If you want to develop a successful and effective strategy for your company!!, you must follow specific steps to reach this goal. These steps are called the stages of strategy.
The stages of strategy are the processes and steps the company takes to reach a successful and effective strategy. These are six main stages: Strategic analysis of the company’s internal and external environment, Development of the strategic vision, Preparation of strategic objectives, Strategy formulation, Strategy implementation, and Strategic monitoring and evaluation.
Your knowledge about the different stages of strategy development increases the guarantee of your company’s success in achieving its goals. Therefore, this article provided you with these stages in sufficient detail, easy and simplified. Let’s start
💡 Helpful Statistics About Strategy: ● 67% of well-formulated strategies failed due to poor execution. (HBR) ● 48% of leaders spend less than a day on strategy each month. (HBS) ● 61% of executives feel they are not prepared for the strategic challenges. (HBR) ● 77% of successful companies translate their strategy into operational terms and evaluate it on a day-to- day basis. (Palladium) ● 98% of leaders think strategy implementation takes more time than strategy formulation. ● 42% of managers and 27% of employees get access to the strategic plan ● 95% of employees do not understand their organization's strategy ● 84% of all staff members are clear on their organization’s top priorities
Table of Contents
The six main stages of strategy development:
- Strategic analysis of the company’s internal and external environment
- Develop a strategic vision for the company
- Preparing strategic goals and objectives
- Strategy formulation
- Strategy Implementation
- Monitoring and evaluating the strategy
The following parts of the article will explain each of the previous stages separately. let’s start
1- Strategic analysis
Strategic analysis is the first stage of the six steps of the strategy. It is the basis on which strategic planning as a whole depends. Therefore, you must give this stage extra care.
Strategic analysis refers to the use of appropriate tools to study the company’s internal and external environment. This stage aims to know the company’s challenges, the opportunities that can be seized and build a picture of the company’s future during the upcoming specified period.
The stage of strategic analysis uses several different tools. For example, you can use a SWOT analysis to study the company’s internal environment. Also, you can use PESTEL analysis to analyze the company’s external environment.
Strategic management is not a collection of canned tricks and techniques! Rather, it is analytical thinking, devoting all resources and capabilities to work
Peter Dakar
The strategic analysis does not depend only on the results of these tools, but the strategy preparation team’s experience significantly affects this stage.
2- Develop the company’s strategic vision
This stage is a continuation of the work of the previous step of the strategy. Therefore, this stage receives the results of the last stage and emerges from it with an accurate vision for the company’s future during the coming period. This perception is called the strategic vision.
The strategic vision refers to a greasy picture of the company’s future position, which the management wants to reach. This vision provides specific information about technology, geographic markets, production volume and quality, and future operations.
The strategic vision is the result of the strategic analysis process and the experience of the strategy preparation team.
An in-depth analysis of the company’s internal and external environment must lead to a better vision of the company’s image in the future.
The strategic vision begins with a visualization of the industry’s future and the company’s external environment during the specified period. Then a set of questions that specifically pertain to the future of the company are answered. For example:
- What is our vision for the company in the next period?
- What is the ultimate goal of the company?
- What should the company focus on?
- Will you focus on future technology, customers, or production lines?
- What kind of companies does our company want to be like?
- What results should we achieve five years from now?
The main objective of the strategic vision is to clarify the direction of the company. Through this vision, it is possible to derive the various goals, plans, and policies.
Company Message
The development of the strategic vision usually accompanies the formulation of the company’s mission.
The company’s message must always be present in the mind because it addresses its customers and the employees within it about its function.
The company’s message is the identity of the company mission, the reason for its existence, and its function in its commercial field. The company’s message focus on customers and the value they provide (who are our customers? & What value do we offer them?). In addition, the company’s message may include the goals that the company aspires to reach.
The company’s message is not necessary to formulate the strategy. But, the company’s strategic vision is considered essential for formulating the strategy from which the strategic objectives emanate. Therefore, some companies do not formulate the corporate message because it is known implicitly.
The company’s message aims to clarify the company’s mission to customers and employees of the company. In other words, the company presents its mission to be stuck in the minds of customers. But it is not used in the strategic planning process.
But sometimes, the message is included with the vision to be a single integrated unit that describes the company’s image in the future and clarifies the company’s identity and mission.
It is worth noting that the different administrative schools differ in the message’s importance to the strategic planning process. Therefore, you may find in some sources other ways to deal with the company’s message.
3- Strategic objectives
The objectives aim to transform management data and strategic vision into specific, measurable performance standards.
Strategic objectives are the final results and outputs that the company wants to achieve in a measurable form. The strategy team extracted the objectives from the company’s strategic vision and strategic analysis. They are sometimes called strategic goals.
Strategic objectives are the long-term goals or the ultimate goals that the company aspires to reach. Therefore, in some sources, strategic goals are called strategic objectives.
4- Strategy formulation
The nature of the strategic objectives or goals is big and comprehensive goals in various aspects.
Strategic goals are more than the company’s ability to accomplish at once. Therefore, the first process is the breakdown of strategic goals into interim goals, according to the company’s ability to achieve them.
The second step in this stage is to prepare practical plans to enable the company to reach its interim goals.
This plan aims to bridge the gaps between the goals and the actual reality of the company.
Strategy formulation refers to preparing interim goals and developing plans and programs that bring the company to these goals. It depends on the strategic vision and the goals emanating from it. The strategy formulation also works to ensure consistency and integration of plans and objectives.
The strategy formulation stage transforms the vision and strategic goals into interim goals and plans that the company can implement.
In addition to the clarification, the following paragraph shows an example of how to transform strategic goals into interim goals.
Converting strategic goals into interim goals for implementation
For example, the strategic goal of a car production company is: Our car will be the most used in the world within the next ten years.
When the company’s planning experts met, they decided: to reach this strategic end,
The company must produce a car every hour.
Reducing prices by reducing costs by using modern production technologies (this is a more detailed objective).
The more detailed objectives are as follows:
- Increasing the annual income of the company by 50% during the next three years
- Opening 5 additional branches of the company after two years
- 10% cost reduction after one year
- Increase the company’s profits by 10% after three years
- Transition to nanotechnology within the next three years
Thus, the strategic objectives are transferred to other detailed goals. And so on until reaching the lowest management level in the company.
After that, the strategy team develops necessary plans to reach all the interim goals. These plans are specified for certain periods,
Also, the plans show the roles and tasks required to be implemented by each part of the company.
All plans and objectives must be integrated and consistent with each other. This stage requires careful work from the planning teams and all employees of the company.
Results of the strategy formulation stage
At the end of this stage, a summary of all previous stages is gathered and coordinated to form integrated plans and goals that do not contradict each other. These plans and goals work to deliver the company to its final goals easily and conveniently.
The following list illustrates the most important items and documents of the strategy formulation stage:
- strategic vision
- Strategic message
- strategic goals
- Strategic Plan for the first year (to reach the interim goals during this period)
- Strategic Plan for the second year (to reach the interim goals in this period)
- ……
- The final strategic plan to reach the final strategic goals.
With this stage, the intellectual stage of the strategy has ended, and now it can be put into implementation, and its results tested periodically.
5- Implementation of the strategy
After all necessary approvals have been taken, the strategic plan is ready to execute.
The strategy implementation refers to executing the plan and put it into action. This stage includes training managers and employees on strategic plans to ensure that all individuals know their duties and responsibilities in the plan well. This stage also, Provides the necessary resources to implement the plan.
Therefore, many good and effective strategic plans fail due to poor implementation or lack of implementation. Therefore, you must give special attention to this stage in particular.
Every part of the company must understand its role within the plan and rehearse it effectively. The failure of any department to achieve its goals will result in the company failing to implement the strategic plan.
Many organizations have excellent plans. But it is on the shelves as a result of non-compliance by the implementers. As a result, all previous efforts in preparing the plan are wasted.
Given the importance of this step, it is accompanied by continuous periodic monitoring and evaluation to ensure the implementation process. The next section will explain this topic in more detail.
6- Monitoring and strategic evaluation
The plan is not static because it operates in a constantly changing environment. Therefore, this stage is working in parallel with strategy implementation to monitor it and overcome its challenges.
The Strategic Monitoring and Evaluation is the process responsible for following up on implementing the strategic plan. To overcome the difficulties facing the plan’s implementation and modify the plan to suit the continuous changes in the work environment. To ensure the implementation of the plan and its continued effectiveness.
This stage shows that the planning process is ongoing. It does not stop at the end of the planning process and deliver the plan to the implementation stage.
However, the planning team continues to follow up the plan’s implementation, overcome difficulties and address any weaknesses.
This stage also ensures the necessary resources to implement the plan and ensures that the organizational structure and the necessary powers are amended to align the plan.
Therefore, the plan development team continues to carry out this important stage, which ensures the implementation of the plan and its alignment with the continuous changes in the work environment.
Conclusion
Building a good and effective strategy requires going through several different stages. These stages are called strategy development stages.
The stages of strategy are the processes and steps the company takes to reach a successful and effective strategy. These are six main stages: strategic analysis of the company’s internal and external environment, development of the strategic vision, preparation of strategic objectives, strategy formulation, strategy implementation, and strategic monitoring and evaluation.
The six main phases of the strategy are:
- Strategic analysis of the company’s internal and external environment
- Develop a strategic vision for the company
- Preparing strategic goals and objectives
- Strategy formulation
- Strategy Implementation
- Monitoring and evaluating the strategy
The strategic analysis uses appropriate tools such as SWOT analysis and PESTEL analysis to study the company’s internal and internal environment.
Strategic vision: It is a greasy picture of the company’s position in the future, as this picture summarizes its goals.
Strategic objectives: the strategy team extracts strategic objectives from the company’s strategic vision. The strategic objectives aim to transform management data and strategic vision into specific, measurable performance standards. To be able to monitor and implement the strategic plan.
The strategy formulation stage prepares the necessary plans to move the company from its current reality to its desired goals. The strategy formulation combining of all planning work in a coherent form to be ready for implementation.
Strategy implementation is putting the strategic plan into action. It includes training employees and ensuring that all individuals know their duties and responsibilities related to the plan. This stage also works to provide the resources, tools, and powers necessary to implement the plan.
The Strategic Monitoring and Evaluation is the process responsible for following up on implementing the strategic plan. To overcome the difficulties facing the plan’s implementation and modify the plan to suit the continuous changes in the work environment. To ensures
the performance of the plan and its continued effectiveness.
This stage shows that the planning process is ongoing. It does not stop at the end of the planning process and deliver the plan to the implementation stage. However, the planning team continues to follow up the plan’s implementation, overcome difficulties and address any weaknesses.
For more information, you can refer to the purpose of the strategy article.
