Strategy Formulation
Defining How Firms Work
Reporter: TRINA NUÑEZ
MBA-1
What is Strategy Formulation?
Is the process of establishing goals and determining the proper
plan of action to achieve those goals. An organization uses strategy
formulation to plan for success and make improvements to
workplace strategies as needed. Strategy formulation is essential
for achieving and measuring the attainability of goals. After
creating strategies, an organization typically educates its
employees so they know the organization's purpose, workplace
objectives and goals.
Levels of strategy formulation
In business, there are three levels of strategy. Defining a strategy for each of
these levels may help your team align your efforts and optimize your
operations. It may also help you visualize the future of the organization and
determine what steps you should take to scale your operations along with
changing market conditions. Here are the three levels of strategy:
Corporate level: How you structure the organization and coordinate
across business units
Business level: How you target and retain customers and compete with
other organizations in your market
Functional level: How you plan to grow and improve the organization
6 Steps to Execute
Strategy Formulation
Reporter: TRINA NUÑEZ
MBA-1
1. Develop a Strategic Mission
A strategic mission is a foundational statement that includes the organization's values and
long-term goals. To identify your company values, think of practices you would like to see
your employees implementing on a daily basis. A strategic mission is a high-level
understanding of a company's purpose and philosophies, and it can guide your strategies.
The three major components of a strategic mission are as follows:
Time: Think of where you'd like the business to be in one, five and 10 years from now.
Having long-term perspective can help you identify aspects of your strategic mission
which may involve your target market, customers and challenges.
Core values: Understanding core values can help you decide how to achieve goals and
identify why you're working toward achieving these goals, how they could affect the
company and what outcome they may produce. A mission often includes core values
that have a deeper meaning to the organization.
Business description: A description of what the organization does and hopes to achieve
can also assist with developing a strategic mission. Ask yourself what industry your
organization is in, what you hope to create and how you plan to sell your goods or
services.
2. Establish Organizational Goals
Organization goals are actionable objectives that can bring your team closer to
achieving your strategic mission and improving your operations. Understanding what
you're working toward can help you develop appropriate processes and procedures to
reach your business goals efficiently. To identify organizational goals, consider the
following factors:
Target market: This factor identifies a specific demographic and market an
organization would like to sell its products or services to.
Customers: Identifying purchasing habits and behaviors of target customers is a
large part of developing a business goal, so consider how they might use your
product and what factors guide purchasing decisions.
Offerings or goods: Reflect on how you can distinguish and improve your products
or services, explore the benefits of your offerings and determine what price point is
best to sell the products or services.
Adaptation to changes and challenges: Anticipating obstacles and planning
solutions to them can help an organization develop a plan of action to mitigate risk
and excel.
3. Create Departmental Plans
Then, you can dissect your goals and develop a plan for each department,
team or business unit. This help you create tasks for employees to reach
company goals and improve key performance indicators (KPIs). At this stage,
you can establish numerical targets that you aim or establish practical goals
toward which you can take action. Here are some examples of departmental
goals:
Develop and use a customer database.
Improve workplace safety.
Invest in customer management.
Convert more than 10 leads per month.
Increase company revenue by 15%.
4. Conduct a Performance Analysis
After gaining perspective on what to achieve, an organization might conduct a
performance analysis on internal and external departments to assess its current
performance. This may help you learn if the organization is competitive and
valuable, if its goals are attainable and if it aligns with trends in the industry. An
analysis can reveal gaps between your stasis and your goals, and it may help you
determine what techniques are the best fit for your needs/
One common type of analysis you might perform is a SWOT analysis, which
investigates the following:
S: Strengths
W: Weaknesses
O: Opportunities for growth
T: Threats to the business
A SWOT analysis helps you objectively assess your current operations while also
making future plans. You can use this tool to identify risks, implement
management procedures and policies, reduce error and develop realistic
predictions for sales. An effective SWOT analysis can help you implement proactive
strategies to help you remain resilient.
5. Implement a Plan of Action
Define what methods you plan to use to active your strategy. You can also
make adjustments to your strategies as market or industry changes occur. It
may be helpful to have regular meetings with management across all
departments to discuss how the strategy applies to their team's work.
Allocate business resources accordingly so each team can promote
organizational goals. Some examples of strategies include:
Creating a website to increase customer reach
Implementing a new online advertising campaign to increase sales
Using unique features for products to increase product differentiation
Gaining a technological advantage by investing in new software programs
or technology devices to improve productivity and perform market
research
6. Revise your Strategy as Needed
As you implement a new strategy to reach organizational goals, be sure to
monitor your progress and consistently conduct analysis to evaluate the
effectiveness of a strategy. Using metrics to evaluate the results of your
strategy may help you make objective, data-backed decisions. Remember
to monitor industry news and relevant financial markets so you can adapt
your strategy accordingly. It's vital to set regular times to review progress
and re-evaluate strategies like every month, quarter or year.
Use SMART goals
SMART goals can help you craft a specific objective that's easy to measure or track and has a
clear and concise plan for success.
Here's an example of a SMART goal for a business that plans to start new social media
accounts to grow the customer base:
Catarina's Confectionary Creations Company wants to utilize social media to connect with
potential customers. They plan to create 15-second videos to post on three different social media
platforms showing customers how they bake each of their products. They're aiming to gain at
least 1,000 engagements and 250 followers on each site by the end of the month.
Specific: The organization states the exact measures they can take to achieve their goal.
Measurable: They include numerical goals, so they can clearly understand whether they met
their goal at the end of the month.
Achievable: Since the organization is new to social media, they set realistic goals for slowly
building a follower base rather than expecting to go viral immediately.
Relevant: The actions Catarina's Confectionary Creations Company plans to take are
relevant to their overall strategy, which is to start using social media to attract customers.
Time-based: The business hopes to complete their goal by the end of the month.
THANK YOU
AND
PEACE BE WITH YA’LL
