1.2.3 Where do you find Tools to implement a Business Strategy?

Strategy formulation is comprised of four principles: (Hinterhuber 1996):

  • The entrepreneur or the management cannot create from nothing. They have to take into account the existing conditions of a company and transform them, if possible. Strategy formulation begins with the analysis of the strategic initial point, which means observing strengths and weaknesses of your company but also the opportunities and threats of the environment (SWOT analysis).
  • The future position of strategic business units and the company as a whole in the environment is determined by its capability:
    • to create products or services which correspond to the needs of certain customers effectively and efficiently,
    • to offer employees safe and meaningful working places accompanied by fair compensation and
    • to gain all the required resources and components from suppliers, while creating fair conditions for both parties (i.e. company and suppliers).
  • The concentration to central skills and the allocation of resources as well as the chronological classification of the main steps which can promote a company from the initial point to the desired target position.
  • The last critical element of strategy is the determination of criteria and standards that can be used to measure and assess the success of the formulated strategy and be compared with the planned degree of achievement of objectives.

The planning phase within the framework of annual strategic planning activity normally lasts for several months, because it serves as basis for the forthcoming operational annual plans and budgets. If the procedure of strategic planning is formalized and implemented as part of the management´s responsibilities, then employees can be urged to question key points and to help answer them.

As outlined previously strategic management consists of three elements: Strategic analysis, strategic choice and strategy implementation. After strategic analysis, which will presented in detail in the next two modules ("The internal environment" and "The external environment"), you have to make a strategic decision.