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Overview

The Strategy Formulation

Process

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Importance of Strategy Formulation Process

Causes strategic Thinking

Mechanism to ease the communication of ideas

Co-ordinate the efforts of those involved in the

process Inject structure into the thinking without rigidity

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Characteristics of good strategy

Judged by the results achieved NOT by theprocess

Process must match: business needs

Culture

Specific issues of the context

Process must be: Original

Creative Easy to implement

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Nature of the formulation process

Can be both:

formal and informal

simple and complexAnalytical and qualitative

Involve many people or just a few

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Strategic Thinking Should

Consider the enterprise as a whole

Be about the long term and not the immediate

Address the organisations relationship with

the environment and its capabilities andresources

Be based on fact and reality with some

imagination

Have a good understanding of the present

Be able to think imaginatively about the future

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The 3 Interlocking aspects of the

Strategy Formulation Process

Strategic

Intent

StrategicAssessment Strategic

Choice

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The 3 Aspects of Strategy Formulation

Strategic Intent

Driver of Strategy Formulation Process

Provides direction for strategy

Answers question Where do we want to go?

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The 3 Aspects of Strategy Formulation

Strategic Assessment

Provides relevant knowledge of strategic context

Anchors future strategies in reality

Answers question Where are we now?

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The 3 Aspects of Strategy Formulation

Strategic Choice

If no choice - no strategy needed

The link to action

Answers question How to get from where we are to

where we want to be?

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Activities and Results of Process

Activities

in Process

Intending

Assessing

Choosing

Results from

Process

Intent

Assessment

Choice

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Effective strategy formulation processes

Customer awareness

Supplier relationships

Stakeholder influences

Understanding of competence

Awareness of technological change and innovation Mix of people involved in process

Encouragement and understanding of top management

Communication of results and reaction to feedback

Sound logic and balance to the process Process design but not over-design

Considered role of external support

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Results from the strategy formulation process

Goals that are simple, consistent and

long term.

Profound understanding of the

competitive environment

Objective appraisal of resourcesEffective implementation