Strategy Formulation, Choice and Implementation
This domain tests the choice between strategic options and the credibility of the plan that follows. Case requirements typically ask you to evaluate two or three options and recommend one, or to critique a plan the board has already committed to. Marks reward criteria-based evaluation and resourced implementation, not a description of the Ansoff matrix.
Formulation: the logic chain
Objectives must flow from mission and be measurable - revenue, margin, ROCE, market share - with a time horizon, so the recommendation can be tested against them later. Then fix the direction (Ansoff: penetration, product development, market development, diversification) to establish how much new risk is being taken, and the basis of competition (Porter, Bowman's clock): cost leadership needs scale and process discipline; differentiation needs a difference customers value and rivals cannot copy quickly. Finally the method: build, buy or ally. Organic is slower but culturally simpler; acquisition buys speed and pays a premium; alliances share risk but dilute control. Choose against the case's constraints - cash, management depth, time, regulatory approval.
Evaluation: suitability, feasibility, acceptability
- Suitability - does it address the environmental drivers and close the gap to the objectives?
- Feasibility - funding headroom, people, systems, approvals, time.
- Acceptability - return against the hurdle rate, risk (covenants, gearing), stakeholder reaction. Rumelt's tests - consistency, consonance, advantage, feasibility - are a useful second filter.
Implementation
Cover structure and systems (McKinsey 7S), culture (Cultural Web) and change leadership: who owns it, who resists, what happens in the first 90 days, milestones, budget, KPIs, risks and exit triggers.
Worked example
A Ghanaian bank must choose between an organic digital build (GHS 60m over three years) and acquiring a licensed fintech (GHS 150m). Both are suitable - each addresses the shift to mobile channels. Feasibility favours organic on cash. On acceptability, debt-funding the acquisition moves gearing from 35% to 55% against a 45% lender covenant, so the acquisition is not acceptable as structured. The recommendation is a staged alliance or an equity-funded acquisition, not simply "acquire" or "reject".
Traps that cost marks
- Recommending before evaluating, then back-filling arguments.
- Describing feasibility when the requirement asked about suitability.
- An implementation section that is only "run a training programme".
- Ignoring culture, management capacity and regulatory approvals.
- No premium or synergy arithmetic in a build-versus-buy choice.
- No explicit recommendation and no stated conditions.