YAP PING WAY 212576 AIN NABILAH BT MAT RASID 213738 NOR ALEYAMIRA BT AHMAD FAIZOL 213753 AMARUL AYASY BIN AB. BASIR 213769 SITI NURNABIHA BT HAMZAH 214009 SHAKINAH BT ZOOLKIFFLI 214125 NOOR FADILA BT ISMAIL 214350 NUR ZURIATI BT ABD RAZAK 214501 Strategy implementation the process through which a chosen strategy is put into action. It involves the design and management of systems to achieve the best integration of people, structure, processes and resources in achieving organizational objectives. It affects whole organization from top to bottom. Has a substantial impact on organization performance. There are a few component to ensure the effective strategy implementation. 1) Peter & Waterman, 1982 - Organization structure System Shared values (culture) Skills Style Staff
2) Husseys Framework Task People Structure Decision Process Culture Information system Control system Reward system Varies among different types and sizes of organizations. a. Altering sales territories b. Adding new departments c. Closing facilities d. Hiring new employees e. Cost-control procedures f. Modifying advertising strategies g. Building new facilities Strategy formulation is positioning forces before the action Strategy implementation is managing forces during the action Strategy formulation focuses in effectiveness Strategy implementation focus efficiency Strategy formulation requires good intuitive and analytical skills Strategy implementation requires special motivation and leadership skills Strategy formulation requires coordination among a few individuals Strategy implementation requires coordination among many individuals
Essential because I. represent the basis for allocating resources II. are a primary mechanism for evaluating managers III. are the major instrument for monitoring progress toward achieving long term objectives IV. establish organizational, divisional and department priorities
specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals
instruments for strategy implementation
Central management activity that allows for strategy excution. Four types of resources : a. Financial resources b. Physical resources c. Human resources d. Technological resources CONFLICT APRROACHES Disagreement between two or more parties on one or more issues Avoidance Confrontation Defusion The reasons for matching structure with strategy : Structure largely dictates how objectives and policies will be established Structure dictates how resources will be allocated
7 types of organization structure :
1. Functional structure 2. Divisional by geographic area structure 3. Divisional by product 4. Divisional by customer 5. Divisional process 6. Strategic Business Unit (SBU) 7. Matrix
Simplest and least expensive Groups tasks and activities by business function, such as production/operations, marketing, finance/accounting, research and development, and management information systems For example : University
Also known as decentralized structure Functional activities are performed both centrally and in each separate division Geographic area, product or service, customer, process
Groups similar divisions into strategic business units and delegates authority and responsibility for each unit to a senior executive who reports directly to the chief executive officer Can facilitate strategy implementation by improving coordination between similar divisions and channeling accountability to distinct business units
Most complex of all designs Can result in higher overhead Other disadvantages: Dual lines of budget authority Dual sources of reward and punishment Shared authority Dual reporting channel A need for an extensive and effective communication system Widely used in many industries
For a matrix structure to be effective, organizations need participative planning, training, clear mutual understanding of roles and responsibilities, excellent internal communication, and mutual trust and confidence
Dos Reserve the title CEO for the top executive Use the title chief or VP or manager for functional business executives Directly below the CEO it is best to have a COO and other chief officers Donts Use the title president for the top executive Use the title president for functional business executives Restructuring Involves reducing the size of the firm Is intended to improve the efficiency and effectiveness Concerned primarily with shareholder well- being than employee well-being Also called downsizing, rightsizing, or delayering
Reengineering Involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed Concerned more with employee and customer well-being than shareholder well-being Also called process management, process innovation, or process redesign
Policies to improve compensation practices: Provide full transparency to all stakeholders Reward long-term performance with long-term pay, rather than annual incentives Base executive compensation on actual company performance, rather than on stock price Extend the time-horizon for bonuses. Replace short-term with long-term incentives Increase equity between workers and executives. Delete many special perks and benefits for executives
Criteria to link performance and pay to strategies Bonus system- can be an effective tool for motivating individuals - to encourage managers and employees to push hard for successful strategic management Profit sharing- widely uses form of incentive compensation Gain sharing- requires employees or departments to establish performance targets Does the plan capture attention? Do employees understand the plan? Is the plan improving communication? Does the plan pay out when it should? Is the company or unit performing better? It can be considered the single greater treat to successful strategy implementation. Resistance occur the form of sabotaging production machines, absenteeism, filling unfounded grievances, and unwillingness to cooperate. Approaches for implementation strategy: i. Force change strategy involves giving orders and enforcing those orders ii. Educative change strategy one that presents information to convince people of the need for change iii. Self-interest change strategy one that attempts to convince individuals that the change is to their personal advantage 1. Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization 2. Designing of physical spaces, facades, buildings 3. Deliberate role modeling, teaching, and coaching by leaders 4. Explicit reward and status system, promotion criteria 5. Stories, legends, myths, and parables about key people and events 6. What leaders pay attention to, measure, and control 7. Leader reactions to critical incidents and organizational crises 8. How the organization is designed and structured 9. Organizational systems and procedures 10. Criteria used for recruitment, selection, promotion, leveling off, retirement, and excommunication of people
Production related decision on plant size, plant location, product design, kind of tooling, size of inventory, inventory control etl. Just in time (JIT) production approaches have withstood the test of time. Significantly reduces the cost of implementing strategy
The job HRM is changing rapidly as companies to down size and reorganize. The responsibilities of HRM is assessing the staffing need and the cost for alternative strategies proposed during the strategy formulation and developing a staffing plan for effectively implementing strategies.
Activity of Human resource Employee stock ownership plans(ESOPs) A tax qualified, defined contribution, employee benefit plan whereby employees purchase stock company through borrowed money contribution. Balancing Work life and Home life Allow employees to define how they work (Bank of America) Benefit of a diverse workforce
Corporate wellness program
INTRODUCTION Countless marketing variables affect the success or failure of strategy implementation. Some examples of marketing decisions that may require policies are as follows:
oTo use exclusive dealerships or multiple channels of distribution oTo limit (or not) the share of business done with a single customer oTo be a price leader or a price follower CURRENT MARKETING ISSUE STRATEGY IMPLEMENTATION THE NEW PRINCIPLES OF MARKETING STRATEGY IMPLEMENTATION ADVERTISING MEDIA Companies are rapidly coming to realization that social networking sites are better means of reaching their customer than spending so many money on traditional method yellow pages, television, magazine, radio, and newspaper ads.
Internet advertising is growing so rapidly that marketer are more and more allowed to create bigger, more intrusive ads that take up more space on the web page
STRATEGY IMPLEMENTATION PURPOSED-BASED MARKETING The best way to sell in a weak economy Show customer how they can improves their lives with your product Need to build trust and emotional connection to the customer in order to differentiate your product When consumers are more interested in buying cheaper brand, Stengel says, ads must promote price and show the intrinsic value of the product to be cost effective Purposed-based appeal: promote low price & build emotional equity PRODUCT POSITIONING STRATEGY IMPLEMENTATION MARKET SEGMENTATION MARKETING ISSUE Market Segmentation
Subdividing of a market into distinct subsets of customers according to needs and buying habits
STRATEGY IMPLEMENTATION Requires strategies to determine the characteristic and need customer, analyze consumer similarities and differences and to develop consumer group profile. Key to matching supply and demand, which is one of the thorniest problem in customer services. MARKET SEGMENTATION MARKET SEGMENTATION Example text This is an example text. STRATEGY IMPLEMENTATION Market Segment Basis Psychographic Behavioral Geographic Demographic Market-development, product- development, market- penetration, and diversification strategies require market segmentation Market segmentation allows operating with limited resources; enables small firms to compete successfully Market segmentation decisions affect marketing mix variables MARKET SEGMENTATION 1 PLACE 2 3 4 PRODUCT PROMOTION PRICE STRATEGY IMPLEMENTATION Marketing Mix Variables PRODUCT POSITIONING STRATEGY IMPLEMENTATION Product Positioning Schematic representations that reflect how products/services compare to competitors on dimensions most important to success in the industry STRATEGY IMPLEMENTATION
Select key criteria
Diagram map
Plot competitors products
Look for niches
Develop marketing plan
PRODUCT POSITIONING STRATEGY IMPLEMENTATION Look for a vacant niche
Dont serve two segments with the same strategy
Dont position yourself in the middle of the map RULES FOR USING PRODUCT POSITIONING AS A STRATEGY IMPLEMENTATION TOOL PRODUCT POSITIONING STRATEGY IMPLEMENTATION An effective product positioning strategy meets 2 criteria: 1.It uniquely distinguishes a company from the competition 2.It leads customers to expect slightly less service than a company can deliver PRODUCT POSITIONING Acquiring needed capital Developing projected financial statements Preparing financial budgets Evaluating the worth of a business The value of a firm is defined to be the sum of the value of the firms debt and the firms equity. V = B + S
Value of the Firm S B S B EBIT-EPS Analysis - used to help determine whether it would be better to finance a project with debt or equity. The EPS-EBIT approach to capital structure involves selecting the capital structure that maximizes EPS over the expected range of EBIT. Using this approach, the emphasis is on maximizing the owners returns (EPS).
EPS = (EBIT - I)(1 - t) - P S I= interest expense P = preferred dividends S = number of shares of common stock outstanding 56 57
58 For combination stock/debt options eg. 30/70 , 70/30 In preparing EPS/EBIT graphs, the line will intersect, thus revealing break-even points at which one financing alternative becomes more or less attractive than another. > best financing alternatives- highest EPS Financial statements use to summarize the different events projected for the future. To forecast the impact of various actions and approaches Projected income statement and balance sheet allow organization to compute projected financial ratio. 1. Prepare the projected income statement before the balance sheet. 2. Use the percentage-of-sales method to project cost of goods sold and the expense items in the income statement. 3. Calculate the projected net income. 4. Subtract from net income any dividends to be paid for that year, remaining retained earning(RE). 5. Bring this retained earnings amount over the balance sheet by adding it to the prior years RE. 6. Project the balance sheet items, beginning with RE and then forecasting stockholders equity, long- term liabilities, current liabilities, total liabilities, total assets, fixed assets and current assets. A document that detailed how funds will be obtained and spent for a specified period of time It is the planned allocation of a firms resources based on forecasts of the future. Cash budget Stockholders equity (common stock, additional paid-in capital, retained earnings) Price-earnings ratio method
Outstanding share method number of shares outstanding x market price per share
Transferring complex technology Adjusting process to local raw material Adapting process to local market Altering product to particular taste and specification Emphasis Product
Stress basic
Leader
Develop robotic
High Spending
R&D within the firm
University Research Process Improvement
Applied Research
Follower
Manual Type Processes
Low Spending
Contract The Research
Private Sector Research Technology Progress Rate Of Market Growth Barrier To New Entrant Time R&D Decision Fast Moderate High - Used In- House R&D Fast Low - - Dont stress out R&D Slow High - Low Outsourced R&D Fast High - - Outsourced R&D Be the first firm to market new technology product
Imitator the successful product with less cost
Mass Producing with lesser cost Staffing Compensation Safety And Health Training And Development Industrial Relationship Depend heavily on Cooperation among all personal in organization
Strategy without implementation will be just a strategy.
Implementation is the No-way-back in strategic management.