Rift Valley UNIVERSITY
MBA program
STRATEGIC FORMULATION, IMPLEMENTATION AND EVALUATION PROCESS
GUIDE LINE FOR AN ASSIGNMENT FOR THE COURSE BUSINESS POLICY AND
STRATEGY
1. Defining the organization’s business (philosophy that the organization follows) “What
business are we in?”
An organization should define a business by:
The type of customers it wishes to serve
The particular needs of those customer groups it wishes to satisfy
The means or technology by which the organization will satisfy the
customer need
2. Business mission
Underscores the scope of an organization’s operations apparent in its business definition
Reflects management’s vision of what the organization seeks to do
Most statements describe:
the organization’s purpose
customers, products/services, markets, philosophy, and technology
3. Business goals
Goals or objectives convert the organization’s mission into tangible actions and results
that are to be achieved, often within a specified time frame.
4. Identifying and framing organizational growth opportunities
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5. STRATEGY FORMULATION: Refers to the process of choosing the most appropriate
course of action for the realization of organizational goals and objectives and thereby
achieving the organizational vision. The process of strategy formulation basically
involves six main steps.
Setting Organizations’ objectives - The key component of any strategy statement is to
set the long-term objectives of the organization. It is known that strategy is generally a
medium for realization of organizational objectives. Objectives stress the state of being
there whereas Strategy stresses upon the process of reaching there.
While fixing the organizational objectives, it is essential that the factors which influence
the selection of objectives must be analyzed before the selection of objectives. Once the
objectives and the factors influencing strategic decisions have been determined, it is easy
to take strategic decisions.
Evaluating the Organizational Environment - The next step is to evaluate the general
economic and industrial environment in which the organization operates. This includes a
review of the organizations competitive position. It is essential to conduct a qualitative
and quantitative review of an organizations existing product line. The purpose of such a
review is to make sure that the factors important for competitive success in the market
can be discovered so that the management can identify their own strengths and
weaknesses as well as their competitors’ strengths and weaknesses.
After identifying its strengths and weaknesses, an organization must keep a track of
competitors’ moves and actions so as to discover probable opportunities of threats to its
market or supply sources.
Setting Quantitative Targets - In this step, an organization must practically fix the
quantitative target values for some of the organizational objectives. The idea behind this
is to compare with long term customers, so as to evaluate the contribution that might be
made by various product zones or operating departments.
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Aiming in context with the divisional plans - In this step, the contributions made by
each department or division or product category within the organization is identified and
accordingly strategic planning is done for each sub-unit. This requires a careful analysis
of macroeconomic trends.
Performance Analysis - Performance analysis includes discovering and analyzing the
gap between the planned or desired performance. A critical evaluation of the
organizations past performance, present condition and the desired future conditions must
be done by the organization. This critical evaluation identifies the degree of gap that
persists between the actual reality and the long-term aspirations of the organization. An
attempt is made by the organization to estimate its probable future condition if the current
trends persist.
Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of
action is actually chosen after considering organizational goals, organizational strengths,
potential and limitations as well as the external opportunities.
4. Strategy Implementation: Successful strategy implementation is critical to the
success of the business venture. This is the action stage of the strategic management
process. If the overall strategy does not work with the business' current structure, a
new structure should be installed at the beginning of this stage. Everyone within the
organization must be made clear of their responsibilities and duties, and how that fits in
with the overall goal. Additionally, any resources or funding for the venture must be
secured at this point. Once the funding is in place and the employees are ready, execute
the plan.
5. Evaluation and Control: Strategy evaluation and control actions include performance
measurements, consistent review of internal and external issues and making corrective
actions when necessary. Any successful evaluation of the strategy begins with defining
the parameters to be measured. These parameters should mirror the goals set in Stage 1.
Determine your progress by measuring the actual results versus the plan. Monitoring
internal and external issues will also enable you to react to any substantial change in your
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business environment. If you determine that the strategy is not moving the company
toward its goal, take corrective actions. If those actions are not successful, then repeat the
strategic management process. Because internal and external issues are constantly
evolving, any data gained in this stage should be retained to help with any future
strategies.
