Unit-IV-Strategy Implementation
Example of Strategy Implementation
In the year 1980, IBM grew to be the leading technology brand with the help of
immense sales and market place share. Yet because the agency did not change to
meet customers changing computing needs. It has isolated itself and become
reliant on hardware sales. Over the following ten years, IBM’s influence
diminished, reaching a peak with the declaration of an $ 8 billion second-quarter
loss in 1993-at the time, the largest in American history.
As IBM’s CEO in 193, Louis Gerstner made some revolutionary changes from
products to services. IBM essentially changed its strategy, moving from being a
global provider of services to a partner in shared services.
• The core elements of the approach have been to:
• Give clients a high-quality generating stack rather than promoting sales of individual
hardware, even if it covers rival items.
• Link employee compensation to company performance (as opposed to branch
performance).
• Instead of 40+ agencies, combine advertising, marketing, and branding operations
under each agency.
• Consolidate efforts in crucial centers and standardize techniques to reporting for all
internal features.
• Sell off low-profit, low-growth product lines and technology (e.g. reminiscence chips,
printers, non-public computers, etc.).
• The new strategy adopted by IBM is hailed and praised as one of the greatest
corporate turnarounds ever. The agency increased its earnings from $3 billion to $7.7
billion, sales from $64 billion to $86 billion, and inventory marketplace fee from $100
million to $180 billion during Gerstner’s leadership from 1993 to 2001.
• Steps in strategy implementation
• [Link] implementation
• [Link] implementation
• [Link] allocation.
• [Link] implementation
• [Link] implementation
• [Link] implementation
• 7. Operational implementation
• Annual objectives
• These are desired milestones of an organization needs to achieve to
ensure successful strategy implementation.
• Represents the basis of allocating of resources.
• Serves as the guidelines for action, directing and channelizing the efforts
and activities.
• Establishes organizational, divisional and departmental activities.
• Project Implementation: A project can be defined as a one-shot, time
limited, goal directed major undertaking requiring the commitment of
varied skills and resources. Project implementation passess through
various phases such as,
• (i) Conception phase: This phase is an extension of strategy formulation
phase. In this phase, project ideas are generated during the process of
strategic alternatives & and strategic choice that may be implemented by
the organization in future.
• (ii) Project analysis phase: The project ideas have to be arranged to
priority for the purpose of development. Before selecting a project for
development, a preliminary project analysis has to be made in respect to
marketing, finance, technical etc.
• Project implementation:
• Planning phase: In this phase, management undertakes detailed planning
of project. The detailed planning should cover different areas of project
such as production schedules, plant design and layout, technical
arrangements, marketing finance etc.
• Organizing phase: The management must organize for necessary resource
s such as manpower finance, systems and procedures to implement the
project.
• Implementation phase: During this phase the management must
undertake engineering, order placement for equipment and material etc.
• Operation phase: The final phase involves handing over the plant to the
operating personnel for operation purpose. At this stage the actual
production starts.
• Procedural Implementation:
• In order to implement the strategies, the management should have good
knowledge of procedural framework within which the plans, projects and
programs have to be approved by the govt.
• Formation of a company: The formation of a company governed by the
provision of Indian companies act, 1956 as amended from time to time.
All activities for formation should be carried out such as registration,
obtaining certificates, documentation should be forwarded to register the
companies.
• Import and Export requirements: Organizations whichare willing to go for
export and import need to follow certain procedural requirements, such
as, they have to register with with Directorate General of Foreign
trade(DGFT) and should obtain importers and exporters code .(IEC).
• Foreign Collaboration Procedures: For proposals to set up projects with
foreign collaborations require prior government approval. The
government authorities such as RBI, Foreign Investment Board (FIPB) and
project approval board are major regulatory bodies for foreign
collaborations including joint ventures abroad
• Consumer Protection act: Business firms must have good knowledge of
consumer protection act, 1986. This act was passed to provide better
protection of the interests of the consumers. The act seeks to promote &
protects the rights of consumers such as,
• 1. The right to be protected against marketing of goods that are
hazardous to life and property.
• [Link] right to be informed about the quality, quantity, potency, purity
standards and price of goods to protect the consumer against unfair
practices.
• The right to be heard & be assured that consumers interests will receive
due consideration.
• The right to seek redressal against unfair trade practices or exploitation of
consumers.
• Resource Allocation: Is the distribution of an organization’s assets across
products, regions and segments according to priorities established by
annual objectives.
• Resources include physical, financial and human reosurces essential for
implementing plans. These are broadly of four categories
• 1. Money
• [Link] and equipment
• [Link], supplies and services
• [Link]
• Structural Implementation
• Designing organization structure
• An organization structure is the arrangement of jobs within an
organization.
• Organization is the process of creating or reshaping an organizational
structure optimized to support strategic decisions.
• The elements of organization structure and design are
• [Link] of labor
• [Link]
• [Link] of authority
• [Link] of control
• Leadership Implementation:Leadership implementation in strategic
management is the process of using leadership to guide an
organization to achieve its goals. It involves ensuring that
everyone in the organization understands how their work
contributes to the overall strategy.
• Setting goals: Leaders create goals that challenge everyone
in the organization to improve performance
• Communicating the strategy: Leaders ensure that everyone
understands how their work contributes to the overall strategy
• Empowering employees: Leaders delegate decision-making
authority to employees.
• Monitoring performance: Leaders monitor followers'
behavior to ensure the strategy is effective.
• Evaluating the strategy: Leaders view the strategy and make
the correct decisions.
• Functional Implementation:Functional implementation is the
process of putting a business's functional strategies into
action. Functional strategies are detailed plans for
managing specific areas of a business, such as marketing,
finance, production, human resources, and research and
development.
• Functional strategies are derived from business strategies
and must align with them
• Functional plans and policies provide guidelines for
implementing strategies across different levels and
coordinating activities.
• Functional strategies aim to improve the effectiveness of
a firm's operations across various functional units or
departments.
• Functional plans and policies" in strategy implementation
refer to specific action plans and guidelines developed
within individual functional areas of a business (like
marketing, finance, operations, and human resources) to
ensure the overall strategic objectives are effectively
carried out across the organization, aligning each
department's activities with the broader company
strategy; essentially translating the high-level strategy
into concrete actions at the departmental level.
• Functional plans and policies of Marketing department:
• Product launch plan
• Pricing strategy
• Customer acquisition campaigns
• Brand management guidelines
• Finance:
• Budgeting and forecasting
• Capital expenditure plan
• Cost reduction initiatives
• Investment strategies
• Operations:
• Production scheduling
• Inventory management policies
• Quality control procedures
• Human Resources:
• Recruitment and selection process
• Employee training and development programs
• Performance management system
• Operational implementation : is the process of putting an
organization's operational strategy into action. It's a part of
the strategic management process, which involves defining
and executing a strategy to achieve business goals.
• Involves designing, managing, and controlling processes for
producing goods and services
• Focuses on improving productivity, processes, people, and
pace
• Involves developing and using resources throughout the
organization's supply chains
• McKinsey7s Model
• McKinsey 7s model was developed in 1980s by McKinsey consultants
Tom Peters, Robert Waterman and Julien Philips with a help from Richard
Pascale and Anthony G. Athos.
• The goal of the model was to show how 7 elements of the company:
Structure, Strategy, Skills, Staff, Style, Systems, and Shared values, can be
aligned together to achieve effectiveness in a company. The key point of
the model is that all the seven areas are interconnected and a change in
one area requires change in the rest of a firm for it to function effectively.
• The 7S model is a strategic model that can be used for any of the
following purposes:
• Organizational alignment or performance improvement
• Understanding the core and most influential factors in an organization’s
strategy
• Determining how best to realign an organization to a new strategy or
other organization design
• Examining the current workings and relations an organization exhibits
• The elements are defined as follows:
• Strategy–This is the organization’s alignment of resources and capabilities to
“win” its market.
• Structure– This describes how the organization is organized. This includes roles,
responsibilities and accountability relationships.
• Systems– This is the business and technical infrastructure that employees use
on a day to day basis to accomplish their aims and goals.
• Shared Values– This is a set of traits, behaviors, and characteristics that the
organization believes in. This would include the organization’s mission and
vision.
• Style–This is the behavioral elements the organizational leadership uses and
culture of interaction.
• Staff–This is the employee base, staffing plans and talent management.
• Skills–This is the ability to do the organization’s work. It reflects the
performance of the organization.