Strategy Formulation vs. Strategy Implementation — What's the Difference?

Both phases are integral to strategic management, with formulation providing the roadmap and implementation bringing the plan to life. The effectiveness of Strategy Implementation is highly dependent on the appropriateness and the robustness of the Strategy Formulation. The formulation provides the what and the why, while implementation provides the how, translating strategic thoughts into strategic action.

Strategy Formulation and Strategy Implementation are sequential phases in strategic management. Strategy Formulation is the process where planners analyze the environment and the organization itself to identify the strategic goals and create a detailed plan. It is about determining what needs to be done to achieve the organizational objectives, involving analysis, decision-making, and planning. In this phase, organizations decide their mission, vision, and strategies, considering external opportunities and threats and internal strengths and weaknesses.

A successful strategic management process harmoniously integrates Strategy Formulation and Strategy Implementation. The formulation of a sound and viable strategy is futile if not implemented effectively, and implementation is directionless without a well-formulated strategy. Thus, a balance between formulating the right strategy and implementing it effectively is crucial for achieving organizational success.

On the other hand, Strategy Implementation is the subsequent phase where the formulated strategy is put into action. It is concerned with the techniques and tactics used to execute the strategies. This phase necessitates the mobilization of resources, structuring, budgeting, and the management of change. It is the realization of the plans set out during the formulation stage, focusing on executing the actions needed to achieve the strategic goals and objectives.

While Strategy Formulation is more about analytical thinking, planning, and decision-making, Strategy Implementation is more about practical application, action, and execution. Strategy Formulation requires a deep understanding of the external environment and internal capabilities, resulting in strategic plans and objectives. In contrast, Strategy Implementation involves managing resources, organizational change, and operational activities to execute the strategy successfully.