According to many introductory strategy textbooks, strategic thinking can be divided into two segments : strategy formulation and strategy implementation. Strategy formulation is done first, followed by implementation.
Strategy formulation involves:
- Doing a situation analysis: both internal and external; both micro-environmental and macro-environmental.
- Concurrent with this assessment, objectives are set. This involves crafting vision statements (long term), mission statements (medium term), overall corporate objectives (both financial and strategic), strategic business unit objectives (both financial and strategic), and tactical objectives.
- These objectives should, in the light of the situation analysis, suggest a strategic plan. The plan provides the details of how to obtain these goals.
This three-step strategy formation process is sometimes referred to as determining where you are now, determining where you want to go, and then determining how to get there.
The next phase, according to this linear model is the implementation of the strategy. This involves:
- Allocation of sufficient resources (financial, personnel, time, computer system support)
- Establishing a chain of command or some alternative structure (such as cross-functional teams)
- Assigning responsibility of specific tasks or processes to specific individuals or groups
- It also involves managing the process. This includes monitoring results, comparing to benchmarks and best practices, evaluating the efficacy and efficiency of the process, controlling for variances, and making adjustments to the process as necessary.
- When implementing specific programs, this involves acquiring the requisite resources, developing the process, training, process testing, documentation, and integration with (and/or conversion from) legacy processes