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CHAPTER 7 • IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES 213

operating policy encourages all employees to challenge computer (PC) industry to become more like the cell
all managers on decisions—to make sure the decisions phone industry whereby customers pay monthly service
are true to the firm’s mission. Another internal rule at fees for use of hardware and software.
Google is to “Give up control,” which means giving up Google’s Chrome will be free to all computer makers
control to outsiders to reap the benefits of their input. such as Hewlett-Packard who historically have pre-
This latter rule is done through beta launches of any installed Microsoft’s operating system for a fee to
new software, product, or service they do. Google’s phi- consumers. Microsoft released its new Microsoft Windows
losophy is that “Low prices are good, but free is better” 2010 in the fall 2009 and believes that the learning curve
because they want every customer they can get. for any consumer to switch away to Google’s operating
Google stock in July 2009 rose above $400 per share system will not be worth the effort. Google.com is the
as the company prepares to launch its own operating most visited Web site in the world and even in 2009
system for computers, a direct assault on the business of offered its own online word processing, spreadsheet, and
software giant Microsoft. Google’s strategic plan is to presentation programs free – called Google Docs. The
attack Microsoft in nearly all of its businesses, including Google strategy is a huge bet that online programs can
browsers, where Google has 1.8 percent market share eventually overtake and crush desktop software.
versus Microsoft’s 66 percent, smartphone operating Due to its dominance in the Internet search and
systems (Google 1.6% versus Microsoft 10%), office advertising business, Google is coming under increasing
suites (Google 0.04% versus Microsoft 94%), and Web scrutiny from the U.S. Justice Department regarding
searches (Google 65% versus Microsoft 8%). possible antitrust infringement. The pending Microsoft/
Google’s Chrome OS operating system will require Yahoo merger may negate that Google vulnerability.
users to be connected to the Internet, unlike Microsoft’s Google obtains about 95 percent of its revenues from
operating systems. CEO Eric Schmidt at Google has online advertising.
been on a mission for the last several years, according to
Source: Based on Jeff Jarvis, “How the Google Model Could Help
analysts, to capture Microsoft’s market share. The
Detroit,” Business Week (February 9, 2009): 33–36; Geoff Colvin, “The
Google strategy is accelerating a shift in the personal World’s Most Admired Companies,” Fortune (March 16, 2009): 76–86.

The Nature of Strategy Implementation
The strategy-implementation stage of strategic management is revealed in Figure 7-1.
Successful strategy formulation does not guarantee successful strategy implementation. It
is always more difficult to do something (strategy implementation) than to say you are
going to do it (strategy formulation)! Although inextricably linked, strategy implementa-
tion is fundamentally different from strategy formulation. Strategy formulation and imple-
mentation can be contrasted in the following ways:
• Strategy formulation is positioning forces before the action.
• Strategy implementation is managing forces during the action.
• Strategy formulation focuses on effectiveness.
• Strategy implementation focuses on efficiency.
• Strategy formulation is primarily an intellectual process.
• Strategy implementation is primarily an operational process.
• Strategy formulation requires good intuitive and analytical skills.
• Strategy implementation requires special motivation and leadership skills.
• Strategy formulation requires coordination among a few individuals.
• Strategy implementation requires coordination among many individuals.
Strategy-formulation concepts and tools do not differ greatly for small, large,
for-profit, or nonprofit organizations. However, strategy implementation varies substantially
among different types and sizes of organizations. Implementing strategies requires such
actions as altering sales territories, adding new departments, closing facilities, hiring new
employees, changing an organization’s pricing strategy, developing financial budgets, devel-
oping new employee benefits, establishing cost-control procedures, changing advertising
strategies, building new facilities, training new employees, transferring managers among