ACTIVITY 3

1. Discuss the following:

a. Strategy Implementation
- The process by which an organization transforms its selected strategy into action
plans and actions that will guide the organization in the direction specified in the
strategy and enable the organization to meet its strategic objectives is known as
strategy implementation.

b. McKinsey 7-s Framework

- The McKinsey 7S Model is a technique for analyzing an organization's
"organizational design." The model's purpose is to show how the interactions of seven
important aspects - structure, strategy, skill, system, shared values, style, and staff –
can lead to organizational effectiveness.

c. Balanced Scorecard
- A balanced scorecard is a strategic management performance statistic that assists
businesses in identifying and improving internal operations in order to achieve
external outcomes. It analyzes prior performance data and gives businesses
suggestions for making better decisions in the future.

2. What are the basic principles which could help to achieve an effective implementation of
the strategy?
1. Communication of the strategy through the whole company: employees are not
inclined to organizational changes that accompany of strategy.
2. Involving employees in the implementation of the strategy: keeping initiative on
employees to find effective way for achieving strategic goals allows company to
eliminate employee’s resistance to changes
3. assignment of responsibilities for strategic projects: defining responsibilities and
financial involvement of employees have a significant impact on success of strategic
goals
4. adaption of the organizational structure: company should adjust the organizational
structure of company’s processes in connection with outputs from employees and
control systems
5. implementation of effective controls: control is in the process of implementation of
the strategy necessary and the problem is content and methodology of control.

3. When do you use the McKinsey 7-s Model?

 - The framework can be used to assess the potential effects of future organizational
changes, as well as to align departments and procedures during a merger or acquisition.
The McKinsey 7-S model can also be applied to team or project aspects.
4. Explain and enumerate the 7 elements of the McKinsey Model.

1. Structure
Structure is the way in which a company is organized – chain of command and accountability
relationships that form its organizational chart.

2. Strategy
Strategy refers to a well-curated business plan that allows the company to formulate a plan of
action to achieve a sustainable competitive advantage, reinforced by the company’s mission and
values.

3. Systems
Systems entail the business and technical infrastructure of the company that establishes
workflows and the chain of decision-making.

4. Skills
Skills form the capabilities and competencies of a company that enables its employees to achieve
its objectives.

5. Style
The attitude of senior employees in a company establishes a code of conduct through their ways
of interactions and symbolic decision-making, which forms the management style of its leaders.

6. Staff
Staff involves talent management and all human resources related to company decisions, such as
training, recruiting, and rewards systems

7. Shared Values
The mission, objectives, and values form the foundation of every organization and play an
important role in aligning all key elements to maintain an effective organizational design.

5. What are the various situations where McKinsey model can be used?
1. Improve the performance of a company
2. Examine the likely effects of future changes within a company
3. Align departments and processes during a merger or acquisition
4. Determine how best to implement a proposed strategy

6. Discuss the Balanced Scorecard performance measures.

 - A balanced scorecard is a performance indicator for identifying, improving, and
controlling the various operations and results of an organization. Learning and growth,
business processes, customers, and finance are all measured using the balanced scorecard.

7. Explain the 6-step guide to strategy implementation.

Step #1: Define the strategy framework
On the one hand, strategy is something that should be embedded in everything that you
do. It should be in the DNA of the organization and its people. On the other hand, if you
don't make an effort to call it out explicitly, you won't get the focus or traction that you
need.

Step #2: Build the company’s plan

The next step of our process guide to strategy implementation is where you will start creating your plan.

Step #3: Define Key Performance Indicators (KPIs)

our process guide to strategy implementation requires you to define your KPIs. Key performance
indicators are one of the oldest management tools around - because they work. They keep you
honest about your progress and focused on your outcomes. They need to become your beacons
for implementing strategy.

Step #4: Establish your strategy rhythm

Step 4 of our process guide to strategy implementation is where you can start to establish your
strategy rhythm. The ironic thing about strategy implementation is that even though everyone
acknowledges how important it is - it's often the first thing to be forgotten about when the going
gets tough.

Step #5: Implement strategy reporting

Step 5 of our process guide to strategy implementation focuses on reporting. Now that your
meetings are in place, you'll want to choose a consistent way of reporting the progress of your
strategy implementation.

Step #6: Link performance to strategy

The first 5 steps of our process guide to strategy implementation are the absolute basics to ensure
that you have success implementing and executing your strategy. But organizations who truly
succeed are those who manage to weave strategy implementation into the fabric of their
existence.
CASE QUESTION

1. Explain why the pharmaceutical industry has historically been a very profitable industry.
2. After 2002, the profitability of the industry, measured by ROIC, started to decline. Why
do you think this occurred?
- The pharmaceutical industry has been historically a profitable sector. Its rate of return
on invested capital (ROIC) was comparatively high than others like computer hardware
industry, grocers, electronic industry & so on. Although it was a lucrative sector, its
profitability has been declining of late. Reasons behind this are given bellow: ?
Customers have become more conscious about the side effect of medicine, hence they use
herbal drugs: Since there are some side effects in certain medicines, people now a days
use herbal drugs that are said to be free from side effects.
Anti-American, Europe campaign: In 2003 during Iraq war there was a protest in using
American product. ? 
Failure to innovate new drugs: We know it takes almost 10 to 15 years to introduce a new
drug, during these long period parasites create a defense mechanism against older drugs
making them ineffective so they gradually lose their market. ? Unable to match
customers’ needs: Now a day’s customers need drugs that take action quickly. ?
Patent expiration: Market leaders lose their market share as their patent expired. People
have become resistant to those drugs that they have frequently used.
3. What are the prospects for the industry going forward? What are the opportunities, and
what are the threats? What must pharmaceutical firms do to exploit the opportunities and
counter the threats?
CHAPTER 4

1. Explain the following:

a. Strategy evaluation
- involves analyzing your strategic plan and assessing how well you've done against
achieving the goals in your strategy. It is also a significant as strategy formulation
because it throws light on the efficiency and effectiveness of the comprehensive
plans in achieving the desired result.
b. Fixing Benchmark of Performance
- These are the benchmarks against which the organization's success will be
measured after the plan has been implemented. It is necessary to specify
parameters in such a way that quantitative measurement is possible.
c. Measurement of Performance
- Regularly measuring outcomes and results, which creates trustworthy data on
program effectiveness and efficiency, is what performance measurement entails.
Input. To undertake tasks and offer services, resources (human resources,
employee time, funding) are used.
d. Analyzing Varience
-
e. Corrective Action
f. Gap Analysis
- Is one strategic evaluation technique used to measure the gap between the
organization’s current position and its desired position. It is used to evaluate a
variety of aspects of business, fromprofit and production to marketing, research
and development and management information systems.
g. SWOT Analysis
- Is another common strategic evaluation technique used as a part of the strategic
management process. The SWOT Analysis evaluates the organization’s strengths
and weaknesses which are internal factors, while opportunities and threats are
external factors. This identification is essential in determining how best to focus
resources to take advantage of strengths and opportunities and combat weaknesses
and threats.
h. PEST Analysis
- Which identifies the political, economic, social and technological factors that may
impact the organization’s ability to achieve its objectives. Political factors might
include such aspects as impending legislation regarding wages and benefits and
financial regulations. Economic factors include all shifts in the economy, while
social factors may include demographics and changing attitudes. Technological
pressures are also inevitable as technology becomes more advanced each day.
 There are all external factors, which are outside of the organization’s control but
which must considered throughout the decision making process.
i. Benchmarking
- Is a strategic evaluation technique that’s often used to evaluate how close the
organization has come to its final objectives, as well as how far it has left to go.
j. Balance Scorecard
- An important strategy evaluation technique. It is a process that allows firms to
evaluate strategies from four key perspective: financial performance, customer
knowledge, internal business process and learning and growth.
k. PERT & CPM
- PERT is that technique of project management which is used to manage
uncertain (i.e., time is not known) activities of any project. CPM is that technique
of project management which is used to manage only certain (i.e., time is known)
activities of any project.
2. Discuss the significance of strategic evaluation.
- Strategic evaluation is significant because of various factors such us- developing
inputs for new strategic planning, the urge for feedback, appraisal and reward,
development of the strategic management process, judging the validity of
strategic choice etc.
3. Enumerate the importance of Strategic Evaluation.
1. Strategic evaluation can help to assess whether the decisions match the intended
strategy requirements.
2. Strategic evaluation, through its process of control, feedback, rewards and review,
helps in a successful culmination of the strategic management process.
3. The process of strategic evaluation provides a considerable amount of information
and experience to strategists that can be useful in new strategic planning.
4. Identify the participants in strategic evaluation.
1. Shareholders
2. Board of Directors
3. Chief Executive
4. Financial Controllers
5. Company secretaries
6. External and Internal Auditors
7. Audit and Executive Committees
8. Corporate Planning Staff or Department
9. Middle-level managers
5. Enumerate the 3 basic activities in strategic evaluation.
1. Examining the underlying bases of a firm’s strategy,
2. Comparing expected results with actual results, and
3. Taking corrective actions to ensure that performance conforms to plans.
6. Discuss the process of strategic evaluation.
7. Explain the barriers in evaluation.
1. Limits of Control
- It is not easy for strategists to decide the limits of control. Too much
control prevents managers from taking initiative, experiment with
their creative ideas and gain through calculated risk taking. On the
other hand, when there is very little control people tend to go off the
hook, waste resources without any fear of punishment and work to
cross purposes putting a big question mark on the very survival of
the firm.
2. Difficulties in measurements
- It is not easy to find measurement techniques that are valid and
reliable. Validity is the extent to which an instrument measures what
it intends, to measure (for example measuring the speed and
accuracy of a typist in a typing test). Reliability is the confidence that
an indicator will measure the same thing every time. When people
are not confident about the measures used for judgment, they resist
the whole process strongly.
3. Resistance to evaluation
-
4. Short-termism
5. Relying on efficiency (doing things right) versus effectiveness (doing right things)
8. Enumerate the difficulties in evaluation.
Strategy Evaluation is becoming increasingly difficult due to the following reasons:
1. A dramatic increase in the environment’s complexity.
2. The increasing difficulty numbers of variables.
3. The increasing numbers of variables.
4. The rapid rate of obsolescence of even the best plans.
5. The increase in the number of both domestic & world events affecting the
organizations.
6. The decreasing time span for which planning can be done with any degree of
certainty.
9. What are the requirements for effective evaluation?
1. Control should involve only minimum amount of information as too much
information creates confusion.
2. Control should monitor only managerial activities and results.
3. Controls should be timely so that corrective actions can be taken quickly.
4. Long-term and short-term controls should be used so that a balanced approach can be
adopted.
 5. Controls should aim at pinpointing exceptions as nitpicking does not result in
effective evaluation. The ’80:20’ where 20 percent of the activities results in 80
percent of achievements, needs to be emphasized.
6. Reward of meeting or exceeding standards should be emphasized so that managers
are motivated to perform.
7. Unnecessary emphasis on penalties tend to pressurize the mangers to rely on
efficiency rather than effectiveness.
10. Discuss the criteria for evaluating strategies.
1. CONSISTENCY: strategy must not present mutually inconsistent goals and policies.
2. CONSONANCE: the strategy must represent an adaptive response to the external
environment and to the critical changes occurring within it.
3. ADVANTAGE: a strategy must provide for the creation and/or maintenance of
competitive advantage in a selected area of the activity.
4. FEASIBILITY: a strategy must neither overtax available resources nor create
unsolvable sub-problems. The final broad test of Strategy is its feasibility, that is, can
the strategy be attempted within the physical, human and financial resources of the
enterprise.

CASE QUESTIONS

1. What are the various strategies introduced by Wal Mart.

2. Compare Wal Mart with another Big Retail Business in the Philippines. What are the
similarities/differences? What can be recommended to make the identified retail business
in the Philippines, more profitable?
3. Identify another retail business in the Philippines classified under Small-Medium Sized
Company. Write an essay, how the said organization can further improve its operation
based on the performance of Wal Mart.