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CA Intermediate · Financial Management and Strategic Management · Strategy Implementation and Evaluation

Sundaram Textiles Ltd. has decided to enter a new export market. The managing director first lists the objectives, then allocates budgets, people and equipment to each unit, and then sets up the structure to run the plan. Which of the following best describes what the firm is doing at this stage?

The firm is in the strategy implementation stage. Allocating budgets, people and equipment and setting up a structure turns an already chosen strategy into action. Formulation decides what to do, while evaluation measures results, so neither fits the activities described in this scenario.

  1. AStrategy formulation, because objectives are being listed
  2. BStrategy implementation, because plans are being converted into action through resources and structureCorrect
  3. CStrategy evaluation, because performance is being compared with standards
  4. DEnvironmental scanning, because a new market is being studied

Explanation

Allocating resources and creating structure to carry out a chosen strategy is the core of implementation. Formulation is about deciding what to do; evaluation compares results with standards. Here the decision is already taken and is being put into action.

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