When it comes to formulating a strategy for your business, it can often be difficult to select the right one, never mind actually implementing and assessing that strategy’s usefulness and effectiveness. So, how do you choose? The first thing you need to do is decide on a criterion by which to assess your options and a useful approach is to consider the Suitability, Acceptability and Feasibility (SAF) of each one. Johnson, Scholes and Whittington argue that a strategy must satisfy these three criteria before it can be successful, and because of this, the use of a SAF strategy model is a great way to fairly weigh up all of your options.
Suitability is probably the most important factor in the SAF strategy model, as an option’s suitability is the key to whether or not the strategy will do what the company wants it to do.
Suitability is usually assessed in a number of different criteria that is specifically important to the business or company such as environmental suitability, expectation suitability and capability suitability. These individual categories of suitability should then be categorised further to really reflect the company’s specific needs.
In order to assess the suitability of a strategy the business should be asking questions such as “does the strategy use the company’s strengths effectively?”, “does the strategy overcome the difficulties which were identified in the analysis?” and “does the strategy fall in line with the goals the business wants to achieve?”
The acceptability aspect of a SAF strategy model is all about measuring the return, risk and stakeholder reactions resulting from a particular strategy. Returns will be measured based on the benefits that stakeholders expect from the strategy and could be financial as well as non-financial, depending on what the stakeholders decide. Returns calculations can be performed by any number of methods such as cost-benefit analysis, profitability analysis, real-options analysis and shareholder value analysis.
In terms of risk, the probability of a strategy’s failure and any financial losses, brand or corporate impacts should also be weighed up. Risk can be measured by the impact on liquidity, sensitivity analysis and stakeholder reactions, to deem how acceptable a strategy is.
When it comes down to it, the feasibility portion of the SAF strategy model is really the make or break of any chosen strategy. Whether or not the business has the resources, aptitude and abilities to actually implement the strategy is key to its success, therefore financial feasibility needs to be assessed by forecasting and analysing cash-flows, performing break-even analysis and a number of other financial tests.
Other questions which need to be asked in terms of a strategy’s feasibility relate to how much manpower, equipment, management power and materials a company has, as well as asking themselves do they have the organisational structure and the markets needed to make a particular strategy work.
An easy way to remember everything you need to assess for feasibility is to use the M-word model: machinery, management, money, manpower, markets, materials and make-up.
Choosing a strategy using SAF strategy model
Once you have gone through each area of the SAF model and decided which criteria and ideas are important to your specific organisation, then you must run each possible strategy through these criteria individually. The strategy that fits each of the suitability, acceptability and feasibility criteria that you have chosen best, is ultimately, the most favourable choice of strategy for your business.
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