Which of the following is an example of strategy formulation?

• A. Incentives
• B. Creating teams
• C. Assessing environments
• D. Executing the strategic plan

Answer: (C)

Strategy formulation is the stage where you decide what to do and how to do it, based on careful analysis of both the external environment and internal capabilities. Assessing environments fits here because it involves scanning market trends, competitors, customer needs, regulatory changes, and internal strengths and weaknesses to shape strategic choices. This information helps determine which goals to set and which directions to pursue.

The other activities belong to putting the plan into action or organizing around it. Incentives are tools to motivate behavior during execution, creating teams is about structuring the organization to implement the plan, and executing the strategic plan is the actual carrying out of the chosen strategy, i.e., strategy implementation rather than its formulation.