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Introduction to Strategy

Strategy comes from ancient Greek word meaning The Art of Leading an Army.
The Art of Generalship.

The Concept of strategy applied to business emerged after the WWII
The methodology was adapted first to industries in the US.

The publication of „Theory of Games and Economic Behavior‟ by Neuman and Morgan Stren acted as a bridge to Business Strategy.

They formulated the method of resolving conflicts in Politics, War and Business by interpreting strategy in two ways.
- Pure Strategy: series of moves by a business in a specific area e. g. Product Development
- Grand Strategy: A combination of Pure Strategies a business should pursue according to a situation.

In business today, strategy traditionally answers the question:
„How can we compete in the market and maintain an advantage‟

The concept assumes Strategy as a Zero Sum Game.
That is the cake is only so big, so that there will be winners and losers.

However the markets are fast evolving due to Globalization, Technology, IT, Dismantling of Government Controls and Media and
several other factors. As a result of which, business have to Manage Change and exploit opportunities.

Thus the strategy also needs to answer the question: „How can we add value to a customer in a sustained way?‟

Today business strategy needs to be linked to
- Systems including IT strategy
- Structure- HR Strategy
- and of course Finance strategy
A successful business strategy will need to ensure that it has fast efficient processes, systems, in a culture that supports overall

Concept of Strategy

A strategy is a fundamental pattern of present and planned objectives, resource deployment and interactions of an organization with
markets, competitors and other environmental factors

A good strategy should specify:
1. What is to be accomplished?
2. Where? Industries, products, markets it focus
3. How? Which resources, activities will be allocated to each product market to meet environmental opportunities and threats and to
gain competitive advantage

Components of Strategy:
There are five components or sets of issues within a well developed strategy
1. Scope: The number and types of industries, product lines and market segments it plans to enter
2. Goals and objectives: Desired levels of accomplishments- Volume growth, profits ROI over specific time period
3. Resource deployment- human and financial across product- markets, functional departments, management teams
4. Identification of sustainable competitive advantage
The organization needs to examine
- Market opportunities in each business product-market
- Core competencies or strengths relative to its competitors
5. Synergy: When a firm‟s business, product market, resource deployment reinforce one another
Synergy enables the total performance of the related businesses to be greater than it would be otherwise

The Hierarchy of strategies:
Most organizations pursue a hierarchy of inter related strategies- each formulated at different levels of the firm
Three important levels are:
1. Corporate strategy
2. Business strategy
3. Functional strategies

favorable customer image competencies. mkts across components of a mktg plan- Across functions shared across functional depts. mkt Profitability across prod. Earning per share. processes or business units competencies for a specific growth profits.-mkts entry.g.g . customer satisfaction new product. cont margin ROI. expansion in unrelated (new customers for existing product elimination plan synergies relative competitors relative to competitors in its across all industries industry in which firm operates Source of synergy Shared resources Shared resources shared marketing resources. sales. ------------------------------. Corporate dev. -----------------------------. R&D. width. Vertical integration products or new products Acquisition. depth shall we be in? Branding policies within this business or ind. mkt. or activities competencies across or functional competencies across product-market entries businesses within the firm across products-markets within an industry . HR. share. cash flow Strengthen basis of competitive advantage Allocation of Resources Across businesses among product.or functional e. product-mkt by multipal businesses within the business unit entry e. technologies./business goals Revenue growth Objectives aggregated objectives of specific product. Key Components of Corporate. Strategy Prod-mkt dev plan Conglomerate diversification concentric. elements of maktg mix. disinvestments for existing customers) policies Goals & Objectives Over all across business Depends on Corp goals depends on corp. ROI. strategies Business Dev. ------------------------------------- Scope Corporate Domain. MIS Source Of Competitive Primarily through superior Primarily through through effective product positioning Advantage corporate Product line.g. Business and Marketing Strategies Strategy Component Corporate Strategy Business Strategy Marketing strategy ---------------------------------. R&D competitive strategy superiority of a component of mktg mix relative to competitors Better org. diversification Line extension plan e. sales growth. Business Domain- “Which business shall Target market def we be in?” “Which product.

vision and values. Consider each of the issues. and making decisions on a day-to-day basis to deal with changing circumstances and the challenges of the business environment. strength of finances. 6..g. Session 2 STRATEGY FORMULATION Mission Objectives Internal Resource Analysis Environmental Analysis Corporate Social Management Responsibility Values STRATEGY CHOICE Generic Corporate Strategy Generic Business Strategy STRATEGY IMPLEMENTATION Culture Structure Leadership Reward Functional Policies System STRATEGY EVALUATION AND CONTROL Feedback THE STRATEGIC MANAGEMENT MODEL Strategic Management is a continuous activity of setting and maintaining the strategic direction of the organization and its business. 2. etc. e. patents and intellectual rights. 5.g.” Attend to the important issues. 7. Prepare a Vision Statement: "What do we hope for our organization and customers?" 3. Prepare Value Statement: The value statement depicts the priorities in how the organization carries out activities with stakeholders. expertise of employees. A step by step description of the tasks of Strategic Management are given below. technology. and the trends effecting the organization. Conduct an External Analysis: Look at trends effecting the organization. Identify Strategic Issues: Identify the major immediate and near-term issues that the organization must address. Establish Strategic Objectives: Design objectives that are specific. e. reputation of the organization. and the stakeholders‟ interests. Conduct an Internal Analysis: Strengths and weaknesses. . 1. 4. The key issues should come from the internal and external analyses. demography. The objectives should be closely aligned to the mission. facilities. Establish Strategies to Reach Objectives: Define the general approaches needed to reach the objectives. Prepare Mission Statement: "Why does the organization exist?" The mission statement provides continued direction and focus to the firm. acceptable to the people. competition. economy. 8. Ask whether it‟s “important” or “urgent. goodwill. political. measurable..

globalization. Driving Forces. technology. 4. joint ventures opportunities -Suppliers drying up -Availability of emerging technologies Framework for Industry and Competition Analysis 1. innovations.commerce. when and by whom. Strategic Objectives and Performance Objectives: Identify the performance objectives of the management staff. competitive environment to change e. 10. moderate or weak force and why)  Power of suppliers (Strong. JV’s access to technologies -Membership of regional blocks Potential opportunities: Threats: -Serving new customer groups -Entry of new powerful competitors -Expanding new markets -Loss of sale to substitute products -Existing technologies to enter new product lines -Competition from startups -Using e. Dominant Economic characteristics of the Industry (see attachment I) 2. Create an Action Plan: Identify objectives that must be achieved while implementing the strategy. 12. govt. what is causing industry. competencies -No clear-cut strategies -Financial resource -Weak balance sheet -Brand power -Higher costs -Economies of scale -Lacking key skills -Cost advantage -Lower profitability because---- -Superior technology -Too narrow product range -Strong A&SP -Weak brand reputation -Innovative skills -Weak dealer network -Processes -Underutilized capacity -E-commerce technologies -Low on product quality. R&D.9. Industry Key Success Factors  Factors that make the industry attractive  Factors that make the industry unattractive  Special industry issues problems . 11. Specify How Plan Will Be Communicated: The plan should be known to everyone in the organization.g. Session 3: SWOT ANALYSIS . 13. moderate or weak force and why)  Power of customers ( Strong. assessment of entry barriers (Strong. lifestyle changes. Internet. skills. Decide how we can make this possible. (See Attachment II)  Strategic Approaches and moves of key competitors  Whom to watch and why 6. Implementation of Plan: To monitor and evaluate the status of implementation design reporting and control systems to identify current issues and any additional resources needed to implement the plan.A FRAMEWORK Environmental Analysis Strengths: Weaknesses: -Powerful strategies. tech know-how -Superior customer service -Not attracting new customers -Wide market coverage -Alliances. moderate or weak force and why) 3. Competition Analysis  Threat of potential entry. Competitive position of major companies or strategic group’s understanding helps better early moves 5. moderate or weak force)  Competition from substitutes (Strong. Decide which board committees will be addressing which strategic objectives. 14. entry or exit of a major firm. Develop Staffing Plan: Reference each of the strategies to reach the objectives and consider what kind of capabilities are needed to implement the strategies. Competitor Analysis. Develop an Operating Budget for Each Year in the Plan: The entire time span the plan should be covered by the budgeting.commerce to cut costs -Intensifying rivalry of competition -Technological changing -Vertical integration -Innovation by rivals -Falling trade barriers in attractive markets -Government policies -Chances to improve market shares -Adversely changing foreign exchange rates -Sharply rising demand -Changing customer needs -Acquisition opportunities of rival firms -Demographic changes -Alliances. e. policy.

. dominated by few rivals .Whether industry activities are characterized strong learning and experience effects such that unit costs decline as cumulative output grows. concentrated in clusters.Whether high level of capacity utilization are crucial to achieving low cost production efficiency .Market growth rate and position in Industry Life Cycle .Dominant Economic Features The factors to consider in profiling an industries Economic Features is fairly standard This is where analysis of industry and competition begins.Ease of entry and exit .Market size . The task of analyzing a company’s external situation cannot be reduced to a mechanical exercise in which facts and data are put in and definitive conclusions pour out.Extent to which rivals can realize economies of scale in purchasing.Capital requirements . Industry Analysis .Number of rivals and their relative sizes.Number of buyers and their relative sizes . fragmented. transportation. trade terms . marketing or advertising .Distribution channels used.scope of competitive rivalry .Industry profitability A industry’s economic analysis is important for its implication for strategy formulation Session 4: Porter 5 force .Pace of technological changes in production process. innovation and new product introduction .Extent to which rivals have backward or forward integration . Strategic analysis always leaves room for differences of opinion about all factors add up and what future industry and competitive situation will be. type and extent. Profile outlook (favorable/ unfavorable) Keep in mind the following while doing industry and competitive analysis. Key features are: . manufacturing.Extent to which products and services of rival firms are differentiated .

know-how and resources rather than a discrete skill or a resource Competitive Capability: A company’s capability to become a meaning competitive capability when customer considers it valuable and beneficial.g the value of Kodak’s resource in film and film processing is rapidly being undercut by digital cameras  Competitive superiority of resource e.Expertise in building networks and systems that enable e. e.Speed and agility in responding to new market trends .g Coca cola’s marketing skills are presumably better than Pepsi cola’ Mercedes Benz’s brand name is more powerful than BMW Can a resource be trumped by different resources/ capabilities of rivals’ . the sustainable competitive advantage  Is the resource hard to copy? More difficult and more expensive it is to imitate. A core competency becomes a basis for competitive advantage only when it is a distinct competency. A core competency can relate to several aspects of its business. A distinctive competency become empowers a company to build competitive advantage Determining the Competitive Value of a company resource Differences in company resources account for why some companies are more profitable and more competitively successful than others. It is a competitively superior company resource. When it helps a company to differentiate from competition Core Competency: a valuable company resource is something a company does something better relative to other internal activities. . greater its value. location and protection  The life of the resource.commerce . and in its intellectual capital and not in its assets and balance sheet Distinctive competency: A distinctive competency is something a company does better than competition.Manufacturing skills in high quality products .Customer service.  The resource uniqueness.g. greater is the potential competitive value. e. creating and operating systems for filling customer orders accurately and swiftly A company may have more than one core competency but usually no more than 2 or 3 A core competency gives a company Competitive Capability and thus qualifies as a genuine its strength and resource A company’s core competency lies in its people. the longer it lasts. Session 5: Identifying company competencies and competitive capability Competency: A company’s competency is the product of leaning and experience and represents proficiency in performance of an internal activity. Skills in working with customers on new applications and product use Expertise in Just-in-time inventory management Expertise in creating an effective advertising campaign Company’s competencies are normally a bundle of skills.Integrate multiple technologies to create family of new products . Examples: Expertise in a specific technology.

Objectives and Strategies Weapons that rivals use in their efforts to out compete one another Competitive Strategic Market share Competitive Strategic Competitive Scope Intent Objectives position Posture Strategy ---------------.Well entrenched .Expansion through .Hold on to .Getting stronger .Global . Advertising is generally heavy.Overtake a acquisition position bases on particular rival .Conservative follower .Be dominant . try it and buy it At this. products are simple.Mostly offensive -Striving for leader via acquisition and on the move leadership for low cost internal growth .--------------------. ------------------------ .Establishing share .Aggressive expansion .Give up share for -Image short term profit .Mostly defensive .Focusing on market niche . growth.Try to move from .Quality. ---------------------.Service .Losing ground . ---------------------.Be among top 5 . know about your product.Maintain position present share -Technology -Range . stage generally. .Stuck in middle -Aggressive risk taker organic growth via .Expansion weaker to stronger differentiation .users Reduce price in real terms Offer value for money to attract price sensitive buyers through cost reduction programs and special value options Develop new segments Improve/ re-launch product Later perhaps increase prices as product is refocused and repositioned on narrower segments Maximise exposure in Make additions to product Change focus of advertising distribution channels line with emphasis on reminder function Improve quality Motivate channels to add new features maximize volumes Rationalize range and reduce variety Focus advertising Focus advertising on on developing awareness new features and and encouraging trial brand loyalty . distribution limited and prices high.Just survive .Overtake leader internal growth . ------------------------------- Convert non.National .Maximizing growth opportunities . profitability and cash flow It may also involve rationalization and product improvement exercises At the Product Category Level: Stages in PLC has a major bearing on how much effort or resource we are prepared to or is sensible to commit Life Cycle Marketing Actions: New Products marketing action would be geared to: .Focusing on top 10 . -----------------------.--------------. Growth Stage Early maturity Late maturity/Decline Convert non users Maximise share Improve productivity ------------------------.Move into .Regional .Local . Profiling competitors’ .Value Product Life-Cycle Perspectives Key Aspects: At the product level: We need to focus on different issues and priorities at different times in the PLC We cope with change factors along the way At the Range Level: This involves having products at different cycle stages to ensure overall balance in volume.Achieving volume Key task is to make early adopters be aware of your product.

Strategic Positioning Specifies how a business brand or a product should be [perceived by the customer relative to competition This is strategic and is a long-term effort to give advantage over competition Strategic Position:  Differentiates from competition  Resonates with customers  Drives strategic initiatives  Expresses the value/ culture of an organization  Is the face of business strategy Two case studies 1. self-expressive benefit –Gap. Target Segment focus: Pepsi. Product Attributes.Ferrari cars 5.Hyundai. Narrow product focus. Star One 6. K-Mart 3.Visa. Emotional. Close-up 8. Organizational intangibles. Visa international acceptance The Process of Positioning Segmentation Co Competitor analysis Choice Choice of Analyzing Customer their offering targets Customer Developing an insights edge Matching Why yours is offering to needs better choice Position your offer . Virgin Atlantic Airlines 2. The quality with a defined product space. Avis 10. IBM Strategic positioning options: 1. 9.Mercedes car 2. Competition position. West-side stores.Maruti service stations. Amul. The value option. Coca-Cola. Levi‟s. The pioneer-HP< IBM 4. Product category: Dove 7.Fair & Lovely.

service efficiency. order.image created by a firm‟s identity programs. Dress. growth. stable environment. The organizations has flat.Organization‟s core activity . project teams or taskforce based structures Some other types of cultures: Entrepreneurial Culture: A mix of power and achievement culture defined by young organizations those are lively and exciting places to work. The term contains the idea of innovative imaginative thinking challenging conventional thinking and points the way to new opportunities . conformity. law firms. openness. impressions created by corporate office Culture change is of vital importance in any program of transformation of an organization The roots of corporate culture are many and complex. respect for authority. accountancy and consultancy firms are some of the examples The problems arise when the firms become large. sound judgment Integrity. systems and structure are designed to support the work of key individual wealth earners. seniority. flexibility. . autonomy. Values: What members of an organization collectively see as important and this tends to guide their behavior. Mind-set or paradigm: Consists of shared set of assumptions. R&D organizations. values and standards. paternalist attitudes. is that it tends to lose its most able people who become frustrated at their lack of involvement in key decision areas. Partnership firms. teamwork. This may lead to anarchy The Task Culture: The power is widely distributed and is based upon competency rather than charisma of holding an office The values would include. characteristic behavior & symbols of various kinds. personal growth and development It is an adaptive culture responsive to fresh ideas and suits highly educated. ethical members and the rest characterized by traditional practices. trust.„Chinese products are of poor quality‟ Characteristic behavior: Key aspects include.large bureaucratic organizations Public-sector organizations The power culture: Dominated by one individual at the center who controls all resources and takes virtually all decisions Such organizations achieve outstanding performance if the person has a strong sense of direction. E. loyalty product quality. tend to cultivate family atmosphere.Organization‟s history . job security. Cultural Change: See change management Vision: Is a description of a desired future state of the organization. Order.achievement. risk taking. status. The Person Culture: An individual is paramount. Session 6: Culture Culture: Is the synthesis of shared values. openness. conformity. Family Business Culture: Common element as power culture.set.Organization‟s systems and procedures Four culture types: The role culture: Rationality.g. intelligence workforce and is found in Service organizations. relationships and interactions Symbols: Symbols of corporate culture. The org. whereas Mission is about ultimate purpose. management style.The geographical origin of the organization . Two subcultures. can win loyalty through setting examples A weakness of power culture org. a common mind. integrity.Source of senior managers .

and seeks their comments Whatever the process. Or the chief takes the lead. at several levels where possible alternate futures are discussed . Some steps that may be needed are: . Values: The underlying beliefs which give a moral force to the other aspects of the mission Ashridge Mission Model: A strong sense of mission exists when the four elements of mission reinforce each other Purpose Mission Strategy Values Behavior Standards Successful mission depends upon how far the individual‟s personal values and beliefs match with those of the organization In order to promote a strong sense of mission careful recruitment is very important . JRD Tata Developing a Vision is a top management function 1.Top managements go through a consultative process inviting ideas or suggestions from the members of an organization before developing a Vision Statement.Virgin Atlantic.Create arenas or for a within the org.Development of vision involves thinking freely without constraints of the past or cultural limitations It is about dreaming ahead. Some companies define their mission in terms of shareholder value 2. the vision is owned and shared.The vision must be „launched/ presented‟ to the members . Strategy: Defines markets in which the business will operate & how it will build a competitive advantage.Meet members of the known around the world for its unmatched level of excellence.Members must be given some idea of turn the vision into reality Jack Welch Statement of Vision for GE A decade from now I would like GE to be perceived as a unique. an oil company may define its business as Energy Business The mission should ideally appeal to both minds (strategy) and hearts (cultural values) of the organization‟s members The definition of mission involves four elements: 1. Behavior Standards: The standards of performance and the patterns of behavior that will be required and making sure that they will be achieved in practice. It should be believable . high spirited entrepreneurial enterprise . face to face and expose them to new thinking . Cipla might define as „To offer life saving drugs the world over at affordable prices. develops a Vision and seeks to share it with others. 4. 3. values or even ethics First approach defines a company's commercial rationale: What business we are in? What business should we be in X years? Companies should not define their businesses two narrowly. Narayan Murty-Infosys. It is however difficult to develop a radically new mind set or paradigm Examples of visionaries who built entire organizations on the basis of a vision are Ray Kroc – MacDonalds Richard Branson.g.The vision must be exciting and inspiring. I would want GE to be the most profitable highly diversified company on the earth with world class quality leadership in every one of its product lines Creating a sense of mission: Two schools of thought: 1. Mission as a statement of business strategy 2. E. Purpose What is the company for? e. Mission as a philosophy.

banking. insurance. Strategy: We are unique in our product and service breadth and our technological depth.have competitive advantage on sustainable basis Session 13: Change management Change Management: Creating a learning organisation Most industries and their competitive environments are rapidly changing. new perspectives and competencies . organizations cannot rely on existing source of competitive advantage. software. health-care. business excellence.acting ethically & continuously striving for excellence in our performance. e. This change is not confined to high-tech or knowledge intensive industries. A manager tends to get emotionally attached and promote current strategies. but learn to create new one as their environments change. Continuous rotation overcomes this tendency and helps the manage to learn new functional skills. biotech but also to once stable industries e. consistently emphasizing on innovation. new markets and new ways of managing. We will use these strengths to be always ahead of our competitors.g. Building and sustaining competitive advantage amidst rapid change requires the organizations to learn new technologies. retailing. operational excellence and highest quality in everything we do Principles we are committed to are Customers: Understanding and meeting their needs Employees: Respecting them as individuals and providing opportunities for their personal growth Stockholders: Achieving long-term growth & the best return for our investors Through teamwork. quality our customers require.People don‟t change values when they join an organization. Management practices of learning organizations: Continued learning Frequent rotation of mgrs Decentralization Learning Openness & diversity of ideas Organization Multiple experiments High tolerance to failure Continued rotation exposes a manager to new ideas and insights. In future the only source of sustainable competitive advantage will be to learn new skills and this can be traumatic.g. Managers and employees at all levels resist change. A pharma company‟s mission statement: We will be the leading healthcare company by providing the best products and services for our customers around the world. food-processing… When the change come.

Incompatibility of change with existing values . Assigning responsibility for implementation 6. Each business unit was finally attuned to competing in its own environment with competition and technology fairly predictable and stable. Strengthening consensus for a preferred approach 5. suggestions and criticisms is rare Successful organizations listen to new ideas but encourage diversity of viewpoint and perspectives thought the firm Excessive control makes the manager myopic. profitable. The steps Mr. marketing approaches and management methods. Make GE a „boundryless‟ organization meaning people in one department/ division talk with people in others and at all levels. Fear of cannibalization . Common reasons for organizational resistance to change: .Continued training of personnel helps to overcome resistance to change as it removes the fear of becoming obsolete and thus loose promotional opportunities/ career advancement.the main obstacles to change. Building organizational awareness for this need 3. Welsh took the following steps: 1. Successful companies have long commitment to training as it benefits both the individual and the organization Decentralization of decision making to some degree is important. Its home appliances. front. We can broadly classify organizations into three types. Lack of interest in opportunity for change .line managers are the first to spot new opportunities or problem areas Encouragement of multiple or parallel experiments is better bec of high failure rates of new initiatives It also helps in a superior idea getting rejected. Allocating resources to sustain the effort Case: Transformation of GE Before Welch took-over GE was profitable and grew slowly. High tolerance for failures: Many innovative companies tolerate failure and reward achievements Openness & diversity of viewpoints: True openness by managers to new ideas. The figure below shows implementation of various changes that has changed GE to a learning organization. Parallel experimentation helps choose better technologies. aircraft engines. to share ideas. Lack of awareness for need to change . product standards. Fear of personal loss Change Steps: 1. Ideas can also come from customers. This also encourages a healthy internal competition. It took two decades to implement many new management practices that make change an acceptable part of working at GE. Sensing the need for strategic change 2. Lower level mangers. Learning organizations that consider change as an opportunity & renewal Static Organizations that focus on doing better what they are doing. Stimulating debate for alternative solutions 4. resources and insights. vendors even competitors . lighting plastics. They take time but change. Most organizations fall in this category. They do not promote new learning In between organizations that change after overcoming varying degrees of resistance. consumer electronics & motor businesses were mature. The process of transformation from a static to a learning organization that is agile and lean was not easy.

1980 1986 1988-1992 1994 GE vulnerable to change Reduce peripheral Form strategic alliances Reduce SBU walls businesses even more Slow growth Sell no performing Work out Invest in Asia/Europe assets Average earnings Breakdown strong Team with suppliers/ Foster continual training SBU lines Customers & development Big Bureaucracy Acquire strong perform share knowledge & skills Encourage best practices ers elsewhere across SBU‟s and benchmarking High divisional walls Delayer gement Promote risk takers Promote common vision management hierarchies Lots of protected turf Adopt new reward Invest in streamlined Hire people with systems product development time entrepreneuri tendencies al Resistance to change Six sigma Welsh believed that a boundary-less organization would change faster because it will learn faster 2.e. 2 in its industry or were sold away. unleashing in greater improvement in quality and productivity 6.Managerial rotation and training . GE became a thin organization in many units 3. Welsh dissolved many layers of management. Expand services businesses to expand to improve profitability of its major businesses Some major service areas are Aircraft Engines. Several businesses were sold away that were profitable 4. Acquired several new companies. GE became aggressive to expand into new markets and into new service-based businesses i. Medical Systems. GE introduced six sigma to revamp all its operations. g. Each business unit was expected to become no 1 or no. Lighting Plastics. . Over time he introduced several new initiatives . GE trainees graduated to „black belt‟ in process improvement 7. Welsh of course resistance from lower level managers who feared erosion of power base. Welsh acquired 100‟s of small companies to bolster GE‟s growth rate Mr. They adopted change as a way of life. They also moved closer to customers by setting up service operations on customer sites e. Mr. core processes to promote those practices that best support and improve quality objectives of six sigma to identify and eliminate all sources of waste. on-site repairs. It lead to layoffs. Power Systems. Promote openness and idea exchange at all levels . Corporate Transformations in the 1990s: Making GE Boundryless. and transportation systems. Some veterans left others were trained. investing in Asia 8.People with the most workable suggestions were given the authority to implement 5.