CHAPTER 4

STRATEGY
IMPLEMENTATION

Prepared by:
Ms. Nelda A. Rosima, MBA
Faculty-in-Charge (SBA) 1
 Strategy Implementation

► Strategy implementation
► the sum total of all activities and choices required for the
execution of a strategic plan

► Who are the people to carry out the strategic

plan?
► What must be done to align company
operations in the intended direction?
► How is everyone going to work together to do
what is needed?

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 Common Strategy Implementation Problems
1. Took more time than planned
2. Unanticipated major problems
3. Ineffective coordination
4. Competing activities and crises created distractions
5. Employees with insufficient capabilities
6. Lower-level employees were inadequately trained
7. Uncontrollable external environmental factors
8. Poor departmental leadership and direction
9. Inadequately defined implementation tasks and activities
10. Inefficient information system to monitor activities
► Link: https://www.youtube.com/watch?v=ERsUXt9GDLg

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Developing Programs, Budgets and
Procedures
► Program
► a collection of tactics where a tactic is the individual
action taken by the organization as an element of the
effort to accomplish a plan

► The purpose of a program or a tactic is to

make a strategy action-oriented.

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Timing Tactics: When to Compete

► Timing tactic
► deals with when a company implements a strategy
► First mover
► first company to manufacture and sell a new product or service
► Late movers
► may be able to imitate the technological advances of others, keep risks
down by waiting until a new technological standard or market is established
and take advantage of the first mover’s natural inclination to ignore market
segments

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Market Location Tactics: Where to
Compete
► Market location tactic
► deals with where a company implements a strategy.
► Offensive tactic
► usually takes place in an established competitor’s market
location
► Defensive tactic
► usually takes place in the firm’s own current market
position as a defense against possible attack by a rival

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Offensive Tactics
Frontal Flanking
assault maneuver

Bypass
Encirclement
attack

Guerilla
warfare
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Defensive Tactics

► Raise structural barriers

► Increase expected retaliation
► Lower the inducement for attack

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Developing Programs, Budgets and
Procedures
► Planning a budget is the last real check a corporation
has on the feasibility of its selected strategy.

► Procedures
► detail the various activities that must be carried out to
complete a corporation’s programs
► Standard operating procedures

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Achieving Synergy

► Synergy
► exists for a divisional corporation/diversification if
the return on investment is greater than what the
return would be if each division were an
independent business.
► usually involves the financial benefits that
companies get from combining their operations.

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Forms of Synergy

Shared know-how

Coordinated strategies

Shared tangible resources

Economies of scale or scope

Pooled negotiating power

New business creation

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 Structure Follows Strategy
► Structure Follows Strategy
► changes in corporate strategy lead to changes in organizational
structure

1. New strategy is created

2. New administrative problems emerge
3. Economic performance declines
4. New appropriate structure is invented
5. Profit returns to its previous level

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Factors Differentiating
Stage I, II and III Companies

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Stages of Corporate Development
I. Simple Structure
► Flexible and dynamic
II. Functional Structure
► Entrepreneur is replaced by a team of managers
III. Divisional Structure
► Management of diverse product lines in numerous industries
► Decentralized decision making
IV. Beyond SBU’s
► Matrix
► Network

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Blocks to Changing Stages
► Internal
► Lack of resources
► Lack of ability
► Refusal of top management to delegate
► External
► Economic conditions
► Labor shortages
► Lack of market growth

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Blocks to Changing Stages
(Entrepreneurs)

Loyalty to comrades

Task oriented

Single-mindedness

Working in isolation
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Organizational Life Cycle
► Organizational life cycle
► describes how organizations grow, develop and decline

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Reengineering and Strategy Implementation

► Reengineering
► the radical redesign of business
processes to achieve major gains
in cost, service or time
► effective program to implement a
turnaround strategy

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Principles for Reengineering
► Organize around outcomes, not tasks
► Have those who use the output of the process perform the process
► Subsume information-processing work into real work that produces
information
► Treat geographically-dispersed resources as though they were
centralized

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Principles for Reengineering
► Link parallel activities instead of integrating their results
► Put the decision point where the work is performed and build control into
the process
► Capture information once and at the source

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 Six Sigma
► Six Sigma
► analytical method for achieving near perfect results on a production line
► emphasis is on reducing product variance in order to boost quality and
efficiency
► Lean Six Sigma
► includes the removal of unnecessary steps in any process and fixing those
that remain

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Process of Six Sigma
1. Define a process where results are
poorer than average
2. Measure the process to determine
current performance
3. Analyze the information to pinpoint
where things are going wrong
4. Improve the process and eliminate
the error
5. Establish controls to prevent future
defects from occurring

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Designing Jobs to Implement Strategy
► Job design
► the study of individual tasks in an attempt to make them more relevant to the
company and to the employees
► Logical sequence to job analysis
► Job enlargement
► combining tasks to give a worker more of the same type of duties to perform
► Adding new tasks to an existing job
► Ex. Cashier – stocking shelves and cleaning the stores.
► Job rotation
► moving workers through several jobs to increase variety

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Designing Jobs to Implement Strategy
► Job characteristics
► using task characteristics to improve employee motivation
► Job enrichment
► altering the jobs by giving the worker more autonomy and control over
activities
► Giving more responsibilities for their work, learn new skills
► Ex. Cashier –may include managing the store’s finances

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International Issues in
Strategy Implementation
► Multinational corporation (MNC)
► a highly developed international company with a deep involvement
throughout the world, plus a worldwide perspective in its management
and decision making

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Drivers for Strategic Fit among
Alliance Partners
► Partners must agree on values and
vision
► Alliance must be derived from business,
corporate and functional strategy
► Alliance must be important to partners,
especially top management
► Partners must be mutually dependent
for achieving objectives

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Stages of International Development
Stage 1: Domestic company
Stage 2: Domestic company with export division
Stage 3: Primarily domestic company with international
division
Stage 4: Multinational corporation with multidomestic
emphasis
Stage 5: Multinational corporation with global emphasis

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Centralization versus Decentralization
► Product group structure
► enables the company to introduce and manage a similar line of products around
the world
► enables the corporation to centralize decision making along product lines and
to reduce costs

► Geographic area structure

► allows the company to tailor products to regional differences and to achieve
regional coordination

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THANK YOU FOR LISTENING!

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