STRATEGY FORMULATION

Formulating strategies involves determining appropriate courses of action for achieving objectives. This part deals primarily with the strategy formulation process. The process of strategy formulation begins with analysis with the principal factors in a firm's internal and external environment and ends with functional strategies designed. It also includes such activities as analysis, planning and selecting mission, objectives, and corporate and business strategies. As discussed in the following six chapters, strategy formulation combines a future-oriented perspective with concern for a firm's internal and external environment indeveloping its competitive plan of action. 

Business and Its Environment

tells how the strategist must analyze theexternal environmentto identify opportunities andthreats in markets, competition, technology, government, and society. The text presents specific toolsof analysis, including customers needs analysis, Porter's model of competition, the stages of technological innovations takeholders, and the precursor society. This chapter also shows how businesses evaluate their internal strengths andweaknesses to producea company profile. Such profilesare used bystrategic managers to target the competitive advantages they can emphasize and the competitive disadvantages they should corrector minimize.

Establishing Organizational Direction

Mission and Objectives, shows how the strategist defines mission and objectives todetermine the direction in which the organization is to move within its environment.

The Concept of Strategy

introduces theconcept of strategy, and the related strategic topics of strategy evaluation and choice.

Corporate-Level Strategy

explores strategic decisions associated with the question "What business(es) should we be in". Five different corporate-level strategies are covered in this chapter: growth, stability, endgame, defensive, and combination strategies. This chapter also examines the process of evaluating and choosing from the various strategic alternatives.

Generic Business Unit Strategies

examines the important issue of how a firm competes in its chosen business(es). This chapter presents Porter's generic strategies that are most appropriate for business units: cost leadership, differentiation, and focus. Avariety of offensive and defensive strategic moves are analyzed - when it is advantageous to be a first-mover or a late-mover. This chapter also reviews the importance of technology in shaping competitive in and industry. In the concluding section, it is reviewed the progress of the strategy field towards developing a truly dynamic theory of strategy. 

Functional Strategy

deals with the strategic decisions made within each of the business functions used to complement and support the competitive advantages sought bythe business - level strategy. This chapter examines functional strategies in the areas of purchasing and materials management, production/operations, marketing, finance, research and development, human resource, and information systems. Then, the ways in which these functional strategies can be integrated and analyzed.