Business Strategy: Elements in the Strategy Process
LMC explains Business Strategy: Elements in the Strategy Process
A strategy framework used to detail the steps needed to be taken and the relative order of execution in the process of analysing, choosing and implementing a business strategy. There are two main phases: formulation and implementation, although in practice these two usually overlap somewhat in their execution. These two phases are further subdivided into three main areas of analysis, choice and implementation, and again into seven individual steps. At each step, the framework identifies key questions to be asked to guide the process.
The first stage consists of defining organisational purpose and detailing facts about the current internal and external (environmental) situation a company is in and where exactly it wishes to be. Questions such as "What is our purpose?", allow the company to develop a mission statement or a list of company aims. The internal/external facts are determined by an analysis of company strengths and weaknesses.
The second stage involves comprehensively laying out a company's options, taking all factors into account including company mission, environment, capabilities and values. The company will then examine and critically appraise each of the strategic options available, and determine where and how it will need to direct its efforts for each one, before selecting the best solution.
This stage involves firstly examining the company resources and competencies to determine readiness for strategy implementation. The company then specifies how the chosen strategy will be implemented using a task list. Finally, the company will closely monitor the performance of the strategy during implementation to assess its progress against the pre-agreed targets.
The strategy process is often cyclical due to constantly changing external environmental forces. In this situation, new assumptions have to be considered and the processes of strategic analysis must be revisited. The benefits of the strategy process are in the discussions and analysis involved in producing the plan. The robust nature of the strategy plan benefits companies by forcing managers to:
- Plan ahead, anticipate change and consider theoretical risks and solutions
- Provide a bridge between long and short term plans (objectives and operational activities)
- Secure a unified company approach by building the core objectives of the company into the operational activities
- Exercise performance measurement and an element of control over company strategy