Step 3: Development of Possible Solutions Once we have the situation clearly de

Step 3: Development of Possible Solutions
Once we have the situation clearly defined, we are in a position to develop a set of strategic options that have a reasonable potential to solve the problem. A key problem students face in this step is that they generate a laundry list of a dozen fairly detail-oriented items. These items have a lot more to do with the tactics of implementing a strategy than with presenting alternative strategies from which we will make our selections. For example, if we are addressing issues in a sourcing process the list may include ideas such as:
Ensure active management of contracts to increase transparency with key suppliers
Require more frequent financial analysis of key suppliers to ensure stability
Use dual or multiple sourcing to ensure supply continuity
Maintain updated market information on key materials to expedite new bidding processes
While these may all be good ideas, they are not strategic alternatives. The term alternative suggests an either/or situation. From the list above, you might include several items in your recommendation section. Strategic alternatives should identify basic directions the firm might go with the acquisition of these materials.
One option is always the status quo. You must understand that this is not a means of avoiding a decision. If recommended as the next step, it is a conscious decision, based on a careful evaluation, that the present strategy in use, perhaps with some tactical modifications, is the best course of action in the current situation.
Besides the status quo, you should use creative thinking to come up with several truly strategic alternatives. For a raw material sourcing example, one option might be to avoid the external market altogether and start using internal manufacturing capabilities to make these items in-house. Another alternative would be to use a substitute product/material and avoid using that particular raw material. Another possible option is to redesign the final product (especially if the purchased items are not critical to consumers) and eliminate the need for that item altogether.
Frequently, the underlying problem facing the organization is the failure to have a current, widely used, well-developed supply chain plan. If the analysis indicates this to be the case, conducting a comprehensive strategic supply chain planning process should be one of the alternatives listed. This is one of the few options that might be selected in combination with some other alternative.