Strategy Formulation - Definition & Meaning
What is Strategy Formulation?
Strategy formulation is the process of choosing the best corporate as well as business course of action for an organization so that it achieves the goals and objectives set by it. A good strategy maximizes competitive advantage and minimizes competitive disadvantage by making best use of the corporate strengths and managing weaknesses.
Strategy formulation essentially involves six basic steps:
- Setting the vision and mission of the company, along with its goals and objectives to be achieved both in long and short term.
- Performing SWOT and other environmental checks to evaluate macro and micro environment and the state of the competition.
- Setting very specific quantitative goals, for example a 20% increase in revenue.
- Setting up the whole organization and all departments so that they work in coherence towards the set target.
- Review of the current status of the organization, its set target and the status of the competition and the methods by which the target could be achieved
- Evaluating the available alternatives and choosing the best among them to be the strategy of the organization.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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