Programme MBA 3rd year (CSP)

Date
Translation by English department
Member name ASLAM MUHAMMAD AUWAL
Member number 19884MBAF

Q1: (i):

Environmental survey is one of strategic management main components which the company
performs to recognize its external and internal environment to determine strategic environmental factors
to perform strategic analysis of environment. This process is performed by collecting statistical data by
traditional or other new technological methods. Undoubtedly, strategic analysis of these factors will
determine the company strategy and its future. It is understood that environment means factors that link
external or internal environment with the company. The company internal factors may be divided into
strength factors or weakness factors, while company external factors may be divided to opportunities or
threatening. This type of analysis is called SWOT which defines information to compare between the
company resources, abilities and its competition environment. SWOT analysis is considered an easy
method to set and choose the company strategy, to analyze work required to achieve goals relying on
strength, weakness, and opportunities and threatening.
Different divisions of environment: Environment General Properties:
1- Everything outside or inside the organization borders is considered within environment domain and
frame.
2- Environment has many factors and variables either measurable or not.
3- This environment with its factors and variables affect on organization goals and level of activities'
performance and costs of such activities.
4- Management may or may not recognize such environmental changes. Management role and efficiency
are different in each management
5- Environment is considered through a perspective of restrictions or opportunities and facilities granted.
First: External Environment: External environment consists of changes (opportunities and
threatening) outside the company and are not subject to senior management monitor in short run .
External environment consists of two factors or groups:
1- Entire / General environment Includes all external powers that affect on the company decisions either
in short run or long run. These external powers include economy, technology, culture, social, political
and legislation powers.
2- Associated environment (work environment): All factors or groups of direct effect on the main
organizational processes such as shareholders, government, stake holders and commercial unions.
Second: Internal Environment: Internal environment consists of changes (strength and weakness)
inside the company itself which subject to senior management in short run. Internal environment
includes:

 Organizational structure: includes communications, authority, leadership which are described in the
structural diagram.

 Culture: includes shared beliefs and standards among the business participants.

 Resources: They include the company financial assets, human skills, managerial talents.
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 Environmental analysis: Analysis of external environment: It aims to defining opportunities and
threatening which may be faced by the company in future. It forecasts the future to define significant
dimensions of environment which include economy, population, political status, social status,
technological or scientific development and geographic status. The final purpose of this analysis is to
list the opportunities, potential threatening and volume and significance of each of them. This analysis
provides basis in strategic choice to use opportunities and avoid threatening. For Example: population
growth rate and many implications which may be opportunity. National economic output which may be
in stable growth: may be an opportunity or threatening. Political status: if there is a potential war, it may
become threatening. Technological status and geographical status represents natural resources and
searching for new natural resources.
Analysis of internal environment: Purpose of analyzing the internal environment is to evaluate the
company position to set its strengths and weaknesses, to evaluate its capabilities, financial and technical
position, type of its employees and their skills, the company network and its marketing potentialities.
Analysis of internal environment includes organizational structure, resources, and the company culture.
For example: if employees are sufficient and highly skilled, they are considered strength point.
Production: Modern devices and equipments and production are considered strength point. Financial
status: If there are debts, they are considered weakness point. Environmental entities: if used
information technology methods are modern, they are considered strength points. Then analyzing and
surveying strengths and weaknesses by analyzing the Situation as called SWOT analysis. This is a new
way of reading internal and external data of the organization to be planned for. Intense competition
between companies concerning markets, sales, production of goods, satisfying costumers, securing
recourses of basic materials; inputs of industry and business as well as trying to succeed over
competitions of the same field, all these factors drove companies to develop concepts of both strategic
administration and planning in order to obtain competitive privileges and thus control markets and
customers. Such technique sure proved to be highly efficient in field of business management,
domination of markets and achieving profit rates for business owners. As for SWOT analysis, accuracy
must be observed when collecting data either on internal or external environment, to depend on accurate
numbers, facts and statistics of the history of past and present achievements the organization, and to
avoid superficial usage of SWOT, depending only on collecting data according to working managers'
opinions that can be insufficient and useless.
Q1: (ii):
Total Quality Management: Despite the conflicting views on the history of quality and origin,
all concerned agree on the usefulness of the short and long term profitability and lives in not-for-profit
institutions, when applied as a clear corporate vision and culture supportive of this vision and
unswerving application of the essence of that vision clear quality as in the Oxford Dictionary means a
high degree of quality or value. But on total quality management TQM has had many definitions for
example, the first attempt to define the concept of TQM by BQA (quality) so you know TQM as
"administrative philosophy of enterprise realizes they both consumer needs as well as the achievement
of project objectives together" ". Either from the point of view of us the definition of TQM is as follows
(total quality management (TQM) is a philosophy and outline the principles that guide the Organization
to demonstrate and achieve continuous development and quantitative methods in addition to human
resources that improve the use of available resources as well as services so that all operations within the
organization seeks to achieve needs of current and prospective consumers). In the aftermath of World
War II both William and Joseph Goran diming their principles in the overall quality and the 14
principles of Edward Deming backbone of TQM and sponsored by the Japanese reconstruction largely
their superiority in the field of total quality. Quality concept has gained importance because of the
current challenges facing the business environment. These include the high rhythm of international
communication via the Internet and the emergence of the concepts of world trade and the global
movement of capital, knowledge and lifestyle which could we reduce him to the concept of
globalization. These variables put companies and entrepreneurs in the development of competitive
forces. That is the challenge facing organizations is how to compete and win more customers and higher
profits and ensure continuity. TQM is a management helps organizations to develop plans, methods, and
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 techniques work in place of integration so that the Organization as a whole to provide the highest
possible level of quality products and services alike. The concept of diversity can be applied to all levels
of the institutions and to all types of organizations seeking to improve their products or services. In fact
is an ongoing focus on command, activating the role of staff, improve processes, and public order
management and debriefing that support strategic decision-making. Because of this importance of
TQM, it became necessary to establish scientific criteria to benefit a greater number of institutions and
individuals. The primary goal of TQM implementation in companies is: (develop quality products and
services with lower costs and minimize wasted time and effort to improve the service provided to
customers and earn their satisfaction: The main objective of quality includes three key benefits is
important:
1. Reduce costs: the quality requires correct doing things the right way the first time and this means
reducing bad things or completed and thus reduce costs.
2. Reduce the time required to complete client assignments: the procedures developed by the Foundation
for the delivery of services to the customer focused on goals and control and measures came long and
rigid, often impacting negatively on the client.
3. Achieving quality: by developing products and services according to customer's wish, the lack of
attention to quality leads to increase the time for performance and completion of tasks and increase
surveillance thus increasing complaint the users of the services all this leads to.
- Reducing of tasks and activities required to transform inputs (raw materials) to the products or services
of value to customers.
- Following and development of tools measuring of operations performance.
- Create a culture focuses strongly on the clients.
- Improving the quality of output.
- Increase efficiency by increasing cooperation between departments and encourage teamwork.
- Improving profitability and productivity.
- Increasing the potentiality to attract clients with fewer complaints.
- Increasing targets progress percentage

Q2:
Michael Porter's analysis to the five powers is a frame to be used in analyzing an industry in
order to develop the relevant commercial business strategies and learning whether or not the
organization is advancing or retreating. Strategic consultants often use Porter's analytical frame of the
five powers when conducting a qualitative and descriptive evaluation of strategic position of companies.
However, most consultant experts consider this analytical frame as a starting point or a referential list
they can use, like all general frames since any analysis that depends entirely on this frame to the extent
of excluding and neglecting details of the special position of both company and industry is considered
an incomplete analysis. These five powers analysis is just a part of Porter's strategic models of strategic
analysis, the other parts are the value chain and general strategies
According to Porter, the analytical five powers model should be used at the level of one industry,
as it is not designed to be used at the level of group of industries nor at the level of industrial sector.
Here industry can be defined as primary and basic form in the market where similar and related products
or services are sold or introduced. Companies that compete in an industry should offer, as minimum,
one analysis of the five powers of such industry. Porter explains that multi business companies must
define industries (work line) where they should compete, as fundamental step and part in the process of
making strategies of company's work, thus such company must conduct an analytical research of the
five powers of each special industry (each work line) separately. Before talking about Michael Porter's
five powers we must refer to the competitive advantage for which Porter made his strategy. Porter
thought that achieving a competitive advantage bigger than other competitors requires that the
organization, inventing or producing any new product (commodity or service), should consider
customer or user's needs in the production process, through considering his opinions through the whole

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or some phases of the production. This will greatly contribute to his acceptance of the new product,
giving it his loyalty. Moreover, prices of the product components as well affect the product's quality and
diversity; where as low costs are affected by prices of basic materials, control of technology used and
skills.
Porter's five powers:
1. Threatening existing opponents or what's called level of completion: Intense completion
between companies can lead to wining. Companies may compete aggressively and my compete in
fields other than price like competing in creativity, marketing and other fields. Companies should
look for solutions to defeat competitors like searching for a competitive advantage of products or
services. Completion may appear in: Number of organizations: The more organizations there are in
an industry the less share of targeted market there is. Level of development of markets: The less
market development exists the more completion between organizations to preserve their shares
increases. Degree of product advantage: Minor differences between an organization's product and
another's or between an organization's offered service and another's increases the level of completion
where customers find slight deference between one company's product and another's to choose
between, thus there is a remote possibility to keep customers.
2. The alternative product threat: Alternatives refer to products of another industry that serve the
same propose of the product or service of the organization. Completion shows as price of alternative
product changes positively or adversely, for instance: Accompany that works in the field of
manufacturing aluminum cans for juices soft drinks. In normal analysis, according to SWOT
analysis, completion is restricted among companies that deal with aluminum, so for any reason there
should be a difficulty in getting the required crude aluminum, juice packing companies will shift to
plastic or glass cans since its cheaper and easily available. Thus it is not enough to study competitors
of the same industry, yet must expand the field of study to include competitors who work in
manufacturing alternatives, the existence of alternatives outside the general domain of the competing
product increases customers' tendencies for alternative goods
3. The threat of new competitors: A new company in or an existing company out in a particular
industry affects the shares of other companies in the same field, the more the technology used in the
industry is easily produced the large the number expected to enter this industry is, which adversely
affects the shares of other companies and often cause many companies to declare bankruptcy and
consequently hurting the industry itself. Therefore, laws gad to be legislated to regulate the process
of entering and exiting and determining the number of companies enough to provide local residents
needs of this industry as well as setting boundaries for entering like patents, trademarks and
providing industries with technologies difficult to copy, for the more the technology is difficult to
copy the more chance there is the company will last and continue. It is better to have innovative
ideas that are hard to copy in order for the organization to remain stronger even in simple industries
4. Strength of suppliers: In order to produce any product or service, accompany needs the elements
required to provide such product whether these elements are manpower, raw materials or anything
else and thus there must be a source to supply these requirements. The stronger the supplier the more
it affects the company's profit especially if there is a monopoly either due to having one supplier or
due to an agreement between suppliers concerning certain prices
5. The buyers' negotiation power: Same principle, the more the buyer represents a purchasing power
capable of influencing the more effect he will have on profits. For example: if the organization is
making a product and supplies it to powerful purchasers who own more the one distribution outlet,
then those buyers will have an influencing power that assist getting more facilities or discounts
compared to a regular buyer who owns one or two outlets.
This shows how Porter's model focused on the attraction of industry to any company is based on these
five competitive powers in this industry. Thus, the more these powers increase the more the attraction of
this industry decreases meaning its profits for any company, its capability of making more profits
through working in this industry field. Porter's model was criticized by some strategic experts, saying
that the analytical model is based on disengaged assumptions like Buyers, competitors and suppliers do
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 not interact with each other and do not plot - Creating boundaries to entering is a structural and
organizational matter - Mystery at low market will allow market participants to plan and respond to
competitive behavior in the market
Q3: a:
Undoubtedly, choosing of strategic alternative aims to strategy correction in terms of aim
accomplishment, encountering of different types of environment, followed by making the proper
decisions, strategy orientation and using of a proper alternative that suits the company. In this regard,
the following should be considered:

 Strategies of the past: Existing strategies should rely on background of past or current
strategies, as it would not be possible to start from nothing.

 Risk taking ability: when new strategies are applied, certain risks measures should be
accepted in order the company is able to face future within very dynamic environment.

 Strategy Proper timing: Proper timing is represented in time of available resources to be

replaced, extent of market ability to accept changes and the competitors' reaction.

 Organizational struggle: It means employees 'acceptance of new strategies which may be

affected by struggle of forces and influences inside the organizational structure. Strategic
planning team should study the effect of applying new strategy (or the best mix of
strategies) on the following aspects:
1. Responsibility positions
2. Resolutions of supervising work units.
3. Resolutions of allocation and distribution of budget and resources
4. Changing the influence of different administration's officers
In addition to the previous standards, focus should be more paid on choosing process on the new
unique element provided by the alternative and the continuation of this uniqe element and abiliy to
develop the same in the future. Strategic orientation may take three alternatives:

 Strategy of keeping the current status

 Growth and extension strategy

 Shrinking and expenses reduction

First: Strategy of keeping the current status:
This strategy is used in certain cases where business organizations seek accomplishment of
relative lasting status of stabilization. This scenario is applied when the company management is
satisfied with the current status of the company and with the accomplished results; meanwhile it seeks
assuring the continuity of this status. For this reason, the company makes simple changes on its products
and methods of production. By application of this strategy, the company management recognizes
reasonable but slow growth. This strategy is applied for the reasons such as:
1- When the company works in good productivity level, there would be no need to change or performing
other activity.
2- When the company accomplishments are satisfactory and no risks taking- such as practicing of other
activities - is planned by the management.
3- The managers are adapted of certain management way and activity in routinely basis which doesn’t
require new decisions or risks taking.
4- Low available level of resources and difficulty to obtain loans.

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 Second: Growth and extension strategy: It can be shown in increasing of sales, profits or
market share, and applied when the company attempts to extend its business and increase its activities
and functional performance. This strategy include sub other strategies such as internal growth strategy,
focusing strategy, merging strategy, joint venture strategy, direct or indirect variation strategy , internal
and external variation strategy and vertical/ horizontal variation strategy. The question is: when the
company can apply this strategy:
1- Disorders of industries that have speed cycle and stabilized strategies are not suitable but growth
strategy is the only mean to survive.
2- Harmony existence of growth and efficiency.
3- It contributes in benefit provision to society.
4- It achieves big administrative progress and growth leads to more powerful position to the company.
5- More possible results.
Possibility of controlling and success in the long term: Growth and extension strategy may take one
of the following forms:

 Focusing strategy

 Variation strategy

 Direct or indirect variation strategy

 Vertical/ horizontal variation strategy

 Internal and external variation

 Sharing strategy
Third: Shrinking strategy: When performance of business in companies is found to be low, shrinking
strategies proper with the low performance of companies should be followed. Risks shall be the results
of continuation of low performance in the companies. Shrinking may include reduction and
rehabilitation strategies, abandonment, conversion and liquidation strategies. A corporation may track
retrenchment strategies when it has a feeble competitive position in some or all of its product lines
resulting in deplorable performance. There are four kinds embodied in this third category. The first is
the turnaround Strategy that emphasizes the promotion of equipped capability and is perhaps most
appropriate when a corporation's difficulties are inclusive, but not conclusive. There are two basic
phases of turnaround strategies; namely, contraction and consolidation. On one hand, contraction is the
process of cutting back in size and costs. On the other hand, consolidation implements a sequence to
stabilize the new-leaner business. Plans are schemed to brand the functional activities cost-justified. If
the merging phase is not conducted in a constructive manner, people will leave the business. This
simply means that employees should be heartened to get involved in the production improvements. The
second of these strategies is the Captive company strategy which is the giving up of individuality in
exchange for safety. A company in this situation faces unfortunate sales and increasing losses unless it
takes some action. The administration greatly offers to be an incarcerated corporation to one of its larger
customers so as to warrant the company's continued continuation with a long-term contract. The third is
the Sell-out/Divestment Strategy which any company in a weak competitive position may seek to sell
out the entire business. This strategy makes sense if the organization can still obtain a good price for its
shareholders and the workers can keep the jobs by selling the entire business to another firm. If the
company has frequent business lines and it chooses to sell off a partition with low growth possible, it is
referred to as divestment. The fourth of these strategies is bankruptcy and liquidation which involves
giving up the organization of the firm to the courts in return for some payments of the corporation's
duties. Liquidation is the loss of the firm because the presented merchandise is unattractive.

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 Q3: b:

Portfolio analysis: It means analyzing of the company portfolio from different benefits and
activities performed. We call this analysis portfolio as it requires dealing with these activities and
benefits as portfolio and that each activity shall be dealt as separate work unit by guessing its
profitability, development need, or entire winding up. An investor may analyze his portfolio by shares
he owns. Analyzing of portfolio is a strategic analysis for each strategic work to determine rate and
direction of growth in the same. It means analyzing of the company portfolio from different benefits and
activities performed. We call this analysis portfolio as it requires dealing with these activities and
benefits as portfolio and that each activity shall be dealt as separate work unit by guessing its
profitability, development need, or entire winding up. An investor may analyze his portfolio by shares
he owns.

Portfolio analysis requires:

1) The company should specify works or products which the portfolio contains and which might be called
units of strategic works
2) Evaluate the units of strategic works to state their priorities and support needed for each unit , aiming to
add new products or works to business portfolio or current products.

3) Portfolio analysis is a strategic analysis for each unit of strategic work to specify its rate and direction of
growth.

First: Analysis of Boston Consulting Group: This method relies on a notice states that "the company
which applies variation cannot consider its activities, products or careers in partly basis, but from
comprehensive aspect." This method considers the whole portfolio of the company activities through the
matrix of market share growth. This model can be explained as follows:

 Activities "volume": this type of activities has big relative share in the market and strong
growth rate and thus with strong center comparing with activities of competitors. These activities
represent the future for the company if maintained until they become" milk cow". These
activities require productivity ability, raising of market share, and monitoring financing source of
competitors. Although these activities make surplus in resources, they also need big resources in
order to grow and extend.

 Activities "milk cow": They are the controlling activities but they are developed in slow growth
market. These activities represent aged products which make more resources than consumption.
Theses are main sources of self finance where they bear efforts exerted in other activities. It
would be the company's interest to keep these activities in that status the longest possible
duration, the matter which requires keeping the market shares, profitability margins and
monitoring the competitor’s ability as well as organizing of sector.

 Activities "enquiry": They have strong growth rate and weak market share. Although they
represent the future activities, their center doesn’t allow gaining enough resources. These
activities decide selection (entering or withdrawing from the market shares). In order to extend
market share, this requires unique product, development of patent and focusing of investment.

 Activities " flat corpse " This type of activity doesn’t grow and has no powerful center in the
market. Corpse activities represent margin activities which the company didn’t know about their
development. They also add burden on the activities portfolio as no growth or profitability
margin are gained, thus, this type of activity should be abandoned or not considered for strategic
target. In case of abandoning, its resources should be re-distributed on other activities.

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 Matrix of Boston Consulting Group can be read as follows:

By applying this matrix, the company seeks moving of activities from existing phase where they
require more liquidity to be spread into status where financial needs equal to liquidity resulted from
activities and the last phase when there is surplus in liquidity. The company has to keep the last phase to
longest possible duration etc. Many criticisms were raised for this matrix as it relies on stable
environment. Based on this, the new version was issued in 1980.This new version takes into
consideration four types of environment and attempting to know if there is a relation between market
share in each environment and investment profitability rate. It can be explained as follows:

 Activities ( volume): we can maximize exploiting the experiment effect. Volume offers low costs
and relation between market share and investment profitability is in deep connection.
 Activities "especialized": There are many sources of distinction that allows establishing of very
special markets "niches" and can be defended for long term. The company should maximize
exploitation of one or more of these parts in different way from the competitor to succeed.
 Activities "impasse": Volume and distinction advantages cannot require a decisive competition
quality. There are almost no entrance hindrances, technology is available for everybody, and
profitability for competitors is weak. In this status, applied strategy represents changing rules of
competition game, the matter which avail niches or volume effect.
 Activities "distracting": In this type of activities, profitability doesn’t relate much with market
share as the company volume may form an obstacle as distinction factors are many and in fast
development. Success in these activities depend on ability of fast adaptability with market changes,
i.e. the company has to attain big flexibility. Portfolio analysis through strategic business units and
by using market attractiveness and competition ability.
McKinsey Matrix: It is a module to execute business portfolio analysis on strategic units of the
company. Synonyms of this method: GA matrix, business evaluation matrix, G.A screens work.
 What is the portfolio? It is group of strategic business units which form the company. The ideal
work portfolio is the one which perfectly suit the company and helps in exploiting the more
attractive industries or markets.
 What is the strategic work unit? Strategic work unit may be an entire company of medium size
or section in a big scaled company as long as there is a strategy to perform its work and has
separate targets from the parent company.
Portfolio analysis targets:
1- Analyzing portfolio of current work and report which work strategy should have less investment.
2- Development of growth strategies to add new products and commercial business to the portfolio.
3- Reporting which one of the commercial business or product that should be abandoned.
P.C.G.L means matrix of Boston Consulting Group the most common structure to analyze the portfolio
and McKinsey is the advanced form of it.
There are three qualities in which McKinsey matrix show more development than matrix of Boston
Consulting Group as follows:
1- Market attractiveness (industry) instead of market growth. Market attractiveness includes more factors
except market growth rate which can decide the industry/market attractiveness.
2- Competitiveness force replaces the market share through competition site for each evaluated strategy
unit and competitiveness force include standards of factors, except market share that can decide
competitiveness force for strategic business unit.
3- G.A matrix works as 3*3 matrixes, while matrix of Boston Consulting Group works as 2*2 only and
this allows more development.
Usually, strategic work units are pictured as striped circle in the GA matrix where: Circles size
represents market volume - Circle slice volume represents market share of strategic work units -
Arrows represent direction and movement of strategic work units in the future.
To apply McKinsey matrix, the following six steps should be applied:

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1- Specifying leadership of each dimension. The company should specify these factors which are
important for its general strategy.
2- Specify description of each leadership. Certain relative leadership should be allocated.
3- Record strategic work unit of each leadership.
4- Multiply measures and numbers for all strategic work units.
5- Point of view to produce and plan.
6- Performing of revision / sensitive analysis and using of big measures and numbers – unanimous may
not be obtained.
Some restrictions of McKinsey matrix
 Pricing of conversion into different factors
 Indication gathering is difficult and doesn’t represent sufficiency
 Interactions between strategic work units are not considered
Second: corporate parenting concept: The two British citizens Michael Gold and Andrew Campbell
by the end of eighteenth were the first who handled this concept in this article about strategic plans of
business units and adding of value through parenting concept. They mentioned that parenting concept
helps setting a value, and the owner company should not add value to business unit only, but value more
than any other potentiality. This is called original advantage, strategic parenting, establishment strategy
level: There are four types for setting the original value:

 Independent effect: each branch shall be considered as a separate profitable center. Using of main
performance targets, controlling and monitoring of commercial business. Setting of value shall be
performed by making strategic resolutions such as appointing of managers, approval of main expenses
of the capital.
 Linking effect: value shall be prepared by cooperation.
 Central jobs and services: value related to companies is derived from administrational services item of
commercial works.
 Company development: Setting of value through portfolio management.
Parenting concept for Michael Gold and Andrew Campbell is a frame about role of common
center in a company. They tackled this subject in a book called " strategies and methods " and many
other articles. The authors argue that that are many successful theories about company strategies based
on management methods, and the main standards are planning methods that affect the center, type of
effect practiced in the commercial business center within the group. There are other methods
approaching the three methods introduced by the authors, each method has different theory with
strength and weakness points and can offer many different benefits for the company
General parenting methods: or corporate education Michael Gold and Andrew Campbell three methods:
1- Financial control
2- Strategic planning
3- Strategic control

Advantages and disadvantages of portfolio analysis

Disadvantages advantages
It is really helpful in specifying the market -It encourages utilizing specific information related to
divisions suitable for which type of products. the external ambient factors of the company to support
management terms.

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 -it lacks the practical and actual aspects in -It stimulates supreme administration to appraise every
some situations. kind of its product, setting of targets and allotment of
resources for every one.

- It presents deluded images which depend on -It utilizes the cash flow obtainable in cases of maturity
self or personal judges. and extension.

-
-Inability to provide false but reasonable - It is considered an effective tool through diagram
information regarding factors to make an figures about competition status ,its current and planned
industry is attractive. center .
-.
- It requires many and varied information
which is difficult to obtain due to being
general or private.

- It requires mathematical and special skills.

Q: 4:
Successful application of strategy is considered the most difficult and complex challenge, where
the way of handling such challenge and translating the same into chain of progresses determine the pre-
exerted efforts. Failing of management to apply strategy is not limited in this phase, but its extends to
failure of the whole strategic management. Moreover, even if management is successful in internal and
external environments, using of modules and tools of strategic analysis to choose and form the proper
strategy, each step taken shall be considered worthless without being set in the proper organizational
context and moving to the right executing step.
Forming of proper strategy concerns about stating and analyzing of effecting factors before
execution, while execution phase concerns about management of effecting factors during operations and
production and it is also based on operational operations with efficiency. Strategy implementation is
meant converting and translating strategies and policies into actions represented in programs, budgets
and procedures. These operations require changes within the organizational culture, structures and the
whole management methods inside the organization.
1. 1-Programs: These programs include the annual targets which management seeks to achieve
under strategic plan, necessary resources, due activities, starting and ending time of these activities
and officers in charge.
2. Budgets: After setting of programs, budgets necessary for these programs shall be set. It is
important to ensure that execution of strategy is not limited on exploitation of the company
resources, but also to protect, organize and control using of these resources and how to allocate
them on programs and projects being partly systems and contribute on execution of strategy.
Resources should be categorized to realize the organizational ability to execute strategy as the
latter is impacted by available resources, actual and expected skills of the company.
3. Procedures: Procedures represent a system of successive steps that determine method of
implementing specific job or mission and describe in details different activities that should be
performed to accomplish the company programs.
4. Execution: means conversion of the organization strategy into tangible acts with results,
otherwise, all activities of management strategy shall be useless for the company, and to do this
annual targets should be specified.

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 5. Determining annual targets: Annual targets are determined in non central way as they are linked
directly with each sector's and administration's manager. Based on these targets, resources are
allocated and distributed, where priorities of individuals, administrations and sectors are
determined. Allocation of resources is the principal factor to measure progress in achieving
strategic targets; however, this process requires coordination between annual targets and strategic
targets.
Successful execution of strategies chosen by the company depends on group of requirements as
follows:
1. Harmony existing between strategy and organizational structure.
2. Organizational culture should be suitable with strategy
3. Policies should support strategy.
4. Mangers should be skilled enough to execute strategy sufficiently.
5. Availability of supportive administrational systems for strategy implementing.
Organizational structure: It is necessary for strategic management to consider designing of proper
organizational structure to execute strategy. Studies proved that there is integrity between structure and
strategy as the designed organizational structure is the frame of strategy implementing. It is important to
observe the organizational considerations of formal and informal organization in the company:
1. Getting to know if the organizational structure helps in application of the company strategy.
2. Specifying of managerial levels and the included functions which are responsible for execution of
different duties of the strategic plan.
3. Possibility to make use of non formal organization to facilitate application of strategy.
 Supportive administrational systems to apply strategy: Designing of administrational systems
that support operations and activities of strategy application is among the requirements which
consist of at least systems of strategic information, planning and controlling system and computer
integrated systems for industrialization.
 Systems of strategic information: They play important role in strategic administration process to
form and apply business strategy through the following three fields: Improving of operational
efficiency afforded by information technology, especially, the impact if this technology in
reduction of costs, improvement of quality and services and establishing strong relations with
suppliers and consumers. Boosting of technological creativity in business, and in return, the ability
to manufacture new products. Establishing resources for strategic information for advanced
information systems that contribute in improving operations and internal activities. The most
significant benefit afforded by strategic information systems is building of strategic information
enables system to provide the administration of necessary information for planning, controlling
and decision making. Information is considered a valuable resource for the company that should
managed and invested to achieve a value added to the company and contribute in forming strategic
competition in business environment.
Planning and controlling systems: Planning and controlling systems are considered part of
operations of forming and applying of strategy, where work starts by operation of these systems in the
initial phases of plans designing which include strategy. It is known that strategy is an integrated system
of practical plans aiming to achieve the company target eventually. Planning systems are medium and
long termed. In medium termed planning phase, strategic management concerns about operation of plans
or programs for each unit of strategic works which form the company, or in each product section.
Planning systems can be expressed in budgets which are in charge of providing the management of
necessary data about income, current and expected expenses in each phase. Budgets have many types as
follows: Requirements of strategic management consist of the main strategic budget to cover capital .
Operational budget represents expenses of each unit of strategic works. Each functional section has the
necessary activities to implement plans and targets. Financial budget represents a plan of expected flow of
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resources and expenses during budget period. It also includes changes occur in the capital and volume of
present and expected cash.
McKenzie theory: This theory is known by the seven factors module in application of strategy. These
factors are: strategy, organizational structure, systems, method, management (leaders), skills and common
values (organizational culture). Application of strategy can be successful if the module factors are in
harmony with strategy" or at least supporting it". Accordingly, if a problem appeared during application
course, this means there is a lack of harmony between strategy and one of the module's factors.

Distribution and allocation of resources: When resources are allocated, linking them with targeted
aims should be considered according to the priority of each aim and within general governing policy. If
allocation was performed improperly, implementing of remedy procedure would be difficult; as
allocation and distribution of resources on different fields will result on losing all or part of them and it
would be difficult to recover them. The following considerations shall be observed in allocation process:
Maintaining and protecting of rare resources - Observing of financial standards in short term - Proper
organizational building - Accuracy in recognizing requirements of each administration and timing of
such requirement.

Problems encountered during evaluation of strategy efficiency

 Increasing of change rate
 hard competition
 globalization of management in terms of thinking and application
 Technological changes
 Changing of work force nature
 Deficiency and rarity of available resources.
 Conversion from industrial approach into social approach.
 Complexity of strategic management environment.

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