Editing Strategic management (section)

===Formulation===
''Formulation'' of strategy involves analyzing the environment in which the organization operates, then making a series of strategic decisions about how the organization will fulfill its mission. Formulation ends with a series of goals or objectives and measures for the organization to pursue. Environmental analysis includes the:
*Remote external environment, including the political, economic, social, technological, legal and environmental landscape ([[PEST analysis|PESTLE]]);
*Industry environment, such as the competitive behavior of rival organizations, the bargaining power of buyers/customers and suppliers, threats from new entrants to the industry, and the ability of buyers to substitute products ([[Porter five forces analysis|Porter's 5 forces]]); and 
*Internal environment, regarding the strengths and weaknesses of the organization's resources (i.e., its people, processes and IT systems).

''Strategic decisions'' are based on insight from the environmental assessment and are responses to strategic questions about how the organization will compete, such as:
*What is the organization's business?
*Who is the target customer for the organization's products and services? 
*Where are the customers and how do they buy? What is considered "value" to the customer?
*Which businesses, products and services should be included or excluded from the portfolio of offerings?
*What is the geographic scope of the business?
*What differentiates the company from its competitors in the eyes of customers and other stakeholders?
*Which resources, skills and capabilities should be developed within the firm?
*What are the important opportunities and risks for the organization?
*How can the firm grow, through both its base business and new business?
*How can the firm generate more [[Shareholder value|value]] for investors?<ref name="Drucker1954">{{cite book
| last = Drucker
| first = Peter
| author-link = Peter Drucker
| year = 1954
| title = The Practice of Management
| publisher = Harper & Row
| isbn = 978-0-06-091316-8
}}</ref>

The answers to these and many other strategic questions result in the organization's strategy and a series of specific short-term and long-term goals or objectives and related measures.<ref name="MintzbergQuinn1996">{{cite book
| last1 = Mintzberg
| first1 = Henry
| last2 = Quinn
| first2 = James Brian
| year = 1996
| title = The Strategy Process: Concepts, Contexts, Cases
| publisher = Prentice Hall
| isbn = 978-0-13-234030-4
}}</ref>