What is the second step in the strategy formulation process?

In the strategy formulation process, developing a competitive strategy is critical as it involves creating a plan that outlines how an organization will compete in the marketplace. This step requires a deep understanding of the company's strengths, weaknesses, opportunities, and threats, and how these elements interact with market conditions and competitor actions. A competitive strategy provides the framework for where resources should be allocated and how to position the organization effectively against competitors.

This step typically follows the initial phase of analyzing the market and the company's internal environment. Once a solid competitive strategy is developed, it can guide the implementation of the business plan and the setting of operational goals, which are subsequent steps in the formulation process. Hence, the focus here is on establishing a clear competitive direction before taking further action, confirming the importance of this step in the overall strategic planning process.