Strategic management consist of three stages are formulation, implementation and evaluation of strategies. Each stage based upon set of activities performed by the individual working in the organization.
Strategy formulation is the first stage of strategic management, this stage includes developing vision and mission statement, identifying external opportunities and threats, evaluating company internal strengths and weaknesses, developing alternative strategies, selection strategies which benefits the business. Strategy formulation issues include deciding what new business to enter, what business to abandon, how to allocate resources, whether to expand operation or diversify, whether to enter international market. whether to merge or form a joint venture.
No organization have unlimited resources, strategists must go with the strategies which are most feasible and beneficial for the business.Strategy formulation commit an organization to specific products,services, markets, resources and technologies over an extended period of time. Strategies are developed for long term competitive advantage over its competitors.