Formulation - Strategy

Evaluating the overall industry, factors to be looked at include

•  size of the market,
•  past and potential market growth,
•  competitive profitability,
•  new market entries, and
•  industry threats.

These market factors must be evaluated on a regular basis, as small changes may have a large impact on an organization’s business activities. For example, if an organization becomes aware of new technology that is on the verge of being introduced into the marketplace, then it can avoid making any new plans that would involve the older, existing technology available. Also, if an organization is
considering global expansion, then it would be beneficial to be aware of emerging markets, other areas of potential growth, and what other companies have already entered in those markets.

The Competition

An organization cannot be successful unless it has a full understanding of the other players in marketplace. A company must be able to identify the strengths and weaknesses of the competition and analyze the ways in which the competition’s products or services meet the needs of its customer base.

Strengths & Weaknesses

When developing a competitive strategy, it is vital for an organization to be fully aware of its internal strengths and how those strengths relate to the competition. These strengths should be maximized and leveraged to the company’s advantage as well as highlighted in all business and marketing activities that the company undertakes.

It is equally important for an organization to take an honest look at its areas of weakness. This is where a company can become vulnerable to outside market conditions, such as competitive gains, advances in technology, economic shifts, and other factors.

If an organization recognizes that it must constantly be aware of the business world around it and must be flexible to the changes that will inevitably occur, then it will be in a position to adapt and modify its plans to achieve maximum success.