Strategic Options Generation
This step involves formulation of widely different but equally viable strategic options that might be available to the firm in question, and is often the most complicated of all the steps. It requires the participation of the Executive Committee/Senior Leadership Team and is often very time consuming. The typical pitfall in this part of the process is that options are often not even brought to the table because somebody believes they won’t work, or won’t be financially viable. The skill of the practicing strategist lies in getting the leadership team to articulate the logic behind a particular strategic option rather than moving directly into an evaluation stage. In other words, the leadership team should be able to articulate in one or two pages what is the strategic theme/intent, where in the value chain do you propose to play, what choice of products/services should be sold at what prices, through which channels, and in which geographies in order to maximize value for the organization. It is important to get the logic, in English, right. The Math can follow in subsequent steps. Combining the two often leads to premature assessment and circular reasoning without any closure.
The quality of the industry analysis done, gaps highlighted, relative positioning in the industry versus competition and consumers, as well as understanding of revenue drivers and key success factors, all play a critical role in framing different strategic options.