Managerial Process of Crafting and Executing Strategy

Managerial process of crafting and executing a company’s strategy consists of five interrelated and integrated phases:
1. [Phase 1] Developing a strategic vision about the company’s direction and future product/market/customer/technology focus. A strategic vision describes the route a company intends to take in developing and strengthening its business. It points an organization in a particular direction, charts a strategic path, and molds organizational identity.
A strategic vision should not be confused with a mission statement. A strategic vision portrays a company’s future business scope (“where we are going”) whereas a company’s mission typically describes its present business and purpose (“who we are, what we do, and why we are here”).
This managerial step provides long-term direction, infuses the organization with a sense of purposeful action, and communicates mangement’s aspirations to stakeholders.

2. [Phase 2] Setting objectives regarding to organization’s performance targets –the results and outcomes management wants to achieve. Well-stated objectives are quantifiable, or measurable, and contain a deadline for achievement. It functions as yardsticks for measuring how well the organization is doing. The two types of performance yardsticks required are relating to financial performance and strategic performance, where those can be found in Balance Score Card approach.

3. [Phase 3] Crafting a strategy to achieve the objectives and move the company along the strategic course that management has charted. Crafting a strategy is concerned principally with forming responses to changes under way in the external environment, devising competitive moves and market approaches aimed at producing sustainable competitive advantage. In most companies, crafting and exectuing strategy is a team effort in which every manager has a role for the area he or she heads. It is not merely that high level managers obligation. In diversified, multibusiness companies where the strategies of several different businesses have to be managed, the strategy-making task involves four distinct types or levels of strategy: (1) corporate strategy, (2) business strategy, (3) functional-area strategies, (4) operating strategies. Typically, the strategy-making task is more top-down than bottom-up, with higher-level strategies serving as the guide for developing lower-level strategies.

4. [Phase 4] Implementing and executing the chosen strategy efficiently and effectively. Management’s action agenda for implementing and executing the chosen strategy emerges from assessing what the company will have to do differently or better, given its particular operating practices and organizational circumstances, to execute the strategy competently and achieve the targeted financial and strategic performance.

5. [Phase 5] Evaluating performance and initiating corrective adjustments in vision, long-term direction, objectives, strategy, or execution in light of actual experience, changing conditions, new ideas, and new opportunities. It is the trigger point for deciding whether to continue or change the company’s vision, objectives, strategy, or strategy execution methods.

Reference: Thompson, Strickland, Gamble. 2010. Crafting and Executing Strategy. 17th ed., Chapter 2. p. 22-53. McGraw-Hill Inc., New York