University of Luzon

COLLEGE OF ACCOUNTANCY
Dagupan City

Strategic Implementation

Strategic implementation is a process that puts plans and strategies into action to

reach desired goals. The strategic plan itself is a written document that details the

steps and processes needed to reach plan goals, and includes feedback and progress

reports to ensure that the plan is on track.

What Strategic Implementation Addresses

Strategic implementation is critical to a company’s success, addressing the who,

where, when, and how of reaching the desired goals and objectives. It focuses on the

entire organization. Implementation occurs after environmental scans, SWOT

analyses, and identifying strategic issues and goals. Implementation involves

assigning individuals to tasks and timelines that will help an organization reach its

goals.

Basic Features

A successful implementation plan will have a very visible leader, such as the

CEO, as he communicates the vision, excitement and behaviors necessary for

achievement. Everyone in the organization should be engaged in the plan.

Performance measurement tools are helpful to provide motivation and allow for

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COLLEGE OF ACCOUNTANCY
Dagupan City

follow up. Implementation often includes a strategic map, which identifies and

maps the key ingredients that will direct performance. Such ingredients include

finances, market, work environment, operations, people and partners.

Sample Strategic Assessment Plans

Numerous sites and reference works offer sample strategic plan documents.

The My Strategic Plan website, for example, offers a step-by-step plan for

implementation that includes assessing necessary personnel, aligning the budget

and producing various versions of the plan for individual groups. Several of these

sample strategic plan documents allow you to set up a system for tracking the plan

and managing the system with rewards. Typically, the plan is presented to the entire

organization and includes a schedule of meetings, annual review dates for reporting

progress and a means of modifying current assignments or adding new assessments.

Five Key Components Necessary to Support Implementation:

1. People

The first stage of implementing your plan is to make sure to have the right

people on board. The right people include those folks with required competencies

and skills that are needed to support the plan. In the months following the planning

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COLLEGE OF ACCOUNTANCY
Dagupan City

process, expand employee skills through training, recruitment, or new hires to

include new competencies required by the strategic plan.

2. Resources

You need to have sufficient funds and enough time to support

implementation. Often, true costs are underestimated or not identified. True costs

can include a realistic time commitment from staff to achieve a goal, a clear

identification of expenses associated with a tactic, or unexpected cost overruns by a

vendor. Additionally, employees must have enough time to implement what may be

additional activities that they aren’t currently performing.

3. Structure

Set your structure of management and appropriate lines of authority, and have

clear, open lines of communication with your employees. A plan owner and regular

strategy meetings are the two easiest ways to put a structure in place. Meetings to

review the progress should be scheduled monthly or quarterly, depending on the

level of activity and time frame of the plan.

4. Systems

Both management and technology systems help track the progress of the plan

and make it faster to adapt to changes. As part of the system, build milestones into

the plan that must be achieved within a specific time frame. A scorecard is one tool

used by many organizations that incorporates progress tracking and milestones.

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COLLEGE OF ACCOUNTANCY
Dagupan City

5. Culture

Create an environment that connects employees to the organization’s mission

and that makes them feel comfortable. To reinforce the importance of focusing on

strategy and vision, reward success. Develop some creative positive and negative

consequences for achieving or not achieving the strategy. The rewards may be big

or small, as long as they lift the strategy above the day-to-day so people make it a

priority.

Steps for Strategy Implementation

1. Institutionalization of Strategy - this is the first step in implementing strategy

and involves two aspects namely;

 Communication of Strategy

 Securing acceptance of strategy

2. Formulation of action plans and programmes - once the strategy is

institutionalized through communication and acceptance, the management

proceeds to formulate action plans and programmes.

Action plans has the following factors:

 The purpose of the action plan

 The activities required to execute the action plan

 The person(s) who would be performing the activities

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COLLEGE OF ACCOUNTANCY
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 The resources required to perform the activities

Programmes is a single use plan designed to accomplish a specific objective. It

clearly indicates the steps to be taken, the resources to be used, and the time period

within the task should to be completed.

3. Translating general objectives into specific objectives- the top management

frames the general objectives. To make these objective operative, functional

managers must set specific objectives within the framework of the general

objectives.

Two important criteria to translate the general objectives into specific

objectives:

 The specific objectives must be realistic, achievable and time bound

 The specific objectives should contribute to the accomplishment of

general objectives

4. Resource Allocation- for successful implementation of strategy, there must be

proper resource allocation to various units and activities. Resources can be

broadly classified into 3 groups:

 Financial Resources

 Physical Resources

 Human Resources

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COLLEGE OF ACCOUNTANCY
Dagupan City

5. Procedural requirements - an organization must follow various procedural

requirements to implement the strategy.

6. Other Activities - strategy implementation requires other activities such as;

 Creating or modifying the organizational structure

 Developing or modifying leadership styles

 Building a suitable organizational climate

Factors of Strategy Implementation Process

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COLLEGE OF ACCOUNTANCY
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Common Mistakes in Strategy Implementation

Mistake #1. Confusing marketing with strategy.

Correction: A value proposition isn’t the same thing as a strategy. If you’re trying to

describe a strategy, the value proposition is a natural place to begin — it’s intuitive

to think of strategy in terms of the mix of benefits aimed at meeting customers’

needs. But as important as it is to have insight into customers’ needs, don’t confuse

marketing with strategy. What the marketing-only approach misses is that a robust

strategy also requires a tailored value chain, a unique configuration of activities that

best delivers that kind of value. This element of strategy is not at all intuitive, but it’s

absolutely essential. If you perform the same activities as everyone else, in the same

ways, how can you expect to achieve better performance? To establish a competitive

advantage, a company must deliver its distinctive value through a distinctive value

chain. It must perform different activities than rivals or perform similar activities in

different ways.

Mistake #2. Confusing competitive advantage with “what you’re good at.”

Correction: Building on strength is a good thing, but when it comes to strategy,

companies are too often inward looking and therefore likely to overestimate their

strengths. You might perceive customer service as a strong area. So that becomes the

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COLLEGE OF ACCOUNTANCY
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“strength” on which you attempt to build a strategy. But a real strength for strategy

purposes has to be something the company can do better than any of its rivals. And

“better” because you are choosing to meet different needs and performing different

activities than they perform, because you’ve chosen a different configuration for

your value chain than they have.

Mistake #3: Pursuing size above all else, because if you’re the biggest, you’ll be
more profitable.

Correction: There is at least a grain of truth in this thinking, which is precisely what

makes it so dangerous. But before you assume that bigger is always better, it is

critical to run the numbers for your business. Too often the goal is chosen because it

sounds good, whether or not the economics of the business support the logic. In

industry after industry, Porter notes that economies of scale are exhausted at a

relatively small share of industry sales. There is no systematic evidence that

indicates that industry leaders are the most profitable or successful firms. To cite one

notorious example, General Motors was the world’s largest car company for a

period of decades, a fact that didn’t prevent its descent into bankruptcy. To the

extent that size mattered at all, it might be more accurate to say that GM was too big

to succeed. Meanwhile, BMW, small by industry standards, has a history of superior

returns. Over the past decade (2000-2009), its average return on invested capital was

50 percent higher than the industry average. Companies only have to be “big
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enough,” which rarely means they have to dominate. Often “big enough” is just 10

percent of the market.

Mistake #4. Thinking that “growth” or “reaching $1 billion in revenue” is a

strategy.

Correction: Don’t confuse strategy with actions (grow, acquire, divest, etc.) or with

goals (reach X billion in sales, Y share of market). Porter’s definition: the set of

integrated choices that define how you will achieve superior performance in the face

of competition. It’s not the goal (e.g., be number one or reach $1 billion in top-line

revenue), nor is it a specific action (e.g., make acquisitions). It’s the positioning you

choose that will result in achieving the goal; the actions are the path you take to

realize the positioning. Moreover, when Porter defines strategy, he is really talking

about what constitutes a good strategy — one that will result in a higher ROIC than

the industry average. The real problem here is that you will think you have a

strategy when you don’t.

Mistake #5. Focusing on high-growth markets, because that’s where the money is.

Correction: Managers often mistakenly assume that a high-growth industry will be

an attractive one. Wrong. Growth is no guarantee that the industry will be

profitable. For example, growth might put suppliers in the driver’s seat, driving up

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COLLEGE OF ACCOUNTANCY
Dagupan City

the industry’s costs and limiting profitability. Or, combined with low entry barriers,

growth might attract new rivals, thereby increasing competition and driving prices

down. Growth alone says nothing about the power of customers or the availability

of substitutes, both of which would dampen profitability. The untested assumption

that a fast-growing industry is a “good” industry, Porter warns, often leads to bad

strategy decisions.

Avoiding the Strategic Implementation Pitfalls

Potential implementation traps:

 Lack of ownership: The most common reason a plan fails is lack of

ownership. If people don’t have a stake and responsibility in the plan, it’ll be

business as usual for all but a frustrated few.

 Lack of communication: The plan doesn’t get communicated to employees,

and they don’t understand how they contribute.

 Getting mired in the day-to-day: Owners and managers, consumed by daily

operating problems, lose sight of long-term goals.

 Out of the ordinary: The plan is treated as something separate and removed

from the management process.

 An overwhelming plan: The goals and actions generated in the strategic

planning session are too numerous because the team failed to make tough

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COLLEGE OF ACCOUNTANCY
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choices to eliminate non-critical actions. Employees don’t know where to

begin.

 A meaningless plan: The vision, mission, and value statements are viewed as

fluff and not supported by actions or don’t have employee buy-in.

 Annual strategy: Strategy is only discussed at yearly weekend retreats.

 Not considering implementation: Implementation isn’t discussed in the

strategic planning process. The planning document is seen as an end in itself.

 No progress report: There’s no method to track progress, and the plan only

measures what’s easy, not what’s important. No one feels any forward

momentum.

 No accountability: Accountability and high visibility help drive change. This

means that each measure, objective, data source, and initiative must have an

owner.

 Lack of empowerment: Although accountability may provide strong

motivation for improving performance, employees must also have the

authority, responsibility, and tools necessary to impact relevant measures.

Otherwise, they may resist involvement and ownership. It’s easier to avoid

pitfalls when they’re clearly identified. Now that you know what they are,

you’re more likely to jump right over them!

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COLLEGE OF ACCOUNTANCY
Dagupan City

Case Analysis: Samsung

I. Company Profile and Background

Samsung is a Multi-national South-Korean Company founded in 1938. It was

originally meant to be a trading company. Right now it has a number of holding

companies and subsidiaries united under the brand name of Samsung. It is the

largest South Korean conglomerate.

In 1980, Samsung entered the telecommunications hardware industry with the

purchase of Hanguk Jenja Tongsin. Initially building telephone switchboards,
Samsung expanded into telephone and fax systems which eventually shifted to
mobile phone manufacturing. The mobile phone business was grouped together
with Samsung Electronics which began to invest heavily in research and
development throughout the 1980's. During this time Samsung Electronics
expanded to Portugal, New York, Tokyo, England, and Austin, Texas.

Samsung grew as an international corporation throughout the 1990's. The

construction division of Samsung secured several high-profile construction projects,
including one of the Petronas Towers in Malaysia, Taipei 101 in Taiwan and the half-
mile tall Burj Khalifa Tower in the UAE.

II. Statement of the Problem

Jong Yong Yun’s strategy to focus on higher end products has clearly enhanced

the firm’s brand image and lead to a sharp increase in its revenues and profits. But

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COLLEGE OF ACCOUNTANCY
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accordingly, they have failed to address serious questions about Samsung’s ability to

rely exclusively on its hardware to continue to generate high margins.

More so, the life cycle of most electronic products are short with prices tending to

drop sharply over time. With this matter and considerations, this study will answer

the following questions:

1. What are Samsung’s competitive advantages over its competitors?

2. What are the ways to reduced Samsung’s cost in order to be competitive

with lower margin products?

3. How will Samsung deal with the recovery of research and development costs

in incurred in producing electronic products with short life cycle and prices that

drop sharply over time?

III. Areas of Consideration

As part of assessing Samsung’s competitive advantage among its competitors

and determining its future course of action to take as part of its strategic

management process, we will take into consideration the following:

a) PEST Analysis

Politics

Samsung has been at times subjected to political action law suit. For instance,

it has been subjected to copyright law suit.

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COLLEGE OF ACCOUNTANCY
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Economic

The recession that hit America in 2007 negatively affected the sell of Samsung

phones in the US. Fluctuation of the dollar also affects the sells of Samsung

phones.

Social

There has been a trend in various places that Samsung produces the best

smart phones. Therefore, consumers around the world are influenced by this

notion that Samsung produces the best smart phone.

Technology

Samsung is ranked as one of the most innovative companies. The software

and applications available in the Samsung phone makes it exclusive.

b) SWOT Analysis
Strengths

Most of Samsung’s hardware’ can easily be integrated with various softwares.

It has the best innovation and design Samsung’s products are environment

friendly unlike apple, Samsung’s products are cheap. Samsung’s brand is

recognized globally.

Weakness

Compared to other technology companies, Samsung has low profits margin.

Samsung’s competitors like apple are also its largest buyers of its electronic

equipment focuses on producing too many products of different kinds

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COLLEGE OF ACCOUNTANCY
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(laptops, television, phones etc.) Samsung does not have its specific OS and

software.

Opportunities

Growing demand of smartphones from India increasing mobile advertising

industry demand of quality products from Samsung expansion of tablet

markets.

Threats

Rapid technological transformation decreases smartphone prices.

IV. Alternative Courses of Action

After thoroughly considering and analyzing the internal strength and weaknesses

and external opportunities and threats, the possible courses of action that Samsung

can undertake are as follows:

• Undertake forward and horizontal integration.

• Product Proliferation

• Cost minimization

• Increase sales through market penetration and market development.

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COLLEGE OF ACCOUNTANCY
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V. Recommendation

We would like to recommend that Samsung should use its strengths to

overcome its weaknesses and use different strategies to catch opportunities and

resist the threats coming from its competitors by hiring well experienced and

talented marketing executives, officers, managers, and other personnel.

Business Strategy

• Sub-branding for penetrate to high-end market, higher positioning as high

quality products provider.

• Build valuable brand/communicate values to customer and more focus on

Flash memory products.

• More promotion and selling campaign for DRAM products, preparing for

price war coming of China competitors.

• Develops new products with green technology, less energy consumption and

toxic materials.

Corporate Strategy

• Forward vertical integration of expanding business to downstream, utilizes

strength of technology expertise, manufacturing resources and a large scale of

electronic materials provider to be an electronic devices manufacturer.

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COLLEGE OF ACCOUNTANCY
Dagupan City

• Build up business in China, for blocking growth of China competitors and

gain cost advantage from low cost manufacturing (lower labor rate).

Implementation Strategy

• Prepares organization that is suitable for international business especially in

china, recruits Chinese employees for faster familiarity with China’s culture

and market behaviors.

• Clear formulation of forward vertical integration strategy, what business

units should have to do (eg. Computer, cellphones, data storage).

• Align goals of all related business section to become consistent with corporate

goal.

VI. Conclusion

The preceding analysis clearly indicates that Samsung has its task cut out for

itself as it navigates the treacherous global consumer market landmine. Indeed, as

the company prepares to expand its global footprint, the stakes could not been

higher in a recessionary era and an over competitive technological market

landscape.

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