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How much attention are you giving to strategy management in your organisation? (Continued )
FormulationFormulation of strategy involves analysing the environment in which the organisation operates, then making a series of strategic decisions about how the organisation will compete. Formulation ends with a series of goals or objectives and measures for the organisation to pursue. Environmental analysis includes: The remote external environment, including the political, economic, social, technological, legal and environmental landscape (PESTLE).Industry environment (Macro), such as the competitive behaviour of rival organisations, bargaining power of buyers/customers and suppliers, threats from new entrants to the industry, and the ability of buyers to substitute services/products (Porter's 5 Forces) and;Internal environment (Micro), regarding the strengths and weaknesses of the organisation's resources (i.e. people, processes and systems).Strategic decisions are based on insight from the environmental assessment and are responses to strategic questions about how the organisation will compete, such as:What is the organisation's business?Who is the target customer for the organisation's products and services?Where are the customers and how do they buy? what is considered "Value" to the Customer?Which businesses, products and services should be included or excluded from the portfolio of offerings/What is the geographic scope of the business?What differentiates the company from its competitors in the eyes of customers and other stakeholders?Which skills and capabilities should be developed within the firm?What are the important opportunities and risks for the organisation?How can the firm grow, through both its base business and new business?How can the firm generate more value for investors?The answers to these and many other strategic questions result in the organisations's strategy, and a series of specific short-term and long-term goals or objectives and related measures.  Endnotes:Source of information: Strategic Management (Wikipedia.org)References:1. a b Nag, R.; Hambrick, D. C.; Chen, M.-J (2007). "What is strategic management, really? Inductive derivation of a consensus definition of the field" (PDF). Strategic Management Journal 28 (9): 935–955. doi:10.1002/smj.615. Retrieved October 22, 2012.2. a b c d e f g h Ghemawat, Pankaj (Spring 2002). "Competition and Business Strategy in Historical Perspective". Business History Review (Harvard Business Review).3. Hill, Charles W.L., Gareth R. Jones, Strategic Management Theory: An Integrated Approach, Cengage Learning, 4. (Lamb, 1984:ix)5. Lamb, Robert, Boyden Competitive strategic management, Englewood Cliffs, NJ: Prentice-Hall, 19847. Kvint, Vladimir (2009). The Global Emerging Market: Strategic Management and Economics. Routeledge.8. a b c Chaffee, E. “Three models of strategy”, Academy of Management Review, vol 10, no. 1, 1985.9. a b Chandler, Alfred Strategy and Structure: Chapters in the history of industrial enterprise, Doubleday, New York, 1962.10. a b Mintzberg, Henry (1987). "Why Organizations Need Strategy". California Management Review (Fall 1987).11. a b c d e f g h Mintzberg, Henry and, Quinn, James Brian (1996). The Strategy Process:Concepts, Contexts, Cases. Prentice Hall. ISBN 978-0-13-234030-4.14. Mintzberg, Henry “Crafting Strategy”, Harvard Business Review, July/August 1987.15. Minitzberg, Henry and Quinn, J. B. The Strategy Process, Prentice-Hall, Harlow 1988.
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"Formulation of strategy involves analysing the environment in which the organisation operates, then making a series of strategic decisions about how the organisation will compete," says Porter.(PESTLE).
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