Strategic flexibility refers to an ability of firms to respond and adapt to environmental changes. Strategic flexibility enables firms many advantages. For example, it may improve to innovation performance and develop the competitive advantage of a firm in a dynamic environment.

Why is strategic flexibility important for strategy formulation?

The ability to demonstrate strategic flexibility can increase the value of an organization as the business is able to more quickly adapt to change and therefore better manage risk.

Why strategic flexibility important for strategy formulation when an organization is at growth stage?

Strategic flexibility enable a firm to gain unique competitive advantage, because the capabilities to generate decision making options, and different forms of strategic flexibility to deal with dynamic and changing environments, is perhaps difficult for competitors to reproduce (Sanchez, 1995).