Question

In what ways may strategy formulation and strategic decision-making be determined by the needs of international business?

Answer 1

The strategy is defined as "setting the long-term goals of the enterprise and adopting guidelines for the actions and allocations of resources necessary to achieve these goals." Strategies are designed to set goals, focus efforts, define or illuminate an organization, and provide a sustainable or environmentally friendly direction.

Strategic management includes the concept of strategic planning and strategic thinking. Strategic planning is characterized by the analysis and reference of formal procedures for the production and analysis of data used as input for strategic thinking, which synthesizes data leading to strategy. Strategic planning can also refer to the control mechanisms used to implement a strategy once it has been identified. In other words, strategic planning revolves around strategic thinking or strategic development.

Strategic management is often described as involving two main processes: strategic formulation and implementation. While described in the following sequence, in practice both processes are repetitive and each contributes.


Formulation-

Formulation of strategic development involves analyzing the environment in which the organization operates, then making several strategic decisions about how the organization will compete. Formulation ends with a series or goal and the measures that the unit follows. Environmental analysis includes:

The remote environment includes the political, economic, social, technological, legal and ecological landscapes.
Industry environment such as competitive behavior of competitors, market power of buyers / customers and suppliers, threats from new entrants into the industry and the ability of buyers to replace products. And
Internal environment in terms of strengths and weaknesses of the organization's resources.

Strategic decisions are based on environmental assessments and answer strategic questions about how the organization will compete, such as:

What is the organization's business?
Who are the target customers for the organization's products and services?
Where are the customers and how do they buy? What is considered a "value" for the customer?
Which companies, products and services should be included or excluded from the portfolio of proposals?
What is the geographical scope of the business?
What sets a company apart from its competitors in the eyes of customers and other stakeholders?
What skills and abilities should be developed in the company?
What are the main opportunities and risks for the organization?
How can a company grow both through its core business and through its new business?
How can a company create more value for investors?

The answers to these and many other strategic questions lead to the organization's strategy and a set of specific short-term and long-term goals or objectives and related measures.