What is the first step of a strategy-making process?

The first step in the strategy-making process involves assessing the need for strategic change. This step is crucial because it establishes the foundation for the entire strategic planning process. Understanding the current state of the organization and the external environment helps to identify whether the existing strategy is effective or if there are significant gaps that need to be addressed.

Assessing the need for strategic change requires a thorough evaluation of both internal and external factors, such as market trends, competition, organizational performance, and stakeholder expectations. By conducting this initial assessment, management gains insights into whether the current strategy aligns with the organization's mission and goals and whether adjustments or a complete overhaul are necessary.

Once the assessment is complete, the organization can then move on to conducting situational analysis, which further defines strengths, weaknesses, opportunities, and threats. Following this, the formulation and evaluation of strategic alternatives can take place, ensuring that any chosen strategy is well-informed and relevant to the organization’s context. This sequential approach highlights the importance of starting with the need for change to lay a solid groundwork for effective strategic decision-making.