Making Strategies Work MSW establish clearly intended outcomes (effects) and plan actions (causes) that will

l bring them about. Strategic planning (content what does it cover and does it hang together : process did develop in logical way) deals with conceptual ideas: how organizations should interact within their environments in order to achieve their goals. Strategy implementation (carry into effect or ideas into actions) deals with the translation of those conceptual ideas into concrete activities (converting into actions): fundamentally about manipulating the organizations interactions with its environment in order to achieve its objectives. MSW requires linking ideas with actions and necessitates ironing out the inevitable misfits between expectations and reality. The process of manipulating (directly or indirectly) the pattern of interactions that the organizations has wit its environment in order to achieve its objectives or mission. Environmental pressures regulation; globalization and the era of management theory; new technologies (reduced barriers to entry) and new channels (enquiry; purchase; delivery); power of the consumer. Need to effective implementation; investor pressures to increase profits; ceo tenure for now results (right things - execution, derisiveness, follow through and delivery on commitments. The best strategy is a strategy that can be implemented! Ceo make MSW harder by: over complicating strategic decision making; failing to make strategy clear to their staff and separating planning and execution.

Strategy (relates to future) determination of long term objectives and policies for achieving the objectives (allocation of resources, managing the interaction and direction with the environment and limitation of market and or product scope of business). Content what are you trying to achieve; can that strategy get you their. Direction and scope of org. Planned strategy interactions that the organization plans to have with its environment in order to achieve its mission. Emergent strategy interactions that the organizations have been and are having with its environment. Success attribution why did success happened or what caused a desired outcome. Analyzing and isolate the primary cause of past success. A company undertakes many activities and so therefore one activity on overall performance appears to be unquantifiable. Difficulties: the desired state is made very clear and it cannot be articulated; environments change very quickly and constantly; organizations are not simple in their construction and they therefore become difficult to manage (alignment of personal incentives with those of the company); effective feed back, need to measure the right variables, measure effectively, good communication and interpret the data accurately and then actually making decisions due to bounded rationality. Aims of the course: clear headed thinking that is necessary to tackle management problems. Clear understanding of key concepts, and appreciation of what theory exists and simple tools to enable application to what is needed to implement strategy effectively. Major theme is the challenge of creating organizational alignment.

Multiple aspects of the organization are working together and towards achieving consistent outcomes. Strong alignment in the organizations creates a line of sight from the top to the bottom. Management thinkers: consultants; magazines business schools etc. To be useful management ideas must be: understandable; effective in producing desired outcomes and relevant and appropriate to specific outcomes. Questions for theories: who developed them; what was their agenda; empirical observations (systemic, quality, and reliable); is product constrained by its context and can it be reasonable implemented, representative sampling. Implications for managers: connecting the companys interactions with the objectives is very difficult.

Chapter 2 - Common Issues in Implementing Strategy Importance of implementation 1945 to 1970: demand > than supply and no competition 1970 to 1990: copy Japanese production 1990 to current: deregulation pressure to reduce prices: educated workforces other countries have high educated standards at lower costs therefore a pressure to reduce costs; few uncontested markets, no free expansion opportunities; the internet increase in supply because of information; markets are unforgiving customers want low prices and available stock, no product they will go elsewhere; technology advances increases the pressure for continuous innovation; capacity greater than demand which causes pressure to reduce costs and therefore prices, companies look to fragmentation of value chain to reduce costs and they look to specialization. An important question is does the changes meet company objectives? Management responses to challenges Study other successful (and not successful) organizations; adopt new theories and tools; and seek innovation. problems with learning from successful organizations: direction of cause and effect, identify characteristics of successful companies that are different form the not successful companies, success because of different character tics or do things differently because they are successful; luck or good judgment mostly because of luck, if they become successful they use dominate paradigm, which is therefore resistant to change, which reduces there competitive advantage; dominant paradigms are of past success BUT you compete in the future. Long term competitive advantage: study successful competitors > only play catch up use new management theories > each company has different /unique therefore need customization from standard theory. Bonuses do not create competitive advantage, you need innovation and creativity.

Key issues (T LC: theories limitations; why choice the theories). (O CBM SLT: organization capability building; bias towards action; motivation; structure; leadership; team building; integration). (I DCSCA: develop control systems; change sequence; setting right measures; changing attitudes; communicating objectives) Why new management theories and tools are risky: many companies do not recognize the limitations of the theories and tolls they are adopting (they have limited awareness of the risks involves) Figure 2.1 classification of research

Management fashions there are many reasons and failures for adopting new fashions (content of new fad or how new fad was chosen). Poor understanding of the organizational context (systems, processes and people issues) and how the new innovation was chosen. The new innovation requires resources but if you did not deal with the underlying problem less time would then be devoted to implementation and the workforce would perceive this as a reduced level of commitment.

Appropriate organizational structures The greater the number of managers with responsibility for success then the greater likelihood of failure. The same is true of accountability. Unclear responsibilities are also a recipe for failure. If you are making a change, know how that change impacts the solution. Managers underestimate the time to implement making the changes. How long should managers wait for success: the magnitude of the change; seriousness of the environmental changes. Need a system to track the developments. Leadership from the whole team Leadership from ceo or leadership as a set characteristics required or desired and many different levels in the org. An example is people taking ownership for achieving results and being committed, that support the delivery of the organizations key strategic direction. Corporate and or business unit relationships: business units that do not seek corporate office for advice, some dont because they perceive it to be a weakness, it slows down decision making, and it prevents learning. Should they make a decision for the business unit or corporately (this is related to principle agent problem). A hinge player (have hinge player align with business plan > line of sight) may act in accordance with either manager above or below them in different ways. The hinge player does not always achieve goals of their bosses because there was not a clear understanding of the objectives and or they interpret information from their own unique perspective. It is important to align the hinge players activities with the strategic activities as far as possible, this is termed line of sight of objectives to the individual. Empowerment is devolving accountability and decision making to the lowest level of the organization that is tractable, i.e. providing the workforce with the tools and authority needed to carry out their work and resolve any issues. Managerial blindness; senior management lack of relevant factual information (information and reporting) whether org is working or not.

Team working and integration how do you observe team working and leadership, have nits that are closely related from a strategic perspective or in the same strategic territory? There are synergies and an exploitation of synergies requires strong teamwork. Synergies have a competitive advantage because they are acting in an integrated unity. Three broad stages of team working: stage one - low level of integration and few exchanges of ideas, products, processes and technologies; stage two - systematic examination of common issues across the units can be observed and they start to use common languages for things which helps the flow of information and exchanges; stage three common standards and practices are adopted across the units, they have centers of excellence and they motivate the workforce. They have corporate yellow pages (facilitate within org), which helps in problem solving in similar problem. There are regular data flows of information across the organization for new initiatives, projects and practices. In stage three there is no hesitation to call on any staff for assistance. In order to make team working, integration of the strategic territory effective it is necessary to communicate it across the organization. Setting the right measures (E/E > leads to competitive advantage) efficiency, fewer resources for same output or same resources for more output. Need to consider the drivers of competitive advantage and how they are improved. Problems with corporate efficiency are corporate anorexia. The need to always cut costs so that profits can increase, cutting cost will only go so far. Innovation and creativity is important. The measurement of long term success is far more difficult than short term efficiency. Effectiveness is about doing the right things that leads to sustainable success. Where do you want to go then apply energy going in the right direction? The drive towards effectiveness is about attempting to create some form of competitive advantage over time.

Figure 2.3 classification of businesses SICW

Survivors: seek to survive. Improvers: pursing financial objectives to the exclusion of all others. Competitors: being able to compete head on. World class: being the best in the world. Setting the right measures They balance the short term (financial) and long term (competitive advantage) health of the organizations. Financial health is important but is shows the past results which do not indicate future needs. Balance scorecards: financial; internal business process; learning and growth and customers. Setting ambitious and realistic goals: setting the right measures requires ambitious and realist tic goals. BHAG are goals that are within the capability which places the people firmly concentrated on actions to achieve the goals at all times. If there is a large goal, break it up into smaller measurable pieces. Communicating the objectives figure out how to close the gaps then communicate that across the organization, which usually requires recognizing the resources. Figure 2.4 map of confidence levels

Creating a continuous and prioritize capability building program shotgun approach - pursue all changes at once, leads to demoralization with lack of commitment an cooperation: overcautious approach making small incremental changes in a few areas and waiting to see results (ad hoc non systematic an uncoordinated manner). strategic approach - prioritize the changes and introduce changes systemically in order to focus achieving objectives) and channel organizations energies (process more efficient), by the end the company will have build an integrated set of capabilities that re difficult for competitors to copy. Figure 2.5 capability building staircase Correct Sequence success is measured by - long term objectives have been clarified, resources will have worked towards desired point; studied current situation in detail and developed sequential action plans to close the gap. Continuous improvement increases efficiency. Motivating resources to change managing and balancing dilemmas - must be aware and good at resolving them in ways that work for organizations. Typical dilemmas: consistency verses flexibility - consistency of direction allows efficiencies to be developed into routine actives. For a fast paced environment flexibility is critical. Differentiation verses low cost: differentiation is adding features for customers but customers also want low prices. Short term verses long term results - short term is financial in nature but long term repositions the organization for ongoing competitive advantage. Generally people that address the resources are more forward looking.

Bias towards action depends on how managers respond to the unexpected. If positive it will encourage communication and swift resolution. Bias involves risk taking and managers must be empowered to calculate the opportunities and associated risks facing their part of the decisions. Empowerment is critical for bias towards action. Two views on change: change the people or train the people. Companies that do not exhibit bias towards action tend to be unsuccessful with their change management with is essentials for implementing strategy successfully. In being successful companies are: connecting economic and organization al change; challenging norms and constantly looking for new ways of doing things. Changing the correct attitude change sequence by cultural change behavioral changing attitudes changes performance. Capture the hearts and souls will lead them in a new direction. Should reinforce the changes by rewards. Important in linking the rewards to the desired performance levels once it has been achieved. Rewards and accountability change - changing the incentives and accountabilities will gain the performance desired and ultimately attitudes will change. Change the organization structure in order to align it with the desired goals and provide incentives (inducements to change). This is more direct and a straightforward, less expensive and less time consuming than cultural change. Behavioral changes > cultural changes > performance increases Developing appropriate control systems track progress towards organizations desired outcomes and instigate action when deviations occur. Use the carrot or stick approach.

Chapter 3 - Making Strategies Work Process MSW: drives from strategy through to day to day activities; at each stage of the msw process tests for implementability by testing the feasibility at each stage and establishing measures at each stage; msw is process oriented. two key ideas causality - end goals and objective are established and activities that will cause the goals and objectives to be achieved are identified; and the chain of causes and effects linking the prime cause of the end outcomes is established. And criticality is about identifying the important or critical issues and the individual goals to be achieved. Application of the process In order to achieve their goals and objectives effectively and efficiently organizations face the challenge of integrating the segments necessarily created by structure. 'strategy is the direction and scope of an organization over the long term, which achieves advantage for the organization through its configuration of resources within a changing environment and to fulfill stakeholder expectations' top down planning does not work because the environment changes to quickly, while emergent planning is unsuccessful due to planning going in direction that usually does not meet with corporate goals or mission statement. the process approach deals with first order issues first and then second order issues next and so on. Culture is a problem of dominate paradigms or the need to realign the systems and processes. Facilitator can eliminate the dominate paradigm; encourage dialogue; challenge thinking; have a structured approach; ensure actions have timelines.

How best to apply process Senior management should be involved at each stage to be the sponsor, so that the process is taken seriously. At each stage the necessary levels of knowledge and expertise are brought together. Using only internal staff could associate activities with the dominate paradigm and expertise could be spread over several levels of hierarchy (this causes junior people mixing with senior people who are reluctant to express their opinions or disagreements). A facilitator can overcome problems because they can manage group dynamic (storming, forming, norming and performing); will encourage team members to contribute views and opinions; challenge team thinking; ensure a structured approach is followed and ensure that actions, timelines and responsibilities are attached to each action item. In large organizations people will be changing in the team, a good facilitator will help new people transition. When the process involves more groups - a project manager is required to co-ordination and transfer of information so that the project manager will control and manage the process. Current management techniques: environmental scanning; value chain analysis; porters external forces; pest; swot and stakeholder analysis. A shared vision is when an understanding of the organizations objectives at all levels of the organizations and the willingness to participate in pursuing these. A constant reinforcement will cumulative shared vision. Workshops are where csf and ca (related to kpi and api) are developed and are ideal places for shared vision and where management takes ownership of the ideas and process. It is there where they understand were the csf are underpinned by the ca. Communicating regularly helps organization learning. There are rewards for getting it right: extrinsic money and intrinsic - praise status. The benefits of the process are: capabilities for strategies thinking and implementation; development training; identification in gaps in management team; and enhancement of existing of managerial skills. MSW is effective in identifying and sustaining competitive advantage.

overview of the process Mission: highest level objectives. Environmental analysis: systemic identification of barriers to achieving the mission or enablers that assist in its achievement. Strategy; how to harness the enablers to overcome the barriers in order to achieve the mission. CSF: the limited number of things that must go well in order for the strategy to work. Critical activities: the activities that must be carried out well in order to achieve the csf. organizational design, process and systems: grouping of activities into an organizational structure to support the effective and efficient execution of the CA. Mission (stated with a clear and unambiguous mission statement and then linked the strategy and the business day to day activities, greater clarity and less confusion would result): It describes the highest level objectives to be achieved. Common problems: (FRIILC) mission statements are a reference point; it can be explicit (articulated and written down) or implicit one that can be inferred by studying how the organization behaves through time (being implicit is hat it cannot be articulated); lengthy and confusing can be difficult to comprehend; short mission statements lack clarity and allows some leeway in their interpretation; some mission statements become institutionalized or their are the dominant paradigm; some mission statements are written by a few people, so only a few people really understand them and the rest of the organization that was not involved demonstrate that they do not take ownership. Tackling the mission statement needs asking the right questions such as (PWS): purpose of the organization; where is the organization trying to go; what organization would you like to see at the end: what is the ultimate role of our function in the organization; if your department did not exist what important things would be missing or fail to be achieved in the future.

structuring the mission it should be defined sufficiently well in words ensuring unambiguous and clear meaning and ease of reference when required. Defining the mission the intended meaning and shared rationale it is well worth defining the key terms in the mission (which is an important first step). EA barriers are elements that make it difficult to achieve the mission and enablers are elements that could help to achieve the mission. EA analysis considers the current and also the future (the organization strategy will be played out in the future); were the level of uncertainty is high you can use scenarios planning; you can control the internal environmental but it is difficult to control the external environment; external, use environmental scanning (helps managers to be watchful of changes and their likely effects) to access the situation with respect to changes and trends for the whole organization (also use the - structural analysis - PEST, stakeholder analysis and SWOT) and the industry (external and internal factors that are important to the org are tracked on a regular basis are reffered to as KEI); internal, use the value chain (IOOMS PHTA); identification of barriers (use structural analysis) use good questions such as what gets in the way, why has the org NOT achieved the mission, why can the mission not be achieved immediately; identification of enablers, what would help to achieve the mission, what are you or other department good at, how can you help achieve the mission or assit other achieve the mission; be specific about WHY the issues form the barriers or enablers; prioritize barriers or enablers, rate them according to their importance in achieving the mission and their perceived strength; KEI must track changes through time (this can be accomplish through brainstorming techniques); and a consultant will challenge the dominant paradigm.

Strategy "strategy is the direction and scope or an org over the long term which achieves advantage for the organization through its configuration of resources within a changing environment and to fulfill stakeholder expectations". Is the org response to the environment in order to achieve the mission, how the org purposes to overcome the barriers and make use of the enablers in the environment in order to realize its overall goal; a strategy statement ought to be conceptual; when the strategy is broken down you can develop timescales, budgets, structures, roles, performance indicators, org processes and systems for the strategy. CSF " the limited number of areas in which results, if they are satisfactory, will ensure the competitive performance for the org. There are few key areas where things must go right for a business to flourish." The identification of CSFs is one of the MAJOR tasks of the strategy implementation approach, identification of CSF requires significant industry and business knowledge combined high intelligence and experience; there are tow types of csf - industry based and specific to org. the nature of csf csf depend on specific environmental factors to be overcome. Necessary and Sufficient rule: There are any potential success factors but only a few will be critical. the necessary rule states that something is a csf only if it is critical to achieving the strategy. The sufficiency rule states that the full set of csf required, but no more than that, must be identified for the strategy to succeed to the desired extent. If the full set of csf are not identified the pace of learning will be slower, and you will get bogged down in a dominant paradigm. Note: if things do not turn out i can ask which csf are not being achieved and then check the ca are then being executed correctly. That lets you initiate a response quickly to get things back on coarse

quickly. Values of csf: intuitively understand and accept the concept; identity operational issues; provide a common language; provide a structured approach; planning discussion at the highest level and does not require significant commitment. Therefore csf are flexible. Identify csf: the use of workshops with a facilitator to brainstorm for ideas which can be prioritized and ranked. Useful questions: what things have to happen to achieve the strategy; do we have to do this and if we dont do this can we still achieve the strategy. Characteristics of a good csf: csf should be action oriented (we must); should be meaningful and should be creative. KPI: is an indicator to track the achievement towards strategic objectives (KPI are developed for each csf). How to measure KPI: diagnostic measures, those that monitor whether the business remains in control and can signal when unusual events are occurring) and strategic measures (those that define a strategy designed for competitive excellence). Measures can also be developed through workshops by a facilitator. "CSF are the areas of activity that should receive constant and careful attention from management. The current status of performance in each area should be continually measured and that information should be made available." Critical Activities necessary and sufficient rule applies apply to ca also. CSF are underpinned by a set of activities necessary to make them successful. CA provide a strong link between org activities on a day to day basis and the requirement to meet the strategic plan (CA are achieved through a facilitated lead workshop). The process is strengthened by the development of API for EACH CA. Then there is a direct link and api can be both financial and non financial measures. API associated with the CA can provide a line of sight from the board to the shop floor. Identifying which CA service which CSF is a crucial step towards understanding how business as a whole or a sub unit operates and is VITAL in the strategy implementation process ... this is the difference between success and failure. CA will cross functional boundaries, due to ABC accounting and the performance drivers. CA from CSF are where the rubber meets the road. Identify CA: devise

measures of success for each activity; allocate responsibilities and accountabilities for each activity; timescales; milestones for tracking; have resource allocation and cost plan; establish a project plan and a reporting system. API are measures that should be identified for all CA. Organizational designs process and systems Once the ca have been determined it is necessary to decide where these will be accomplished with the org. Then there is the need to allocate sufficient resources against beach of the activities to ensure they can be delivered. Org structure: functional; divisional; geography, matrix > need to be grouped so that the org goals and objectives can be delivered in an efficient and effective way. They should be grouped to take advantage of EOS and by specialization. RACIS responsible; approval; consulted; informed and supported by. Some rules: someone should be responsible for each activity (push the responsibility down the ladder) and there must be one party to ensure support for each activity (sponsor). Budgets: once all the CSF and CA have been identified and resources allocated > budgets can then be set. Rewards systems can have a major impact on the level of peoples motivation towards delivering the desired outcomes. Org must support delivery of cas. if imped > change: reward system is a powerful influence on change

Chapter 4 Causality and Strategy Implementation The notion of cause and effect is highly useful for diagnosing existing situations and planning for the future. causality defines why alignment is a key concept for MSW, they can link operations to strategy. CE is good for both current situations and planning for future actions. Notion of cause and effect MSW is a deterministic planning tool, derived around cause and effect. CE is embedded in our everyday learning, learning conditioning. Learning human errors: missing information or leap to conclusions (fail to recognize when we are short of information. construction or assume facts(filling in information that doesnt exist); assuming causality from association of variables (assume because a second event closely follows a first that the first event caused the second one - association between events not causation - co-variables - bidirectional causality, a simple example of a system - REMEMBER never to assume causality from association); ignoring time lag, there could be significant time lag bt cause and effect. Bounded rationality, human can never account for all relevant factors into making a decision. Problems with BR; blurred objectives; outcomes in distant future; indirect causality and interdependence. IMPORTANT to acknowledge BR and cut through information to reach decision. Therefore you need to break problems into manageable chunks, which the MSW relies heavily upon. Application of MSW MSW is an integrated process series of CE hypotheses. Good CE chains are look obvious and their purpose is to make very clear why an org should invest time and money undertaking activity. The CE chain should be reviewed in one direction then another. Alignment is causally related, is also essential in order to ensure that the resources are allocated optimally in order to achieve objectives. MSW process crates alignment bt objectives and the activities undertaken by org and the org that has a superior alignment will outperform others or have CA. Structured thinking about cause and effect: avoid closed thinking (selection of specific options before or without consideration

alternatives; avoiding leaps of logic ( which is to skip through many casual links in one step) - not skipping allows for greater precision, planning, assessment and review, and leaps could mean alternatives are ignored; confusion bt critical paths and causal chains (critical paths put activities into correct sequence but causality is event, in essence the critical activities would not contribute to achievement of objectives; avoiding wooley casual chains ( need to be clear and have unambiguous language. Also need to be linked so that causality bt them is clear). useful questions about causal chain: what do variables used really mean; casual links bt the variables and can each be measured (if you can measure then they are NOT unambiguous also if the language is clear then also less ambiguous). The more precise relationships it is easier to test CE. The value of strategies hierarchies: represents how the key activities undertaken by org achieve the objectives and also the direction in which major change efforts are moving the org in the intended direction. Working with causal chains deterministic strategy (is a MSW process) or top down process that seeks to determine the future of the org through deliberate modification of its activities to reach future state. Emergent strategy is a bottom up process bc of bounded rationality issues. Emergent strategy is needed bc unexpected edict; unanticipated problems and an issue arising from diagnosis work. In each case it is important to tie the resulting work back to the objectives. benefits of casual chains: identification of possible methods to achieve objectives by breaking down into small pieces; provide frameworks to make assumptions about CE explicit (due to ore effective discussions and sophisticated comparison); you can have a ready assessment and logical testing of intended objectives achievement; articulate intended strategy very clearly (through communication of strategy and creating a clear line of sight); help orient projects towards a positive impact; identify risks; identify measures of successes through leading an lagging indicators; enables for cost benefit analysis (to determine if project is worth undertaking; prioritize projects and which ones are most critical to

objectives. risk identification: identify; assess their probability and impact; and determine how to avoid or manage. The two types of risk; implementation risks (threat on TCQ) and post implementation (threat to the positive outcome). Examining each link in the causal chain makes it easier to identify and show impacts on the success of project. causal chains: measure leading indicators. Are valuable for identifying relevant variables in a change program and then determining how these are to be tracked. Difficult to determine what to measure and how to do it. Using both leading and lagging indicators enables for easier identification of why problem occurs. Feedback or system thinking CE are not always linear and can be looped thus creating a feedback (or reinforcing) system. Feedback systems are usually missing bc they do not become clear until problems occur and they occur bc of the excellent systems in place to track the measurements.

Chapter 5 Competitive Advantage and Strategy Implementation CA is created through the interlinked process of strategy development and implementation. Orgs that implement strategy more effectively than their competitors in order to undertake unique activities can create sustainable CA. CA is the ability to out perform org operating in the same industry. Three essentials of CA: industry choice; strategic positioning and fit of value creating activities. Industry Choice Industry definition: can be products and also functions; international and domestic pressures; existing and future pressures and pressures from important stakeholders. Profitability: industry choice affects profitability (banks vs telecommunications). Structural analysis: attractiveness can be determined through structural analysis: new entrants; substitutes; suppliers; buyers and rivalry. Strategic Positioning interaction with customers SP are ways in which firms interact with customers in a marketplace: variety based; needs based and access based. Variety based: perceived differentiation of product vs perceived differentiation on price. Objective assessment of products: identify the determinants; allocate a weighting and rate competing products. When choosing determinants it is important to use factors that are important to prospective customers. Next use determinants for price (also use determinates that are important to customers. Needs based positioning: offering to a specific group of customers who needs are matched well by your offering. Access based positioning: access by geography; access by internet and access by direct selling. Generic strategies (one characteristics of clever strategies is that they are heavily interdependent , most casual hierarchies have several cause and several outcomes): cost leadership (low price and low value); differentiation (high price and high value); focus (cost leadership or differentiation but aims at narrow market segment and stuck in the middle (no real strategy). Cost leadership: sell for less than

competitors; need low price and high volume to gain market share; need economies of scale (batch to continuous production. Increase market share; increase market share (steal from others) or increase market share (Mobile phones use pay a you go rather than expensive three year contract). Products are standardized or no customization. Differentiation: higher price for higher value (quality, functionality, variety or customization). The challenge is to maintain the differentiation perceived gap bt their and others products. Generate profits through premium pricing. Companies need to know what is their perceived value, which will lead to how to create perceived value. Focus is to avoid direct confrontation with competition. Need to target specific customers: either over served by broad products or under served by broad products. Stuck in the middle: no distinct strategy but average perceived products and average perceived differentiation. SITM confuse customers bc there products are like lots of others (who may be cheaper dell vs apple). Fit of value creating activities Resource based view of strategy encourages deeper consideration of internal strengths, in particular strengths that are unique to the industry. Needed is flexibility and responsiveness. Distinctive resources or capabilities can be used to outplay the competitors through unique positioning (flexibility enough to exploit opportunities (but companies need the resources to execute the strategies or strategies that they can execute). Distinguish bt operational effectiveness and strategy: the need to link generic strategies to resources configurations by looking at the way the activities do or dont fit. Operational effectiveness is: greater productivity, quality, efficiency and speed. Problems with operational effectiveness: can be copied by competitors; companies are more homogeneous therefore more alike each other and less room for CA; have already focused on operational effectiveness and are now cutting to the bone; short term thinking vs long term thinking. You can think of operational efficiency by running the same race faster. Strategy is choosing to perform the same activities in na different manner. You need to find activities that are difficult to replicate or choosing to run a different race. Strategic positioning depends on internally managed activities. Need to perform activities differently or different activities from competitors.

Making trade offs is important for a good strategy to be better. Trade offs arise for: avoid unacceptable or confusing inconsistencies in their identities; activities that dont fit together effectively; and excessively complex or varied activities. The value of clear trade offs: ensures maximum extraction value; makes it difficult to copy by competitors; and makes it far easier to ensure effective speedy and efficient implementation. If competitors want to replicate it would be difficult bc they need to reconfigure their own activities and or match prices with competitor (which is not wise bc they are not lower in costs and therefore would have lower profits). Another reaction is to have alliances and partnerships. Fit: an array of interlocking activities. First order; simple consistency. Second order: activities are reinforcing. And third order: activities re reinforcing and effort is optimized. Strategy Implementation Effective implementation of any of the three strategies (cost, differentiation and focus) usual requires total commitment and support from the org. Companies need to choose an implementing strategy and then develop a superior strategy implementation ability. Choosing a implementable strategy: is a long term objective for a company is sustainable profitability and therefore revenue growth. They have four options: market penetration ( sell more to existing markets) if it is yet to become a saturated market then seek to increase market penetration need alignment and fit of activities; market development (enter new markets with existing products) this does have risk through PEST but porters 5 can be used to identify differences, company can maintain system configuration in this strategy vs product development; product development (new products into existing markets) involves new activities where knowledge and expertise are likely to be limited, significant product development usually does not draw on operational alignment and fit and uniqueness to maintain CA; and diversification (new markets for new products) involves changes in activity sets of a firm A few simple rules for strategy implementation: keep strategy simple, focused, and orientated towards securing sustainable CA; and ensure your org can implementation new strategy! Developing a ability has a greater success if: more effective; at lower cost; more quickly and

with fewer negative or unintended effects. Focus on the most important elements to change and move an org from its current position to a future desired state.