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Enhancing Business Success through Effective Strategy Formulation

The strategy formulation process is crucial for organizations seeking to align their objectives with their environment. It fosters strategic thinking, enhances communication, and coordinates efforts, injecting both structure and creativity. Good strategies are judged by their results and should be tailored to business needs and culture. The process is inherently flexible, involving both formal and informal elements. With a focus on long-term goals and a deep understanding of current contexts, the key interlocking aspects—strategic intent, assessment, and choice—guide businesses toward effective decision-making.

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Enhancing Business Success through Effective Strategy Formulation

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  1. The Strategy Formulation Process Chapter 6 Overview (c) Macmillan & Tampoe 2001

  2. 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 (c) Macmillan & Tampoe 2001

  3. Characteristics of ‘good’ strategy • Judged by the results achieved NOT by the process • Process must match: • business needs • Culture • Specific issues of the context • Process must be: • Original • Creative • Easy to implement (c) Macmillan & Tampoe 2001

  4. Nature of the formulation process • Can be both: • formal and informal • simple and complex • Analytical and qualitative • Involve many people or just a few (c) Macmillan & Tampoe 2001

  5. 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 and resources • Be based on fact and reality with some imagination • Have a good understanding of the present • Be able to think imaginatively about the future (c) Macmillan & Tampoe 2001

  6. The 3 Interlocking aspects of the Strategy Formulation Process Strategic Intent Strategic Assessment Strategic Choice (c) Macmillan & Tampoe 2001

  7. The 3 Aspects of Strategy FormulationStrategic Intent • Driver of Strategy Formulation Process • Provides direction for strategy • Answers question “Where do we want to go?” (c) Macmillan & Tampoe 2001

  8. 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?” (c) Macmillan & Tampoe 2001

  9. 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?” (c) Macmillan & Tampoe 2001

  10. Activities and Results of Process Activities in Process Intending Assessing Choosing Results from Process Intent Assessment Choice (c) Macmillan & Tampoe 2001

  11. 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 (c) Macmillan & Tampoe 2001

  12. Results from the strategy formulation process • Goals that are simple, consistent and long term. • Profound understanding of the competitive environment • Objective appraisal of resources • Effective implementation Source: Robert Grant 1995 “Contemporary Strategy Analysis” (c) Macmillan & Tampoe 2001

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