Steps in Strategy

Formulation Process
 Strategy formulation is a process that outlines a

Strategy measurable and concrete course of action to achieve

certain strategic objectives and goals or overcome
specific challenges. Companies follow a strategy

Formulation: formulation process to develop a business plan that

will guide their decision-making and help them realize

what is it?
their long-term vision. It is essential for achieving and
measuring the effectiveness of goals because without a
thorough strategy formulation process, it is not
possible for an organization to survive in a competitive
industry. 
There are three levels of strategy in business. Setting
up a plan for each of them could aid your team in
coordinating its efforts and optimizing its processes. It
might also assist you in planning the organization's
future and deciding how to scale back operations in
response to changing economic trends.
 • Corporate level: how you structure the organization
and coordinate across business units.
 • Business level: how you target and retain customers
and compete with other organizations in your market.
 • Functional level: how you plan to grow and
improve the organization.
 Develop a strategic
mission

A strategic mission is a foundational statement that

includes the organization’s long-term goals. Consider
the actions you want to see your staff take on a regular
basis to come up with your company's core principles. A
strategic mission help to perform your initiatives by
providing a high-level awareness of a company's goals
and values. There are three main components of a
strategic mission: time, core values and business
description. 

Step 1.
Objectives may be ambitious or modest, but in either case, they must

Establish
be spelt out with the help of a detailed plan that shows how these
objectives can be realized by the organization. It can bring your team
closer to achieve your strategic mission and improve your operations.
When determining organizational objectives, strategy
formulation also takes care of the periods when particular objectives
organizational
have to be met or discarded, if they are no longer practical within the
boundaries of the specific industry. objectives
To identify organizational goals we should consider the following
factors:
 • Target market: This factor identifies a specific demographic and
market an organization would like to sell its products or services to.
 • Customers: Identifying purchasing habits and behaviors of target
customers is a large part of developing a business goal, so consider
how they might use your product and what factors guide purchasing
decisions.
 • Offerings or goods: Reflect on how you can distinguish and
improve your products or services, explore the benefits of your
offerings and determine what price point is best to sell the products or
services.
 • Adaptation to changes and challenges: Anticipating obstacles and
planning solutions to them can help an organization develop a plan of Step 2.
action to mitigate risk and excel.
 Step 3.
Create departmental plans
If your company has several departments, each department has its own goal and task, then you need to draw up
a business plan for the department. A department manager usually writes a business plan for their department,
usually under the direction of the business owner. Regardless of the name, such a plan can:
• detail any current responsibilities or commitment of the department
• include a SWOT analysis of the department
• analyze previous performance
• collect and review historical information on income and expenses
• create financial forecasts
• determine departmental goals and initiatives
• align individual plans with wider business strategy
• draft tactical plans and propose budget, resource, timescales, etc.
The manager must coordinate their plan with other departments, ask for feedback, negotiate (if necessary) with
senior management, and get approval.  It is important for each department to feel that it is a stakeholder in the plan.
Each department's budgets and priorities should align with the budgets and priorities of the entire organization. 
Departmental plans should be more specific than a general business plan.  It is important that you set realistic and
Step 4.
What is a performance analysis in
business?
Performance analysis is an assessment of the
performance of a company or individual over a
certain period of time.  Performance analysis
can track progress using three different
Conduct a methods: revenue analysis, analysis of other
key performance indicators, and analysis of

performance progress toward business goals.

analysis 
Step 4.
How to conduct a business performance analysis?

1. Do variance analysis 3. Analyze metrics

A variance analysis involves comparing financial Understanding your non-financial key business metrics
projections to data in different categories of revenue. can be a helpful tool in researching the causes of
The variation is the difference between the projected variances. By looking at process numbers and contact
amount and the actual amount, and can be conveyed as numbers, you can understand stages of your
a dollar amount or a percentage of the projected total. manufacturing or sales process that don't directly change
Analyzing your revenue over time can show you if your your company's revenue and provide a greater level of
business was successful in certain seasons, product lines detail about company performance.
or markets.
4. Review goals
2. Research variances
Review your original goals for the year outside of revenue
Next, look for significant outliers that are large in and metrics. This may include goals about cultivating a
proportion to the overall category or large dollar brand tone, interacting with customers or providing a
amount.  Then investigate why the deviations occurred.  different level of service. Analyze how you met these
In addition to external factors, consider internal factors goals and what factors contributed to your success or
such as staff availability, hours worked, process failure.
efficiency and technological abilities.
Step 4.
How to conduct a business performance analysis?

5. Review competitor performance Note any changes that may have happened
To put your business's performance into perspective, within your customer base or influenced it,
evaluate how your competitors have performed over the as well as economic events, market demand
same period. You might list specific strengths and
weaknesses of your main competitors, any opportunities or supply changes and any strategy changes
they have had or made and any specific threats they might to your marketing approach.
pose to your markets or products.
7. Decide on changes
6. Review customer and market context
Reviewing the entire market and customer behavior over the The final step of a performance analysis is
time period can show you whether you are meeting needs discovering how to use the information from
with your product and where you might find additional the analysis to improve your processes.
possibilities.

As you look at instances where you had plenty of revenue, excellent metrics or fulfilled your goals,
consider the reasons why you achieved that success and how you can encourage that success in the
future.
 Define what methods you plan to use to active
your strategy. You can also make adjustments to
your strategies as market or industry changes
occur. It may be helpful to have regular meetings
with management across all departments to discuss
how the strategy applies to their team's work.

Implement a Allocate business resources accordingly so each

team can promote organizational goals. Some
examples of strategies include:
plan of action • Creating a website to increase customer reach
• Implementing a new online advertising campaign
to increase sales
• Using unique features for products to increase
product differentiation
• Gaining a technological advantage by investing
in new software programs or technology devices
to improve productivity and perform market
research
Step 5.
 How to implement a plan?

Components of an action plan include:

• A well-defined description of the goal to be
achieved
• Tasks/ steps that need to be carried out to
reach the goal
• People who will be in charge of carrying out
each task
• When will these tasks be completed
(deadlines and milestones)
• Resources needed to complete the tasks
• Measures to evaluate progress

Step 5.
 Step 6.
Revise your strategy as needed
As you implement a new strategy to reach organizational goals, be sure to monitor your progress and
consistently conduct analyses to evaluate the effectiveness of a strategy. Using metrics to evaluate the
results of your strategy may help you make objective, data-backed decisions. Remember to monitor industry
news and relevant financial markets so you can adapt your strategy accordingly. It's vital to set regular times
to review progress and re-evaluate strategies like every month, quarter or year. So, the company needs this
step to measure their performance and regarding to the results change its strategy by repeating some or all of
the above steps.

Importance of Strategy Formulation

Strategy formulation is the course of action companies take to achieve their defined goals.
It creates awareness of an organization’s objective, mission and purpose.
A strategic plan enables a company to evaluate resources, allocate budgets, and maximize return on
investment.
It gives an organization a clear direction and focus.
An organization implements in order to achieve success. This is done by developing appropriate tactics,
which are the action steps for meeting the strategies directives.
 Sources
https://www.zambianguardian.com/strategy-formulation/
https://asana.com/ru/resources/implementation-plan
https://creately.com/blog/diagrams/how-to-write-an-action-plan/
https://www.indeed.com/career-advice/career-development/strategy-formulation
https://www.cascade.app/blog/how-to-formulate-a-strategy
Thanks for your
attention!