Mckinsey's 7s framework

Effective implementation of strategy should be supported by 7s.They all should work together.They are :

1. Strategy :Set of decisions and actions aimed at gaining a sustainable competitive advantage.They are based on anticipation of changes in external environment.
2. Structure :Who reports to whom and how tasks are differentiated and integrated.It defines the focus of the company product or customer.
3. Systems :The flow of activities in operations including core processes and support systems.It includes information systems.
4. Style :How managers act developed and their basic values shaped.It refers to human resources systems.
5. Shared values:Commonly held beliefs and assumptions that shape corporate culture.It refers to human resources system.This is the core of strategy.
   
6. Skills :Dominate capabilities and competencies of an organization.They provide competitive advantage.
   

Concept of strategy implementation

Strategy is a road map for future direction and scope.Implementation is translating strategy into action.Strategy formulation is followed by implementation .Implementation is a managerial job.a strategy becomes meaningful when it is implemented and working in practice.Objectives can be achieved only when strategic are implemented:

• According to Steiner and Miner:Implementation of strategy is concerned with the design and management of systems to achieve the best integration of people,structure,processes and resources.
• According to Wheelen and Hunger:Strategy implementation is the process by which strategies and policies are put action through the development of programs,budgets and procedure.
• According to Thompson and Strickland:Implementing strategy entails converting the organization's strategic plan into action and then into result.

The characteristics of strategy implementation are :

• Implementation is putting strategy into action.
• Implementation is an operational process.It operational strategies.
• Implementation is a managerial job.It requires managerial skills and leadership.
• Implementation requires coordination among all business units and functions.
• Implementation involves strategic control.
• Implementation involves management of change.
  

Formulate your individual strategic

Each person should plan for the future.Each person faces opportunities and threats and has strengths and weakness.You are about to graduate with a BBA degree.Formulating strategies is important for your future.
Instructions

1. Construct a SWOT matrix for you.List five points for each areas of opportunities,threats,strengths and weakness.External opportunities may be an offer of admission with scholarship by an American University.An internal weakness may be low grade point average.
2. Identify external opportunities of advantage and internal strengths that provide you strategic advantage.
3. Match opportunities with strengths to formulate strategies for road map of your future direction and scope.
4. Present your finding to the classes.Every individual is unique.There is no right answer.
   

BCG matrix

It was developed by Boston consulting group.It uses relationship between market share and market growth.Market share is the share in relation to the largest competitors.Market growth is the annual market growth rate.They both affect cash flow.
BCG matrix is divided into four cells.

• A star is a business unit which has a high market share and high market growth rate.Large amount of spending is needed to protect market share.It achieves cost reduction overtime.
• A question is a business unit with high market growth rate but low market share.Heavy spending is needed to increase market share.But it is not achieving cost reduction.It has uncertain future.
• A cash cow is a business unit with high market share but low market growth rate.Heavy investment is not needed.It generates high cash flow.It has low costs relative to competitors.
• A dog has low market share and low growth rate.It drains cash to survive.Its future prospect is bleak.

Matrix of BCG matrix :

• It is important for a business unit seeking to dominate market.
• It provides a balanced mix in portfolio.
• It focuses on cost reduction and planing of cash flow.

Limitations of BCG matrix :

• The matrix is applicable only to strategic business units.
• Market growth rate and market share may not be the sole determinants of profitability.
• It gives induce focus to cash at the cost of innovation.
• It is not easy to liquidate dogs due to political and market reasons.
  

Feasibility analysis

Feasibility is concerned with availability of resources and competencies to driver a strategic option.It determines an option's implement ability and workability in practice.It assesses the organization's capability to make the strategic option succeed.
The approaches available for feasibility analysis are:

1. Fund flow analysis :It assesses financial feasibility.It forecasts the funds required and the likely sources of those funds for a strategic option.The timing of new funding requirements are also identified.Fund flows are inflows and outflows of cash and cash equivalent.Operating activities are the principal cash inflow activities.Fixed assets,working are,tax and dividends are the principal cash outflow activities.
2. Break even analysis :It studies cost-volume profit relationship to assesses financial feasibility.This identifies break even point where revenue equals cost.Costs are classified into fixed and variable.Variable costs directly very with production levels.Fixed costs remain fixed.Profit is possible when sales exceed the break even point.Break even analysis helps to assess whether the strategic option is feasible in meaning profit target.It also provides as assessment of risk of strategic options having different cost structure.
3. Resources development analysis :It identifies needs for resources and competencies for a specifics strategic option.It is used to judge.

• Sufficiency of current resources and competencies to pursue a strategic option.This is necessary to stay in business.
• Need for unique resources and competencies to sustain strategic advantage.This is necessary to complete successfully.

4.Staying in business :The questions for analysis are :

• Do we lack any necessary resources.
• Are we performance below threshold on any activity.

Stakeholder reactions

Stakeholder are outside organizations,groups or individuals who have a stake in the outcomes of the organization.They depend on the organization to fulfill their objectives.The organization also depends on them to fulfill its objectives.They can shareholders,supplies,customers,competitors,government,labour unions,financial institution and presser groups.They provide political dimension to the organization's acceptability of a strategic option.
The acceptability of a strategic option depends on:

• Understanding the likely reaction of stakeholders.
• Ability to manage stakeholder reactions.

The approaches for analyzing stakeholder reaction can be :

• Stakeholder mapping :The power matrix is used to map stakeholders.Level of interest is the degree of interest in strategic option.Power ability to influence a strategic option.The acceptability of strategic options to key players is important for strategic choice.
• Game theory :It is concerned with anticipating how competitor reaction to various strategic option ti assess acceptability of strategic option.

The organization anticipates the reaction of competitors in game theory.This theory assumes :

• The competitors will behave rationally to win for their own benefit.
• The competitors is in an interdependent relationship with other competitors.
  

Analyzing risk

It involves probability estimates about robustness of a strategic option.The level of risk is important for acceptability of a strategic option.New product development carries high level of risk.
The approaches for analyzing risk are :

• Projection of financial ratios :It project s changes n key financial ratio resulting from a strategic option.Such changes indicate level of risk.The ratios can be related to capital structure and liquidity.
• Sensitivity analysis :It is "what if ?" analysis.It questions and challenges the underlying assumptions of a particular strategic option.It tests sensitivity of performance outcomes to each of these assumptions.For example,key assumption may be 10% growth in market demand.
• Simulation modeling :Simulation is abstraction of reality.It is used to analyze a strategic option when several uncertain variables affect its outcomes.Computers are used to simulated outcomes over time by changing certain variable for a strategic option.
• Heuristic models :Heuristic are rules of thumbs.They are based on managerial memory and judgement.Risk assessment of strategic options is based on past experience,memory,institution,hunch,and abstracter reasoning.These models do not considered logical facts.They are judgemental shortcuts.
• Representativeness :The likelihood of future occurrence is assessed by matching it with a preexisting category.
• Decision matrices :They are rectangular array of numbers arranged in rows and columns.They are to assess the level of risk of different strategic option.Low risk strategic options are identified.