2. OBJECTIVES Upon completion of this chapter, you will be able to: Identify the degree of alignment between competitive methods (CM) and core competencies (CCs). Understand the complexities associated with implementing strategy. Demonstrate how context and process variables impact the strategy implementation process. Describe the process used to integrate the context and process variables to achieve effective implementation. Understand the implementation planning process. Apply the concept in this chapter to find solutions to the Case Study

3. The Importance of Alignment A business MUST achieve alignment among the three constructs which, in turn results in outstanding value -adding financial performance. Read Pages 294-297 of the text. Read Article 1 : As Barbie Sales Fall, Mattel Looks to Simplify its Iconic Line

4. The Importance of Alignment The following exhibit presents a way of looking at the relationships between CMs and CCs that focuses attention on the importance of the alignment between the two. The intersection axes representing the service product dimensions is the locus of the most important CMs and CCs for the firm. Exhibit: The Relationships among Core Competencies, Peripheral Competencies, and Competitive Methods: Good Alignment

5. The Relationships among Core Competencies, Peripheral Competencies, and Competitive Methods: Good Alignment Product Dimension Outer boundary of core competencies – all CMs should be contained within this boundary Service Dimension Outer boundary of peripheral competencies necessary to execute the delivery of the CMs Core Competencies CM

6. The Importance of Alignment continued The following Exhibit illustrates an undesirable situation where the CMs are not concentrated within the CC circle. In this situation product/service quality is likely to be come very inconsistent when so many of the CMs fall outside of the CCs of the business. Exhibit: The Relationships among Core Competencies, Peripheral Competencies, and Competitive Methods: Bad Alignment

7. The Relationships among Core Competencies, Peripheral Competencies, and Competitive Methods: Bad Alignment Product Dimension Service Dimension Core Competencies CM

8. Analyzing the Match/Aligning the CMs and CCs The essence of the construct of ‘firm structure’ is defined as how the firm is organized to permit the successful implementation of all of its CMs. Managers need to concentrate decision making on achieving the match (between CMs and CCs). All of the CMs must in some way be matched to the CCs. Read Pages 298-305 Read Article 2: Ugly Banks are Alluring

9. The Alignment of CMs and CCs HR Leadership Economies of scale Real Estate Technology utilization Sales and marketing Quality control Low cost Competitive Method Service Training Revenue Maximization Strategic Alliances S1 Outsource Restaurant Expert Systems P1 Resource Allocation

10. The Implementation Model Thinking strategically should always be the primary c apability valued most in all employees if firms are to be able to compete in the contemporary business env ironment. Read Pages 305-307 Exhibit: A Comparison of the Meeting Agendas of Two Firms: One a Strategically Oriented Firm, and the Other One not

11. A Comparison of the Meeting Agendas of Two Firms: One a Strategically Oriented Firm, and the Other One Not

12. Thinking Strategically Employees must become proactive. Strategic orientation will ensure that all employees are continuously thinking of the Coalignment Model. The following two exhibits are two forms that help keep manager and employees focused on achieving successful implementation. Read Pages 305-309 Exhibit: Implementation Planner: The Relationship Among Environment, Domain, and Objectives Exhibit: Implementation Planning and Execution Form

13. Implementation Planner: The Relationship Among Environment, Domain, and Objectives

14. Implementation Planning and Execution Form

15. Management Information Systems The objective of all management information systems (MIS) should be to achieve the most efficient and effec tive allocation of the firm’s resources. Thus the resource allocation system should be at the heart of the management information system. Read Pages 309-315 Read Article 3: Microsoft’s Core Challenge

16. Formal System Management Information Systems Operating Systems Planning and Control Value Adding Performance of Competitive Methods Environmental Scanning Evaluation of Strategy and Human Performance Strengths and Weaknesses Analysis Short and Long Term Objectives Informal System Resource Allocation System

17. True or False? 1. It can be expected that the tighter the alignment between the CMs and CCs, the greater the overall performance level of the firm. TrueFalse 2. Resource allocation systems should be at the heart of the management information systems. TrueFalse 3. Resources should be allocated to the competitive methods that generate the largest proportion of cash flow. TrueFalse 4. Service personnel receiving tips for excellent customer service is an example of "pay for performance.“ TrueFalse

18. Multiple Choice Questions 1.The importance of strategy alignment can be shown by the relationship between A. competitive methods B. core competencies C. competitive methods and core competencies D. All of the above 2. Competitive advantage can be achieved by A. offering the best competitive methods within the business environment B. developing the best core competencies C. maintaining the best core competencies D. All of the above

19. Multiple Choice Continued 3. Which of the following provides the primary linking mechanisms among competitive methods, core competencies, and the implementation of a strategy? A. Resource allocation systems B. Management information systems C. Operating systems D. Reward and incentive systems 4. The sustainable competitive advantage increases along with the increase of A. Strength of CCs B. Strength of CMs C. Both the strength of CCs and the strength of CCs D. All of the above.

20. Case Study Boutique Hotels and Service Apartments Read Pages 316-321 of the text.

21. Case Study Boutique Hotels and Service Apartments 1. Provide your assessment of how alignment can be achieved in boutique and service-department hotel concepts. 2. Discuss the differences in operating systems between boutique and serviced-apartment hotels. 3. How would these hotel concepts be differently organized in terms of management structure, communications systems, and other process and contextual variables? 4. Discuss the differences between the integrating mechanisms that may be utilized in each of the hotels. 5. Design a resource allocation process for each type of hotel. 6. Discuss how the rewards and incentives systems may differ between two types of hotel accommodations.

22. Possible Case Study Solution as proposed by Krystal Peters QUESTION ONE Alignment can be achieved in boutique and serviced apartment hotel concepts by using the Coalignment model: ◦ Scanning the environment. A SWOT analysis must be done before developing a strategy ◦ Strategy: this is the tactics one will use between the boutique and serviced apartment hotels ◦ Structure: Evaluate products, services and competencies needed ◦ $  Evaluate what work was done. How much money can be made? QUESTION TWO The differences in operating systems between boutique and serviced apartment hotels are: ◦ Those systems of the serviced apartments are geared toward long term travelers ◦ Serviced apartments are hybrid between a hotel and an apartment ◦ Operating systems for the boutique hotels are typically centralized between properties

23. Possible Case Study Solution as proposed by Krystal Peters QUESTION THREE Hotel concepts would be differently organized in terms of management structure, communications systems, and other process and contextual variables are: ◦ Boutique Hotels: All typically a unique concept. Is geared toward short term lodging ◦ Serviced Apartment Hotels: Management and operating systems are typically decentralized. Is geared toward long term stays. QUESTION FOUR The differences between integrating mechanisms that may be utilized in each of the hotels are: ◦ Operating Systems: Systems may be decentralized with lack of terminology to describe services and systems ◦ Service Quality: While quality may differ between hotels, they should be a recommended adequate level of service

24. Supplemental Readings Article 1: As Barbie Sales Fall, Mattel Looks to Simplify its Iconic Line Article 2: Ugly Banks are Alluring Article 3: Microsoft’s Core Challenge Article 4: Harrah’s (available on text’s website as a Case Study) http://wps.prenhall.com/chet_olsen_strategic_3/78/20064/5136447.cw/index.html Article 5: McDonald’s (available on text’s website as a Case Study) http://wps.prenhall.com/chet_olsen_strategic_3/78/20064/5136447.cw/index.html Article 6: Starbucks (available on text’s website as a Case Study http://wps.prenhall.com/chet_olsen_strategic_3/78/20064/5136447.cw/index.html Article 7: Wendy’s (available on text’s website as a Case Study) http://wps.prenhall.com/chet_olsen_strategic_3/78/20064/5136447.cw/index.html

25. Student Objectives Upon completion of this chapter, you should be able to: Successfully identify the degree of alignment between competitive methods (CM) and core competencies (CCs). Identify the complexities associated with implementing strategy Demonstrate how context and process variables impact the strategy implementation process. Describe the process used to integrate the context and process variables to achieve effective implementation. Understand the implementation planning process. Apply the concept in this chapter to find solutions to the Case Study