Question

Discuss the ways in which mangers arrive at new strategic directions, formal and informal and discuss which is best.

Answer 1

Answer:-

The first stage of a strategic preparation procedure is the planning stage. A statement of missions and aims is developed which charts the way of the company and provides the basis for subsequent strategic procedures. The aims of a company evolve from the stated mission. After the mission and aims are completed. A company must develop an environmental appraisal. Which will imply collection and roll upping necessary geographic information's every bit good as calculating tendencies and actions by the competition. The following measure involves an internal analysis. Which determines the strengths and failings of the firm's fiscal and managerial expertness compared to that of its rivals. This analysis focuses on the company's resources and operations.

Explanation:-

In the process of forming the strategy the first phase of a strategic formulation process is the planning phase. A statement of goals and mission is developed that charts the instruction of the organization and gives the groundwork for subsequent strategic procedure. The goal of a company evolves from the stated mission.

The managers can use formal planning techniques like industry structure analysis - SWOT (Strength Weakness Opportunities and Threats), PESTEL (Political, Environmental, Social, Technological, Economical, and Legal) analysis of the firm. They can carefully screen country and find opportunities to match between their resources and opportunities.

Formal: planning is through definition more systematic and is, therefore more likely to uncover challenges in the company, dangers in the surrounding, and/or strengths upon that to build and opportunities to exploit

a) Industry factors- such factors includes industry growth rate, technology, and the extent of globalization in the industry.

b) Location factors- these take into account the country's risk factors, cultural distance, potential and competition of the local market.

C) Venture-specific factors- tacit knowledge of the venture, the extent to which it will be researched and developed with partners, and consideration of cost and size of venture affect choices.

Apart from these the few other factors that can be considered are

(i) Availability of Raw Materials

(ii) Proximity to Market

(iii) Infrastructural Facilities

(iv) Government Policy

(v) Availability of Manpower

(vi) Local Laws, Regulations and Taxation

(vii) Ecological and Environmental Factors

(viii) Competition

(ix) Incentives, Land costs. Subsidies for Backward Areas

(x) Climatic Conditions

(xi) Political conditions.

Informally: They may employ their intuition and their connection of contacts and staff to grow and implement venture ideas.

It's better to go in a formal way, because in formal way we will be thinking from all the sides instead of trusting on a person who looks the problem only from one direction, it's better to look a problem from different ways like political, technical, economic, environmental etc.,