Overview of strategy formulation

Stages of Strategic Management

The strategic-management process consists of three stages:

• Strategy formulation

• Strategy implementation

• Strategy evaluation

Strategy Formulation

Vision defines where we are going.

Mission defines who we are and what we are doing.

Vision will be just a dream without mission.

And mission will be just a waste without a vision.

External Opportunities and Threats

Economy

Social

Cultural Factors

Demographic

Environmental

Political

Legal

Governmental

Technological Trends

Competitive Trends

Strategic management is all about gaining and maintaining competitive advantage.

Your organization has something that anyone does not have

Competitive Advantage

• Windows bought Nokia

• Smart bought Sun Cellular

• Smart bought Araneta Coliseum

• MOA Stadium

Internal Strengths and Weaknesses

• Management

• Marketing

• Finance/Accounting

• Production/Operations

• Research and Development

• Management Information Systems

People

Machines/ Equipment

Land and Buildings

Consumption of Energy

MATERIALS

Money

What will happen to our organization

if we cannot adapt?

Long – Term Objectives

It should be SMART

Difference between Objectives and Mission/Vision

• Objectives are different per department.

• Objectives are different per day and per year.

• Objectives are guided by the mission and vision.

• Objectives are usually from two to five years.

Alternative Strategies

Strategy Formulation includes:

• Developing a vision and mission

• Identifying an organization’s external opportunities

and threats

• Determining internal strengths and weaknesses

• Establishing long-term objectives

• Generating alternative strategies

Case Study

The six broadcast networks—ABC, CBS, Fox, NBC, UPN,

and WB—are being assaulted by cable channels, video

games, broadband, wireless technologies, satellite radio,

high-definition TV, and digital video recorders.

The three original broadcast networks captured about 90

percent of the prime-time audience in 1978, but today

their combined market share is less than 50 percent.

The strategic-management process consists of three stages:

• Strategy formulation

• Strategy implementation

• Strategy evaluation

The ACTION STAGE of Strategic Management

Implementing strategy

means mobilizing your

MACHINES,

EQUIPMENT,

MATERIALS, FACILITIES,

MONEY, and PEOPLE.

Often considered to be the MOST DIFFICULT STAGE in strategic management.

Strategy Implementation needs ABILITY and ATTITUDE.

The strategic-management process consists of three stages:

• Strategy formulation

• Strategy implementation

• Strategy evaluation

Strategy Evaluation

Because SUCCESS today is no guarantee of SUCCESS tomorrow!

Knowing

WHAT,

WHEN,

WHERE, and

WHY particular

strategies are

not working

well.

All strategies are subject to future modification

because EXTERNAL AND INTERNAL FACTORS

are CONSTANTLY CHANGING.

Stages in Strategic Management

Stages in Strategic Management

• Where are we now?

• Where do we want to go?

• How are we going to get there?

Benefits of Strategic Management

Strategic management allows an

organization to be more proactive

than reactive in shaping

its own future.

To help organizations formulate

better strategies through the use of a

more systematic, logical, and rational

approach to strategic choice.

Seventeen Guidelines for

the Strategic-Planning

Process to Be Effective

It should be a people process more than a paper process.

It should be a learning process for all managers and employees.

It should be words supported by numbers rather than numbers supported by words.

It should be simple and non-routine.

It should vary assignments, team memberships, meeting formats, and even the planning calendar.

It should

challenge the

assumptions

underlying the

current

corporate

strategy.

It should welcome bad news.

It should welcome

open-mindedness

and a spirit of

inquiry and

learning.

It should not be a bureaucratic mechanism.

It should not

become

ritualistic,

stilted, or

orchestrated.

It should not be too formal, predictable, or rigid.

It should not contain jargon or

arcane planning language.

It should

not be a

formal

system for

control.

It should not disregard qualitative

information.

It should not be

controlled by

“technicians.”

Do not pursue too many strategies at once.

Continually

strengthen

the “good

ethics is good

business”

policy.