We have covered the 10 critical questions that have to be answered by business executives in formulating strategy. Let us consider the first three;

What kind of business am I in?
This question might be an easy one to answer. However in formulating strategy, absolute clarity about the business and its potential future direction are important. The business you are in, brings focus to all business activities, clarifies who your competitors are and enlists the appropriate skills to achieve business objectives.
Suppose you are in the taxi-cab business. Should there be a sudden downturn due to regulatory restrictions or competition, you may have difficulty bouncing back to high performance. If however, you defined your business as transporting people then you will be open to opportunities to invest in the mini-bus service or full coach service well before the downturn in the taxicab business.
All businesses should strive to define a competitive advantage. This can only be defined in comparison to competitors. Having absolute clarity about the business you are in, ensures you study your competitors’ strengths and weaknesses in order to formulate a unique proposition.

What is the current state of my business?
The old adage in business is that you cannot improve what you cannot measure. Every business executive should have data on the performance of the company. Key indicators like sales, net margin, operating expenses, liquidity performance, number of transactions closed etc. should be monitored on a regular basis.
During strategic planning, executives have to be brutally honest about their business performance both in relation to previous performance and to industry benchmarks. If net margins are thinning out, new strategies are required to sustain the bottom-line. If profits are increasing rapidly, strategies are required to sustain the growth and to prepare for the inevitable downturn. You can only strategize for the future with a clear picture of the current situation.

What does my ideal future look like?
The answer to this question alone is a good starting point for formulating strategy. Executives at this stage can adopt a bold approach to envision the future. The future which cannot be envisioned cannot be achieved. The take-off point of formulating strategy therefore is to paint a perfect picture of the future.
Business executives at this stage must set both a long-term and a short-term vision for the organization. Some of the questions that have to be answered are;
What will the level of profits be?
What products and services will be offered?
What will the company’s reputation be?
What social and environmental impact will be company make?
In how many countries will the company be operating?
How many employees will be on the roll?
The more detailed the narrative of the future, the better it will be for the organization.
The question is always asked at this stage; how realistic should the company executives be? My response is always the same; provision always follows vision.