There are many factors that need to be taken care of while choosing the best possible strategic options. The most influential ones are the following −
● External Constraints − The survival and prosperity of a business firm is fully dependent on interaction and communication with the elements that are intrinsic to the business. It includes the owners, customers, suppliers, competitors, government, and the stakeholders of the community.
● Intra-organizational Forces − The big decisions of a company are often influenced by the power-play among various interest groups. The strategic decision-making processes are no exception. It depends on the strategic choices made by the lower Management and top notch strategic management people.
● Values and Preferences towards Risk − Values play a very important role, It has been observed hat the successful managers have a more pragmatic, interactive and dynamic progressive and achievement seeking values. The risk takers in the high-growth less-stable markets prefer to be the pioneers or innovators. They seek an early entry into new, untapped markets.
● Impact of Past Strategies − A strategy made earlier may affect the current strategy too. Past strategies are the starting point of building up a new strategies
● Time Constraints − There may be deadlines to be met. There may be a period of commitment, which would require a company to take immediate action.
● Information Constraints − The choice of a strategy depends heavily on the availability of information. A company can deal with uncertainty and risks depending on the availability of information at its disposal. Lesser the amount of information, greater the probability of risks.
● Competitor’s Risk − It is important to weigh the strategic choices the competitors may have. A competitor who adopts a counter-strategy must be taken into account by the management. The likelihood of a competitor’s strength to react and its probable impact will influence the strategic choices.