implementation bpsm

Download Implementation Bpsm

Post on 14-Apr-2018

216 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • 7/30/2019 Implementation Bpsm

    1/60

    Strategy Implementation

  • 7/30/2019 Implementation Bpsm

    2/60

    Formulation of a strategy is not the end ofstrategic management. In fact, it is thebeginning of a whole new episode of success orfailure of an organization.

    Implementing a strategy requires a very highlevel of commitment from the top management,employees, organization culture, structure,leadership, departments etc.

    Strategy formulation and implementation areinterrelated.

  • 7/30/2019 Implementation Bpsm

    3/60

    Forward linkage : Deals with preparing theorganizational activities including the org.

    structure, leadership, culture etc required forimplementation.

    Backward linkage : Deals with the influence ofimplementation on the strategy formulation. (To

    avoid any deviations in the ground reality )

    Different strategies require different changes inthe business processes.

  • 7/30/2019 Implementation Bpsm

    4/60

    Stability strategy requires least change.

    A strategy of changing price requires

    minor changes in the marketing dept. anda few changes in the day to day businessactivities.

    Joint Ventures require radical change likereplacing org. structure, technology, newmarkets, new practices etc.

  • 7/30/2019 Implementation Bpsm

    5/60

    Project implementation

    Strategies give rise to plans, programmes,projects, budgets, policies, procedures,

    rules and regulations. Project : A project can be defined as aOne shot, time limited, goal oriented,

    major undertaking requiring thecommitment of varied skills andresources

  • 7/30/2019 Implementation Bpsm

    6/60

    A project passes through the followingphases :

    Conception : Of a number of strategicalternatives that generate at the time ofstrategy formulation, some ideas form theplatform for the beginning of projects.

    These ideas are developed further andranked on priority.

  • 7/30/2019 Implementation Bpsm

    7/60

    Definition phase :Of all the project ideasselected and ranked, a preliminary analysis isdone from the point of view of marketing,technical, financial, ecological feasibility.

    After studying the viable projects, a detailedproject report is prepared for submitting to thefinancial institutions.

    This report contains all details about the projectsuch as the promoters, nature, capacity,location, size, cost, assets, selling arrangementsetc.

  • 7/30/2019 Implementation Bpsm

    8/60

    Planning and organizing : Detailed planningregarding the technical aspects, engineering

    design, infrastructure, schedules, budgets etc isworked.

    Implementation : The detailed engineering,issuance of orders, civil construction, etc are

    undertaken.

    Clean up : Finishing and handing over the plantto operating personnel.

  • 7/30/2019 Implementation Bpsm

    9/60

    Procedural Implementation

    Formation of a company is governed by theprovisions of the companies act 1956 andconsists of promotion ( primary step ),

    registration of the memorandum of the companywith the Registrar and flotation of the company (Raising Capital ).

    The IRDA of 1951 divided all industries in three

    categories. Government Private Joint

  • 7/30/2019 Implementation Bpsm

    10/60

    Procedural Implementation

    Licensing procedures : A license is a writtenpermission by the government to an industrial

    undertaking to manufacturers specified in theschedule.

    Post 1991, after the govt. adopted the policy ofLPG, licensing procedures for all sectors of non

    strategic importance were abolished. The onlystrategically important sectors were the defense,environment etc.

  • 7/30/2019 Implementation Bpsm

    11/60

    Procedural Implementation

    SEBI requirements : The SEBI Act of 1992, hadthree main objectives :

    The protect the interest of investors in security To promote the development of security

    markets.

    To regulate the security market. All strategies should be developed by taking into

    consideration all the regulations laid by theSEBI.

  • 7/30/2019 Implementation Bpsm

    12/60

    Procedural Implementation

    The MRTP Act of 1969 had the main aim ofpreventing the concentration of economic

    power.. It oversees and prevents : Collusions and Cartels

    Price discrimination among different customers

    Forcing buyers to buy a whole range ofproducts.

    There should always be free and faircompetition.

  • 7/30/2019 Implementation Bpsm

    13/60

    Procedural Implementation

    Foreign collaboration procedures : many strategies resultin foreign collaborations. Foreign investment is of twotypes :

    FDI takes place through wholly owned subsidiariesforeign institutional Joint Ventures and Acquisitions.

    FII takes place when the outside parties invest ininstruments such as GDR ( Global Depositary Receipts )FCCBs (Foreign currency convertible bonds ).

    Special incentives are given to NRIs for this purpose.

  • 7/30/2019 Implementation Bpsm

    14/60

    Procedural Implementation

    FERA / FEMA has now considerablyliberalized rules related to maintenance of

    dollar accounts by exporters, remittanceof foreign exchange for visits abroad,agency commission export claims etc.

  • 7/30/2019 Implementation Bpsm

    15/60

    Procedural Implementation

    Export Import requirements : Thegovernment today supports import

    substitutions and offers incentives toorganizations who take initiatives inproduction of capital goods and raw

    material which is currently imported.

  • 7/30/2019 Implementation Bpsm

    16/60

    Procedural Implementation

    Patenting and Trademark requirements :Owning to the international change, patents,trademarks, copyrights, designs are assuminggreater importance.

    Important industries where innovations aretaking place are chemical, computer software,entertainment, food, pharma etc wherepatents are a major tool. These elements aregoverned by the Trademark and MerchandiseMark Act, 1958, Copyright Act 1957.

  • 7/30/2019 Implementation Bpsm

    17/60

    Procedural Implementation

    Labour Legislation requirements : Various lawsrelated to the betterment of the workforce have

    been formulated. These include : Labour Laws related to women and children.

    Labour Laws related to specific industries likemines, minerals etc.

    Rules regarding the provision of a base forwages, social security, bonus have beenformulated.

  • 7/30/2019 Implementation Bpsm

    18/60

    Procedural Implementation

    Environment Protection and Pollution Control : Sterncontrol has to be enforced on use of non renewablesources of energy such as oil and natural gas. Increased

    national and global awareness about overuse and misuseof natural resources such as air, land, water, hasresulted into a number of environment protection actssuch as the Environment Protection Act, 1986, TheWater ( Prevention and Control of Pollution ) Act 1974,

    The Air (), 1981, The wildlife Protection Act, 1972 etc. Besides this the Central and state governments have set

    up separate pollution control boards.

  • 7/30/2019 Implementation Bpsm

    19/60

    Procedural Implementation

    Consumer Protection Requirements : To protectthe consumers from any unethical practices and

    unfair acts, all organizations have to abide to theprovisions of the Consumer Protection Act.

    The issues of consumer protection is highlightedin the procedural implementation and at the

    time of formulation business and operationallevel strategies.

  • 7/30/2019 Implementation Bpsm

    20/60

    Structural Implementation

    Org. growth : With a change in the objectives inan upward direction, suitable changes are to be

    made in the formal and informal organization. Org. structure : In alignment with the changed

    strategies, suitable changes have to be made inthe org. structure. Shifting from simple

    structures to more complex structures like theMatrix or Hybrid structures may be essential.

  • 7/30/2019 Implementation Bpsm

    21/60

    Structural Implementation

    Phases of Organizational Growth : Initial expansion & accumulation of

    resources Rationalization of the use of resources. Expansion into new products & business

    lines Development of new organization structure

    to enable effective mobilization & utilizationof resources.

  • 7/30/2019 Implementation Bpsm

    22/60

    Options

    The above 4 stages give rise to 3 types oforganization structures :

    Type 01 : One organization, single product

    market, hence central decision making. Type 02 : Expansion and hence top boss

    delegated some decision making & authority tomanagers.

    Type 03 : Diversification leads to multi productmulti structure and hence need for complete de centralization arises.

  • 7/30/2019 Implementation Bpsm

    23/60

    Types of Org. Structures

    Simple org. structure : Two levels, owner manager &employee. Useful for small firms. Implementation mosteasy. Success depends upon the skill levels of the

    owner. Functional org. structure : As an org. grows & develops

    a number of related products and markets, structurechanges to reflect specialization in functional areas i.eproduction, marketing, R&D, etc.

    Divisional Org. structure : As firms develop new productsin different industries and markets, they may evolvedivisional org. structure. Each division may operateautonomously under a divisional head.

  • 7/30/2019 Implementation Bpsm

    24/60

    Types of Org. Structures

    SBU Structure : When divisional structuresbecome unmanageable by one CEO, orgs. mayreorganize themselves by appointing VPs foreach related business.

    Matrix org. structure : Used to facilitate &development & execution of variousprogrammes or projects. Each of the VPs havefunctional responsibility for all the projects, whileeach project manager has project responsibilitycompleting and implementing strategy.

  • 7/30/2019 Implementation Bpsm

    25/60

    Patterns of Growth of Large Corporations:

    Simple structure is the oldest and most commonorganizational form

    Staff serve as an extension of the top executivespersonality

    Highly informal

    Coordination of tasks by direct supervision

    Decision making is highly centralized Little specialization of tasks, few rules and

    regulations, informal evaluation and reward system

    Simple Structure

    P tt f G th f L C ti

  • 7/30/2019 Implementation Bpsm

    26/60

    Patterns of Growth of Large Corporations:

    Functional Structure

    Lower-level managers, specialists, and operating personnel

    Di i i l St t

  • 7/30/2019 Implementation Bpsm

    27/60

    Divisional Structure

    Lower-level managers, specialists,

    and operating personnel

  • 7/30/2019 Implementation Bpsm

    28/60

    Divisional Structure

    Organized around products, projects, or markets

    Each division includes its own functional

    specialists typically organized into departments Divisions are relative autonomous and consist of

    products and services that are different fromthose of other divisions

    Division executives help determine product-market and financial objectives

  • 7/30/2019 Implementation Bpsm

    29/60

    Divisional Structure

    Strategic business unit (SBU) structure

    Divisions with similar products, markets,

    and/or technologies are grouped intohomogenous SBUs

    Task of planning and control atcorporate office is more manageable

    May become difficult to achievesynergies across SBUs

  • 7/30/2019 Implementation Bpsm

    30/60

    Matrix Structure

  • 7/30/2019 Implementation Bpsm

    31/60

    Keys for org. structure

    Functional Structure It is used for a singleproduction or a related product, single locationorganization, medium in size. Eg. John deer,Tractor manufacturing.

    Divisional Structure It is used for multi product,multi location organization, vast in the turnover,complex to control, may be multinationals. Eg.Tata Motors in Pune

    Matrix Structure It is used where you want tomake the organization innovative or sometimeyou want cost optimization.

    Strategic Business Unit SBU are used to makeorganization profit and result oriented.

  • 7/30/2019 Implementation Bpsm

    32/60

    Behavioral Implementation

    Leadership: Three Interdependent Activities

    Leadership is the process of transforming

    organizations from what they are to what theleader would have them become

    Leadership should be

    Proactive

    Goal-oriented

    Focused on the creation and implementation of acreative vision

  • 7/30/2019 Implementation Bpsm

    33/60

    DeterminingStrategic

    Direction

    Exploiting &Maintaining

    CoreCompetencies

    DevelopingHumanCapital

    Sustainingan Effective

    OrganizationalCulture

    EmphasizingEthical

    Practices

    EstablishingBalanced

    OrganizationalControls

    Exercise of Effective Leadership

    Effective Strategic Leadership

    D t i i

    Effective Strategic Leadership

  • 7/30/2019 Implementation Bpsm

    34/60

    Strategic direction means the development of a long-term vision of a firms strategic intent.

    A charismatic leader can help achieve strategic intent.

    It is important not to lose sight of the strengths of theorganization when making changes required by a newstrategic direction.

    Executives must structure the firm effectively to help

    achieve the vision.

    Determining

    Strategic

    Direction

    Determining

    Strategic

    Direction

    Exploiting &Maintaining

    CoreCompetencies

    DevelopingHumanCapital

    Sustainingan Effective

    OrganizationalCulture

    EmphasizingEthical

    Practices

    EstablishingBalanced

    OrganizationalControls

    Effective Strategic Leadership

    E l i i &

    Effective Strategic Leadership

  • 7/30/2019 Implementation Bpsm

    35/60

    Exploiting &

    Maintaining

    Core Competencies

    Determining

    Strategic

    Direction

    Exploiting &Maintaining

    CoreCompetencies

    DevelopingHumanCapital

    Sustainingan Effective

    OrganizationalCulture

    EmphasizingEthical

    Practices

    EstablishingBalanced

    OrganizationalControls

    g p

    Core competencies are resources and capabilities that serve asa source of competitive advantage for a firm over its rivals.

    Strategic leaders must verify that the firms competencies areemphasized in strategy implementation efforts.

    In many large firms, and certainly in related diversified ones,core competencies are exploited effectively when they aredeveloped and applied across different organizational units.

    Core competencies cannot be developed or exploitedeffectively without developing the capabilities of human capital.

    D l i

    Effective Strategic Leadership

  • 7/30/2019 Implementation Bpsm

    36/60

    Developing

    Human

    Capital

    Determining

    Strategic

    Direction

    Exploiting &Maintaining

    CoreCompetencies

    DevelopingHumanCapital

    Sustainingan Effective

    OrganizationalCulture

    EmphasizingEthical

    Practices

    EstablishingBalanced

    OrganizationalControls

    g p

    Human capitalrefers to the knowledge and skills of the firmsentire workforce.

    Employees are viewed as a capital resource that requiresinvestment.

    No strategy can be effective unless the firm is able to develop andretain good people to carry it out.

    The effective development and management of the firmshuman capital may be the primary determinant of a firmsability to formulate and implement strategies successfully.

    Sustaining an

    Effective Strategic Leadership

  • 7/30/2019 Implementation Bpsm

    37/60

    Sustaining an

    Effective

    OrganizationalCulture

    Determining

    Strategic

    Direction

    Exploiting &Maintaining

    CoreCompetencies

    DevelopingHumanCapital

    Sustainingan Effective

    OrganizationalCulture

    EmphasizingEthical

    Practices

    EstablishingBalanced

    OrganizationalControls

    g p

    An organizational culture consists of a complex set of

    ideologies, symbols, and core values that are sharedthroughout the firm and influences the way it conductsbusiness.

    Shaping the firms culture is a central task of effectivestrategic leadership.

    An appropriate organizational culture encourages thedevelopment of an entrepreneurial orientation amongemployees and an ability to change the culture asnecessary.

    Reengineering can facilitate this process.

  • 7/30/2019 Implementation Bpsm

    38/60

    Every job in the company is essential and important

    The benefits ofbusiness reengineeringaremaximized when employees believe that:

    All employees must create value through their work

    Constant learning is a vital part of every persons job

    Teamwork is essential to implementation success

    Problems are solved only when teams accept theresponsibility for the solution

    Changing Culture and Reengineering

    Emphasizing

    Effective Strategic Leadership

  • 7/30/2019 Implementation Bpsm

    39/60

    Emphasizing

    Ethical

    Practices

    Determining

    Strategic

    Direction

    Exploiting &Maintaining

    CoreCompetencies

    DevelopingHumanCapital

    Sustainingan Effective

    OrganizationalCulture

    EmphasizingEthical

    Practices

    EstablishingBalanced

    OrganizationalControls

    Ethical practices increase the effectiveness of strategyimplementation processes.

    Ethical companies encourage and enable people at allorganizational levels to exercise ethical judgment.

    To properly influence employee judgment and behavior,ethical practices must shape the firms decision-makingprocess and be an integral part of an organizations culture.

    Leaders set the tone for creating an environment of mutual respect,honesty and ethical practices among employees.

    Establishing

    Effective Strategic Leadership

  • 7/30/2019 Implementation Bpsm

    40/60

    EstablishingBalanced

    OrganizationalControls

    Determining

    Strategic

    Direction

    Exploiting &Maintaining

    CoreCompetencies

    DevelopingHumanCapital

    Sustainingan Effective

    OrganizationalCulture

    EmphasizingEthical

    Practices

    EstablishingBalanced

    OrganizationalControls

    Organizational controls provide the parameters within which

    strategies are to be implemented and corrective actionstaken.

    Financial controls are often emphasized in largecorporations and focus on short-term financial outcomes.

    Strategic control focuses on the contentof strategic actions,rather than theiroutcomes.

    Successful strategic leaders balance strategic control andfinancial control (they do not eliminate financial control) withthe intent of achieving more positive long-term returns.

    d f

  • 7/30/2019 Implementation Bpsm

    41/60

    A Leaders Bases of Power

  • 7/30/2019 Implementation Bpsm

    42/60

    Functional Implementation

    Five functional areas that need specialaddress in implementation are :

    Marketing

    Research and development

    Production-operations-manufacturing

    Human resource managementFinancial-accounting

  • 7/30/2019 Implementation Bpsm

    43/60

    Marketing

    Marketing is defined as a process ofassessing and meeting individuals or

    groups wants and needs by creating,offering, and exchanging products ofvalue.

  • 7/30/2019 Implementation Bpsm

    44/60

    Possible Marketing Strategies

    Segmentation StrategiesGeographic

    DemographicPsychographicBehavioral

    Target Market Selection Strategies

    Single-segment concentration

    Selective specializationProduct specializationMarket specializationFull market coverage

  • 7/30/2019 Implementation Bpsm

    45/60

    Differentiation Strategies

    Product itself

    ServicesPersonnel Image

    Positioning Strategies

    Attribute positioning

    Benefit positioning

    Use-application positioningUser positioning

    Competitor positioningProduct category positioningQuality-price positioning

  • 7/30/2019 Implementation Bpsm

    46/60

    Marketing Mix Strategies

    New-product developmentProduct lineBrandPackaging-labelingProduct life cycle decisions

  • 7/30/2019 Implementation Bpsm

    47/60

    Product Life Cycle

    Introduction Growth Maturity Decline

    Sales

    Time

  • 7/30/2019 Implementation Bpsm

    48/60

    PLC

    The product life cycle (PLC) concept is arecognition that a products sales rise and

    decline, bringing about the need for differentstrategies for coping with these ups and downs.

    The various stages of the PLC might require

    changes not only in the product strategies, butin the other Ps, as well.

  • 7/30/2019 Implementation Bpsm

    49/60

    Marketing Mix Strategies

    Pricing The pricing strategy depends upon the

    organizations pricing objectives survival, maximum currentprofit, maximum current revenue, maximum sales growth,

    maximum market skimming, product-quality leadership, orother.

    Markup pricing Target-return pricing Perceived-value pricing Value pricing Going-rate pricing Sealed-bid pricing Geographical pricing Promotional pricing

    Price discounts-allowances Discriminatory pricing

    Product mix pricing

  • 7/30/2019 Implementation Bpsm

    50/60

    Promoting

    Advertising Billboards Point-of purchase displays Symbols and logos Packaging inserts Sales promotion

    Public relations Personal selling Direct marketing

  • 7/30/2019 Implementation Bpsm

    51/60

    Possible HRM Strategies

    Organize for efficiency or innovation

    Organize for control or flexibility

    Use specialized or broad job categories Use detailed or loose work planning

    Use internal or external recruitment

    Who makes hiring decision Whats important in hiring

    Formal or informal approach

    Possible Human Resource Management

  • 7/30/2019 Implementation Bpsm

    52/60

    gStrategies

    Employee Separations

    How to downsize Hiring freeze Support for terminated employees Preferential or non-preferential rehiring process

    Performance Appraisal Customized or uniform appraisals

    Appraisal for developmental or control purposes Multipurpose or focused appraisals Use multiple or one input

  • 7/30/2019 Implementation Bpsm

    53/60

    Possible Human Resource ManagementStrategies

    Training and Development Buy or develop skills Individual or team-based training On-the-job or external training

    Job-specific or generic training

    Compensation

    Fixed-pay or variable pay system Job-based or individual pay Seniority-based or performance-based system Centralize or decentralize pay decisions

  • 7/30/2019 Implementation Bpsm

    54/60

    Possible Research andDevelopment Strategies

    R&D Emphasis

    Basic scientific research

    Product development Process development

    R&D Timing

    First mover

    Follower

  • 7/30/2019 Implementation Bpsm

    55/60

    First Mover Advantages-Disadvantages

    An organization thats first to bring a newproduct innovation to the marketplace or

    to use a new process innovation is called afirst mover. Being a first mover has certainstrategic advantages and disadvantages.

  • 7/30/2019 Implementation Bpsm

    56/60

    Advantages

    Reputation for being innovative andindustry leader

    Cost and learning benefits resulting frommoving along experience curve first

    Control over scarce assets preventingcompetitors from having access to them

    Opportunity to begin building customerrelationships and customer loyalty

  • 7/30/2019 Implementation Bpsm

    57/60

    Disadvantages

    Uncertain over exact direction technologyand market will go

    Risk of competitors imitating innovations(free-rider effect)

    Financial and strategic risks

    High development costs

    Possible Research and

  • 7/30/2019 Implementation Bpsm

    58/60

    Possible Research andDevelopment Strategies

    Product and ProcessDevelopmentWho conducts R & D

    Separate R&D department

    Cross-functional team

    Some variation

    How is R& D conducted

    Use prototypes

    Use product tests

    Use design reviews

    Use test markets

    How to implement new design

    How to evaluate success of new design

  • 7/30/2019 Implementation Bpsm

    59/60

    Possible Financing-AccountingStrategies

    Evaluating Financial Performance

    How often

    How much analysisFinancial Forecasting, Planning, and Budgeting

    Percent of sales forecast

    Discretionary financial needed model

    Sustainable rate of growth model; Types of budgets used

    Financing Mix

    Financial structure-capital structure

    Short-term versus long-term fund sources

    Permanent or long-term sources

  • 7/30/2019 Implementation Bpsm

    60/60

    Possible Financial-Accounting Strategies

    Other Financial Management Decisions

    Capital budgeting choicesStock dividend policyCapital budgetingCash flow managementWorking capital management and short-term financingCash and marketable securities managementAccounts receivable and inventory managementUse term loans or leases

    Current Financial-Accounting Strategies

    Controlling costs

    Compliance; New financial performance measures

    Valuing intangible assets