Strategic choice
Towards of the end of the strategic planning process an organisation may have identified a number of strategies, any of which might hold the possibility of achieving the organisation’s objectives. It is important to realise that it is unlikely that there is one strategy which is obviously better than all the others. One strategy might hold the possibility of higher profits but may carry with it additional risk. So how do we choose between those strategies and decide on which strategy or indeed which mix of strategies to follow?
One of the most useful ways of evaluating strategic options is to use Johnson and Scholes method. This looks at three aspects; suitability, acceptability, and feasibility.
Use this framework when it fits the question, and leave it alone when it does not. Where a requirement asks for the benefits of, and problems with, two options, taking each option in turn and setting out its benefits and then its problems shows the reader which way each point cuts; forcing the same material through suitability, acceptability and feasibility tends to blur that and to duplicate points between suitability and acceptability. On such a requirement, feasibility in particular invites general comment on whether the organisation could manage the move at all, which is not what has been asked.
This approach is indispensable both to evaluate future strategies and to appraise past strategies.
Suitability. Under suitability, the organisation will look at whether or not the strategy plays to its strengths or whether it makes use of weaknesses. Does the strategy make use of environmental opportunities? Does it guard against threats? Is it suitable in relation to the way environmental factors and competition are changing?
Acceptability. This raises the question of ‘acceptable to whom?’ Ultimately, this is asking if the strategy is acceptable to the stakeholders, but we already know that stakeholders, in general, do not all want the same thing. There is little point following a strategy which is entirely unacceptable to customers. There is probably little point in following a strategy which is liable to provoke wide scale industrial unrest. There is little point adopting a strategy which its shareholders don’t want, for example, a strategy which markedly increases the risk of the investment. Here of course, management has to make a compromise, but at the end of the day it has to adopt the strategy which most stakeholders are prepared to tolerate.
Feasibility. This looks primarily at the resources of the organisation. Does it have the money, the marketing, the management, the manufacturing and the materials available? If it doesn’t have these important resources available and can’t make them available, the strategy is simply not feasible; it can’t do it and therefore it would need to be ruled out.