Strategy formulation is a process by which a company selects the most suitable approaches to accomplish its defined objectives. This process is vital for the success of a company, because it gives a structure to the activities that will prompt the expected outcomes. Strategy formulation aims to develop coordinated actions for managing the company because of ecological chances and dangers (Hackney & Little, 1999). Furthermore, strategy formulation incorporates defining the mission, framing goals on distinctive levels, creating support plans, and setting the policies of an organization (Hill & Westbrook, 1997). Strategy formulation starts with a comprehensive examination to the strengths, weaknesses, opportunities, and threats (SWOT analysis). In the same connection, it is essential to show the vital role of actualizing a suitable order in strategy formulation.
The definition of a sound procedure encourages various actions and expected outcomes that might be troublesome. When a strategic plan is communicated to all members in a company, it gives workers an apparent vision of what the goals and purposes of the company are. The formulation of strategies is established in a specific order to allow a company to analyze the possibility of change within a reasonable period and to plan for change instead of waiting inactively until the market forces constrain it. Strategic formulation in a specific order permits an organization to plan its capital rationing. Organizations have constrained funds to invest and must dispense capital trusts where they will be more effective and infer the highest profits for their investment.
It is important to formulate strategies in this specific order for the process to flow smoothly. Some strategies cannot be implemented before others. Strategies are formulated in a manner such that those that provide direction for other strategies come first in the formulation process. Formulating strategies in a specific order also enables a company to assess its resources, allocate, and identify the most effective plan to maximize return before taking further actions.
To get primed for strategy formulation, a company should first survey on the off chance that it is prepared. While various issues must be tended to in evaluating readiness, the determination descends to whether the managers of a company are sincerely dedicated to the effort, and have the capacity to give the fundamental consideration regarding the whole picture. Managers ought to first study the aggressive drives in their settings, deduce a set of options that help the company to go up against those powers, and afterward execute the options. The mission of a firm offers a long-range point of view of what the firm strives for going forward and define a specific order to follow in strategy formulation. A clearly expressed mission will offer a company with an aide for executing its plans. The components of a solid mission statement should incorporate the values that the company holds, special capabilities, the nature of the business, position the company holds in the market, and the vision of the company. This clearly indicates the need to formulate strategies in a specific order. Without the mission to guide the process of formulating the strategies, there will be no flow of actions to be taken.
Following a specific order in strategy formulation holds many benefits. Undoubtedly, most techniques are dependent upon systemic methodology (Iivari, Hirschheim & Klein, 2001). Following a specific order will help in handling complex issues through partitioning them into sensible time-based parts and sees how these segments associate with one another, which gives a full understanding to strategy formulation process. In addition, applying a specific order enables managers to draw a framework outline for the company, which gives the bases to effective critical thinking, and therefore produce a dynamic and systematic strategy.
JIivari, J., Hirschheim, R., & Klein, H. (2001). A Dynamic Framework for Classifying Information Systems Development Methodologies and Approaches. Journal of Management Information Systems 17(3), 179-218
Hackney, R. & Little, S. (1999). Opportunistic Strategy Formulation for IS/IT Planning. European. Journal of Information Systems 8, 119 – 126.
Hill, T., & Westbrook, R. (1997). SWOT analysis: It’s time for a product recall. Long Range Planning, 30, 46-52.