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(a) 1. A diagnosis of the competitive challenge.
This element is accomplished through analysis of the firm’s external and internal environments.
(b) 2. A guiding policy to address the competitive challenge. This element is accomplished through strategy formulation, resulting in the firm’s corporate, business, and functional strategies. The formulated strategy needs to be consistent, often backed up with strategic commitments such as sizable investments or changes to an organization’s incentive and reward system—big changes that cannot be easily reversed. Without consistency in a firm’s guiding policy, a firm’s employees become confused and cannot make effective day-to-day decisions that support the overall strategy. Without consistency in strategy, moreover, other stakeholders, including investors, also become frustrated.
(c) 3. A set of coherent actions to implement the firm’s guiding policy. This element is accomplished through strategy implementation.
maurice.mutuku answered the question on April 16, 2019 at 10:07