BAM 200
Strategy
Formulation
Phase
IMEER JEAISA L. MAURICIO, CEMP, MBA
Assistant Professor I
Lesson Objectives:
1. To explain an organization’s objectives,
strategies, and policies;
2. To differentiate the characteristics of
strategic objectives.
Strategy Formulation Phase
• The Strategy Formulation Phase begins with the
review of the Mission-Vision of the organization.
• The most important thing to understand is
whether the vision and mission are still relevant
to the company.
What is Strategy Formulation?
• Strategy formulation is the process of
establishing goals and determining the proper
plan of action to achieve those goals.
• An organization uses strategy formulation to
plan for success and make improvements to
workplace strategies as needed.
6 steps to execute strategy formulation
1. Develop a strategic mission
• A strategic mission is a high-level understanding
of a company's purpose and philosophies, and
it can guide your strategies.
The three major components of a strategic
mission are as follows:
• Time: Think of where you'd like the business to
be in one, five and 10 years from now.
• Core Values: can help you decide how to
achieve goals and identify why you're working
toward achieving these goals.
• Business Description: what the organization
does and hopes to achieve.
6 steps to execute strategy formulation
2. Establish organizational goals
• Organization goals are actionable objectives
that can bring your team closer to achieving
your strategic mission and improving your
operations.
To identify organizational goals, consider the
following factors:
• Target Market
• Customers
• Offerings or Goods
• Adaptation to changes and challenges
6 steps to execute strategy formulation
3. Create departmental plans
• You can dissect your goals and develop a plan
for each department, team or business unit.
• This helps you create tasks for employees to
reach company goals and improve key
performance indicators (KPIs).
Here are some examples of departmental goals:
• Develop and use a customer database.
• Improve workplace safety.
• Invest in customer management.
• Increase company revenue by 15%.
6 steps to execute strategy formulation
4. Conduct a performance analysis
• After gaining perspective on what to achieve,
an organization might conduct a performance
analysis on internal and external departments
to assess its current performance.
One common type of analysis you might perform
is a SWOT analysis, which investigates the
following:
• Strengths
• Weaknesses
• Opportunities for growth
• Threats to the business
6 steps to execute strategy formulation
5. Implement a plan of action
• 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.
Some examples of strategies:
• Using unique features for products to increase
product differentiation.
• Creating a website to increase customer reach.
• Using new online advertising and marketing
campaign to increase sales.
• Improving the research and development
department by using of technological
advantage.
6 steps to execute strategy formulation
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.
Strategic Objectives
• Strategic objectives are purpose statements
that help create an overall vision and set goals
and measurable steps for an organization to
help achieve the desired outcome.
Types and Characteristic of Strategic Objectives
1. Financial strategic objectives
• Financial strategic objectives are created to
help companies make projections for profits,
shape budgets and measure costs for their
organization.
Examples of financial strategic objectives to help
your organization better plan for financial future:
• Increase internal revenue over the next three
years.
• Decrease overhead spending.
• Budget additional funds for marketing
initiatives.
• Increase of stockholders and shareholders
shares over the 3 years.
Types and Characteristic of Strategic Objectives
2. Growth strategic objectives
• Businesses use strategic growth goals to make
actionable statements about expanding and
increasing their company influence in the
market and developing new internal processes.
Examples of growth strategic objectives to plan
your organization’s expansion and success:
• Increase business intelligence team.
• Grow national sales.
• Acquire small competitive company within next
two years.
• Restructure internal evaluation system.
• Open ten new locations in three years.
Types and Characteristic of Strategic Objectives
3. Training/learning strategic objectives
• Companies create strategic objectives for
learning by planning to increase staff
knowledge and capabilities with specific
actions.
Examples of training/learning strategic objectives
that can help your organization identify ways to
refine skills, gain up-to-date industry knowledge
and master job-specific tools and processes:
• Implement leadership training.
• Mentoring initiative.
• Increase professional development offerings to
staff.
• Fund certificate training for IT employees.
• Create digital learning platforms.
Types and Characteristic of Strategic Objectives
4. Business processes/operations strategic
objectives
• Changing or restructuring the way a business
operates is the focus of strategic objectives for
business processes and operations.
Examples of business processes/operations
strategic that enables your organization to
streamline and improve processes and policies:
• Create new research and development
structures.
• Innovation.
• Increase productivity throughout the year.
• Reorganize production processes.
Types and Characteristic of Strategic Objectives
5. Customer strategic objectives
• Some businesses want their strategic objectives
to focus on the customer experience.
Examples of customer strategic objectives that
help your organization attract and retain clients
and consumers:
• Create excellence in customer service.
• Increase five-star ratings.
• Offer product replacement.
• Offer competitive pricing.
• Increase product value based on cost.
Remember!
• Objectives should always be SMART!