Strategy Formulation
Content
I. Definition
II. Importance
III. Levels of Strategy
IV. Key Elements of A+ Strategy
V. Strategy Formulation Process
VI. Steps of Strategy Formulation
VII. Examples
08 Oct 2023 2
Definition
According to Harvard Business School
Online, strategy formulation is the process
of using available knowledge to document
the intended direction of a business and
the actionable steps to reach its goals.
In Business Jargons, it is defined as an
analytical process of selection of the best
suitable course of action to meet the
organizational objectives and vision.
SOURCE: HTTPS://ONLINE.HBS.EDU/BLOG/POST/STRATEGY-
FORMULATION#:~:TEXT=STRATEGY%20FORMULATION%20IS%20THE%20PROCESS,AND%20VALIDATION%20OF%20BUSINESS%20GOALS. 08 Oct 2023 3
HTTPS://BUSINESSJARGONS.COM/STRATEGY-FORMULATION.HTML
Why is Strategy Formulation important?
Formulating an effective strategy can allow your organization
to share one clear vision, catch biases by examining the
reasoning behind goals, and track performance with
measurable key performance indicators (KPIs).
In addition, strategic plan allows an organization to examine
its resources, provides a financial plan and establishes the
most appropriate action plan for increasing profits.
It is essential for achieving and measuring the attainability of
goals.
SOURCE: HTTPS://ONLINE.HBS.EDU/BLOG/POST/STRATEGY-
FORMULATION#:~:TEXT=STRATEGY%20FORMULATION%20IS%20THE%20PROCESS,AND%20VALIDATION%20OF%20BUSINESS%20GOALS. 08 Oct 2023 4
HTTPS://BUSINESSJARGONS.COM/STRATEGY-FORMULATION.HTML ; HTTPS://WWW.INDEED.COM/CAREER-ADVICE/CAREER-DEVELOPMENT/STRATEGY-FORMULATION
provides a roadmap for maximizing an organization’s
return on investment (ROI)
“Without thorough
strategy formulation through strategy formulation, resource allocation and
exact role divisions take place in an organization
process, it is impossible
for an organization to
offers clarity on the big picture when it comes to
survive in a organizational objectives and makes sure that all
employees are on the same page
competitive industry.”
a rigorous and regularly evolving strategy
formulation process keeps track of competition for
the organization and prevents complacency within
the management and employees
SOURCE: HTTPS://HARAPPA.EDUCATION/HARAPPA-DIARIES/STRATEGY-FORMULATION-
PROCESS/#:~:TEXT=STRATEGY%20FORMULATION%20ALLOWS%20AN%20ORGANIZATION,
%2C%20WEAKNESSES%2C%20OPPORTUNITIES%20AND%20THREATS. 08 Oct 2023 5
Three Levels of Strategy Formulation
This level outlines the
structure of the organization
and how you coordinate
across business units
This level answers how you
target and retain customers
and compete with other
organizations in the market
This level concentrates the
growth and improvement of
the organization
SOURCE: HTTPS://BUSINESSJARGONS.COM/STRATEGY-FORMULATION.HTML
HTTPS://WWW.INDEED.COM/CAREER-ADVICE/CAREER-DEVELOPMENT/STRATEGY-FORMULATION
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Strategic Business Unit Structure
SOURCE: HTTPS://BUSINESSJARGONS.COM/STRATEGIC-BUSINESS-UNIT.HTML 08 Oct 2023 7
Three Key
Elements of an
A+ Strategy
Formulation
SOURCE: HTTPS://WWW.CASCADE.APP/BLOG/HOW-TO-FORMULATE-A-STRATEGY
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Strategy Formulation Process
In conducting strategy formulation, a business will
go through a process that includes different steps.
Among these steps, there are the two in the
strategy formulation process that must always be
taken at every stage of the process. They are:
1. Environmental scanning is the process of paying
attention to the external environment for changes
that will affect the business and will therefore
affect the strategy.
2. Continuous implementation refers to how the
planned strategies should be constantly
implemented in order to understand whether the
strategies are leading the business in the right
direction and whether there is a need to reevaluate
the strategy.
SOURCE: HTTPS://STUDY.COM/LEARN/LESSON/STRATEGY-FORMULATION-OVERVIEW-
PROCESS.HTML#:~:TEXT=FOR%20EXAMPLE%2C%20A%20BUSINESS%20MAY,BUSINESS%20IN%20THE%20RIGHT%20DIRECTION. 08 Oct 2023 9
Six Steps of Strategy Formulation
3 Objectives in 5
1 6
Establishing Analysis of Forming
Context with Performance Selection of
Organizational Organizational Quantitative
Divisional Analysis Strategy
Objectives Environment Goals
2 4 Plans
SOURCE: HTTPS://BUSINESSJARGONS.COM/STRATEGY-FORMULATION.HTML 08 Oct 2023 10
Establishing Analysis of Forming Objectives in Performance Selection of
Organizational Organizational quantitative goals: context with Analysis: Strategy:
Objectives: Environment: Defining targets so divisional plans: This is done to This is the final step
This involves This involves SWOT as to meet the This involves setting estimate the degree of strategy
establishing long- analysis, meaning company’s short- up targets for every of variation formulation. It
term goals of an identifying the term and long-term department so that between the actual involves evaluation
organization. company’s objectives. Example, they work in and the standard of the alternatives
Strategic decisions strengths and 30% increase in coherence with the performance of an and selection of the
can be taken once weaknesses and revenue this year of organization as a organization. best strategy
the organizational keeping vigilance a company. whole. amongst them to be
objectives are over competitors’ the strategy of the
determined. actions to organization.
understand
opportunities and
threats.
SOURCE: HTTPS://BUSINESSJARGONS.COM/STRATEGY-FORMULATION.HTML 08 Oct 2023 11
APPLE: Macintosh
Computers
A classic example of strategy formulation
comes from Apple’s approach to designing
its famous Macintosh computers in the
1980s. Taking advantage of an opening in
the tech industry that nobody else knew of,
Apple came up with a strategy to kickstart a
new era with its Macintosh series. Apple’s
strategy was built on repurposing the
computer from a chunky piece of hardware
that’s only seen in offices to something
that’s more handy, user-friendly, even
entertaining. The Macintosh strategy paid
off and the personal computer launched a
tech revolution that lives on to this day.
Today in Apple history: Apple ships the first Mac
By Luke Dormehl, 24 Jan 2023
Source: https://www.cultofmac.com/463776/tiah-first-mac-ships/
SOURCE: HTTPS://HARAPPA.EDUCATION/HARAPPA-DIARIES/STRATEGY-FORMULATION-
PROCESS/#:~:TEXT=STRATEGY%20FORMULATION%20ALLOWS%20AN%20ORGANIZATION,%2C%20WEAKNESSES%2C%20OPPORTUNITIES%20AND%20THREATS. 08 Oct 2023 12
NIKE: Sport
Manufacturing Giant
In the early 2010s, Nike was beginning to
lose its lead in endorsements among
footballers, with competitors like Adidas
and Puma catching up. To ensure that Nike
retained its appeal, the organization
decided to cross-endorse, that is use an
athlete from one sport to promote
merchandise for another sport. Their first
choice was legendary basketball player
Michael Jordan, with whom Nike launched
the Air Jordan line of football kits and
apparel. French football club Paris Saint-
Germain (PSG) were the first to join the Air
Jordan bandwagon, which not only steered
Nike clear of its rivals but also provoked
What are the contract details between Michael Jordan and Nike? All you need to know interest among millions of Jordan fans about
By Itiel Estudillo, 08 Nov 2022 football and PSG.
https://www.sportskeeda.com/basketball/what-contract-details-michael-jordan-nike-all-need-know
SOURCE: HTTPS://HARAPPA.EDUCATION/HARAPPA-DIARIES/STRATEGY-FORMULATION-
PROCESS/#:~:TEXT=STRATEGY%20FORMULATION%20ALLOWS%20AN%20ORGANIZATION,%2C%20WEAKNESSES%2C%20OPPORTUNITIES%20AND%20THREATS. 08 Oct 2023 13
Sources
✓ 5 TIPS FOR FORMULATING A SUCCESSFUL STRATEGY by Catherine Cote, 14 Oct 2020
https://www.sportskeeda.com/basketball/what-contract-details-michael-jordan-nike-all-need-know
✓ How To Use Strategy Formulation: Definition, Steps and Tips by Indeed Editorial Team, 4 Feb 2023
https://www.indeed.com/career-advice/career-development/strategy-formulation
✓ Strategy Formulation by Business Jargons
https://businessjargons.com/strategy-formulation.html
✓ Strategy Formulation Process, 20 Sep 2021
https://harappa.education/harappa-diaries/strategy-formulation-
process/#:~:text=Strategy%20formulation%20allows%20an%20organization,%2C%20weaknesses%2C%20opportuni
ties%20and%20threats.
✓ What is Strategy Formulation? by June Wai See Leung, 15 Jun 2022
https://study.com/learn/lesson/strategy-formulation-overview-
process.html#:~:text=For%20example%2C%20a%20business%20may,business%20in%20the%20right%20direction.
✓ Strategy Formulation: 5 Steps To Create A Winning Strategy by Cascade Team, 25 Jan 2023
https://www.cascade.app/blog/how-to-formulate-a-strategy
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