Comparing Strategy Formulation with Strategy Implementation
When comparing strategy formulation and strategy implementation, it is important to start by defining each in order to determine the difference that comes out. Strategy formulation involves coming up with new policies (strategies) that are to be followed in order to achieve a specific objective based on internal and external environmental factors. As Fred, Abbas, and Abdulrahman (2011) observe, it involves saying how something will be done.
On the other hand, strategy implementation involves the actual execution of a strategy that has been formulated. Based on these definitions, strategy formulation comes out as a science, while strategy implementation is an art. In strategy formulation, scientific approaches such as Decision Support Systems (DSS) can be used to arrive at an appropriate strategy that will meet all the constraints in the internal and external environment. When it comes to strategy implementation, the operational managers will need to involve employees practically in addressing specific issues as formulated by the top management. This practical approach of involving the employees to work towards a given objective makes it more of an art than a science.
Relationship between Annual Objectives and Policies
There exists a close relationship between annual objectives and policies within an organizational setting. Annual objectives focus on how to implement strategies based on the realities within an organization. It involves understanding the capacity of the employees and the organization in general and then setting specific goals that should be achieved based on these capabilities. Policies, on the other hand, look at the rules, procedures, guidelines, or administrative practices that are put in place by the top management to define how stakeholders should work towards achieving the vision of an organization.
After setting annual objectives, the managers will need to ensure that the set policies within the firm are followed to make it easy to predict their pattern of work. The policies will help in defining the dos and don’ts that should be followed in the implementation process. The policies define organizational culture, and when implementing annual objectives, employees are bound by the culture to work in a given pattern.
Long-Term Objective and Supporting Annual Objectives
When developing long-term objectives, it is always important to focus on the vision of a firm. For instance, a developing manufacturing company may set its long-term objectives as the achievement of ISO 9001:2008. This quality management system is based on eight principles defining how a firm should work to ensure that it meets the needs of its customers in the best way possible using superior production and management strategies. In order to achieve these long-term objectives, the following annual objectives will be very important.
- To cut the cost of production and improve efficiency at the plant by using emerging technologies
- To understand the needs of the customers and be able to create products that meet these needs in the best way possible
These two annual objectives may be of benefit to the firm as it seeks to achieve its long-term objective of ISO 9001:2008.
Policies that Apply to the Present Business Policy Class
Every organization has specific policies that should be observed by the stakeholders in order to protect the interests of everyone. A number of policies exist that apply to my present business policy class. One of the most important policies at this institution is the grading policy. The administration has set a clear grading pattern for all the subjects. It also outlines what it takes to achieve each grade. The grading policies are set to ensure that students can only proceed to the advanced levels of learning after understanding the basic concepts at each stage. Attendance policies at this institution also define the behavioral pattern of the learners.
This policy was developed to help eradicate cases where learners fail to attend most of the classes but would present themselves for the exams at the end of the semester. This policy demands that for a student to sit for the end-semester examination, he or she must have attended at least 80% of the lessons in that particular course. Finally, the honor code policies deal with ethical issues when it comes to the handling of all forms of the exam. It prohibits any form of cheating, from plagiarism to using third parties to address one’s exams.
Reasons Why Conflict May Arise During Objective-Setting Process
It is common to find cases where conflict arises during the process of setting objectives. One of the main reasons that cause conflict is the competition for scarce resources. Different departments may end up struggling for the resources to meet their departmental needs without considering the needs of other departments. Sometimes different expectations of the policymakers may make them think differently, leading to conflict when setting objectives.
When the parties involved in setting objectives have different perceptions towards policy issues, then it is very likely that a conflict may arise. In other cases, miscommunication may lead to serious misunderstanding among the concerned stakeholders, and this may cause conflict. Conflict may also arise when the policymakers are under great pressure to meet the deadline that is first approaching. In such cases, some people may prefer quick-fix approaches to solving problems, while others may insist on a detailed and highly accountable approach. Finally, it is important to note that sometimes the differences are brought about by personality differences.
How to Segment the Market for the Product
Developing an appropriate segmentation strategy is critical in achieving success as this firm seeks to penetrate the market with its new product. As the new owner of this firm, I will consider geographic segmentation as one of the best ways of defining the niche. The mower will be more appropriate to the urban dwellers with small yards because this equipment may not be very efficient on large yards. Socio-economic segmentation will also be an appropriate approach because of the pricing strategy that will be used to position this product in the market.
Moreover, the rich are always fascinated by highly innovative products such as this battery-powered mower. Psychographic segmentation may be very appropriate, especially when targeting people who are keen on protecting the environment. The problem with this method, however, is that sometimes it may not be easy to identify individuals who are genuinely concerned about environmental conservation.
Product-Positioning Map of Six Fast-Food Restaurant Chains
The figure below is a product-positioning map that identifies and then classifies some of the top fast-food restaurant chains in this country.
From the map above, it is clear that Wendy’s and Hardee’s products are highly-priced, but they are of low quality. This is a very dangerous position because if consumers realize that they are charged highly for a low-quality product, they can shift their loyalty in mass to other better brands. On the other hand, Burger King and McDonald’s offer high-quality products at high prices. This is the position that every firm would want to be in this competitive industry.
Their high prices are justified because their products are of high quality. In the third segment is Taco Bell that offers high-quality products at low prices. This strategy is very effective when a firm aims at attracting more customers. By offering high-quality products at low prices, the firm is able to maintain a large pool of loyal customers. In the fourth segment is KFC, which offers low-quality products at low prices. Its pricing strategy is justified, and firms in this position always target low-income earners who cannot afford expensive products.
How Involvement of Departmental Heads in Strategy Formulation Can Enhance Strategy Implementation
The involvement of departmental heads in strategy formulation is important in order to enhance strategy implementation. When the marketing and R&D managers are involved in policy formulation, they will appreciate the relevance of conducting specific market research and organizing campaigns as suggested in the annual objectives. The finance managers are responsible for all the budgetary allocations. When involved in policy formulation, they will have a better understanding of how to allocate different departments the limited resources, eliminating conflicts that may arise during the implementation process. The MIS manager will also have the knowledge of the relevant technologies needed in the implementation process.
Activities That a Small Restaurant Chain Might Undertake To Expand Into a Neighbouring State
When a small restaurant chain is planning to expand its operations to a neighboring state, the departmental managers will have a big role to play. The R&D unit will have the responsibility of conducting research in the new market to identify forces that are new to this firm and how they can be manipulated once the firm moves to the neighboring state. The marketing unit will need to use the intelligence gathered by the R&D unit to design marketing strategies that will be appropriate for this country.
It will also be necessary to identify the market segment that will be targeted in the new market. The finance unit will need to find a way of stretching the budget to meet the new financial obligations in the new market. The MIS unit will need to find a way of integrating a communication system and expand its capacity to meet the new needs in the neighboring country.
Steps in Developing Projected Financial Statements
Projected financial statements are very important because they help the management to predict the future results of a given decision made today. It is necessary to understand the steps involved in developing these financial statements. The first step will be to have a forecast of sales in the given market. Determining the expected sales will help in forecasting the possible income that will be generated from the sales. The second step will be to forecast the expected running expenses. The accounting officer will need to estimate the possible cost of running the unit as per the capacity of the firm, taking into consideration all the environmental constraints.
In the third stage, the accounting officer will need to determine the start-up costs. this includes legal fees, cost of the location, web development fee, and any other payments that will be needed to put up all the structures needed for the normal operations of the firm. In the fourth step, it will be necessary to understand expected cash flows in order to determine how easily the firm will be able to meet its short-term financial obligations. The final step will be to review the processes and revise them regularly.
Reference
Fred, D., Abbas, A. & Abdulrahman, A. (2011). Strategic Management: Concepts and Cases. Upper Saddle River: Pearson Education.