A new scorecard for strategic planning
Edward William Wright, Yue Cai Hillon, Mariano Garrido-Lopez and Drake Fowler
Edward William Wright,
Yue Cai Hillon and
Mariano Garrido-Lopez are
all based at the Western
Carolina University,
Cullowhee, North Carolina,
USA. Drake Fowler is based
at The North Carolina
Arboretum, Asheville, North
Carolina, USA.
PAGE 50 j JOURNAL OF BUSINESS STRATEGY j VOL. 40 NO. 2 2019, pp. 50-58, © Emerald Publishing Limited, ISSN 0275-6668
Introduction
Most organizations recognize the need for strategic planning. While some entrepreneurs
are successful in seizing an opportunity without a plan, good strategic plans substantially
increase the likelihood of business success. Researchers typically follow a standard
strategic planning process: creating the vision, mission and core values statements;
analyzing the external situation (trends, direct competitors and the market); evaluating the
firm’s resources (value chain); preparing an analysis of strengths, weaknesses,
opportunities and threats (SWOT); selecting strategy; and determining goals and programs
for realizing the plan.
Strategic planners must overcome several obstacles to be effective. Often, participants rely
upon brainstorming instead of research to gather the latest, factual data. Planners are also
hampered by a lack of tactics for conducting an analysis. As a result, participants tend to
create long lists of factors using ambiguous phrases with no prioritization. In some cases,
factors show up in more than one category with no explanation or attempt to reconcile the
conflict. Finally, strategic planners rarely establish a link between the analysis and the
subsequent selection of strategy.
This study introduces tools to assist planners in preparing the situational analysis and
deriving logical strategic choices based upon the SWOT analysis. These aids include an
environmental factors scorecard, a market favorability scorecard, a competitive
benchmarking scorecard, a resource evaluation scorecard and a strategy fit matrix.
Planners can use these devices to produce a research-based, situational analysis and as a
guide to select the most appropriate strategy.
The situational analysis – external
Strategic planners examine environmental factors such as global trends, industry
developments, market conditions and competitor positioning to derive the external
situational analysis. Researchers often find it difficult to tackle this challenge in an unbiased
way (Baer et al., 2013). Authors of popular strategic planning textbooks (Pearce and
Robinson, 2014; Rotheaermel, 2016) explain the essential elements of the situational
analysis but are less helpful in describing how to assess and interpret the research findings.
The environmental scan scorecard
Consider, for example, an environmental scan of political factors in the medical device
industry. The researchers, using various literature and research databases to discover
influential trends, find that regulatory changes and budget cuts to the Food and Drug
Administration (FDA) will be substantial. Will the impact be positive or negative on the
industry? How should the findings be interpreted for the firm? There is sparse literature
available to instruct planners in this research task.
DOI 10.1108/JBS-08-2017-0107
Following a review of political factors, the researchers move on to a review of economic
trends. Government databases and websites are available for collecting economic
information. Suppose that the results of data show that the US economy will grow at about
1.5 per cent annually for the next several years. Will that favorably or unfavorably impact the
medical device industry? How significant will the impact be on the individual business?
Strategic planners also explore social, technological and ecological factors as part of a
complete environmental scan. Upon conclusion, the researchers must judge the overall
impact of the trends to set the stage for selecting strategy. Finding and interpreting relevant
data can be difficult.
This study introduces an environmental scan scorecard to assist planners (Table I). The
researchers assign a score to indicate the anticipated impact of each finding for every
factor. For example, suppose researchers conclude that expected budget cuts to the FDA
will likely reduce the time to market for new medical products by 20 per cent. The
researchers conclude that this is an important opportunity with an expected impact of þ2.
Likewise, the expected growth of the economy by 1.5 per cent annually would be recorded
as a positive economic factor but with a score of þ1 due to its more moderate impact. Other
trends are included in the example below as a sample of a completed scorecard.
The environmental scan scorecard serves as a convenient summary tool for the SWOT
analysis.

The market analysis scorecard

The market analysis is based on Michael Porter’s Five Forces Model (Porter, 2008). Porter
maintains that five attributes: supplier power, the threat of substitutions, buyer power, the
threat of new entrants and the intensity of competition, indicate whether a market is
favorable.
Supplier power refers to the influence that vendors have over the supply and pricing of
materials or services essential to the operations of a business or industry (Wright and
Fowler, 2017). The threat of substitutes denotes the likelihood that a close substitute is
readily available for a company’s product. Buyer power represents the control that
customers have over the negotiated purchase of a product. The threat of new entrants
refers to the ease with which a new competitor may enter the market. Intensity of
competition signifies whether an industry is competing based on price or product
differentiation. Highly differentiated products are generally in a favorable market situation.
Researchers typically use multiple sources of data, surveying, and interviews to gauge the
market situation. This study introduces a market favorability scorecard to help strategic
planners in the assessment (Table II).

Table I Environmental scan scorecard

Opportunities Threats
Factors Influential trends 0 to þ 2 2 to 0

Economic factors Economic growth of 1.5% in the USA þ1

Continued strong US dollars 1
Social factors Aging US demographics þ2
Political factors Expected funding cuts to the FDA þ2
Anticipated changes to US Health Care Insurance 2
Technological factors 3D printing of medical components þ1
New grades of medical plastics þ1
Ecological factors Reduced environmental regulations þ1

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 Table II Market favorability scorecard
Rating 1-10 (unfavorable to favorable)

Supplier power 9
Threat of substitutions 8
Buyer power 7
Threat of new entrants 9
Intensity of competition 7
Total 40
Average 8

In this exercise, strategic planners assess each factor on a score from 1 to 10 based on the
favorability of the market for the chosen unit of analysis (an industry, business or product
line).
As an example, consider the market evaluation of a medical products company whose main
product is a cervical collar for head trauma patients. The product is made from readily
available materials. No individual supplier can control prices or influence the overall supply.
Researchers consider this a highly favorable market condition and assign a score of 9 for
supplier power.
Researchers score the threat of substitutions favorably with a rating of 8. Though other
companies manufacture cervical collars, this company has a utility patent for its design.
Similar products are available, but no other product has the unique features of this one.
Planners give buyer power a 7 for the company’s limited ability to set a premium price due
to constraints imposed by Medicare and Medicaid and assign a value of 9 for the threat of
new entrants. Not only does the company have protection due to its patent but also medical
companies are closely regulated by the FDA. New, competing products would have to
survive a rigorous review by the FDA for product safety and efficacy. Due to these
limitations, the threat of new entrants is low and the favorability of the market is high.
Finally, researchers give intensity of competition a moderately favorable score of 7.
Manufacturers of cervical collars are not competing solely on cost. However, the price does
have some influence on the customer’s purchase decision when it is not fully covered by
insurance providers.
Overall, the planners give the market favorability a score of 40 with an average value of 8.
Researchers may use discretion to weigh each factor’s relative importance on market
conditions. Final average scores are interpreted as follows: 1-3 = a poor market; 4-6 = a
neutral market; 7-10 = a favorable market.

The competitive benchmarking scorecard

In competitive benchmarking, researchers compare a business to its direct competitors
based on the critical success factors for the industry. Effective competitive benchmarking
largely depends upon the appropriateness of those success factors. At times, an industry
research report will provide the relevant critical success factors based upon validated
research. More often, strategic planners conduct primary research where customers or the
target market segment are surveyed and quantitative analysis reveals success factors This
study introduces a competitive benchmarking scorecard as a tool for comparing and
evaluating competitors (Table III).
In this example, investigators compare the company to three direct competitors using the
critical success factors from a commercially available research study. The researchers
award the company the highest score (5) for access to innovative technology due to its
ownership of the patent for the cervical collar. Competitor 1 also has a patented product but

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 Table III Competitive benchmarking scorecard
Competitive benchmarking (1-5 with 5 being most favorable)
Critical success factors Our company Competitor 1 Competitor 2 Competitor 3

Access to innovative technology 5 4 3 2

Product customization 5 3 4 4
Market scope 2 4 5 4
Price/reimbursement 2 3 4 5
Access to distribution channels 2 4 4 3
Average 3.2 3.6 4.0 3.6
Strengths Patent protected product Established Broad product line Medicare
Ability to customize player recommended
Weaknesses Weak market presence due to size. Generic Products generally Products generic and
Limited product line and product line dated somewhat outdated
distribution

the researchers consider the technology somewhat dated (score 4) with less potential for
individualization. Competitor 2 offers a line of non-proprietary but proven cervical collars
(score 3) while Competitor 3 offers a line of imported, generic products (score 2).
Investigators also award the company the highest score for product customization (5) due
to the ease of customization based upon the three-dimensional (3D) printing of a main
component to match the physical characteristics of the patient. Competitor 1 has a product
with limited customization potential (score 3), while Competitors 2 and 3 provide minor
customization by switching out Velcro strapping for individual patients.
Market scope is the broadness of the company’s market appeal, including its brand
recognition, product availability, and breadth of products. Researchers score the company
the lowest in this category (2) due to its narrow product offering and small market presence.
Comparisons to additional critical success factors are also shown in the scorecard. Lastly, the
investigators note each competitor’s strengths and weaknesses based upon market positioning.

Situational analysis – internal

Strategic planners pay attention to the internal situational analysis as an important
assessment of a firm’s circumstances. In this analysis, researchers look for sources of
sustainable competitive advantage (Wernerfelt, 1984), which must have four attributes
(Barney, 1991). Each must be valuable in the sense that it can be used to exploit
opportunities or minimize a threat, rare among the firm’s competitors, difficult to imitate, and
there can be no close substitutes that are valuable but not rare. Researchers consider
resources which meet all four criteria as strengths and possible sources of sustainable
competitive advantage. This study introduces a competitive benchmarking tool based on
Barney’s original checklist (Table IV).

Table IV Resource test for competitive advantage

List resources
Place 0 or 1 in each box to the
right. (0 = does not qualify; Imperfectly Strength (Sum of
1 = qualifies) Valuable Rare Imitable Non-Substitutability rows must total 4)

US utility patent 1 1 1 1 4
Substantial market capital 1 0 0 0 1
Management team experience 1 1 0 0 2
Access to EDS interest groups 1 1 0 0 2
3D printing capabilities 1 0 0 0 1

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 In this example, strategic planners identify the company’s utility patent as a resource. An
assessment yields a positive score for valuable, (the design is popular with customers), a
positive score for rare, (the patent keeps the product unique), a positive score for difficult to
imitate (the patent safeguards duplication of the design) and a positive score for no close
substitutes. Thus, the patent passes the resource test for all four criteria (total score of 4),
which qualifies it as a strength and a possible source of competitive strategic advantage.
Researchers also assess the additional resources: market capital, management team
experience, access to certain patient groups and 3D printing capability; however, each of
these falls short as a source of competitive advantage (scores 1, 2, 2 and 1, respectively).
The utility patent is the only resource that meets all four criteria.

The strengths, weaknesses, opportunities and threats analysis

Management teams commonly use the SWOT analysis as a tool for strategic planning (Bartol
and Martin, 1998; Dyson, 2004). Despite the importance of having detailed knowledge of an
enterprises’ strengths and weaknesses, many companies only have vague information about
these valuable facts (Houben et al., 1999). Previously, strategic planners found compiling the
SWOT analysis an abstract exercise, highly dependent on the experience and opinion of the
participants. This paper advises the use of the proposed scorecards to demystify compiling
the SWOT matrix and to provide structure for its interpretation. Table V presents an example of
a matrix with the contents derived from the scorecards as follows:
Strengths (from Tables III and IV). Researchers review Tables III and IV to identify strengths.
High competitive benchmarking scores from Table III indicate strengths related to market
position and the industry critical success factors. In the resource test exercise (Table IV),
internal resources which received a score of þ4 qualify as internal strengths. Strategic
planners should record these items as strengths in the SWOT matrix (Table V).
Weaknesses (from Tables II and III). Researchers should consider low competitive
benchmarking scores (Table III) relative to direct competitors as weaknesses. Weaknesses
are also identified by the market favorability exercise (Table II) depending upon the overall
average score. In both cases, the weakness stems from a lack of internal resources needed
to be competitive. Strategic planners should record these items as weaknesses in the
SWOT matrix (Table V).
Opportunities (from Tables I and II). Researchers review Tables I and II for possible
opportunities. In the environmental scan, factors with the greater positive values (þ2) are
primary opportunities. Investigators should use discretion in considering any of the lower
value factors for inclusion. Opportunities may also be derived from Table II, depending
upon the overall average score of the favorability of the market.

Table V SWOT analysis

Strengths Weaknesses
US Utility Patent protecting product design Limited market scope and poor access to
(Table IV) distribution channels due to size (Table III)
Ability to customize products and innovate High price relative to competitors (Table III)
(Table III)
Opportunities Threats
Aging US and Western world demographics Anticipated changes to US Health
(Table I) Insurance (Table I)
Expected funding cuts to FDA (Table I)
Favorable market situation (Table II)

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Threats (from Table I). Researchers assess the environmental scan (Table I) for factors with
high negative values and include these as threats in Table V. Strategic planners should use
discretion when deciding to include other, lower value factors.
The authors maintain that this scorecard-based analysis process mitigates several common
problems. Generally, SWOT matrixes are long lists of relevant and irrelevant factors. This
scorecard approach promotes greater scrutiny of each factor and minimizes the tendency
to include every factor which may influence the firm no matter how remote the possibility.
Second, because strategic planning often takes place over an extended time frame, the
scorecard-based SWOT helps overcome any availability heuristic biases – the tendency to
rely upon information that is more recent and easier to recall and to attribute greater value to
that data than is warranted (Schwarz et al.,1991). Finally, as addressed in the upcoming
section, the scorecard links directly to the choice of strategy from the many grand strategy
options.

Linkage to strategy selection

Based on the assumption that a good strategy maximizes strengths and opportunities and
minimizes threats and weaknesses (KohlöVel, 2000), strategic planners should evaluate the
SWOT table for logical combinations which answer the following questions (Lobriser and
Abplanalp, 1998):
Q1. Which strength fits with which opportunity?
Q2. Which strength fits with which threats?
Q3. Which weakness fits with which opportunity?
Q4. Which weakness fits with which threat?
Researchers formulate logically derived strategies by finding the synergistic combinations.
Using the matrix in Table VI, investigators take each possible combination and consider the
logical strategy result. For example, S1/O3 indicates that Strength 1 and Opportunity 3 have
been appraised. With this methodology, researchers systematically look for possible
synergistic combinations. The results of mapping out strategies in this way are shown in
Table VI.
Researchers assess the strategic fit of the strengths and weaknesses with the opportunities
and threats using a scale of 0-2. A score of 0 indicates no strategic fit and a 2 denotes a
strong strategic fit. The results of this exercise are found in Tables VII-X.

Strengths, weaknesses, opportunities and threats strategy fit scorecards

Upon evaluation of the possible synergies, the researchers conclude that exploitation of the
product design patent and the development of customized products should be pursued as
strategic objectives. This infers a product development grand strategy. Additionally,
expected reductions in FDA regulations and the firm’s ability to make customized products

Table VI Grounded approach based upon SWOT synergies (corresponds to Table V)

Strengths Weaknesses
S1 W1
S2 W2
Opportunities Threats
O1 T1
O2
O3

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 Table VII Strengths/opportunities
Strength Opportunity Fit (0-2)

S1 O1 0
O2 1
O3 2
S2 O1 1
O2 1
O3 2

Table VIII Weaknesses/opportunities

Weakness Opportunity Fit (0-2)

W1 O1 0
O2 0
O3 1
W2 O1 0
O2 0
O3 0

Table IX Strengths/threats
Strength Threats Fit (0-2)

S1 T1 0
S2 T1 0

Table X Weaknesses/threats
Weakness Threats Fit (0-2)

W1 T1 0
W2 T1 1

present additional possible synergies. The company may also reduce the weakness of the
cost of its design and the threat of reduced US health-care insurance by focusing on a cost
reduction effort for its eventual product.
While the SWOT match-up evaluation identifies likely areas for strategic synergies, the
researcher selects the appropriate grand strategy to exploit the synergy. Applying the
results of the fit analysis together with commonly recognized grand strategies leads to
the logical match-ups in Table XI.

Strategy execution
Once strategic planners determine the appropriate grand strategies, then goals, programs
and budgets must be devised and monitored to execute the plan. Such goals and
programs exist in the realm of management (as opposed to strategic planning) and are the
deliverables of the strategic plan. These objectives usually have a shorter horizon than the
strategic plan itself. Managers typically devise multiple annual goals to execute a strategic

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 Table XI Grand strategies to utilize strengths to exploit opportunities
From Table VII
(Fit Scores = 2)
Strength Opportunity Grand strategy

S1 – US Utility patent protecting O3 – Favorable market situation Product development

product design
S2 – Ability to customize O3 – Favorable market situation Product development
products and innovate

plan. For example, from Table XI, strategic planners determined that the grand strategy to
exploit the utility patent (Strength S1) to capture a market segment (Opportunity O3) is
product development. A marketing manager would have a goal to deliver the product
specifications to the design group by a certain time. The sales manager, aligning objectives
to this same grand strategy, could have a goal to develop distribution channels and to
negotiate agreements with key distributors for the new product. The R&D manager would
have a goal of determining engineering specifications for the product and producing a
prototype. The operations manager may need to determine the production layout and
equipment requirements as objectives. The grand strategy may be appropriate for several
years in the future, while the annual goals and programs will change frequently. The adage
that success comes to those that “plan the work and work the plan” remains a truism of
strategic management.

Conclusion
This study makes several contributions to the literature of strategic planning. The
authors present scorecard tools to assist the strategic planner with the situational
Keywords:
analysis and provide a variation of Barney’s resource test for competitive advantage for
Strategy,
the internal analysis. Additionally, the paper outlines a process for creating a research- Strategic planning,
based, SWOT analysis and links synergistic combinations of SWOT elements to the SWOT analysis,
choice of strategy, based upon the approach by Lobriser and Abplanalp, 1998. In Environmental scan,
Grand strategy,
doing so, the authors provide managers with the tools and guidelines for objective and
Situational analysis
more effective strategic plans.

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Corresponding author
Edward William Wright can be contacted at: ewwright@wcu.edu

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