Process for Formulating a Competitive Strategy
A generalized approach to developing a competitive strategy
The Process for Formulating a Competitive Strategy is a generalized approach to developing a competitive strategy. It involves identifying the firm's current strategy, analyzing the environment, and developing a new strategy that takes into account the firm's strengths and weaknesses, as well as the opportunities and threats in the environment.
- A firm's competitive strategy should be based on a thorough analysis of the environment and the firm's strengths and weaknesses.
- The strategy should be designed to achieve the firm's goals and objectives.
- The strategy should be regularly reviewed and revised to ensure that it remains relevant and effective.
- Identify the Firm's Current StrategyThe firm's current strategy should be identified in terms of its implicit or explicit goals and policies.Pro tipThe current strategy should be analyzed in terms of its strengths and weaknesses, as well as its opportunities and threats.WarningThe current strategy should not be assumed to be effective or relevant, and should be subject to regular review and revision.
- Analyze the EnvironmentThe environment should be analyzed in terms of the firm's industry, competitors, and broader social and political context.Pro tipThe analysis should identify the key factors for competitive success, as well as the opportunities and threats in the environment.WarningThe analysis should not be too narrow or too broad, and should be designed to identify the most critical factors that will impact the firm's strategy.
- Develop a New StrategyA new strategy should be developed that takes into account the firm's strengths and weaknesses, as well as the opportunities and threats in the environment.Pro tipThe new strategy should be designed to achieve the firm's goals and objectives, and should be regularly reviewed and revised to ensure that it remains relevant and effective.WarningThe new strategy should not be too rigid or too flexible, and should be subject to regular review and revision.
A company uses the Process for Formulating a Competitive Strategy to develop a new business strategy. The company identifies its current strategy, analyzes the environment, and develops a new strategy that takes into account the firm's strengths and weaknesses, as well as the opportunities and threats in the environment.
The Process for Formulating a Competitive Strategy was developed by Michael E. Porter as a tool for managers to develop a comprehensive and effective competitive strategy.