Strategy Implementing - UoM

8/12/2019 Strategy Implementing - UoM

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Implementation of a strategy


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The greatest strategy is doomed if its implemented badly.

Successful strategy formulation does not guaranteesuccessful strategy implementation.

Less than 10% of strategies formulated are successfullyimplemented!

The Nature of Strategy Implementation

Implementation may fail due to:

Paying too much for a new acquisition Not recognizing benefit of computers in managinginformation


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Formulation vs. Implementation

Formulation focuses on effectiveness Implementation focuses on efficiency

Formulation is primarily an intellectual process

Implementation is primarily an operational process

Formulation requires good intuitive & analytical skills

Implementation requires special motivational &leadership skills

Formulation requires coordination among a fewindividuals

Implementation requires coordination among manyindividuals


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Varies among different types & sizes oforganizations

Nature of Strategy

Implementation

Strategy Implementation


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Altering sales territories

Adding new departments Closing facilities

Hiring new employees

Cost-control procedures

Modifying advertising strategies

Building new facilities

Nature of Strategy

Implementation

Implementation Activities


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Shift in responsibility

Nature of Strategy

Implementation

Management Perspectives

Division or

Functional

Managers

Strategists


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Management Issues

Management

Issues

Resources

Organizational structure

Restructuring

Annual Objectives


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Management Issues (contd)

Management

Issues Production/Operations

Resistance to Change


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Management Issues

Purpose of Annual Objectives --

Basis for resource allocation

Mechanism for management evaluation(e.g. IT management)

Metric for gauging progress on long-term

objectivesEstablish priorities (organizational, division,

& departmental)


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Management Issues

Requirements of Annual Objectives

Measurable

Consistent

Reasonable

Challenging

Clear to Understand

Timely


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Management Issues

Annual Objectives Should State

Quantity

Quality

Cost

Time

Be Verifiable

SMART Type


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Management Issues - Resource Allocation

Enables resources to be allocated according to

priorities established by annual objectives. However

it may cause conflict. Is this good or bad?

1. Financial resources

2. Physical resources

3. Human resources

4. Technological resources

4 Types of Resources

-- Central management activity that allows

for the execution of strategy


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Management Issues

Matching Structure with Strategy

-- Changes in strategy= Changes in

structure

Structure dictates how objectives & policies

will be established and how resources will be

allocated; e.g. is structure based on locationor based on the product


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New administrative

problems emerge

New strategy

Is formulated

Organizational

performance

declines

Organizational

performance

improves

New organizationalstructure is established

Structure should be designed to

facilitate the strategic pursuit of a firm


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Management Issues

Restructuring

-- Reducing the size of the firmNumber of employees, divisions and/or

units, Number of hierarchical levels;

e.g. The ERP & Internet is ushering in anew wave of business transformations


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Management Issues

Re-engineeringIn re-engineering, a firm uses information

technology to break down functional barriers

and create a work system based on businessprocessesReconfiguring or redesigning

work, jobs, & processes to improve cost,

quality an example to quo te done by mewhich sp read across the Industry - Cost

reduct ion & Qual ity Improvements.


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Management Issues

Resistance to Change-- Singlegreatest threat to successful strategy

implementation

Raises anxiety; fear concerning:economic loss, Inconvenience or Uncertainty

Force Change Strategy

Educative Change Strategy

Rational or Self-Interest Change Strategy


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Management Issues

Production/Operations Concerns

Production processes typically

constitute more than 70% of firms total

assetsDecisions concern e.g. :

Plant size

Quality control

Technological innovation


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Failing to segment markets appropriately

Paying too much for a new acquisition

Falling behind competition in R&D

Not recognizing benefit of computers in

managing information

The Nature of Strategy Implementation

Strategy Implementation can have a low success rate


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Marketing of goods & services well

Raising needed working capital

Producing technologically sound goods

Sound information systems

The Nature of Strategy

Implementation

Successful Strategy Implementation


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Marketing Issues

Marketing variables affect success/failure

of strategy implementation

1. Market segmentation

2. Product positioning


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Marketing Issues

Market Segmentation: Subdividing of amarket into distinct subsets of customers

according to needs and buying habits

Market segmentation variables: Product

Place

Promotion

Price


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Marketing MixComponent Factors

Service level

Warranty

Transportation

carriersProduct line

Inventory

levels/locationsPackaging

PublicitySales territoriesBrand name

Payment termsSales promotionOutlet locationStyle

Discounts &

allowancesPersonal selling

Distribution

coverageFeatures

LevelAdvertising

Distribution

channelsQuality

PricePromotionPlaceProduct


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Acquiring needed capital

Developing projected financial statements

Preparing financial budgets

Evaluating worth of a business

Finance/Accounting Issues

Essential for implementation


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Management Information

Systems (MIS) Issues

Information is the basis forunderstanding the firm. One of themost important factors differentiatingsuccessful from unsuccessful firms

MIS used to :

Information collection, retrieval, & storage Keeping managers informed

Coordination of activities among divisions

Allow firm to reduce costs


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Documents

Strategy Implementing - UoM