Strategic Management Plan (SMUnit 3 of 4)

BBA 4951, Business Policy and Strategy
SMUNIT 3: Strategic Management Plan
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The easiest stage of the strategic management plan is strategic formulation where decisions are made and there is planning. Having already gathered information, an organization is already aware of the strength, weaknesses, opportunities and threats to its operations. Thus, strategy formulation is straight forward and the organization can attain competitive advantage by carefully utilizing the strategies chosen. The strategies chosen might focus on differentiation or cost, so long as they improve competitive advantage. Strategy formulation requires coordination among few people unlike strategy implementation, but also seeks to improve effectiveness.
One of the critical aspects in strategy formulation is the growth strategy, application of forward vertical integration to increase growth improves the value chain efficiency by taking over activities previously ran by retailers, manufactures and final distributors (Gandellini et al., 2013). This goes to show that strategy formulation is critical for the success of any organization, but is also the easiest as it focuses on the business environment in deciding which alternative is the best. For instance, forward vertical integration can result to increase in efficiency as an organization can directly oversee related activities and eliminates bottlenecks.
Strategy formulation could result to using diversification where an organization expands to related products or service provision in a way that provides synergy to the organization (Gandellini et al., 2013). This is mostly applicable when an organization can use the same technology or distribution in the expanded line of business. Similarly, strategy formulation could occur when there is horizontal growth where an organization expa...