Strategic Management: LO3 Be Able To Evaluate Various Tools and Approaches To A Strategy Implementation Plan

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STRATEGIC MANAGEMENT
LO3 Be able to evaluate various tools and
approaches to a strategy implementation plan.
©2020 UK Versity Online Limited

Indicative Content
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¨ Developing appropriate vision, mission and strategic goals for an organisation:

situational analysis; setting vision and mission targets; understanding
organisational values; business environment outlining; conceptualising
stakeholders.
¨ Proposing a suitable structure: stakeholders: identification, role analysis;
comprehensive target setting for a business organisation; motivation to
participate in strategic planning; strategy formulation; strategy
implementation; monitoring and evaluation of stakeholders’ performance.
¨ Developing an agreed strategy plan that addresses all resource implications
due to new action plan: organisational culture analysis; understanding basic
values of a business organisation e.g. cultural, ethical, social, economic,
business; SMART (specific, measurable, achievable, realistic, time-based)
target selection; resource audit; risk analysis.

Key Terminology
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¨ What is vision statement?

¤ A vision statement describes what a company desires to achieve in the
long-run, generally in a time frame of five to ten years, or sometimes
even longer.
¤ Examples LinkedIn: “Create economic opportunity for every member of
the global workforce.”
¤ IKEA: “Our vision is to create a better everyday life for many people.”
¤ Zoom: “Video communications empowering people to accomplish more.”
¤ Tesla: “To create the most compelling car company of the 21st century
by driving the world’s transition to electric vehicles.”
¤ Google: “To provide access to the world’s information in one click.”

What is a mission statement?
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¤ a formal summary of the aims and values of a company, organization, or

individual. mission statement describes the who, what and why of your
business
¤ A mission statement is a short statement of why an organization exists, what
its overall goal is, identifying the goal of its operations: what kind of
product or service it provides, its primary customers or market, and its
geographical region of operation
¤ Examples - Tesla. “To accelerate the world's transition to sustainable
energy.”
¤ LinkedIn. “To connect the world's professionals to make them more
productive and successful
¤ PayPal - “To build the web’s most convenient, secure, cost-effective payment
solution.”

What is the difference between vision and
mission statements?
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¨ A Vision ¨ A Mission
Statement describes the Statement defines the
desired future company's business, its
position of the company. objectives and its approach
to reach those objectives
Elements of Mission and Vision Statements are often combined to provide

a statement of the company's purposes, goals and values.
What is a stakeholder?
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¨ A stakeholder is a party that has an

interest in a company and can either affect
or be affected by the business. The
primary stakeholders in a typical
corporation are its investors, employees,
customers, and suppliers.
¨ The easy way to remember
these four categories of stakeholders is by
the acronym UPIG: users, providers,
influencers, governance
¨ How to prioritize your stakeholders – using
Mendelow’s matrix ààààààààà
Adapted from Mendelow, A.L. (1981)

Mendelow's matrix
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¨ A key aspect of formulating corporate strategy is understanding key stakeholders.

¨ Mendelow (1991) suggests we analyse our stakeholder groups based on Power (the
ability to influence our organisation strategy or project resources) and Interest (how
interested they are in the organisation or project succeeding).
¨ The objectives of an organisation will be governed by its key stakeholders. These key
stakeholders be determined using stakeholder mapping. Mendelow's matrix is a
popular method for performing stakeholder mapping.
¨ Stakeholder mapping - Stakeholder mapping can help deal with stakeholders'
conflicting demands. It identifies stakeholder expectations and power and helps in
establishing political priorities. The process involves making decisions on the following
two issues.
¤ How interested the stakeholder is to impress their expectations on the
organisation's choice of strategies, i.e. how likely is the stakeholder to exercise
power?
¤ To what extent the stakeholder has power to impose its wants? ©2020 UK Versity Online Limited
Stakeholder Analysis Video
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The position that you allocate to a stakeholder on

the grid shows you the actions you need to take with
them:
• High power, highly interested people (Manage
Closely): you must fully engage these people,
and make the greatest efforts to satisfy them.
• High power, less interested people (Keep
Satisfied): put enough work in with these people
to keep them satisfied, but not so much that they
become bored with your message.
• Low power, highly interested people (Keep
Informed): adequately inform these people, and
talk to them to ensure that no major issues are
arising. People in this category can often be
very helpful with the detail of your project.
• Low power, less interested people (Monitor):
again, monitor these people, but don’t bore them
with excessive communication.

What is situational analysis in strategic
management?
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¨ A situation analysis is a detailed examination of a company's market presence based on internal

and external factors.
¨ “Situational analysis” helps develop a basis of understanding of the environment in which a plan is
delivered. It provides a common reference point for the planning process and prioritises actions.
¨ An analysis can forecast what results a company can expect—based on the decisions made—so it
can adjust its strategies to meet its goals.
¨ The analysis can provide an appreciation of the risks and benefits to the project and the
organisations involved from the way in which the communication process is implemented. It takes a
snapshot view of an organisation or situation and where things stand at a certain point in time. It
is sometimes accomplished by means of a SWOT analysis (Strengths, Weaknesses, Opportunities and
Threats), which examines all aspects in relation to the success
¨ The analysis will also identify where opportunities may exist to develop strategic alliances with
groups of supportive stakeholders and indicate where extra efforts can be made to develop these.
¨ The analysis can also help identify capabilities within an organisation in terms to fulfil the
requirements of the communication plan before it is developed to implement the strategy. It also
serves to highlight areas in the strategy where improvements may need to be made, to take account
of the current or developing situation

Components of a situation analysis
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¨ The company
¤ An analysis of a company’s vision, strategy, and goals—and if it’s meeting
them—is a good start. Examining how the company is performing by reviewing
sales, market share, and customer retention provides a useful snapshot that
reveals if the business is fulfilling its goals. It will also help you evaluate
competitors and market share.
¨ Product and services
¤ Analyzing current products or services, as well as future product launches, is a
vital component of a situation analysis.
¤ Market research is needed to determine how viable a new product or service
will be.
¤ A market analysis conducted with potential customers who offer feedback or
opinions about the product, service, or pricing can shed light on who the target
market is and how to improve a company’s offerings.

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¨ Distribution
¤ The market analysis uncovers the target demographic and demand for a
company’s products or services. The competitor analysis compares your
business to other similar companies
¤ The distribution portion of a situation analysis reviews how you get your
products to market and compares it to your competitors’ to determine
the best distribution channels for your business.
¨ Opportunities
¤ Unmet or underserved needs represent market opportunities. Knowing
how to capture that market share is essential to a company’s success.
¤ A strength, weakness, opportunity, threat (SWOT) analysis is a useful
tool to identify how capable your business is of capitalizing on
opportunities.
Current business environment
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¨ A situational analysis should examine the external and internal environment that
impact a business's performance. External factors include the economy, competitors,
government policies, and regulations. Company culture, employees, business
resources, and cash management are internal factors that affect a business.
¨ A PESTLE analysis examines the external situation of a company by looking at
political, economic, social, technological, legal, and environmental factors.
¤ Political factors: the impact of government policies or elections
¤ Economic factors: how fiscal trends, current import and export trade ratios, and taxes
affect a business
¤ Social factors: the effect of customer lifestyles and demographics
¤ Technological factors: how technology and innovation impact a business
¤ Legal factors: the impact of safety regulations and employment laws
¤ Environmental factors: how environmental regulations or climate change affect a company
¨ What are the 3 methods of analysing Environments?
¤ 5C’s, Porter’s 5 Forces and SWOT or TOWS
5C situation analysis
The 5Cs are company, customers, competitors, collaborators, and climate.
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¨ In a 5C analysis, the company segment
includes the company’s vision and goals, its
market position, distribution, opportunities,
and products. The customers provide key
information on current customers, the target
market, and the opportunities a company
should pursue through a marketing plan.
¨ The competitors’ section reveals a
company’s strengths and how it can
improve, based on competitors’ strengths
and weaknesses. Collaborators are the
partnerships that make products and
distribution possible. Climate includes
factors like government policy and the
economy,
¨ Performing a periodic situational analysis
can help you identify the state of your
company as it evolves so you can succeed in
the market.
Understanding the Three Categories of Risk
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• The risks that companies face fall into three

categories, each of which requires a
different risk-management approach.
• Preventable risks, arising from within an
organization, are monitored and controlled
through rules, values, and standard
compliance tools.
• In contrast, strategy risks and external risks
require distinct processes that encourage
managers to openly discuss risks and find
cost-effective ways to reduce the likelihood
of risk events or mitigate their
consequences.
https://hbr.org/2012/06/managing-risks-a-new-framework
Example of Risk management
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¨ Managers can develop a companywide risk perspective by anchoring their discussions in strategic planning,
the one integrative process that most well-run companies already have.
¨ For example, Infosys, the Indian IT services company, generates risk discussions from the Balanced
Scorecard, its management tool for strategy measurement and communication.
¤ “As we asked ourselves about what risks we should be looking at,” says M.D. Ranganath, the chief risk
officer, “we gradually zeroed in on risks to business objectives specified in our corporate scorecard.”
¤ In building its Balanced Scorecard, Infosys had identified “growing client relationships” as a key
objective and selected metrics for measuring progress, such as the number of global clients with annual
billings in excess of $50 million and the annual percentage increases in revenues from large clients.
¤ In looking at the goal and the performance metrics together, management realized that its strategy had
introduced a new risk factor: client default. When Infosys’s business was based on numerous small
clients, a single client default would not jeopardize the company’s strategy.
¤ But a default by a $50 million client would present a major setback. Infosys began to monitor the credit
default swap rate of every large client as a leading indicator of the likelihood of default.
¤ When a client’s rate increased, Infosys would accelerate collection of receivables or request progress
payments to reduce the likelihood or impact of default.

3.1 Create a relevant vision, mission and
strategic goals for an organisation.
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¨ Here you need to choose and organisation after research and

mention the
¤ Vision
¤ Mission
¤ Strategic goals of the company by referring to the annual general
report

Identify Vision/Mission/Goals
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¨ In strategy development, it is necessary to determine and understand the primary

objective and goals of the strategy.
¨ This may be as simple as informing as many stakeholders as possible, or it may
include specific goals such as reaching certain stakeholder groups, undertaking a
specific number of meetings, or even gaining support
¨ he key to developing sensible objectives is that they are SMART:
¤ Specific: The objective is clear about what you are going to do and exactly how are you going to do it.
Questions to ask include: “What am I going to do? Why is it important? Who is going to do it?”
¤ Measurable: You should be able to measure the objective (Example: X percent people contacted,
number of presentations completed).
¤ Achievable: The objective is achievable given local conditions, time period, resources allocated, etc.
¤ Realistic: The objectives can be achieved using the time and the resources available.
¤ Time-bound: The objective is clear concerning how much time it will take to achieve.

3.2 Propose a suitable structure for an
organisation that fits a strategic plan.
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¨ Here you need to take an organisation and then

¤ Describe or put the organisation structure
¤ Provide the strategic plan for the organisation
¤ Talk about how it structure fits the organisation’s strategic plan

What is resourced strategy?
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¨ The resource-based view (RBV) is a model that sees

resources as key to superior firm performance. If a
resource exhibits VRIO attributes, the resource
enables the firm to gain and sustain competitive
advantage.
¨ RBV is an approach to achieving competitive
advantage that emerged in 1980s and 1990s, after
the major works published by Wernerfelt, B. (“The
Resource-Based View of the Firm”), Prahalad and
Hamel (“The Core Competence of The Corporation”),
Barney, J. (“Firm resources and sustained competitive
advantage”) and others.
¨ The supporters of this view argue that organisations
should look inside the company to find the sources of
competitive advantage instead of looking at
competitive environment for it.
RBV Explained
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¨ According to RBV proponents, it is much more feasible to exploit external

opportunities using existing resources in a new way rather than trying to acquire
new skills for each different opportunity. In RBV model, resources are given the
major role in helping companies to achieve higher organizational performance.
There are two types of resources: tangible and intangible.
¨ Tangible assets are physical things. Land, buildings, machinery, equipment and
capital – all these assets are tangible. Physical resources can easily be bought in
the market so they confer little advantage to the companies in the long run because
rivals can soon acquire the identical assets.
¨ Intangible assets are everything else that has no physical presence but can still be
owned by the company. Brand reputation, trademarks, intellectual property are all
intangible assets. Unlike physical resources, brand reputation is built over a long
time and is something that other companies cannot buy from the market. Intangible
resources usually stay within a company and are the main source of sustainable
competitive advantage.

The two critical assumptions of RBV are that resources must
also be heterogeneous and immobile.
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¨ Heterogeneous. The first assumption is that skills, capabilities and other resources that organizations
possess differ from one company to another.
¨ If organizations would have the same amount and mix of resources, they could not employ different
strategies to outcompete each other. What one company would do, the other could simply follow and
no competitive advantage could be achieved.
¨ This is the scenario of perfect competition, yet real world markets are far from perfectly competitive
and some companies, which are exposed to the same external and competitive forces (same external
conditions), are able to implement different strategies and outperform each other. Therefore, RBV
assumes that companies achieve competitive advantage by using their different bundles of resources.
¨ The competition between Apple Inc. and Samsung Electronics is a good example of how two
companies that operate in the same industry and thus, are exposed to the same external forces, can
achieve different organizational performance due to the difference in resources.
¨ Apple competes with Samsung in tablets and smartphones markets, where Apple sells its products at
much higher prices and, as a result, reaps higher profit margins.
¨ Why Samsung does not follow the same strategy?
¤ Simply because Samsung does not have the same brand reputation or is capable to design user-friendly products like Apple does.
(heterogeneous resources)

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¨ Immobile. The second assumption of RBV is that resources are

not mobile and do not move from company to company, at
least in short-run.
¨ Due to this immobility, companies cannot replicate rivals’
resources and implement the same strategies. Intangible
resources, such as brand equity, processes, knowledge or
intellectual property are usually immobile.

VRIO framework
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• Although, having heterogeneous and

immobile resources is critical in
achieving competitive advantage, it is
not enough alone if the firm wants to
sustain it.
• Barney (1991) has identified VRIN
framework that examines if resources
are valuable, rare, costly to imitate and
non-substitutable.
• The resources and capabilities that
answer yes to all the questions are the
sustained competitive advantages.
• The framework was later improved from
VRIN to VRIO by adding the following
question: “Is a company organized to
exploit these resources?”

VRIO
Value, Rarity, Imitability and Organisaton
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¨ Question of Value. Resources are valuable if they help organizations to increase

the value offered to the customers. This is done by increasing differentiation or/and
decreasing the costs of the production. The resources that cannot meet this
condition, lead to competitive disadvantage.
¨ Question of Rarity. Resources that can only be acquired by one or few companies
are considered rare. When more than few companies have the same resource or
capability, it results in competitive parity.
¨ Question of Imitability. A company that has valuable and rare resource can
achieve at least temporary competitive advantage. However, the resource must
also be costly to imitate or to substitute for a rival, if a company wants to achieve
sustained competitive advantage.
¨ Question of Organization. The resources itself do not confer any advantage for a
company if it’s not organized to capture the value from them. Only the firm that is
capable to exploit the valuable, rare and imitable resources can achieve sustained
competitive advantage.
Views of Competitive Advantage Compared
Industrial Organisation Model Vs Resource Based View
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3.3 Create a resourced strategy
implementation plan
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¨ Here you need to take a

company and then
reference it to using
resources strategy and
cover it in the assignment
brief.
¤ Example of Google,
Facebook, LinkedIn or
Apple, Samsung, Sony

Reference
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¨ https://fitsmallbusiness.com/vision-statement-examples/
¨ https://sprigghr.com/blog/alignment-direction/the-difference-between-
mission-and-vision-statements/
¨ https://www.mindtools.com/pages/article/newPPM_07.htm#Interactive
¨ https://kfknowledgebank.kaplan.co.uk/business-strategy/stakeholder-
analysis/mendelows-matrix
¨ https://hbr.org/2012/06/managing-risks-a-new-framework
¨ Rothaermel, F. T. (2012). Strat.Mgmt.: Concepts and Cases. McGraw-
Hill/Irwin, p. 5
¨ Barney, J. B. (1991). Firm Resources and Sustained Competitive Advantage.
Journal of Management, Vol. 17, pp.99–120.

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1

©2020 UK Versity Online Limited

¨ Developing appropriate vision, mission and strategic goals for an organisation:

©2020 UK Versity Online Limited

¨ What is vision statement?

©2020 UK Versity Online Limited

¤ a formal summary of the aims and values of a company, organization, or

©2020 UK Versity Online Limited

Elements of Mission and Vision Statements are often combined to provide

¨ A stakeholder is a party that has an

©2020 UK Versity Online Limited

Adapted from Mendelow, A.L. (1981)

¨ A key aspect of formulating corporate strategy is understanding key stakeholders.

The position that you allocate to a stakeholder on

©2020 UK Versity Online Limited

¨ A situation analysis is a detailed examination of a company's market presence based on internal

©2020 UK Versity Online Limited

©2020 UK Versity Online Limited

• The risks that companies face fall into three

©2020 UK Versity Online Limited

©2020 UK Versity Online Limited

¨ Here you need to choose and organisation after research and

©2020 UK Versity Online Limited

¨ In strategy development, it is necessary to determine and understand the primary

©2020 UK Versity Online Limited

¨ Here you need to take an organisation and then

©2020 UK Versity Online Limited

¨ The resource-based view (RBV) is a model that sees

¨ According to RBV proponents, it is much more feasible to exploit external

©2020 UK Versity Online Limited

©2020 UK Versity Online Limited

¨ Immobile. The second assumption of RBV is that resources are

©2020 UK Versity Online Limited

• Although, having heterogeneous and

©2020 UK Versity Online Limited

¨ Question of Value. Resources are valuable if they help organizations to increase

©2020 UK Versity Online Limited

¨ Here you need to take a

©2020 UK Versity Online Limited

©2020 UK Versity Online Limited

©2020 UK Versity Online Limited

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