When it comes to business strategy, focusing on strategy development and implementation alone is insufficient. It is also important to assess the quality of your strategic choices. This can be done in a preliminary way by assessing the comparative likelihood of success of a range of strategic options.
The SFA model, as I usually refer to it, looks at Johnson, Scholes and Whittington’s three “success criteria”: suitability, feasibility and acceptability (See Figure 1).
Suitability is the extent to which a strategy would address previously identified core issues of the company’s strategic position. It considers the degree to which each strategic option would fit or adapt to environmental trends and transformations in order to exploit strategic capabilities, and how it would address stakeholder expectations and influence.
Feasibility reveals whether a strategy could be applied, i.e., whether the skills and resources needed for implementation of the strategy are present.
It is crucial to analyze the financial feasibility of the partnership, vis à vis each strategic option: are the resources and capacities necessary for its achievement available?
Finally, acceptability relates to expected performance results of each strategic option, and to what extent these results will meet stakeholder expectations.
These results could be stakeholder return, risk or reaction.
The application of the SFA model provides the initial evaluation of a strategic option’s capacity to generate expected results.
If you would like to study this topic further, I recommend Gerry Johnson, Kevan Scholes, and Richard Whittington, Fundamentals of Strategy, 1st edition. Pearson Education Limited 2009.
See you next week!