Strategy formulation

STRATEGY FORMULATION:
Objectives:
After you have studied this chapter, you should be able to:
1. Know the porter’s generic strategy
2. Describe the 5 powers of P’S
3. Explain the Essentials of Balance Score card
4. Discuss the Strategic Evaluation and Control
Strategy Formulation
- Stage of strategic management that involves planning and decision making that lead to the establishment of the organization’s goals and of a specific strategic plan.
The Five Power P’S
 There are five power Ps that spell strategies in the works for a particular organization.
1. Position
- The advantage that an organization gains in the hands of the consumers. It is a position that a company should not allow the snatched by its competitors. Position strategies are the best exemplified by Porter’s Generic- Strategies.
2. Power
- A company should enjoy power over its competitors. It is a competitive edge, a following of some sort that a company should not allow competitors to surpass. There are power strategies that can be used in the company.
3. Pace
- There is timing and intensity of strategy put on the ground. It is the right time for strategy to work. This includes the adaptive methods.
4. Potential
- It is the probability of the success element of a particular strategy. It is necessary to know the important characteristics of a product or service that will spell success.
5. Performance
- It is the effective implementation of a particular strategy. Excellence performance relates to growth strategies.

Power Strategies There are two power strategies available for organizations.
1. Horizontal Integration.
2. Vertical Integration
 Forward Integration
 Backward Integration
Adaptive Methods
Miles and Snow discussed the need of the company to adapt to a constantly changing competitive environment. With this, they created three approaches of creating a competitive strategy.
THREE APPROACHES OF CREATING A COMPETITIVE STRATEGY
 Prospector