1. The Strategy Formulation Process
Chapter 11
Strategic Choice
(c) Macmillan & Tampoe 2001

2. strategy formulation process
Figure Results of the
strategy formulation process
Results of Process
Chosen Strategy
Strategic
Intent
CONTEXT
Strategic
Assessment
Available
Options
(c) Macmillan & Tampoe 2001

3. Logically viable options/
Figure Choosing a strategy
from among strategic options
Logically viable options/
Chosen Strategy
Aligned but
Infeasible Options
Strategic
Intent
Choice Criteria/
No options identified
Strategic
Assessment
Available
Options
Feasible but
Unaligned Options
(c) Macmillan & Tampoe 2001

4. Linking into available strategic options
Figure Structure for making strategic choice
What Options
are available?
Options about
products, markets
and services
Options to improve
resources &
capabilities
Options of
method on
how to progress
Linking into available strategic options
Choice Criteria
-Assessment
-Intent
Theoretical
Frameworks for
making
strategic choice
Making the Choice
Who should be
involved in
the Choice?
Chosen Strategy
(c) Macmillan & Tampoe 2001

5. Figure 11.4 Options for Markets and Products
New
Present
Product
New
Present
Market
Geography
(the third dimension)
‘Do Nothing’
Withdraw
Consolidate
Market penetration
Present
Product
Development
Market
Need
Market
Development
Diversification
(related or unrelated)
New
(c) Macmillan & Tampoe 2001
Adapted from: Ansoff, I Corporate Strategy

6. Options for building resources, capabilities and competence
Resources as important as markets and products
Capabilities may take time to build
Particular capability may relate to particular market/product options
True competence may depend on a subtle combination of resources and capabilities
(c) Macmillan & Tampoe 2001

7. Options in methods of implementation
Internal development
Acquisition
Contractual arrangements
Strategic alliances and partnerships
(c) Macmillan & Tampoe 2001

8. Strategic Options
Product/market, resource/capability and implementation method may be grouped to form strategic options
Small number
Combining top-down and bottom-up thinking
Strategic Options tested:
Aligned with strategic intent
Feasible in terms of capabilities and resources
Acceptable to those who have to approve and implement it
(c) Macmillan & Tampoe 2001

9. Who should be involved with strategic choice?
Political as much as logical process
Political reality revealed by asking:
Who stands to gain or lose?
How will existing coalitions be affected?
Who may be seen to have originated choices?
Board approval is one thing
Support from those who will make it happen is also essential
(c) Macmillan & Tampoe 2001

10. Porter’s 3 Generic Strategies
Cost Leadership
Differentiation
Focus
(c) Macmillan & Tampoe 2001

11. Figure 11.6 The Strategy Clock
High
Low
Price
Perceived
Added Value
Low price/
added value 1 2 3 4 5 6 7 8
Low Price
Hybrid
Differentiation
Focused
Strategies Destined
for ultimate failure
Source: Bowman & Faulkner (1995)
(c) Macmillan & Tampoe 2001