Strategy Formulation Versus Strategy Implementation - Assignment Example

Strategy Formulation versus Strategy Implementation Introduction Corporate strategy entails a pattern of decisions that establishes and reveals its objectives, purposes, and goals. The strategy produces principal policies and plans in order to achieve corporate targets. Corporate strategy involves defining the range of businesses, which the corporate intends to pursue, economic, and human resource organization. Moreover, the strategy encompasses the nature of economic and noneconomic contribution, which the corporate aims to make to shareholders, employees, communities, and customers. To achieve its objectives, corporate needs to formulate and implement sound strategies. Strategy formulation and implementation are two important aspects, which are interrelated. Strategy formulation and implementation are important facets of strategic management in a corporate for long-range performance. Strategy management comprises of three phases namely, diagnosis, formulation, and implementation (Hill and Jones 2012:20-21). Literature Review Strategy formulation entails development of long-range plans for effective management of environmental opportunities and threats. This is in the light of corporate strengths and weaknesses. Hill and Jones (2012:20) state that formulation encompasses defining corporate mission, objectives, setting policy guidelines, and developing sound strategies. Formulators of strategy attach some estimate or risk to discernible alternatives. They appraise corporate strength and drawbacks with the resources, which are available. Formulation gives a clear set of recommendations in order for the corporate to accomplish its mission successfully (Hill and Jones 2012:20). Formulation of corporate strategy entails creating sustainable competitive advantages. This happens through giving prudent and practical solution to problems that may affect the corporate. Strategy implementation encompasses putting strategies, which corporate formulates into practice. This entails designing and management of systems in order to achieve best integration of people, processes, structures, and resources in order to attain organizational set goals. This is the step in which corporate converts its strategy into operationally effective action. Formulated strategy gains commitment of resources of organization or corporate. Strategy implementation aims at bringing sound ideas into practice. For implementation of corporate strategy to be effective, strategic managers in organization should support the chosen plan. Second, the strategic supervisors should allocate sufficient resources. Third, the formulated strategy should complement with corporate/organizational culture (Hill and Jones 2012:21-25). This is crucial in order for the selected strategy during formulation stages to achieve strategic goals and objectives. Comparison and Contrast of Strategy Formulation and Implementation Criteria The comparison and contrast in this essay uses block method. It presents all information about strategy formulation then later explores strategy implementation. This criterion of comparison looks at similarities and differences between strategy designing and putting this strategy into practice. On contrasting part, the essay looks at whatever is different from strategy formulation and implantation. The essay will indicate that strategy implementation is very difficulty from strategy formulation. Formulation entails with objectives and goals while implementation entails actions plans and allocation of resources in a corporate or organization. It is crucial for the formulators to devise sound strategies to keep an organization or corporate strong in their activities. This is because formulation and implementation share a very tight link, which determines the performance of a corporate or organization (Hill and Jones 2012:23). In order to achieve its objectives, a corporate should not only formulate, but also implement its strategies soundly. This is because success is the most likely outcome when strategy is appropriate and implementation is good. In cases of in appropriate implementation, trouble sets in the corporate. Formulation of strategy encompasses many activities. To start with, formulation entails setting organizational objectives. This is the key component of any strategy statement. It sets long-term objectives of the organization. Formulators of the strategy devise sound ways of achieving set goals of a corporate. They look at the factors, which influence the growth of a corporate before taking strategic decision. Second, formulators evaluate the general industrial and economic environment in which a corporate operates. This involves a review of corporate competitive position through qualitative and quantitative methods. The formulators of strategy conduct review to make sure that they incorporate factors, which are crucial for competitive progress in the market (Hill and Jones 2012:29-31). This enables management to identify the weaknesses and strengths of corporate/ organisation as well of those of their competitors. The third step of strategy formulation encompasses fixation of quantitative target values for corporate objective. This involves assessing contributions of long-term clients in a corporate. This aims to evaluate the inputs of various products or departments in a corporate. Careful analysis of macroeconomic trends of each department or product helps in strategic planning in a given corporate (Hill and Jones 2012:20). This facilitates corporate to take a course of actions that gives desired results that would have been difficult to achieve. Fourth step involves setting strategic objectives. This entails outlining the position in the marketplace that a corporate seeks. The formulators of strategies incorporate measurable performance targets, which an organisation or a corporate intends to attain. Formulators of strategy aim to achieve maximum profitability, market share, return on investment, technological achievement, diversification, and revenue size. Fifth, the formulators conduct a situation analysis. They can use either SWOT (Strengths, Weaknesses, Opportunities, and Threats) or TOWS matrix to determine external opportunities and threats that have a matching with corporate internal strengths and weaknesses (Hill and Jones 2012:22-24). Strategy implementation entails taking actions at the functional, business, and corporate level to execute strategic plan. Implementation may include putting quality improvement programs into place, changing product design, and positioning differently in the marketplace. Similarly, execution of formulated strategy may encompass segmenting the marketing and giving different types of product to different consumers, and expanding through mergers or acquisitions. Activities involved in implementation of strategy entails several steps. These steps comprises of action planning, organizational structure, human resources, annual business plan, monitoring and control, and linkage. To start with, action planning entails developing chronological lists of activities, which will lead to the success of organisation. This step encompasses assigning responsibilities to specific individuals to specific individuals to achieve each step of action (Hill and Jones 2012:25-26). Moreover, action step involves setting due date and estimate of resources, which a corporate requires to attain its formulated strategies. Therefore, implementers convert broad strategy into number of specific work assignment. Second step of strategy implementation entails giving the right thinking to organisational structure. Implementers of strategy assesses whether the formulated plan fits the structure and culture of a corporate. To achieve this step, it calls for commitment and organisation of implementers through establishment of research and development group. This is institutionalisation of strategy. This is prudent course of action because a strategy does not become acceptable or effective by virtue of its well designing or announcement. The strategy framers work together with implementing units in corporate to avoid unnecessary undermining of the plan. Third step of implementation of strategy entails consideration of human resource. In this step, the framers and implementers of corporate strategy join hands to think about the needs of communication within human resource. Strategic managers look at the agency of the strategy and the available resources required to implement it. This prepares corporate internal environment through encouraging co-operation, dedication, and commitment among people in the organization. This is in realization that human resource is instrumental in implementing a particular corporate strategy in a good climate. Fourth, designing best organisational structure, control systems, and best culture is desirable in order to put formulated strategy into action. This is important in maximising profitability and profit growth. It is evident that strategy formulation entails planning and decision-making involved in developing corporate strategic goals and plans. This is a preparatory stage for the implementation phase of strategic management. It is setting the right course of corporate action. Strategy implementation encompasses putting all means regarding to executing strategic plans. This entails sound management of forces during action. Strategy designing is an entrepreneurial activity that has basis on strategic decision-making while implementation is an administrative task, which anchors on strategic and operational decisions (Hill and Jones 2012:22). Strategic formulation lays a lot of emphasis on effectiveness of strategy. This involves looking at the strengths and weaknesses of corporate. Similarly, the framers of strategy explore opportunities and threat, which the outside environment presents to the corporate. This is a rational process and incorporates views from different stakeholders. Formulation requires a wide deal of logical skills and initiatives. It precedes implementation stage (Hill and Jones 2012:40). Strategy implementation stresses on the efficiency of the plan, which formulators design. Implementation is an operational process that requires co-operation among different individuals such as framers and implementers of the strategy. Implementation follows strategy formulation. Strategy implementation is more difficult than formulation. Successful strategy formulation does not guarantee imply sound implementation of the plan. It is easier to formulate a promising strategy but fail to implement it. Managers find execution a thorny aspect of their jobs. Managers report less than half of the plans do not get implementation. This depicts that there is very weak relationship between strategy designing and implementation. Corporate or organisation spend huge some of money to design attractive plans, which later fail to see the light of the day (Hill and Jones 2012:31. Failing to put sound strategies into practice becomes a huge obstacle to achieving superior corporate performance. Case Study Hennes and Mauritiz (H&M), a Sweden Company that deals in designing and retailing of fashion apparels and accessories, is a good example of strategy formulation and implementation. The strategy formulation of H&M entails a definition of its mission, which is to provide and satisfy customers through providing quality and fashionable offers at best prices. The formulation of strategy at the company encompasses looking at untapped markets in the world. The vision of H&M focuses offering its customers with services and products, which exceeds their client’s expectations. Core values of this company include quality and fashion. These two values direct the strategy designing in H&M (Huiru, 2011: 25-28). Strategy implementation in H&M entails putting framed strategies into practice. For instance, in the year 2009 and 2010 H&M expanded their activities in Lebanon, Russia, Beijing, South Korea, Turkey, and Israel. The company also uses online marketing where they offer catalogue of their sales. The company realises that using online services, their clients will access many products within a shortest time possible (Huiru, 2011: 20-29). Sound strategy formulation and implementation has seen H&M amass huge profits all over the world. Conclusion It is apparent that strategy formulation and implementation go hand in hand is strategic management in a corporate or an organisation. Formulation precedes implementation. This implies that the two phases of strategic management share a very important link that dictates corporate performance. However, sound designing of corporate or organisational plans does not translate to successful execution. In many cases, implementation has failed thereby dwindling growth of many corporate. It is therefore important for corporate to put sound measure in place to ensure that they implement whatever they formulate. This is because it is not beneficial to waste a lot on time and energy formulating what will not get into implementation stage. A disconnect between strategy formulation and implementation dooms efforts to achieve corporate visions, mission, objectives, and objectives. Strategic leadership is a critical driver for effective execution of strategy. Managers should be able to envision, anticipate, and empower human resource to create a strategic change, which is necessary for corporate growth. Bibliography Hill, C., and Jones, G., (2012) Strategic Management: An Integrated Approach. New York: Cengage Learning. Huiru, D. (2011) The Importance of Strategic Management: A Case Study of H&M. Available from: https://publications.theseus.fi/bitstream/handle/10024/27622/Huiru_Ding.pdf?sequence=1 [Accessed 10 June 2012]. Read More