STRATEGY IMPLEMENTATION Chapter 7

FUNCTIONAL STRATEGIES These are made up of day to day decisions made at the operating level of the firm, often performed by employees at the functional level of the organization. Typical functions include:  Marketing  Operations  Research & Development/Technology  Human Resources  Finance  Information Systems Collectively, they are embedded in action plans for implementing the growth and competitive strategies of the firm.

FUNCTIONAL STRATEGIES Characteristics Decisions made within each function should be consistent with each other. Decisions made within one function should be consistent with those made in other functions. Decisions made within functions should be consistent with the strategies of the business.

MARKETING STRATEGIES Decision Areas Target customers Product positioning Product line mix and breadth Pricing strategies Promotion practices Distribution channels Customer service policies Product/service policies Market research Some Performance Metrics Customer acquisition cost Average lead close rate Content investment ROI Marketing contribution to new customers Referral rate Website visits Click through and conversion rates Traffic-driving keywords

OPERATIONS STRATEGIES Decision Areas Capacity planning Facility location Facility layout Technology and equipment choices Sourcing arrangements Planning and scheduling Quality assurance Workforce policies Some Performance Metrics Cycle time Customer rejects/returns Throughput Capacity utilization Incident and non-compliance events Downtime to operating time Manufacturing cost to total revenues

R&D/TECHNOLOGY STRATEGIES Decision Areas Research focus (product/process/applications) Orientation (leader/follower) Project priorities (budget/quality/creativity/time) Linkages with external research organizations Some Performance Metrics R&D expense to sales Patents filed R&D headcount Number of products/projects in development First year sales of new products

HUMAN RESOURCES STRATEGIES Decision Areas Recruitment Selection Performance appraisal Salary and wages Benefits Personnel actions Training Some Performance Metrics Cost per hire Engagement or satisfaction rating Revenue per employee Time to fill Turnover rate Tenure Training/development hours

FINANCE STRATEGIES Decision Areas Capital (debt/equity/internal) Financial reporting Minimum return on investment levels Basis for allocating overhead costs Funds collection/disbursement policies Some Performance Metrics Percent of invoices paid within terms Days sales outstanding Billing accuracy Debt to equity Budget to actual project expenses Time to issue financial reports

INFORMATION SYSTEMS STRATEGIES Decision Areas Hardware and software capability and integration across the organization Linkages with customers and suppliers Investments in new technologies Strategic use of internal and external information Enterprise resource planning system System security Some Performance Metrics Percent downtime Number of user generated tickets User satisfaction Percent of service hours per business initiative/project Mean time to resolve Utilization rates

FUNCTIONAL LINKAGES Organizational structure: specifies the number and types of departments or groups and provides the formal reporting relationships and lines of communication among internal stakeholders. Organizational culture: the system of shared values that guides organizational members. Organizational energy: the level of enthusiasm and focus of organizational members in moving toward organizational goals.

ACTION PLAN A.Work/Process Breakdown Structure B.Time Estimates C.Cost Estimates D.Organizational Resource Requirements E.Performance Requirements, Deliverables & Assignment of Responsibilities

A.WORK/PROCESS BREAKDOWN STRUCTURE Consider functional and geographic configurations when developing the WPS/PBS including tasks that have to be performed by partners and external stakeholders Alternative coordination mechanisms such as teams, task forces, liaison roles, policies and procedures, etc., and information systems can be overlaid on the firm’s existing organizational structures for the purpose of strategic initiatives. Each work unit in the WPS/PBS must have time, cost, resource and deliverable requirements FOR TEAM PROJECT PURPOSES AND NOT INCLUDED IN TOP HAT EXERCISES OR THE FINAL EXAM

B. TIME ESTIMATES What you can include:  Start date/s, End date/s, Latest start & end dates, etc.  Contingency plans for delays  Scheduling policies and procedures  Penalties and rewards for early completion, meeting and missing deadlines  Etc. Consider functional and geographic configurations when developing time estimates Other resources are needed in and/or available from other parts of the company and other projects Consider time estimates in relation to cost and quality of deliverables – what is the company’s business-level strategy? FOR TEAM PROJECT PURPOSES AND NOT INCLUDED IN TOP HAT EXERCISES OR THE FINAL EXAM

C. COST ESTIMATES What you can include:  Planned costs and allowances  Spending, reporting and auditing policies and procedures  Sources of funds, cost of funds  Penalties and rewards for savings, meeting budgets, cost overruns  Etc. Consider functional and geographic configurations when developing cost estimates There are other funding needs throughout the company – budgeting must note potential sources of funds and potential savings Consider cost estimates in relation to time and quality of deliverables – what is the company’s business-level strategy? Do not forget the time of value FOR TEAM PROJECT PURPOSES AND NOT INCLUDED IN TOP HAT EXERCISES OR THE FINAL EXAM

D. ORGANIZATIONAL RESOURCE REQUIREMENTS What you can include:  Staffing, task assignments  Organizing mechanisms for coordination and control  External stakeholder involvement  Infrastructure/technical support  Etc. Consider functional and geographic configurations when developing organizational resource estimates There are other organizational resource needs throughout the company – take note of the day-to-day use of these resources Consider org. resource estimates in relation to cost, time and quality of deliverables – what is the company’s business-level strategy? FOR TEAM PROJECT PURPOSES AND NOT INCLUDED IN TOP HAT EXERCISES OR THE FINAL EXAM

E. PERFORMANCE REQUIREMENTS, DELIVERABLES & ASSIGNMENT OF RESPONSIBILITIES What you can include:  Direct contribution to the goals of the recommendation  Output, reports, tracking best practices  Task leader/s, project liaison/s  Penalties & rewards for quality of deliverables  Etc. Take note of how each task inputs and outputs in the WBS/PBS relate to each other Strategic projects often serve as executive and management training and proving grounds Not all strategic projects deliver desired results, some are even abandoned; account for all soft and hard deliverables FOR TEAM PROJECT PURPOSES AND NOT INCLUDED IN TOP HAT EXERCISES OR THE FINAL EXAM