BUSINESS STRATEGIES FORMULATION

The Formulation of Business Strategies are tied to Past Performance of Older Strategies



The Formulation of Business Strategies are tied to Past Performance of Older Strategies

Strategy

Peter Drucker describes strategy as “actions taken today to meet tomorrow's objectives”. Others define strategy as the basic pattern of current and planned resource deployments and environmental interactions that indicate how an organization will achieve its goals. Strategy development is rooted in the military concept of comprehensive preparedness for any and all eventualities in the course of battle.

Mark Moore (1995) envisions a strategic triangle for the public sector that simultaneously

Defines the organization's mission in terms of important public values,

Describes the sources of support and legitimacy that the organization can draw on to accomplish its mission, and

Explains what activities the organization uses to achieve its mission.

In this way, the public manager is challenged to think beyond the more traditional problems of implementation. Public sector executives are encouraged to look for opportunities to use their organization to create public value.

The political, social, economic, and environmental setting within which public organizations operate will also play a key role in shaping strategies. As mentioned, it is part of a public manager's job to interpret and articulate what policies mean in practice and to figure out what plans and steps are politically and socially palatable and whether economic conditions or other external conditions will make the strategy feasible. (Skinner , 2009)

More specifically, formulating a strategy requires the following six steps:

Problem and opportunity analysis.Scan the organization's environment to identify current constraints and possibilities. The organization's central mission must be drawn from this set of feasible options and must lead to a shared sense of purpose among the members of the organization. An effective means to accomplish this step is to develop or reassess the organization's mission statement.

Identification of interested parties.Identify the individuals and groups who interact with the organization, to assess their current interests, potential demands, and reasons for dissatisfaction with the organization.

Historical analysis.Determine what factors led to past successes and failures. To what extent was the result influenced by factors internal and external to the organization? Could the result have been different if the organization had responded more quickly or in another fashion?

Organization and situation assessment.Determine what the current capacity of the organization is. What is expected of the organization? How are external factors influencing the organization?

Assessment of the impact of specific activities.Determine to what degree these activities resulted in accomplishing specific objectives.

Midcourse corrections.Determine what modifications are needed in activities, resource allocations, or objectives to respond to changes in the organization's environment. (Rumelt, 2004)

I. Strategy Formulation

The idea of “strategy” means different things to different people (and a lot of these ideas aren't particularly accurate). In fact, experts in the field have formulated various definitions of strategy.

Because firms are attempting to sell products or services to potential customers, an implication of strategy in this context is that the firm is attempting to gain an advantage over other potential providers of those products and ...