PROCESS OF STRATEGIC CHOICE Ankit Singh

PROCESS OF STRATEGIC CHOICE

Strategic choice is essentially a decision making process.
The decision making process consists of setting objectives
, generating alternatives, choosing one or more alternatives
that will help the organization achieve its objectives in the
best possible manner and finally , implementing, the chosen
alternative.
Definition : The decision to select from among the grand
strategies considered, the strategy , which will meet the
enterprises objectives. The decision involves focusing on a
few alternatives ,considering the selection factors ,
evaluating the alternatives against these criteria's and
making the actual choice.
 FOUR STEPS OF PROCESS
1. Focusing on strategic alternative
2. Analyzing the strategic alternatives
3. Evaluating the strategic alternatives
4. Choosing from among the strategic alternatives
 1. FOCUSING ON STRATEGIC ALTERNATIVES

1. To narrow down on the choices

2. Focusing can be done by visualizing the
future state and working backwards.
3. Done through gap analysis.
4. Visualize ideal organization position after next
3-5 years, and then works backward to find out
where it can reach through the present level of
efforts.
 1.FOCUSING ON STRATEGIC ALTERNATIVES
1. At the corporate level, the strategic alternatives are four
a) Expansion
b) Stability
c) Retrenchment
d) Combination
2. If the gap is narrow stability strategies would seem to be feasible alternative.
3. If the gap is large, due to expected environmental opportunities, expansion strategies are more
likely.
4. If it is large due to past and expected bad performance , retrenchment strategies may be more
suitable.
5. In a complex scenario where multiple reasons are responsible for the gap, combination strategies
are likely.
 1. FOCUSING ON STRATEGIC ALTERNATIVES

1. At the Business level, organization needs alternative ways of competing.

2. The three dimensions along which a business is defined are :
a. Customer groups
b. Customer functions
c. Alternative Technologies
Enable a decision maker to think in a structured fashion and systematically move in one or
more dimensions.
2.ANALYZING THE STRATEGIC
ALTERNATIVES
The selection factors can be broadly divided into two groups :
1. Objective : based on analytical techniques and are hard facts or data
used to facilitate a strategic choice.
Eg : Market Share
2. Subjective : based on ones personal judgement collective or descriptive
factors.
Example : Perception of company's top management regarding the
prospects of the business in the next 2-3 years.
 3.EVALUATING THE
STRATEGIC ALTERNATIVES
Evaluation of strategic alternatives basically involves bringing together the analysis done
on the basis of subjective and objective factors
Both the factors need to be considered together.
4.CHOICE AMONG THE
ALTERNATIVES
1. The evaluation of choices should be clear assessment of which
alternative is the most suitable under the existing conditions.
2. The final step is making the strategic choice
3. One or more strategies need to be chosen for implementation.
.4. A blueprint has to be made that will describe the strategies and the
conditions under which they would operate.
 SUBJECTIVE FACTORS IN
STRATEGIC CHOICES
Subjective factors are essentially intuitive and descriptive in nature. Here no “cut and
dried” analytical models can be used.

It consider many of the issues that can not be dealt within the application of analytical
models. However it also does not mean that subjective factors are irrational or non
analytical.
 SIX SUBJECTIVE FACTORS
ARE
1. Consideration for Government Policies.
2. Perception of critical success factors (CSFs) and distinctive competencies.
3. Commitment to past strategic actions.
4. Strategist’s decision styles and attitude to risk.
5. Internal Political Considerations.
6. Timing and Competitor Considerations
 SUBJECTIVE FACTORS
1. Consideration for Government Policies
Strategies within organizations are aware of the crucial role the Government plays in
setting down politics and priorities. In fact Government policies are the deciding factor
which impact on the future prospects of companies.
2. Perception of critical success factors and distinctive competencies
For consider several strategic alternatives, strategist could be guided by the distinctive
competencies that the organization possesses and the CSFs that ensure success in
any industry.
3. Commitment to past strategic actions
Past strategic action shows that they move in an incremental fashion. By this strategist
are more likely to start from where the organization is, and work up in the way that had
been adopted by it to reach where it was .
 SUBJECTIVE FACTORS
4. Strategist’s decision styles and attitude to risk
The decision style adopted by strategist, particularly by CEO and their attitude to risk is a
determining subjective factors in strategic choice.
5. Internal Political Considerations
When strategy formulation is viewed as a political process, strategist are viewed as a
coalition of interest. A dominant CEO is able to affect strategic choice a decisively.
6. Timing and Competitor Considerations
1. When to exercise a strategic choice?
2. When a particular strategic choice is to be made?
3. For what time period is a strategic choice to be made?
4. What are the competitor action?
 STRATEGIC PLAN
A strategic plan is a document which provides
information regarding the different elements of
strategic management and the manner in which an
organization and its strategists propose to put the
strategies into action.
 COMPREHENSIVE STRATEGIC PLAN
A comprehensive strategic plan consists of the following documents :
1. A clear statement of strategic intent covering the vision, mission, business definition , goals and objectives.
2. Results of environment appraisal, major opportunities and threats and critical success factors.
3. Results of organizational appraisal, major strengths and weaknesses and core competencies.
4. Strategies chosen and the assumptions under with those strategies would be relevant.
5. Contingent strategies to be used different conditions.
6. Strategic budget for the purpose of resource allocation for implementing strategies and the schedule for
implementation.
7. Proposed organizational structure and the major organizational systems for strategy implementation
including the top functionaries and their role and responsibility.
8. Functional strategies and the mode of their implementation.
9. Measures to be used to evaluate performance and assess the success of strategy implementation.
COMPREHENSIVE STRATEGIC PLAN