How to decide future strategy of the organization?

This is not a simple task because most of us are not clear in our mind about what is strategy. Most of the time what are talking about is the operational issue rather than strategy for the organization. Strategy is long term vision for the organization that provides direction for future actions, in short. It is in evolving processes and we need to keep reviewing the organizational strategy to check if we are align to the present demands of the market and shareholders and are ready to serve the future markets as well. To decide the strategy one need to follow a systematic approach and be honest to yourself and build arguments on logical assumptions. Let’s discuss the process in detail
Identify strategic customers: One of the first tasks is to identify strategic customers. I have discussed this in my previous article .
Identify strategic competitors: It is very important to understand that everyone in the market is competitor but not strategic one. For a bakery retail chain in UK, Tesco Metro is a competitor but not the strategic customer because both of them are targeting customers from different segments. They can be substitute for each other in the mind of customer but not still customer think of them as different options.
Identify core competencies of the organization: This is one of the most difficult tasks because most of the time no one in the organization knows that they are core competencies. Core competencies are practices and processes of the organization that are difficult to imitate by competitors. Managers might say that flexibility is the core competency but it is very abstract. There is something very basic that generate the flexibility and that is the core competency. It needs lots of brainstorming to identify core competencies and most of the time it is the employee very low in the hierarchy who can answer about this than the senior managers. It is shocking but it true.
Identify key issues: These are the issues that are stopping organization from growing further. These are different from operational issues. Many a time, managers start thinking that the poor cash flow is strategic issue but it is not. Key issue can be how to manage cost while the raw material prices going up?
Find Strategic options: Come up with options to address the key issues. Remember we are looking for options and answer to the key issues. Options can be very something out of the blue and completely different from the existing business. It does not matter because anything can be an option.
Evaluate strategic options: One needs to evaluate strategic options in the light of core competencies and if the organization can exploit them it is a viable option. For example a retail chain having logistics as core competency can start logistics business. It is a feasible option. It depends on the shareholder value analysis if this option should be pursued or not.
All these steps are linked to each other if we do any of the steps wrong, we will have completely disastrous strategy. Something Microsoft and Yahoo are trying to pursue. I will talk about this later.