Business Problem-Solving and Strategy

4Create a Dynamic Strategy!

Four Steps in Building a Strategy

Now, how do we create a strategy that is both functional and executable? We've already pointed out that due process is important in creating a strategy. Here are the four key steps in building a strategy:

Step 1 ‐ Analyze the Situation

The first step is situation analysis. This is the starting point and the core of any strategy creation. You can say 70% of strategy building is complete as long as it is based on an accurate situation analysis. That's how important situation analysis is.

In The Art of War, Sun Tzu wrote, “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” This sums up best how important situation analysis is.

In order to create an effective strategy, you must have a thorough understanding of your company's situation and the external factors, including market structure and rules of competition. The on‐site situation can provide you with great clues in coming up with strategic ideas. The core of situation analysis lies in understanding the essence and mechanism of both internal and external situations.

Diagram 1-7 Four Steps in Building a Strategy

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