Discussion Question

Discussion Question IV

1. What is the difference between Corporate Strategy (or strategy formulation) and Business Unit Strategy (Strategy Implementation)?

Strategy formulation including planning and decision-making involved in developing organization’s strategic goals and plans, while strategy implementation involves all those means related to executing the strategic plans. In short, strategy formulation is placing the forces before the action. Strategy implementation is managing forces during the action.

Strategy formulation is an entrepreneurial activity based on strategic decision-making, while strategic implementation is mainly an administrative task based on strategic and operational decisions. Strategy formulation is a rational process and requires co-ordination among few individuals. Strategy implementation is basically an operational process and requires co-ordination among many individuals.

During strategy formulation the strategic planning groups decide on a strategic direction by defining the company’s mission and goals, its external opportunities and threats, and its internal strengths and weaknesses. They then generate various strategic alternatives and compare those alternatives’ ability to achieve the company’s mission and goals. During strategy implementation, the organization follows through on the chosen strategic, This consists of structuring the organization, allocating resources, ensuring that the firm has skilled employees in place, and developing reward systems that align employee behavior with the organization’s strategic goals.

2. Why is that distinction important for a firm that operates in different product markets?

A firm can have its members working towards the same goal while allowing for differentiation in each product market by distinguishing corporate strategy and business unit implementation. The firm operates in different product markets and every product market has it unique features, so that it is not...