Strategy Formation Process:
In general, the strategy formation process is straight forward. The process brings all key factors for consideration before the strategy is formed. Participation of all strategy formation stakeholder of the organization brings the internal and external reality, strength, weakness, opportunities and threats into the process. All organization exists for a purpose. The core objective of any profit organization is to create value to customer and generate profit to the share holder or the owner of the organization. The value dynamics is applicable to all profit organization. The value to the customer is generated by providing a product or service.
The steps involved in the competitive strategy formation are listed below.
- Review four perspectives of the strategy map and its alignment. Choose learning & growth or people perspective based on the organization.
- Identify the strategic objectives for each perspective and emphasis on the identified key words from the vision and mission statement.
- Describe each strategic objective by a vivid statement
- Assess the feasibility and availability of metrics for the key performance measures.
- Refine the key performance measure if the metrics are not available with in the organization and unrealistic to generate the metrics.
- Set the target for the long term
- Incrementally assign the targets into different duration. (per year or per quarter)
- Theme is a group of the related initiates in duration.
- Identify a theme owner
- Identify a owner for each initiative
The core challenge in the strategy formation is to identify the differentiators. Even when an organization has a differentiator in the respective market segment, implementation of the strategy is critical for the organization success. Execution of the strategy contains two major parts. One is to identify the projects or initiatives and second part is to align the whole organization towards the strategy.
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A company’s true value is largely determined by its long-term performance potential as shaped by management’s decisions made today. These decisions guide the translation of the company’s mission, its purpose for existing, into the products and services it provides and hopefully the market wants.
Strategic planning is an iterative, ongoing process consisting of:
Analysis: assessment of the internal and external factors effecting the organization’s ability to achieve its mission
Alternative Development: detailed assessment of the costs, benefits, and risks associated with strategic alternatives including both major, ongoing and newly proposed activities
Alternative Selection: identification of the current portfolio components and proposed activities that will be pursued and the timeframe for execution
Resource Projections: aggregation of the personnel, financial, physical, and technological needs including an assessment of the ability to acquire these resources within the needed timeframe
Plan Development: final validation of the organization’s mission and compilation and approval of its long-range and annual business plans
Execution of these iterative processes takes place throughout the year with a frequency dictated by the pace of market change.
We at StrategyDriven (www.StrategyDriven.com) believe in the power of effective planning coupled with execution. Our website is dedicated to providing executives and managers with the strategic planning and tactical execution best practice tools and techniques needed to create organizational alignment and accountability to acheive superior results.
I hope you and your readers will visit the StrategyDriven website at http://www.StrategyDriven.com.
All the Best,
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co-Host, StrategyDriven Podcast
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