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Strategies Powered By Docstoc
					The business's strategy refers to the coordinated plan of action that it
is going to take, as well as the resources that it will use, to realize
its vision and long-term objectives. It is a guideline to managers,
stipulating how they ought to allocate and utilize the factors of
production to the business's advantage. Initially, it could help the
managers decide on what type of business they want to form.

Types of strategies
The strategy hierarchy

In most (large) corporations there are several levels of management.
Strategic management is the highest of these levels in the sense that it
is the broadest - applying to all parts of the firm - while also
incorporating the longest time horizon. It gives direction to corporate
values, corporate culture, corporate goals, and corporate missions. Under
this broad corporate strategy there are typically business-level
competitive strategies and functional unit strategies.

Corporate strategy (Senior management)

refers to the overarching strategy of the diversified firm. Such a
corporate strategy answers the questions of "in which businesses should
we compete?" and "how does being in these business create synergy and/or
add to the competitive advantage of the corporation as a whole?"

Business strategy (Middle management)

refers to the combined strategies of single business firm or a strategic
business unit (SBU) in corporation. According to Michael Porter, a firm
must formulate a business strategy that incorporates either cost
leadership, differentiation or focus in order to achieve a sustainable
competitive advantage and long-term success in its chosen arenas or

Functional strategies (Lower management)

include marketing strategies, new product development strategies, human
resource strategies, financial strategies, legal strategies, supply-chain
strategies, and information technology management strategies. The
emphasis is on short and medium term plans and is limited to the domain
of each department’s functional responsibility. Each functional
department attempts to do its part in meeting overall corporate
objectives, and hence to some extent their strategies are derived from
broader corporate strategies.

How they works?
Coprate strategy (Senior management)

    * Require an extensive knowledge of management roles and skills.
    * They have to be very aware of external factors such as markets.
    * Their decisions are generally of a long-term nature
    * Their decisions are made using analytic, directive, conceptual
and/or behavioral/           participative processes
    * They are responsible for strategic decisions.
    * They have to chalk out the plan and see that plan may be effective
in the future.
    * They are executive in nature.

Business strategy (Middle management)

    * Mid-level managers have a specialized understanding of certain
managerial tasks.
    * They are responsible for carrying out the decisions made by top-
level management.

Functional strategies (Lower management)

    * This level of management ensures that the decisions and plans taken
by the other two are carried out.
    * Lower-level managers' decisions are generally short-term ones, just
ask Jeff White.

How to implement policies and strategies?

    * All policies and strategies must be discussed with all managerial
personnel and staff.
    * Managers must understand where and how they can implement their
policies and                strategies.
    * A plan of action must be devised for each department.
    * Policies and strategies must be reviewed regularly.
    * Contingency plans must be devised in case the environment changes.
    * Assessments of progress ought to be carried out regularly by top-
level managers.
    * A good environment and team spirit is required within the business.

Reasons why strategic plans fail
There are many reasons why strategic plans fail, especially:

       * Failure to understand the customer
             o Why do they buy
             o Is there a real need for the product
             o inadequate or incorrect marketing research

* Inability to predict environmental reaction
         o What will competitors do
               + Fighting brands
               + Price wars
         o Will government intervene

 * Over-estimation of resource competence
          o Can the staff, equipment, and processes handle the new
          o Failure to develop new employee and management skills

* Failure to coordinate
          o Reporting and control relationships not adequate
          o Organizational structure not flexible enough

  * Failure to obtain senior management commitment
         o Failure to get management involved right from the start

           o Failure to obtain sufficient company resources to accomplish
       * Failure to obtain employee commitment
             o New strategy not well explained to employees
             o No incentives given to workers to embrace the new strategy

* Under-estimation of time requirements
         o No critical path analysis done

  * Failure    to   follow the plan
          o    No   follow through after initial planning
          o    No   tracking of progress against plan
          o    No   consequences for above

   * Failure to manage change
          o Inadequate understanding of the internal resistance to change
          o Lack of vision on the relationships between processes,
technology and organization

* Poor communications
         o Insufficient information sharing among stakeholders
         o Exclusion of stakeholders and delegates

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