Formulation
Formulation, the second phase in the strategic management process, produces a clear set of recommendations, with supporting justification, that revise as necessary the mission and objectives of the organization, and supply the strategies for accomplishing them.
In formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful. This includes trying to create "sustainable" competitive advantages -- although most competitive advantages are eroded steadily by the efforts of competitors.
There are four primary steps in this phase:
- Reviewing the current key objectives and strategies of the organization, which usually would have been identified and evaluated as part of the diagnosis.
- Identifying a rich range of strategic alternatives to address the strategy formulation.
- Doing a balanced evaluation of advantages and disadvantages of the alternatives relative to their feasibility plus expected effects on the issues and contributions to the success of the organization.
- Deciding on the alternatives that should be recommended. or implemented
A good recommendation should be: effective in solving the stated problem(s), practical (can be implemented in this situation, with the resources available), feasible within a reasonable time frame, cost-effective, not overly disruptive, and acceptable to key "stakeholders" in the organization.
It is important to consider "fits" between resources plus competencies with opportunities, and also fits between risks and expectations.
