Strategic scope refers to the products and services a company plans to offer over a specific period, and indicates where and to which target markets they will be sold.
Establishing strategic scope is one of three sets of decisions a company makes as part of the strategic planning process, with the others being defining strategic goals (targets and expected results for the coming years) and choosing key success factors (the important elements required for the company to achieve its goals).
Strategic scope decisions are important because they:
- Set targets for how much profit will come from existing vs. new markets
- Identify the work priorities and the volume of work that must be undertaken by the company
- Determine execution plans for organizational structure, sourcing, manufacturing, marketing, sales, tools and technologies, etc.
- Establish which markets will be entered or exited
Companies use the insights from their SWOT analysis to set their scope. It is refreshed annually as part of the strategic planning process.