wise decision. They can keep the planning 

process on track and record participant 

comments without biases or implications. 

The facilitator will try to involve all members 

of the planning group. Using resource persons from outside the cooperative can provide valuable insight and observations. 

However, care must be exercised that 

a decision made at any point of the planning process is that of directors 

of the cooperative and not of the resource 

persons. Directors carry the sole responsibility for the plan’s content and its execution. 

Strategic planning is important in 

plotting a future course, and it makes 

sense to prepare for that future in every 

way possible. 

There are five phases in the strategic 

planning process— agreement, fact-gathering, evaluation, plan definition, and 

reevaluation. Dividing the strategic planning 

process into five separate phases provides 

for logical and structured organization.

Long-term planning is a primary responsibility of directors. In the first phase, the 

directors agree to the strategic planning 

process. They explore 

the need to plan, decide who will be 

involved, and what will be their roles and 

responsibilities. The directors commit to 

developing and implementing the plan. 

The use of a facilitator and recorder 

trained in the art of strategic planning is a 

1

Understanding Cooperatives:

Strategic Planning

Cooperative Information Report 45, Section 10

The term “strategy” was first used in 

the military to describe the grand 

plan for winning a war. It is usually 

distinguished from “tactics” which 

are the plans for winning individual 

battles. Businesses use strategic 

plans to contend with their environments. These plans 

provide the fundamental direction of 

purposes and policies that define 

the cooperative.

United States

Department of

Agriculture

Rural Development

Rural Business

and Cooperative

Service

March 1995

PLAN DEFINITION

AGREEMENT

FACT GATHERING

EVALUATION

REEVALUATION
Phase two has three components. 

In the first, directors prepare a vision statement. This statement reflects the best possible future that can be seen for the 

cooperative in what it wants to accomplish 

and what the cooperative will be like when 

it achieves its ultimate purpose. The vision 

statement time-span is undefined. It could 

project through several generations of 

members. Some strategic planners use the 

word foresight instead of vision. Business 

foresight is based on insights into the 

trends in technology, demographics, regulation, and lifestyles that can be harnessed 

to rewrite business and industry rules and 

create new competitive space. A vision 

must be based on a solid factual foundation.

2

The second and third components 

assess and evaluate the internal 

and external environment. Accurate documentation, knowledgeable resource persons, responsive hired management, and 

involved directors are critical in these phases. Quality information is crucial.

First, evaluate the strengths and weaknesses of internal factors. These are the 

factors directors or the manager can control, such as plant and facilities operations, 

sources of debt financing, supplies and 

services, distribution of equity, and personnel numbers, including benefits. Internal 

assessment begins with a review of current 

business operations. A review of the articles of incorporation, bylaws, financial 

statements, policy statements, operational 

procedures, and contracts is necessary to 

gain an accurate assessment.

Second, evaluate the threats and opportunities of the external environment. This 

consists of the forces and trends beyond 

the control of the planning group such as 

climate patterns, interest rates, proposed 

Government regulations, and changes in 

technology, social attitudes, competition, 

and patron preferences. Outside resource 

persons often add insight to this assessment.

Phase three has two important tasks. 

The first is to create the mission statement 

for the business. This statement defines the 

philosophy and values of the cooperative 

and how it deals with its environment. It 

focuses on activities the cooperative conducts, states the needs the cooperative will 

attempt to satisfy, and communicates why 

the cooperative exists by answering four 

questions: What does the cooperative do? 

Who are its clients? Who are its members? 

How does the cooperative conduct itself? It 

A vision must be based 

on a solid 

factual foundation.
3

is important not to confuse the mission 

statement with the vision statement. The 

vision statement tells where the cooperative 

is going, while the mission statement tells 

how to get there.

The second task of phase three is to 

identify and evaluate the strategic options 

for the business. Factors like current or 

future policies, problems or opportunities, 

products, services, stated values, and location are identified. Each option should be 

described briefly, and policy questions 

should be addressed relating to the option. 

Conclude by examining the consequences 

of not addressing the option.

The strategic plan is defined in phase 

four. Start by choosing a strategic option. 

Often, several choices in direction and philosophy will become apparent and the 

planning group may have to choose. The 

decision may not be easy. It may be negotiated or delayed until everyone feels comfortable with it. In some instances, the 

choice may require a vote by the membership. Regardless of how carefully crafted 

the new direction may be, it can’t be successful if not supported by all directors and 

a majority of the membership.

Often, when moving the current position 

of the business in a new chosen direction, 

a “strategic gap” develops. In some cases, 

extending the present business strategy 

into the future will lead to the chosen direction. In others, major new programs, different locations, services, and products will 

be needed to reach the future goal. In 

either case, the careful selection of goals is 

the beginning of plan implementation.

Goals are the major steps needed to 

realize the vision statement. They target 

short-, medium-, or long-term accomplishments. Goals must be challenging, but 

attainable and ranked by priority. The outcome must be specific.

An objective is a short-term practical target related to a goal. Objectives are specific, measurable, related to a specific 

timeframe, and results-oriented. Several 

objectives may be needed to meet a goal.

Action plans are specific tasks to be performed to achieve objectives. They are 

intermediate steps to follow in moving from 

the present to the desired position stated in 

the objective. Develop a timeline for each 

action. Each should have acceptable 

parameters or variances of the desired 

position including financial costs and projections. Designating an individual to oversee each action plan provides for 

accountability.

Goals are the major 

steps needed to realize 

the vision statement.
This circular is one of a continuing series that provides training information and presentations for education 

resource persons who may or may not be familiar with the cooperative form of business. This series provides the 

basic background material they need and in a form that can be readily adapted, with limited preparation time, to a 

lecture or other presentation.

The U.S. Department of Agriculture (USDA) prohibits discrimination in all of its programs and activities on the basis 

of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental 

status, religion, sexual orientation, political beliefs, genetic information, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) 

Persons with disabilities who require alternative means for communication of program information (Braille, large 

print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free 

at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 

(Spanish Federal-relay). USDA is an equal opportunity provider and employer.

u Begin at a basic level;

u	Allow time for thinking through 

each step;

u Gather resource materials from a variety 

of sources;

u Consider suggestions and recommendations from all planning participants;

u Explore all suggested strategic options;

u Agree on and implement chosen strategic options;

u Constantly evaluate and revise actions if 

necessary. n

As soon as action plans are implemented, they should be reevaluated so the process can be started over. If desired results 

are not attained, recognize the failure and 

revise parts or the whole strategic plan. 

Strategic planning is an annual event. It 

takes skill and results improve with experience.

Summary

Here are some tips to follow to make the 

strategic planning process work for your 

cooperative: 

4

Strategic planning is an 

annual event.

To see this and 

other USDA cooperative publications online, visit: 

http://www.rurdev.

usda.gov/rbs/pub/

cooprpts.htm 

To order hard copies, e-mail: 

coopinfo@wdc.

usda.gov

or telephone:

1-800-670-6553.