AI sector, boost productivity by helping researchers and businesses develop and adopt AI, and ensure this is done responsibly. Learn more .
• Provide the Canadian Armed Forces with the tools and capacity they need to defend Canada and protect North America, advance Canada’s interests and values around the world, and support its members with an overall investment of $8.1 billion over five years and $73 billion over 20 years. Learn more .

Related Products

• Solving the housing crisis: Canada’s Housing Plan
• Backgrounder: Solving the housing crisis: Canada’s Housing Plan

Why you should wear sunscreen for the eclipse

• Even during a total solar eclipse, exposure to harmful UV rays can lead to sunburn.
• The window of totality, where the sun is completely eclipsed , lasts only four minutes at most.
• Wear sunscreen when you're viewing the total solar eclipse on Monday.

If you're watching the total solar eclipse on Monday , be sure to wear sunscreen.

Hopefully you already have a plan to keep your eyes safe from the sun — like wearing ISO-certified solar eclipse glasses . But you also need to think about your skin during the hour or two you spend watching the moon creep in front of the sun.

"The levels of damaging ultraviolet (UV) light will only be low during the brief, total solar eclipse occurring within the narrow path of totality, in which the sun is completely blocked by the moon," Christin Burd, a professor of molecular genetics at The Ohio State University who studies melanoma and aging, told Business Insider in an email ahead of the last US total solar eclipse , in 2017.

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Even if you're hoping to catch a peek at the eclipse between clouds, sunscreen is still essential. That's because UV light, which we can't see, still penetrates clouds.

That safe window of totality only lasts four minutes at most. After that, "the unblocked UV rays will be intense and could easily result in sunburn ," Burn said.

Those who are just popping out for a few minutes to see a partial eclipse, which varies in timing and size across the country, might get away without lathering up sunblock .

Here are some other things you should bring if you're going to see the total solar eclipse, according to Mark Littman and Fred Espenek, authors of " Totality: The Great American Eclipses of 2017 and 2024 ."

A pinhole camera .

A colander or straw hat, which can project the eclipse through holes onto paper or cardboard.

Snacks — it will be late afternoon, after all

Binoculars — for pointing at paper

Sunglasses (not for looking at the eclipse)

Solar eclipse glasses and solar filters — for looking at the eclipse

Camera equipment to take photos of the eclipse

A notebook to write down observations.

Lydia Ramsey Pflanzer contributed to an earlier version of this post .

Watch: A small Australian town was treated to a rare hybrid solar eclipse

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