Chapter 7

Strategy Formation and Evaluation of Strategic Options

If you don't know where you are going, any road will get you there.

—Lewis Carroll (in Alice in Wonderland)

In this chapter, we:
  • examine how strategic analysis leads to a reconstructed “bigger picture” and then to the formation of strategic options;
  • explore some simple mechanisms for strategy formation leading to the formulation of strategic options that relate to configurations of organizations determined by their maturity and dynamics of their competitive environment;
  • examine three approaches for evaluating and scrutinizing the options derived for suitability on the basis of systematic frameworks.

With markets changing irreversibly, competition intensifying and businesses finding themselves suspended in between, managers are continually asking the same questions: What do we do next; where do we go from here? Which strategy will take us to where we wish to be? Do we reinforce our current competitive position; do we move into adjacent markers – or do we do something radically different?

In earlier chapters of this book we examined sense making and its role in the strategic thinking process as a prerequisite for strategic decision making. We saw that purposeful sense making begins with (1) the articulation of the relevant strategic questions and the framing of issues associated with these questions, (2) the deconstruction of the organization's complex reality, followed by (3) the reconstruction of reality ...

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