1. Strategy Implementation
Chapter 6
Strategy Implementation

2. Learning Objectives To understand:
· functional strategies and their importance to strategy implementation
· corporate and business level organizational structures, and their strengths and weaknesses

3. The Strategic Management Process
Internal and External Analysis
Strategy Formulation
(corporate and business level)
Strategic
Direction
Strategy Implementation
and Control
Strategic Restructuring

4. Links Between Business and Marketing Strategies
For growth strategies - identify new customers, suggest product opportunities, create advertising and promotional programs, arrange distribution channels, and creates pricing and customer service policies
For stability or retrenchment strategies - focus on most profitable segments by reducing number of customer groups, distribution channels, and products in the product line

5. Links Between Business and Marketing Strategies
For low-cost competitive strategies - develop low cost channels of distribution and low-risk product and market development activities.
For differentiation strategies - identify the attributes of products that customers will value, price and distribute in ways that capitalize on the differentiation, and advertise and promote the image of difference.

6. Links Between Business and Operations Strategies
Growth strategies - expand capacity, improve procedures for scheduling customer orders, hire/train new employees, increase quantities of inputs, cultivate new supplier arrangements, invest in larger volume equipment.
Retrenchment strategies - scale back numbers of line employees, idle equipment, close plants.
Differentiation strategies - develop higher quality standards, make investments in technology, develop high skilled workforce, cultivate special arrangements with suppliers.

7. Links Between Business and R&D Strategies
Growth Strategies -- develop new products
Low Cost/Retrenchment Strategies - develop low cost processes
Differentiation Strategies - develop unique products and proprietary processes

8. Information Systems Strategies
At a minimum - provide the organization with the technology and systems that are necessary for operating, planning, and controlling the business.
To support a competitive advantage - allow more superior cost management and customer knowledge, by providing more effective use of timely market information, or by allowing integrated transactions within the supply chain of customers and suppliers.

9. Human Resources Strategies
Establish the performance evaluation, training, rewards, and benefits programs that support chosen strategies
Recruit management and employees that fulfill the strategic needs of the organization.

10. Financial Strategies
Decide the appropriate levels of debt, equity, and internal financing needed to support strategies. Trade-offs carry significant implications.
Determine hurdle rates for new investments.
Determine dividend policies and, through preparation of financial reports, communicate financial performance to stockholders.

11. Well-Developed Functional Strategies
Decisions made in each functional area are consistent with each other
Decisions made within one function are consistent with those made in other functions
Decisions within functions are consistent with the strategies of the business

12. Functional Structure General Manager Marketing Finance Production HR
Organizing Framework
- Inputs such as marketing and production
Degree of Centralization
High
Competitive Environment
Stable
Growth Strategy
Market Penetration (efficiency or quality, etc.)

13. Product/Market Structure
General Manager
Administrative Departments
Flight Simulators
Design Graphics
Design
Manufac.
Organizing Framework
Outputs such as product groups
Degree of Centralization
Low
Competitive Environment
Dynamic with External Market Pressures
Growth Strategy
Market and/or Product Development (serving particular markets well)

14. Project Matrix Structure
General Manager
Administrative Depts.
Project A
Project B
Marketing
Production
Organizing Framework
Inputs and Outputs
Degree of Centralization
Decentralization with Sharing
Competitive Environment
Dynamic with Dual Pressures
Growth Strategy
Frequent New Product/Market Development

15. Network Structure Info. Center Organizing Framework Outputs
Degree of Centralization
Very Low (High Decentralization)
Competitive Environment
Conditions vary from region to region
Growth Strategy
Market Penetration and Market Development

16. Multidivisional CEO Moderate/low relatedness across divisions
Corporate Staff
Division VP
Division VP
Division VP
Moderate/low relatedness across divisions
Moderate/low need for coordination across divisions
Financial synergy may be available across divisions and some operational synergy (although limited) only to the extent that the divisions are related to each other

17. Strategic Business Unit
CEO
Corporate Staff
SBU Manager
SBU Manager
SBU Manager
SBU Staff
SBU Staff
SBU Staff
Related Divisions
Related Divisions
Related Divisions
Groups (SBUs) of related businesses
Moderate need for coordination within each SBU; low need for coordination between SBUs
Financial synergy only across SBUs, potential exists for operational synergy within SBUs

18. Corporate Matrix CEO and Staff Division 1 Division 2 Marketing
Operations
R&D
Any number of businesses
Highly related businesses
Very high level of coordination required
Many opportunities exist for operational synergies (to reduce costs, gain access or share innovation)

19. Transnational Function Country Product
Many businesses in different nations
Highly related businesses
Very high level of coordination is required
Many opportunities exist for operational synergies on a world wide scale (to reduce costs, gain access or share innovation)