SBA - Lesson 13 - Implementing a Business Strategy.pptx

strategy

1. Implementing a Business Strategy Strategic Business Analysis Lesson 13

2. Lesson Outline

3. Strategy Formulation Strategy formulation involves the selection of the most efficient and appropriate ways to achieve the organization’s vision and help it to actualize its mission.

4. Strategy Formulation The process of strategy formulation is part of strategic management that involves the use of analytical tools to arrive at the best way to maximize the use of company resources .

5. Strategy Formulation Strategy formulation intends to provide the organization with a framework for its direction , creating an overall business plan that corresponds to its financial capability and its sustainability.

6. Strategy Formulation The most utilized tool to assess a company’s health is the SWOT (i.e., strengths, weaknesses, opportunities, and threats) analysis . SWOT analysis provides a detailed look on company situation and serves as a guide in creating appropriate strategies and its subsequent implementation.

7. Strategy Formulation Process Implementing a business strategy follows a detailed process that starts with the identification of the company’s big picture . Strategy formulation is the process of choosing the most appropriate course of action that a company must take to realize its objectives and goals and achieve its vision.

8. Strategy Formulation Process Strategy formulation is achieved using this model:

9. Strategy Formulation Process

10. Strategy Formulation Process: Analysis The internal analysis is an inventory of the strengths and weaknesses of the organization’s operation. It includes a survey of human and physical resources, an analysis of the satisfaction of clients and stakeholders, and the effectiveness of the board and of the staff. The result of an internal analysis reveals the strengths and weaknesses that confront the organization.

11. Strategy Formulation Process: Analysis External analysis scans the environment outside the organization and provides an inventory of the political, economic, social, and technological forces that influence the mission and goals of an organization and how it functions.

12. Strategy Formulation Process: Analysis It involves analysis of the current environment and the trends that may affect it. It also includes an analysis of competitive and collaborative forces and agents. The result of an external analysis reveals the opportunities and threats that confront the organization.

13. Strategy Formulation Process

14. Strategy Formulation Process

15. Strategy Formulation Process

16. Strategy Implementation Implementation turns strategies and plans into actions to achieve organizational vision, objectives, and goals. Implementation is an important part of the strategic planning process, and companies that develop strategic plans cascade these plans to the members of the organization for direction.

17. Strategy Implementation The process of strategy implementation may differ based on industry or organizational culture. Strategy is formulated at the top management level and follows a common process of integration within departments and functional areas of the organization.

18. Strategy Implementation The value of strategy implementation is in the expression of more detailed polices and in the communication of these policies to the members of the organization.

19. Strategy Implementation Strategic modifications are made in support of employees as they deal with the nuances of customer and supplier’s relations. Strategic changes are also implemented according to the situation of company resources that are affected by the strategies.

20. Strategy Implementation Similarly, it is important that implemented strategies are practical and relevant for the members of the organization , even at the lower level and can realistically address issues that may arise.

21. Strategy Implementation Strategies must be doable in the areas of marketing, research and development, procurement and operations, human resources, production and information technology, where implementation must consider any resource and capability that is needed to ensure change.

22. Strategy Implementation In the implementation process, the strategy also needs to be controlled and revised to make certain that it is being implemented accurately and efficiently. The evaluation and control procedure must be in place to adjust the system, when necessary.

23. Strategy Implementation The commitment of senior management is an important factor in the implementation of a strategy. Senior management’s commitment is a definite requirement for successful strategy implementation. Therefore, senior management must give critical support and show adherence to the implementation process.

24. Strategy Implementation Senior executives must discard the notion that lower-level managers have the same perceptions of the strategy and its implementation, its underlying rationale, and its urgency as they have.

25. Strategy Implementation Another aspect of implementation of strategic plan is the involvement of middle manager’s valuable knowledge . The success of any implementation attempt depends on the level of involvement of middle managers.

26. Strategy Implementation To generate the required acceptance for the implementation, the affected middle manager’s knowledge , which is often underestimated, must already be accounted for in the formulation of the strategy.

27. Strategy Implementation After that, it is to make sure that these managers are a part of the strategy process , their motivation toward the project will increase and they will see themselves as an important part in the process.

28. Strategy Implementation Effective communication should be emphasized in the implementation process . Research show that communication is a major success factor within strategy implementation.

29. Strategy Implementation An organization introduces a two-way communication program that allows and solicits questions from employees about issues regarding the formulated strategy.

30. Strategy Implementation At the same time, effective communication requires that employees are made aware of the new requirements of their jobs, modification in their tasks and new activities that they need to perform because of their changed situation .

31. Some of the steps that can help in the transition process because of strategy implementation are as follows:

32. Some of the steps that can help in the transition process because of strategy implementation are as follows:

33. Some of the steps that can help in the transition process because of strategy implementation are as follows:

34. Some of the steps that can help in the transition process because of strategy implementation are as follows:

35. Some of the steps that can help in the transition process because of strategy implementation are as follows:

36. Strategic Management Plan Format Following is a sample format for developing a strategic management plan for a company. The format intends to put together the complete information that is required when creating a strategic management plan. The depth and length of environmental scanning and analysis that is performed to a company for the development of a strategic plan enhances the success of the strategy implementation.

37. Strategic Management Plan Format Title Page Table of Contents Acknowledgement Executive Summary Introduction History, Ownership, Management, Culture, and Organizational Structure Nature of Business/Products/Services Current Revenue, Size, and Profit Margin Markets Served Number of Employees Other Relevant Basic Information

38. Strategic Management Plan Format Research Design and Methodology Data and Information Sources Manner of Obtaining Information and Methodologies Used Major Assumptions Comparing Mission and Vision State the Current Mission and Vision Comment and Evaluate Mission and Vision Recommend Changes if Needed Recommend on How the Mission and Vision will be Communicated to All Stakeholders

39. Strategic Management Plan Format External Analysis General Statement ( Note: Discuss the following areas focusing only on factors that will have significant impact on your business.) Political and Governmental Focus Economic Focus Social, Cultural, and Demographic Focus Technological Focus Environmental Focus Legal Focus

40. Strategic Management Plan Format Note: Translate the above in terms of what it means for your business, identifying opportunities that may affect the following: Market Demand and Opportunities Types of Products and Services Offered Intensity of Competition Supplier and Distribution Costs of Doing Business Other Aspects of the Business

41. Strategic Management Plan Format External Analysis 1. Industry and Competitor Analysis Market Size and/or Growth Rate and State in the Growth Cycle Market Share Analysis Market Mix Buyer/Customer Profile Factors Affecting the Cost of Doing Business Operation/Production Aspects Technology Developments Industry Financial Analysis (Growth, Profitability, Liquidity, Leverage, and Efficiency) Problems in the Industry Critical Success Factors

42. Strategic Management Plan Format External Analysis 2. Porter’s Five Forces Framework of Competitive Analysis Do a competitor analysis using CPM and explain the ratings. Identify your major competitors and provide relevant information for each as to revenue, size, financial benefits, market share, strategies, etc. If there are too many competitors, choose only 2-3 major competitors and explain why you chose to focus on these competitors only. Summary and Conclusion (NOTE: Use EFE)

43. Strategic Management Plan Format Company Analysis (NOTE: Use IFE) Human Resources Area Marketing Area (Mix, Customers, and Target Market) Production and Operations Area Financial Performance NOTE: Review company’s performance on key indicators: revenue/sales in the past three years, company’s growth versus industry growth or vis-à-vis other players’ profitability. Strategy Formulation NOTE: Use the different strategy formulation tools and explain your analysis.

44. Strategic Management Plan Format Objectives, Strategies, Recommendations, and Action Plans Strategies and Financial Objectives Recommended Business Strategies Recommended Organizational Strategies The Strategy Map Financial Projections and Overall Evaluation of Strategies Developmental Programs Strategy Evaluation Monitoring and Control Concluding Remarks Appendices ( including all financial statements) References

45. In summary… Strategy implementation which starts with goal setting matters in the overall need to grow a business , reduce risks that goes with running an organization, to identify the company’s strengths and weaknesses and to increase operational productivity.

46. Any Questions?