(c) Macmillan & Tampoe The Strategy Formulation Process Chapter 6 Overview

(c) Macmillan & Tampoe Importance of Strategy Formulation Process Causes strategic Thinking Mechanism to ease the communication of ideas Co-ordinate the efforts of those involved in the process Inject structure into the thinking without rigidity

(c) Macmillan & Tampoe Characteristics of ‘good’ strategy Judged by the results achieved NOT by the process Process must match: business needs Culture Specific issues of the context Process must be: Original Creative Easy to implement

(c) Macmillan & Tampoe Nature of the formulation process Can be both: formal and informal simple and complex Analytical and qualitative Involve many people or just a few

(c) Macmillan & Tampoe Strategic Thinking Should Consider the enterprise as a whole Be about the long term and not the immediate Address the organisations relationship with the environment and its capabilities and resources Be based on fact and reality with some imagination Have a good understanding of the present Be able to think imaginatively about the future

(c) Macmillan & Tampoe The 3 Interlocking aspects of the Strategy Formulation Process Strategic Intent Strategic Assessment Strategic Choice

(c) Macmillan & Tampoe The 3 Aspects of Strategy Formulation Strategic Intent Driver of Strategy Formulation Process Provides direction for strategy Answers question “Where do we want to go?”

(c) Macmillan & Tampoe The 3 Aspects of Strategy Formulation Strategic Assessment Provides relevant knowledge of strategic context Anchors future strategies in reality Answers question “Where are we now?”

(c) Macmillan & Tampoe The 3 Aspects of Strategy Formulation Strategic Choice If no choice - no strategy needed The link to action Answers question “How to get from where we are to where we want to be?”

(c) Macmillan & Tampoe Activities and Results of Process Activities in Process Intending Assessing Choosing Results from Process Intent Assessment Choice

(c) Macmillan & Tampoe Effective strategy formulation processes Customer awareness Supplier relationships Stakeholder influences Understanding of competence Awareness of technological change and innovation Mix of people involved in process Encouragement and understanding of top management Communication of results and reaction to feedback Sound logic and balance to the process Process design but not over-design Considered role of external support

(c) Macmillan & Tampoe Results from the strategy formulation process Goals that are simple, consistent and long term. Profound understanding of the competitive environment Objective appraisal of resources Effective implementation Source: Robert Grant 1995 “Contemporary Strategy Analysis”