Strategic Choice - Definition, Importance, Parameters & Example
What is Strategic Choice?
Strategic Choice involves a whole process through which a decision is taken to choose a particular option from various alternatives. There can be various methods through which the final choice can be selected upon. Managers and decision makers keep both the external and internal environment in mind before narrowing it down to one.
Importance of Strategic Choice
Some of the strategic choices make up a part of bigger strategic policies of the company. Hence, important emphasis is given to them and decision makers follows due diligence before coming up with a final strategic choice. At times, majority shareholder uses his influence for the final strategic choice benefiting his agendas.
In nutshell, we can summarize that, it’s a combination of intent, analysis and options available.
Strategic Choice Parameters
The initial process involves identifying the problem completely. Once, we have the clear picture of the problem in hand, and then the process of short listing various solutions is undertaken. Then comes up the strategic choice process where decision for final choice is taken considering the various parameters in mind.
Some of these parameters could be:
1. Feasibility
2. Prudence
3. Consensus
4. Acceptability
Strategic Choice Example
Following example best describe the Strategic Choice:
Suppose a company has a dilemma in front of it of whether or not to invest in a new inorganic growth process. There are multiple options available for overtaking purpose. Now the process involved would be observing pros and cons of the companies being overtaken. Then after short listing few of them considered the business, their advantages, and their value addition to parent company.
After having the list of few, now the final narrowing down to a single company would be a strategic choice on the factors mentioned above. Many stakes would be considered considering both internal and external situations.
Hence, this concludes the definition of Strategic Choice along with its overview.
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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