Difference Between Strategy Formulation and Strategy Implementation (with Comparison Chart)

calendarJan 15, 2023 · 4 min read  ·
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strategy formulation Vs Strategy ImplementationStrategy Formulation and Strategy Implementation are the two most important phases of strategic management process. Strategy Formulation means crafting a combination of strategies and picking out the best one to achieve the organizational goals and objectives and thereby reaching the vision of the organization. It involves a number of steps which are performed in chronological order.

On the other hand, Strategy Implementation refers to the execution of the opted strategy, i.e. it converts the chosen strategy into action, for the realization of organizational goals and objectives. There are many management students, who often juxtapose the two terms. But there exist a fine line of differences between strategy formulation and strategy implementation, which has been explained in the article below.

Content: Strategy Formulation Vs Strategy Implementation

  • Comparison Chart
  • Definition
  • Key Differences
  • Conclusion

    • Comparison Chart

    Basis for ComparisonStrategy FormulationStrategy Implementation
    MeaningStrategy Formulation refers to the preparation of a well thought strategy, that helps in the achievement of organizational goals.Strategy Implementation means to bring the formulated strategy into action.
    ConceptPlacement of forces before action takes place.Managing forces at the time of strategy execution.
    Process typeLogicalOperational
    Emphasis onEffectivenessEfficiency
    ResponsibilityTop ManagementFunctional Management
    OrientationPlanningExecution
    Activity typeEntrepreneurialAdministrative
    Requirement ofAnalytical skillsLeadership skills

    Definition of Strategy Formulation

    Strategy Formulation is concerned with the crafting and designing of strategies, and picking the best strategy for execution, to achieve the desired organizational goals and objectives. It is the second stage of the Strategic Management Process. The following are the three major aspects of Strategy Formulation:

    • Corporate Level Strategy
    • Business Level or Competitive Level Strategy
    • Functional Level Strategy

    Strategy Formulation involves evaluating the current business strategy and determining measures to improve them. Ascertaining the major areas where business needs any help from the external environment of business. In this phase, the present issues and problems of the organization are resolved first. Alternative courses of action are prepared, taking all the items into account. After that, the strategy is formulated accordingly for implementation, after all, considerations.

    Definition of Strategy Implementation

    This is the third and final phase of Stage of Strategic Management Process, where the formulated strategy is put into action to meet out the organizational goals and objectives. Strategy Implementation is a process of converting planned decisions into action.

    Strategy Implementation Model

    Strategy Implementation Model

    It includes directing the ongoing strategy so that it can work in an efficient manner and taking corrective measures to improve its performance time to time, to reach the targeted results. The following activities are involved in it:

    • Allocation of resources like the man, material, money, machinery, etc.
    • Designing the organizational structure for handling new strategy.
    • Training manpower.
    • Ascertaining functional process.
    • A devising system in the organization.

    Key Differences Between Strategy Formulation and Strategy Implementation

    The following are the major differences between strategy formulation and strategy implementation:

  • Strategy Formulation refers to designing the strategy. Strategy Implementation means, execution of the opted strategy.
  • Strategy Formulation putting all forces into its place before an action takes place while Strategy Implementation focuses on managing those forces during execution.
  • Strategy Formulation is a logical process, whereas Strategy Implementation is an operational process.
  • Strategy Formulation puts emphasis on effectiveness, but Strategy Implementation gives stress on efficiency.
  • Strategy Formulation is the responsibility of top management. Conversely, middle management is responsible for Strategy Implementation.
  • Strategy Formulation requires intuitive skills. In contrast to, Strategy Implementation, which needs motivational skills.
  • Strategy Formulation is an entrepreneurial activity. On the other hand, Strategy Implementation is an administrative activity.
  • Strategy Formulation is related to planning, but Strategy Implementation is concerned with action.

    • Conclusion

    Strategic Management Process is a combination of three processes, i.e. Strategy Analysis, Strategy Formulation, Strategy Implementation. First of all, in depth diagnosis (analysis) on the business environment, organizational goals, resources, and competencies is performed, which is followed by strategy choice (formulation) where alternative strategies are prepared and after taking into consideration various matters the best action plan is chosen to reach the desired goals. Then finally comes the strategy execution (implementation), where the decision is brought into action. Without implementation, the strategy would be of no use to the organization.

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