The most successful undertakings started with well-laid out plans. The biggest businesses and firms grew with the help of properly developed strategies. If you take a careful look at some of the most successful businesses, each and every decision made, the action taken, and every resource allocated and spent, had logic and purpose behind them. All these are based on strategy. Strategies are not obtained from thin air. A lot of effort, thought, and time go into the creations of great plans and strategies. Strategy formulation is the process of establishing and determining goals, mission, and objectives of an organization. So what are the steps for an effective and winning strategy formulation?
Define the organization and its environment
You need to look at the organization as a whole. The points of interest should include:
– Your target market
This basically is the domain that your organization hopes to dominate. You need to clearly identify and define your target market. This means that you need to consider the demographic and psychographic factors that define your target market.
– Customers
You need to know who your customers are, how they perceive value, and you need to evaluate your ability as a business to meet the perception. You also need to look at the customers’ buying decisions and why they purchase certain products and services and leave out others.
– Offerings
What are you offering your customers? Do your offerings give solutions to your customers’ problems and do your products offer value to your customers? Getting answers to some of these questions will enable you to effectively define your organization and the environment it will operate in.
Define the strategic mission
Ordinarily, organizations want to achieve something as they move forward. Having a strategic mission in place will help in providing a clear picture and direction for the organization to achieve that long-range outlook and objective. The strategic mission serves as a definitive and clear guide for the organization and its employees to follow as they perform their duties and responsibilities.
Set the strategic objectives
Strategic objectives essentially represent what the organization must do in order for it to achieve a competitive edge in the market. These strategic objectives come in the form of specific responses and aims the organization must address with regard to competitiveness, long-standing sustainability and performance of the organization, and other business advantages.
Define the competitive strategy
A Competitive strategy is a long-term plan that will enable and organization to gain and maintain a competitive advantage over its competitors on the market. When determining the competitive strategy of the organization, there are three factors that must be considered and these are:
- The industry in which the organization is operating in
- The strengths and weaknesses of the organization
- The competitive position of the business
Implementation of the strategies
An organization can come up with very good strategies, but these strategies will be wasted if they are not well implemented. The organization needs to identify methods that will help in the implementation of these strategies.
Evaluate the progress and effectiveness of the strategies
Not all strategies work as expected and it is important to have a system in place that will monitor and evaluate the implementation and the progress of these strategies. The evaluation of these strategies will help in assessing whether the strategies are working or not.
