Strategy Implementation

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 Implementing and Executing
Strategy
• Action-oriented, operations-driven activity
revolving around managing people and business
processes
• Tougher and more time-consumingImplementati
than crafting strategy on involves .
..
• Success depends on doing a
good job of
– Leading
– Motivating
– Working with others
– Creating fits between requirements for good strategy
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execution and how organization conducts its business
 BUSINESS STRATEGY
Steps in Setting Strategy
• What is a company’s mission?
• Set goals and objectives - quantify, set time
• Design the business portfolio
• Operational details - 4P’s
 Strategy - basics
• Mission
• Business Objectives
• Marketing Objectives
• Marketing Strategy
 Mission
• Who is the customer?
• What is the value to the customer ?
• What will our business be?
• What should our business be?
 Factors that affect mission
• History
• Current preferences of owners and
management
• Market environment
• Resources
• Distinctive competencies - Core
competencies - Hamel and Prahalad
 Mission
• Should define
– Industry scope
– Products and services
– Competencies
– Segments
– Vertical scope
– Geographical scope
 Why Implementing and Executing
Strategy is a Tough Management Job
• Demanding variety of managerial activities that have to
be performed
• Numerous ways to tackle each activity
• Requires good people management skills
• Requires launching and managing a
variety of initiatives simultaneously
• Number of bedeviling issues to be worked out
• Battling resistance to change
• Hard to integrate efforts of many different work groups
into a smoothly-functioning whole
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Implementing a Newly Chosen
Strategy requires Adept Leadership
• Implementing a new strategy takes
adept leadership to
– Convincingly communicate
reasons for the new strategy
– Overcome pockets of doubt
– Build consensus and enthusiasm
– Secure commitment of concerned parties
– Get all implementation pieces in place and
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coordinated
 Characteristics of the Strategy
Implementation Process
• Every manager has an active role

• No 10-step checklists

• Few concrete guidelines

• Least charted, most open-ended

part of strategic management
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 Characteristics of the Strategy
Implementation Process (continued)
• Each implementation situation occurs in
a different context, affected by differing
– Business practices and competitive situations
– Work environments and cultures
– Policies
– Compensation incentives
– Mix of personalities and firm histories
• Approach to implementation
has be customized to fit the situation
• People implement strategies - Not companies!
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 What Are the Goals of the Strategy
Implementing-executing Process?
• Unite total organization behind strategy
• See that activities are done in a manner tightly
matching first-rate strategy execution
• Generate commitment so an enthusiastic crusade
emerges to carry out strategy
• Fit how the organization
conducts its operations
to the requirements of
strategy
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 Who Are the Strategy Implementers?
• Implementation involves a company’s whole
management team
– Every organization unit and all employees have a
role in the strategy implementing
and executing process
• CEO, senior executives, and heads
of major departments must lead the
process and orchestrate major initiatives
– But they must rely on middle and lower-level
managers to push things on the front line, seeing that
strategy is well-executed on a daily basis 13
Ways to Lead the Implementation and
Execution Process
• Take active, visible role or low-key, behind the
scenes role
• Make decisions authoritatively or
based on consensus
• Delegate much or little
• Be personally involved in details or coach others
to carry day-to-day burden
• Proceed swiftly to achieve results or move
deliberately, content with gradual progress
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Factors Shaping How Managers
Lead the Implementation Process
• Experience and knowledge of business
• New to job or seasoned?
• Network of personal relationships
• Diagnostic, administrative, interpersonal,
and problem-solving skills

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Factors Shaping How Managers
Lead the Implementation Process
• How much authority they have
• Leadership style most comfortable with
• How they view their role in getting
things done
• The organization’s situation

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 Importance of Implementation
• Critical to success or failure of any venture
• ‘Internal marketing’
• Understand customer need

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 Key to Implementation
• Message contained in the plan are
communicated so that there is clear
recognition of what the plan says

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 Key to Implementation
• Plan must be understood so that all who
need to play a role in its implementation are
aware of what their roles are
• There is consensus about the wisdom of
pursuing the plan in order to secure
commitment to its accomplishment

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 Key Internal Elements for
Implementation
• Leadership
• Organisational culture
• Organisational structure
• Functional policies
• Resources
• Evaluation and control procedures

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 Organisational Core Skills
• Effective training programmes
• Systems and procedures- TQM
• Clear performance guidelines
• Well-designed information systems
• Effective incentive systems for better
motivation

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 Internal Marketing
• Gain support of key decision makers and
facilitators
• Change attitudes among those employees
who deal with customers

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 Internal Marketing
• Obtain employees’ commitment to making
the marketing plan work by involving them
in the ‘ownership’ of the plan and by
rewarding them on the plan’s attainment
• Train staff to allow them to develop new
skills that will contribute to the effective
implementation of plans

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 Successful Implementation and
Control
• Balance between short run programme-
related measures and longer-term
performance criteria
• attainment of synergy among various
elements of marketing mix
• use of appropriate criteria for assessing
performance within segments

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 Successful Implementation and
Control
• Use of appropriate criteria for allocating
resources to segments, coupled with
flexibility in adaptive reallocations
• executing product-market decisions in the
broader context of business-level
considerations relating to strategic
marketing

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 Implementing Strategy: Tactical
Issues
• Establishing Short-run Objectives: Short-
range objectives at any level in the
organization should be derived directly
from the organization’s long-range
objectives. Short-run objective is focused
on one-year or less, are very specific, and
they are almost always quantifiable.

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 Establishing Short-run Objectives
• To implement short run objectives – the steps in the process are as
follows:
i. The objective setting process begins at the top of the organization
with a statement purpose and mission.
ii. Long range objectives are established to achieve this purpose and
mission.
iii. Long range objectives lead to the setting of short range objectives
for the overall organization.
iv. Long and short range objectives are established for each SBU,
major division, or operating unit in the organization.

The basic focus is - all employees, managers, and line supervisors to

be involved in this process of strategy implementation.

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 Deployment of resources through
budgeting
• Deployment of resources through budgeting: through
the use of budget organization’s goals are achieved.
Following steps need to be discussed to understand the
deployment of resources in the budgeting process.
• Strategy and the budgeting process: to implement the
budgeting process certain conditions must be met.
i. Senior management must support the budgeting process.
ii. Budgeting must be based on objectives and strategies of
the organization.
iii. Regular reviews of the operating results in comparison to
the budget must be conducted.
iv. All levels of management must be required to explain
budget variance.
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 Dangers in the budgeting process
• Dangers in the budgeting process: following issues
need to be considered to understand the dangers in the
budgeting process.
i. If managers view process in inflexible.
ii. Budget can hide inefficiencies. For example, in past
certain expenses were occurred, or manpower used – so
the upcoming one have to continue with it and make the
budget including these extra cost.
iii. Budget can be inflationary or inaccurate. Lower level
managers always pad their budget because they know
upper management will cut some part of it.

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 Origins of Problems of Strategy
Implementation
• Pressures from a variety of sources
(consumer behaviour, economic conditions,
technology, politics, etc), which are
associated with change and the imperative
for enterprises to adapt to change if they are
to be successful
• marketing subsystems with its
interdependencies
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 Origins of Problems of Strategy
Implementation
• Nature of marketing feedback
• adequacy of information
• cost issues and efficiency of marketing
activities
• degree of marketing orientation
• resistance to planning

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 Developing functional strategies
• Developing functional strategies: functional strategies
describe the means or methods to be used by each
functional area of the organization in carrying out the
corporate level or business unit strategy. However,
functional strategy and corporate strategy are different.
The basic differences are stated below:
i. Functional strategy covers short span compared to
corporate strategy.
ii. Functional strategy much more specific and action
oriented.
iii. Functional strategy implementation/development requires
lower level mgt/employee involvement.
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 Developing functional strategies
• Functional strategies normally include the
following strategies:
• Marketing strategy: this strategy is developed
based on 4P of marketing (product, price, place
and promotion).
• Financial strategy: primary concern with – one,
must acquire adequate fund to meet the current
and future needs. Two, recording, monitoring,
controlling, the financial results of organization’s
operation.
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 Structure and Skills
• Interacting
Programmes
• Systems
Allocating
• Policies
Monitoring
• Actions
Organising
Successful implementation of marketing plans results from
the interaction of structure and skills

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 Structural Variables
• Actions- relate to low level execution issues
(e.G. Selling, distribution management, etc)
• Programmes- deal with inteegrated sets of
actions (e.G. A specific marketing mix
tailored to a particular segment)
• Systems- focus on formal controls and
decision aids (e.G. Decision support
systems, order processing systems, etc)

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 Structural Variables
• Policies- are broad rules of conduct
promulgated by top management to guide
marketing operations (e.G. Segments to
develop, technology to use, etc)

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 Skills
• Interaction- focus on how managers deal
with each other and with staff, customers,
etc in order to influence events
• Allocation- relate to an ability to assign
resources to tasks in an effective and
efficient way
• Monitoring- concern the design and use of
feedback mechanisms to measure and
control marketing activities 37
 Skills
• Organising- deal with networking behaviour
by which a manager copes when the formal
organisation is not relevant

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 Structure / Skills Dynamics
R Degree of task complexity
a Low High
t H
e I
g Skills
of h dominate

m
a l
Structure
r o
dominates
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change
 Developing Core Skills
• Establish a clear link between chosen
strategy and required skills, such as quick
delivery requiring excellent distribution
facilities

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 Developing Core Skills
• be specific and selective in defining core
skills so that employees will know what to
do and how to do it
• clarify implications for pivotal jobs
(influences recruitment and training,
support systems, reward schemes, etc)

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 Developing Core Skills
• Provide leadership from the top since the
single most powerful factor between
success and failure in developing core skills
is the degree of top management
involvement

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 Developing Core Skills
• empower organisation to learn, which
requires individuals have scope for learning
by doing- thereby seeing what works and
what fails to work in building core skills
through which strategies can be
successfully implemented

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