Abstract—This article reviews some strategy formulation methodologies that are elaborated to achieve organisation's goals and objectives.
Key words— Strategy, Strategy Formulation, Top- down Methodology, Bottom- up Methodology, Porter Five Force.
I. INTRODUCTION TO STRATEGY AND STRATEGIC PLANNING
A 2007 survey of European and American firms reported that more than ninety-five per cent have employed a strategic planning process. According to this survey, strategic planning is a very important approach which is designed to create an efficient timely framework. This framework aims to guide and control firm’s actions over all internal and external limitations. (Lane et al, 2007)
Barta et al, (2010) believes that the success of strategic planning is related to firm's strategic management. There are two typical sides of strategic management; first is strategy formulation which is responsible about forming a suitable strategy for certain circumstances, and the second is strategy content which is the core of decisions.
To date, researches have mainly focused on either strategy formulation or alternative strategy content options. However, the traditional distinction between strategy process and strategy content has perhaps limited the ability of strategic management research to explain the determinants of organizational performance (Lane et al, 2007). Therefore, in this study will examine multiple formulation and content approaches and will analyse their impact on organizational performance as well.
In order to survive and compete in today’s business environment, organisations should update their processes, procedures and their strategic management. (Barta et al, 2010)
II. STRATEGIC MANAGEMENT
Like mentioned before, the success of strategic management is a very important to achieve organisation's goals. Barta et al, (2010) defined Strategic Management as the process of identifying goals, scanning operating environment and evaluating organization’s structures and resources. Its main responsibility is to create and form decisions to face challenges and make suitable adjustments to improve objective's performance over time.
Strategic management determines organisation’s performance. Whereas, those use strategic planning mainly have better performance than ones that don't, even in a same environmental conditions. (Rai et al, 2000)
Moreover, strategic management helps managers to examine all changing circumstances before making their decisions; thus helps them to better deal with uncertain environments. For organisations that have many departments; strategic management helps to coordinate between them and fours on achieving organization's main goals.
According to Anderson et al (2003), strategic management can be characterised as looking out, in, and ahead. “Looking out” is about exploring organisation boundaries to set its goals and objectives, identifying main stakeholders and alliances as well as setting plans for changes....