TEAM INFINITY

BPMN 3023 / STRATEGIC MANAGEMENT

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

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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.