Chapter 9

Strategy Implementation
Summary

Oleh:

I Putu Arie Argantha (1607521072)

Faculty of Economic & Business

Udayana University
 Strategy Implementation
1. The nature of strategy implementation
According to peter drucker there is no “perfect” strategic decision. One always has
to pay a price. One always has to balance conflicting objectives, conflicting opinions,
and conflicting priorities. The best strategic decision is only an approximation and a
risk. Strategy implementation means change. Less than 10% of strategies formulated
are successfully implemented.
Low strategy implementation success:
a. Failing to segment markets appropriately
b. Paying too much for a new acquisition
c. Falling behind competition in R&D
d. Not recognizing benefit of computers in managing information
For successful strategy implementation
i. Firms must market goods and services well
ii. Firms must raise needed working capital
iii. Firms produce technologically-sound goods
iv. Firms must have sound information systems
2. Marketing Issues
Marketing variables affect success or failure of strategy implementation. There are
two topics that we will discuss here that are market segmentation and production
positioning.
a. Market segmentation
Here we do subdividing of a market into distinct subsets of customers
according to needs and buying habits. Widely used in implementing strategy
with small and specialized firms. Here are the market segmentation important
value.
i. Market and product development, market penetration, and
diversification require increased sales trhough new markets or products
ii. Firms can operate with limited resources enables a small firm by
maximizing perunit profits and per-segment sales.
iii. Segmentation decisions directly affect marketing mix variables.
 Bases for segmenting markets that we need to remember are geographic, demographic,
Psyhcographic and behavioral.
b. Product positioning
Developing schematic representations that reflect how products or service
compare to competitiors on dimensions most important success in the industry.
Product positioning are based on customers wants and needs.
3. Research and development (R&D) Issues
New products and improvement of existing products that allow for effective
strategy implementation. Here we need to focus of 2 things:
a. Level of a support is constrained by resource availability
b. Technological improvements shorten product life cycles.
And also there are 3 Major R&D approaches to implementing strategies
i. First firm to market new technological products
ii. Be an innovative imitator of successful products
iii. Low-cost producer of similar but less expensive products
4. Finance/Accounting Issues
It is central to strategy implementation
a. Acquiring needed capital
b. Developing pro forma financial statements
c. Preparing financial budgets
d. Evaluating worth of a business
Decisions Requiring Finance/Accounting Policies
e. Raise capital w/ short-term, long-term preferred or common stock
f. Lease or buy fixed assets
g. Determine an appropriate dividend payout
h. Extend time of accounts receivable
i. Establish percentage discount on accounts for teams
j. Determine the amount of cash kept on hand
We need to acquiring capital to implement strategies. There are 2 basic source of
capital that are debt and equity. To take the debt or equity decisions we can using EPS/EBIT
analysis.
 Pro forma financial statements allow an organization to examine the expected
results of various actions and approaches. 6 steps of pro forma financial:
- Preapare income statement before balance sheet (forecast sales)
- Use percentage of sales method to project CGS and expenses
- Calculate projected net income
- Substract dividens to be paid from net income and add remaining to retained
earnings
- Project balance sheet times beginning with retairned earnings
- List comments (remark) on projected statement
5. Management Information Systems Issues
a. MIS Implementation aspect
The following section seeks to introduce and describe the MIS implementation
process which can be seen as a vital stage in the deployment of information
technology to support the business information systems that are developed by
the organisation for employees, customers, and other business stakeholders
i. MIS Implementation Process
ii. MIS Implementation Challenges
The more specific categorisations of the issues can be viewed as:
management process issues, organisational environment issues,
leadership issues, technical systems issues, and personnel issues.
 Management process issues speak to the functional operation of
an organisation such as budgeting, personnel, and general management.
 Organisational environment issues are identified as factors which
are less tangible such as organisational culture, change, and behaviour.
 Leadership issues relate to the areas which involve the interaction
and direction of the organisation executive.
 Technical systems issues are mainly those referring to the
hardware and software considerations of information technologies.
 Personnel issues are those issues surrounding each individual in
the organisation.
These issues impact the planning, procurement, and deployment of
information systems in their organisations. These categorisations of
information system issues will be the frame of study in terms of
challenges or problems that an organisation faces when a new
information system is implemented.