Innovation – the creation of new ideas, process or products, also innovation moves

one-step further and requires implementation of the inventive act.

Strategy Formulation – is an analytical process of selection of the best suitable course
of action to meet the organizational objectives and vision.

10 Steps in Strategy Formulation

1.) Vision Statement – describes what a company to achieve in the end, generally in a
period of five to ten years, or sometimes even longer.
2.) Mission Statement – defines what line of business a company is in, and why it is
exist or what purpose it serve. Also, define company’s corporate strategy and is
generally a couple sentences in length.
3.) Define the Company Profile – a company profile is a business. A summary
communicates essential information about the entity.
4.) Study the External Environment – is composed of all the outside factors or
influences that impact the operation of business.
5.) Decision Making – is the process of making choices by identifying a decision,
gathering information, and assessing alternative resolution.
6.) Deciding the Actions – this is where they formulate a strategy before doing an
actions because a wrong decision and action may lead or cause a big problem or an
unexpected good outcome.
7.) Selecting long term Strategy – for me selecting long term strategy is one of the
key of an organization or company to have a long run on business world.
8.) Deciding Short Term Strategy – includes a detailed action plan in which it specifies
of what platforms the marketing will appear on TV, radio, print, social media, it also
details who will be carrying out the strategies, what the budget will be, the expected
profit and the forecast of sale.
9.) Deciding the Budget of Resources Allocation – for me the meaning of this is that
when and where the money will be used, we know that budgeting is also a key for not
going for bankruptcy and where it be used.
10.) Implementation – this is where the CEO will approve the project and also it is time
to make an action for what is being planned for so long.
Strategy Formulation in innovation Strategy – for me it is the process of using all
available knowledge to gather information for the direction of the business and also the
objectives steps to reach the its goals.

Strategy Formulation Process Usage

1.) Resource Allocation – is the process of assigning and managing assets in a
manner that supports an organization’s strategic goals. Also includes managing tangible
assets such as hardware to make the best use of softer assets such as human capital.
2.) Prioritization – is the essential skill that you need to make the very best use of your
own efforts and those of your team. It is also a skill that you need to create calmness
and space in your life so that you can focus your energy and attention on the things that
really matter.
3.) Organization Wide Alignment – is the process of creating unity between the
company’s ultimate vision of success and the way leaders and individual contributes
drive business results. Also, this business strategy nurtures the importance of teamwork
and clarity in communication.
4.) Validation of Business Goals –

Defining Company Profile

1.) Name of the Company – is the first thing customer recognize about your brand. The
best product, perfect service, and engaging marketing will go long way in building brand
loyalty.
2.) Contact Information – sometimes it can be used to send feedback from the product
they bought or the service that they render in your company. Also, it can be used to
order products in your company.
3.) Location if each Main Establishment – it means that it should have one main
establishment so that the costumers will easily locate where it is.
4.) Name of the Top Executives – of course the name of the top executives should be
transparent or simply means that from employees and customers will know who are
those top executives.
5.) Product & Services Offered and Prices – The price you charge for your product or
service is one of the most important business decisions you make. Setting a price that is
too high or too low will at best limit your business growth.
6.) Sales Data – is any data information that machine-readable and of benefit to sales
teams. It helps with decision making, understanding your customers better and
improving future performance within organization.
7.) Financial Data – Consists of pieces or sets of information related to the financial
health of a business. The pieces of data are used by internal management to analyze
business performance and determine whether tactics and strategies must be altered.
8.) Operational Data – it is an important data source for enterprise data warehouse and
operational reporting.

External Environment – composes of all the outside factors on enfloweneses that

impact the operation of business.
1.) Economy – is the large set of inter-related production, consumption, and exchange
activities that aid in determining how scare resources are allocated.
2.) Changes in Technology – in business technology help to improve their
communication processes like emails, texting, websites and apps. Also, in the economy,
competition from other businesses, and politics and government policy.
3.) Regulation – consists of requirements the governments imposes on private firms
and individuals to achieve government’s purposes. These includes better and cheaper
services and goods, protection of existing firms from unfair and fair competition.
4.) Competition – is the rivalry between companies selling similar products and
services with the goals of achieving revenue, profit, and market growth.
5.) Socioeconomic - is the social standing or class of an individual or group. It is often
measured as a combination of education, income and occupation.

Internal Factors
1.) HR Activity – in short, human resource activities fall under the fallowing core
functions and those are staffing, development, compensation, safety and health,
employee and labor relations.
2.) Top Management – company employees responsible for controlling and overseeing
the entire organization.
3.) Organizational Strategy – is the sum of the actions a company intends to take
achieve long-term goals.
4.) Organizational Culture - is the collection of values, expectations, and practices that
guide and inform the action of all team members. Think of it as the collection of traits
that make your company what it is.
5.) Technology – is a business doesn’t upgrade its hardware and software, that any
advantage they have over rivals who do invest in technology will eventually be eroded.
6.) Structure – Is a system outlining how the activities are organized and directed to
achieve goal. These activities will generally include the rules to be followed and the
roles and responsibilities of those within the company.

7.) Size – refers to the scale of organization and operations of a business enterprise. It
is essential here to have a clear understanding of the terms size of the industry.

Advantage of Updating Innovation Strategies

- For me the advantage of updating innovation strategies is that it can make double or
more, the market sale of the organization, also to get the taste of the costumers. In
addition, it will be a good strategy to defeat other businesses.

3 Types of Innovation

1.) Product Innovation – is the introduction of a good or service that is new or

significantly improved with respect to its characteristics, also product innovation include
both new products and new uses of exciting products.

- New Products (newly produce or invented to give more satisfaction to the costumers.)

- New Uses or Existing Products (product that is enhance its uses or that can be use
in any way based on its newly description.

2.) Process Innovation – can be intended to decrease unit cost of production or

delivery, to increase quality or to produce, to deliver new, or significantly improved
products.

3.) Business Model Innovation – the development of new, unique concepts supporting
an organization’s financial viability, including its mission, and the process for bringing
those concepts to fruition. Also, the primary goals of business model innovation is to
realize new resources by improving products are delivered to costumers.
 Modalities and Strategic Decision

1.) Entrepreneurial Mode – the organization is characterized by a willingness to

explore new opportunities, and the problems that encounters are inferiors. The
dominant goal of the organization that operates entrepreneurial mode is the continuous
growth of the organization.

2.) Active Mode – is an approach to strategy formulation that emphasizes taking small
incremental steps, reacting to problems rather than seeking opportunities, and
attempting to satisfy a number of organizational.

3.) Planning mode – is most likely to be used in large organizations that that have
enough resources to conduct comprehensive analysis, have an internal situation in
which agreement is possible on major goals, and face environment that has enough
stability to enable the formulation and implementation of carefully conceived strategies.

Basis and Policies Strategies

1.) Legal Mandate – existence of the business pronouncement of the government and
its statutory or regulatory bodies.

2.) Vision and Mission Statement – the vision and mission statement of a business
organization emanates from its founders and the previous or incumbent leaders or
managers of the organization.

3.) Specific Objectives – stated objectives of the business organization may be a

product of a desire to be competitive of the kind of image culture the company would
like to protect.

4.) Programs and Policies – this specify only to the organizations to have a long term
goals.
 Developing Policies & Strategies

1.) Top to Bottom Approach – for me this approach is from top management whose
implementing the policies down to low rank employees to follow the implemented
policies.

2.) Bottom to Top Approach – In my understanding to this approach is that from lower
rank employees they have the ability to suggest a strategy and policies that can help the
organization and then the top management will polish it to have a concrete policies and
strategy.

3.) Top to Bottom to Top Approach - for my understanding to this approach is that
from the lower rank employees to observe and follow so that they can also give a feed
back to the top management if it is effective to them that kind of strategy.