Planning and Strategizing

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Nike & Jordan

A man in 1962 thought of opening up a running shoe company and was able to sell 1300 pairs in the first year. He alongwith his former track coach from the University of Oregon, started an athletic shoe company called the Blue Ribbon Sports, to evoke the image of a winner. That year they sold 1,300 pairs of running shoes at the local track meets from the trunk of a car. In the meantime, Knight also worked as a C.P.A and an accounting professor until 1969, when he decided to devote himself full time to Blue Ribbon Sports. Then in 1972, Blue Ribbon Sports became Nike, named after the mythological Goddess of victory.
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Nike grew out of an idea Philip Knight expressed in a graduate school paper he wrote in 1962 while he was getting his MBA at Stanford. Between 1972 and 1990, Nike experienced tremendous growth. Sales in 1972 were $2 million. By 1982 sales reached $694 million. In 1990, sales reached $2billion. The Nike/Jordan story began in mid 1980s, when Nike managers felt the company slipping from its position as the leading athletic shoe maker in the United States. In 1984, company earnings dropped for the first time in a decade. In 1985, competitor Reebok even captured the market share lead for a short period of time.
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By mid 1980s, the market experienced a general slow down. Nike managers realized that they had lagged behind their competitors in responding to demands for increasingly specialized shoe types. Enter Jordan. What Jordan brought to Nike was image. After striking a deal with Nike, Jordan went on to become one of the most celebrated sports figure of all time, both as an athlete and as a product endorser. The ``Air Jordan line of basketball shoes is a product inextricably linked to a star. Nike people concentrated their efforts on a single goal: Air Jordan.
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Nikes director of investor relations, said, ``we pointed all our guns in the same direction, firing all at once-the product, the athlete, TV and print ads and point of purchase displays. ``Every corporate marketing resource was aligned and timed to coincide with and support the introduction of Air Jordans. Jordan rescued Nike from six consecutive quarters of declining earnings. Nike expected to sell 1,00,000 pairs of Air Jordan basketball shoes in the first year the were introduced; actual sales reached three to four million pairs. ``Its one of the best things thats ever happened to us, said the Nike spokesman.
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On October 6, 1993, 30 year old Michael Jordan, the Chicago Bulls gravity defying basketball star, retired from the National Basketball Association (NBA). In the wake of untimely death of his father, he decided to put an end for the time being at least-to his professional basketball career. But even before Jordan stunned the sports world with his retirement announcement, Knight and his managers were deciding to look out for options , as they knew that as unique as his talents are, Jordan would not play professional basketball forever.

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One new venture was the ``Nike Town concept. A Nike Town was part sports museum, part store, and part amusement park, and was intended to be a celebration of Nikes ``energy and youth and vitality product image. Nike towns featured 3-D commercials, giant tropical fish tanks, and basketball courts. Nike was planning to open up more of such stores after opening up in Portland and Chicago. ``Its part of a whole program of image making said David Manfredi, partner in Elkus/Manfredi Ltd., the Boston based firm that had designed similar stores for Sony also. When the Chicago Nike town opened it attracted 5000 customers a week who spent approx. $50 each.
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To keep up with the changing marketplace, Nike managers are already diversifying. In 1992, Nike opened retail outlets in which apparel, shoes, and Nike paraphernalia are sold. Nike managers attributed a $100 million increase in gross profits in 1992 to its retail sales division. In 1993, Nike managers expanded their marketing strategy to focus on women audiences, the presence of whom was growing in the market. Nike has also created in-store events, called ``Dialogue that include, fashion shows of Nike sports apparel and feature motivational speakers like biathlon champion Liz Downing and marathon runner Priscilla Welsh.
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The decision to start catering to women was not taken haphazardly. Then womens marketing director, kate Bednarski, had to put in a lot of efforts to make others believe that this move would not cannibalize sales in mens market. Once Nike was convinced that there exists a viable market, the womens team put long hours of brainstorming, and arrived at a series of ads featuring women as capable, and powerful people. Then immediate response within the company was not very favorable. But they were able to convince the management that with low initial investment it was worth a try.
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Planning

Planning is the process of coping with uncertainty by formulating future courses of action to achieve specified results. The conscious, systematic process of making decisions about goals and activities to be pursued in the future Without well formed plans, managers cant know how to organize people and resources effectively. Without planning, controlling becomes a futile exercise.
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Goal/Objective

Objective is defined as a specific commitment to achieve a measurable result within a given time frame.

Importance of Goals

Goals provide a sense of direction Goals focus our efforts Goals guide our plans and decisions Goals help us evaluate our progress
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Basic planning process

Step one: situational analysis

A process planners use, within time and resource constraints, is to gather, interpret, and summarize all information relevant to the planning issue under consideration. Study past and current conditions, and forecast future trends.

Focus on internal forces and influences from the external environment.

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Step two: alternative goals and plans

Generate alternative future goals and plans to achieve them. Goals -targets or ends the manager wants to reach. Plans-the actions or means to achieve goals.
Identify alternative actions, resources needed, and potential obstacles. Single use plan-designed to achieve goals that are unlikely to be repeated in the future. Standing plan- designed to achieve an enduring set of goals. Contingency plan- actions to be taken if initial plans fail.
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Step three: goal and plan evaluation Evaluate the advantages, disadvantages, and potential effects of each alternative goal and plan. Prioritize those goals. Consider the implications of alternative plans. Step four: goal and plan selection Identify the priorities and trade-offs among goals and plans. Leads to a written set of goals and plans that are appropriate and feasible within a predicted set of circumstances.
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Step five: implementation Plans are useless unless they are implemented properly. managers must understand the plan, have the necessary resources, and be motivated to implement it. Step six: monitor and control

Must continually monitor the actual performance in relation to the goals and plans. Develop control systems to take corrective action.

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4-16 Decision-Making Stages And Formal Planning Steps

Identifying and diagnosing the problem Generating alternative solutions Situational analysis Alternative goals and plans

General decisionmaking stages

Specific formal planning steps

Evaluating alternatives
Making the choice Implementing

Goal and plan evaluation Goal and plan selection Implementation Monitor and control

Evaluation
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The Hierarchy of Plans Mission Statement Founder, BoD, Top Managers Top & Middle Managers Middle & First Line Managers

Strategic Plans

Operational Plans

This is an ideal situation. However, this may vary with size of the organization, level of centralization/decentralization, management philosophy and the like.
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Mission Statement

Defines organization for key stakeholders. Creates an inspiring vision of what organization can be and can do. Outlines how the vision is to be accomplished. Establishes key priorities. States a common goal and fosters a sense of togetherness.

*Sony Corporation of Japan, founded after World War II, has become a leading manufacturer of a variety of products such as audio, video and information technology products.

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Also one of the most recognized entertainment company. The company emphasizes on innovation and product development. The company is driven by its mission which is stated in its founding prospectus which emphasizes on open mindedness and an environment in which engineers have a great deal of freedom that encourages innovation and application of advanced technologies. Sony emphasizes on adaptation, innovation, and risk taking contributed to the firms success. Guided by its mission, Sony developed great strengths in developing high quality products in the six business segments: electronics, games, music, pictures, insurance, and others.
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Sony Group Environmental Vision

Sony aims for greater eco-efficiency in its business activities through maximizing the efficiency of nonrenewable energy and resource use and providing products and services with greater added value. Efforts will be on reducing harmful effects on the environment by ensuring compliance with all applicable environmental regulations and reducing the environmental impact of energy and resource use on a continuous basis.

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TATA INTERNATIONAL Mission

To be a competitive value provider in international business for Group companies and all our partners.

Vision

Become a globally networked enterprise seizing opportunities worldwide to generate USD 25 million annual profits by 2008.
Vivid description of vision by 2008, we would have:

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Achieved aggressive and profitable growth of our 5 core businesses & initiated new businesses. Consistently achieved customer delight by focusing on value adding activities throughout our value chain. A strong global supply base for world class goods & services. Institutionalized Tata Excellence Business Model and achieved best in class status. Become an exciting organization which attracts & retains best talent worldwide for global competitiveness. Become a proactive, integral & responsible member of our environment & communities.
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Values

Integrity Spirit of Entrepreneurship Agility Passion for Excellence Unity

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Mission captures the very essence of the organization. Mission statement moves the strategic planning process from the present to the future. The mission statement must ``work not only today but for the intended life of the strategic plan. Mission statement has both an internal and an external dimension.

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The strategy team needs to develop a compelling vision for the future. A vision statement describes a picture of the preferred future. The vision should project a compelling story about the future. A vision statement describes how the future will look if the organization achieves its mission.

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A mission statement concerns what an enterprise is all about. A vision statement is what the enterprise wants to become. Strategic planning is a systematic process whose purpose is to map out how the enterprise should get from where it is today to the future it envisions.
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Personal mission statement encompasses life philosophy and says who you are, what your life goals are, why you live, and what your deepest aspirations are. Your personal vision statement is a description of where you are going, which values and principles guide you to reach that point., what you want to help realize in your life, what ideal characteristics you would like to have, and what your ideal profession, living and health conditions are.

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Organizational mission encompasses the identity and the core competence of the firm and indicates its reasons for existence, for who it exists, why it exists, what its primary goal is, and who are its most important stakeholders. Mission of ESSO Imperial Oil the companys mission is to create shareholder value through the development and sale of hydrocarbon energy and related products. Organizational vision encompasses a long-term dream of the firm and indicates the transformation path necessary to accomplish this. Vision is an image of the desired future. The organizational vision is, contrary to the organizational mission, tied to a time horizon and the related concrete goals.
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The organizational vision is also linked to a number of core values, in order to strengthen the one-mindedness of the employees, and favorably influence their behavior and the organizational culture.

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Organizational mission, vision, objectives and strategies of Shell Oil Refinery Pernis In 1998, Shell Pernis has taken it upon itself to be a world class refinery: a refinery with a perfect operation that belongs to the best in Europe and the top in the Benelux. To achieve this, plan PERFECT 98 was launched in mid 1996 within the organization to change and attune the organization optimally to the dynamics of the market. The decentralization of the functional structure was central, whereby the activities were organized as much as possible around the primary process, which is ``the production of oil and chemical products for shell companies.
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Mission Profitable production of oil and chemical products for shell companies all over the world.
Vision To achieve the mission Shell Pernis wants to be a big producer who: Is efficient, cheap, and as much competitive. Worker, customer-oriented and delivers the agreed upon quality. Acts safe and eco-conscious.

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Points of Difference Between Strategic Goals and operational Goals

Time Horizons Scope Degree of Detail

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Vision, strategic goals, and operational plans must be consistent and mutually supportive. Starbucks Balance Scorecard One of the most enthusiastically adopted tools for mapping a firms strategy in order to ensure strategic alignment.

Developed by Harvard professors Robert Kaplan and David Norton, BSC is a framework that helps managers translate the strategic goals into operational objectives.

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The Balanced Scorecard (BSC) began as a concept for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy.
It was developed and first used at Analog Devices in 1987.

By focusing not only on financial outcomes but also on the human issues, the Balanced Scorecard helps provide a more comprehensive view of a business, which in turn helps organizations act in their best long-term interests

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To use the scorecard for planning, it is necessary to: o clarify the vision o develop business unit scorecards o review business unit scorecards o communicate the scorecard to the entire company o conduct annual strategy reviews

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Applying The Balanced Scorecard For Starbucks

Financial
$1 billion company (market value) $100 million annual profits 800% stock appreciation 2000+ stores

Customer
Striving to be 3rd place Repeat business 30-40% annual expansion Brand extension

Process Vision And Strategy

Brewing the perfect cup Brewing the perfect cup at home Retail skills and customer service Coffee knowledge Empowerment

People/Learning
Commitment/trust (low turnover) Training Beanstock program Opinion surveys Flexible schedules
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Strategy

A companys strategy consists of the competitive moves, internal operating approaches, and action plans devised by management to produce successful performance. Strategy is managements game plan for running the business. Managers need strategies to guide HOW the organizations business will be conducted and HOW performance targets will be achieved.
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Three Big Strategic Questions

Where Are We Now?

Where Do we Want to Go? How Will We Get There?

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What is a Strategic Plan?

A strategic plan specifies where a company is headed and HOW management intends to achieve the targeted levels of performance.

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The Six Tasks of Strategic Planning/Strategic Management Process

Developing a mission and a vision Setting Objectives Analysis of internal strengths and weaknesses and analysis of external opportunities and threats. Crafting a Strategy (Strategy Formulation) Implementing and Executing Strategy (Administration) Evaluating Performance, Reviewing the Situation and Initiating Corrective Action (Strategic Control)

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An organizations MISSION

Reflects managements vision of what the organization seeks to do and to become. Sets forth a meaningful direction for the organization. Outline Who we are, What we do, and Where we are headed.

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Setting Objectives

The purpose is to convert the mission into Specific Performance Targets Serve as yardsticks for tracking company progress and performance. Should be set at levels that require stretch and disciplined effort.
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Crafting a Strategy

HOW to outcompete rivals and win a competitive advantage. HOW to respond to changing industry and competitive conditions. HOW to defend against threats to the companys well-being.

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HOW to pursue attractive opportunities. SWOT analysis

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Elements Of Environmental Analysis

Industry and market analysis Technological analysis Competitor analysis

Macroeconomic analysis

Environmental Analysis

Political and regulatory analysis

Human resources analysis

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Social analysis
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Resources And Core Competence

Resources are rare

Resources are inimitable

Core competencies

Resources are organized

Resources are valuable

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Internal Resource Analysis

Financial analysis

Other internal resource analysis

Internal Resource Analysis

Human resource assessment

Operations analysis
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Marketing audit
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Benchmarking Process of assessing how well one companys basic functions and skills compare to those of other companies. Goal is to thoroughly understand the best practices of other firms. Xerox & L.L. Bean SWOT Analysis Comparison of strengths, weaknesses, opportunities, and threats. Helps summarize the major facts and forecasts derived from external and internal analyses Used as the basis for identifying primary and secondary strategic issues confronting the organization
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Corporate Strategy: focuses on domain selection; where will they compete. E,g., Visteon Corporation vis--vis Ford Growth & diversification IBM & GE GEs CEO Geffrey Immelt has stated that GEs future depends on pursuing businesses that leverage human capital. Mergers & acquisitions HP & Compaq Strategic alliances & joint ventures Sony Ericsson Renault SA and Mahindra & Mahindra Ltd.
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Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. Reason was to combine Sonys consumer electronics expertise with Ericssons technological leadership. Renault is Frances largest car maker and Mahindra & Mahindra Ltd. Is Indias largest maker of SUVs. The two companies have come together to make Logan Sedan in India.

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Business Strategy:
Viewed in terms of domain navigation; how the company will compete against rival firms in order to create value for customers.

Low cost strategy: compete on productivity & efficiency Wal-Mart, Southwest Airlines Outsourcing Differentiation strategy: compete on value addition Fed-Ex Sony
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Functional Strategy: translate strategic priorities into functional areas of organization. In this regard, for example, HR policies & practices need to achieve two types of fit: external & internal. External Fit/Alignment Focuses on fit between the business objectives and & the major initiatives in HR. Internal Fit/Alignment HR practices should be aligned with one another internally to establish a configuration that is mutually reinforcing. Job design, staffing, training, PA, compensation, all need to focus on the same workforce objectives. Charles Schwab & Co.
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Why is a Companys Strategy Constantly Evolving?

Changing market conditions Moves of competitors New technologies and production capabilities Evolving buyer needs and preferences Political and regulatory factors New windows of opportunity Fresh ideas to improve the current strategy A crisis situation

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FedEx and Strategy Formulation

The managers of FedEx had transformed the company from a small package-delivery service into the major force in overnight delivery. However, as competition was closing in from several sides, they needed to decide on directions for the future. FedEx managers didnt see FedEx only as a packagedelivery service, but as part of a larger, more complex industry, in terms of ``information delivery. But even other overnight carriers and competitors like United Parcel Service and the U.S. Postal Service were also worried about information carriers such as MCI, AT&T, and other telecommunication companies.
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PLANNING

Therefore, it was important for company managers to speculate on future directions of all these companies. FedEx managers wanted to keep its image of being at the forefront of trends alive. The company had started with overnight delivery long before anyone realized that this service could become such an integral part of doing business. The technology and the innovation made it possible to go from handling 40 packages a night to 1.7 million . Now managers needed to plan how to use these assets to meet the information delivery needs of the future.

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Since, 1979, the processes of doing business have changed drastically. For important documents, businesses now think in terms of hours instead of days. FedEx had to be ready to meet the needs of tomorrows businesses, and to it had to anticipate the needs today. The postal service was obviously a threat its operations were somewhat limited as to future directions. Though it could challenge in terms of price and service, it would probably continue to specialize in the same type of product. United parcel Services was also a direct challenger.
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FedEx was equally concerned about competition from organizations offering other methods of information transfer. Like, MCI had recently introduced MCI mail System, which transferred documents from one computer to another in a fewer hours that FedEx. FedEx wanted to be the leader in the information delivery business, yet as the business grows more complex and diverse, being the best had become more difficult. FedEx had started with ZapMail facsimile service, which was intended to compete with MCIs Mail system.

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Zapmail seemed a well timed innovation and a way to stay ahead of the competition, but FedEx managers didnt anticipate the number of businesses that would buy their own FAX machines. They discontinued Zapmail in 1986. The Zapmail was just one example of CEO Fred Smiths responsiveness to the rapidly changing world of information delivery. To stay on top , FedEx had to become a global player, Smith & his top managers concentrated on foreign markets & acquisitions. However these efforts were very frustrating at many accounts.
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Difficulties in gaining access to specific foreign delivery routes and government restrictions favoring domestic services, coupled with the high cost of flying small packages in large planes, created a spotty network of service running at high cost. But all this didnt faze Smith. Smith made two key moves to demonstrate his commitment to global information services. First, he acquired Tiger International, the worlds largest cargo hauler in 1989. This gave FedEx access to the vast network of routes Tiger had won over the previous 40 years.

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These routes gave FedEx a direct competitive advantage in such nations such as Australia, Malaysia, and the Philippines, where landing rights were extremely difficult to come by. It also allowed Smith to mix in Federal Express small parcels with Tigers larger cargo, providing a more efficient use of space. And also, acquiring Tigers squadron of long haul aircraft allowed FedEx to move its fleet of DC-10s back to the higher volume parcel routes in the United States.

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Second, FedEx built a new facility in Alaska. This location is the centre of transportation triad, putting FedEx within seven hours of key markets in Asia, Europe and the United States. This move caught the competitors off guard forcing them to follow Smiths lead. In words of one of the expert, these two moved made FedEx the ``undisputed leader in information delivery. Now FedEx has entered into another market: logistics planning for global companies. Logistics involves managing the movement and storage of materials, parts, and finished goods from suppliers, through the firm, and to the customer.
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FedEx guarantees 2 day delivery, a reduction from the manufacturers previous 5-18 day cycles. For instance, National Semiconductor management recently awarded FedEx its finished goods delivery business from Southwest Asia to consumers worldwide. FedEx will use its own Singapore warehouse to store finished goods from National Semiconductor's Southeast Asia assembly points, ship the goods, clear them through customs, and deliver them to customers. National Semiconductor will enter orders directly into FedExs database and will be able to track them as they are moved from inventory, packed, shipped, and signed for by the customer.
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Corporate Portfolio

The most difficult question managers of todays complex organizations face: what allocation of resources to business units, product lines, R&D projects, or other business initiatives will best balance risk diversification, short term earnings, and long term shareholder value?
A business portfolio is the collection of strategic business units (SBU) that make up a corporation. The optimal business portfolio is one that fits perfectly to the companys strengths and helps to exploit the most attractive industries or markets.

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The aim of a portfolio analysis is:

To analyze its current business portfolio and decide which SBUs should receive more or less investment. To develop growth strategies for adding new products and business to the portfolio. To decide which businesses or products should no longer be retained. The BCG (Boston Consulting Group) matrix is one of the best known portfolio planning framework.

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The BCG Growth-Share Matrix is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970's. It is based on the observation that a company's business units can be classified into four categories based on combinations of market growth and market share relative to the largest competitor. Business growth serves as a proxy for industry attractiveness, and relative market share serves as a proxy for competitive advantage.

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This framework assumes that an increase in relative market share will result in an increase in the generation of cash.

Second assumption is that a growing market requires investment in assets to increase capacity and therefore results in the consumption of cash. Henderson reasoned that the cash required by rapidly growing business units could be obtained from the firm's other business units that were at a more mature stage and generating significant cash.

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Dogs

Dogs have low market share and a low growth rate and thus neither generate nor consume a large amount of cash.
Dogs are cash traps because of the money tied up in a business that has little potential. Such businesses are candidates for divestiture.

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Question Marks

Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark (also known as a "problem child") has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows.

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If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines.

Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.

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Stars

Stars generate large amounts of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate; therefore the cash in each direction approximately nets out.
If a star can maintain its large market share, it will become a cash cow when the market growth rate declines. The portfolio of a diversified company always should have stars that will become the next cash cows and ensure future cash generation.

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Cash Cows

As leaders in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate, and thus generate more cash than they consume. Such business units should be "milked", extracting the profits and investing as little cash as possible. Cash cows provide the cash required to turn question marks into market leaders, to cover the administrative costs of the company, to fund research and development, to service the corporate debt, and to pay dividends to shareholders.
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The BCG Matrix method can help understand a frequently made strategy mistake: having a one-size-fitsall-approach to strategy, such as a generic growth target (9 percent per year) or a generic return on capital of say 9.5% for an entire corporation. In such a scenario: A. Cash Cows Business Units will beat their profit target easily; the management has an easy job and is often praised anyhow. Even worse, they are often allowed to reinvest substantial cash amounts in their businesses which are mature and not growing anymore.

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B. Dogs Business Units fight an impossible battle and, even worse, investments are made now and then in hopeless attempts to 'turn the business around'. C. As a result (all) Question Marks and Stars Business Units get mediocre size investment funds. In this way they are unable to ever become cash cows. These inadequate invested sums of money are a waste of money. Either these SBUs should receive enough investment funds to enable them to achieve a real market dominance and become a cash cow (or star), or otherwise companies are advised to disinvest and try to get whatever possible cash out of the question marks that were not selected.
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Limitations

High market share is not the only success factor. Market growth is not the only indicator for attractiveness of a market. Low share businesses can be profitable too. The problems of getting data on the market share and market growth. The model uses only two dimensions. A high market share does not necessarily lead to profitability at all times.

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Competitive Intelligence

CI is the fastest growing area of SWOT analysis. Seeks basic information about competitors: who are they? What are they doing? What affect will it have on us? Michael Porter provides a framework that models an industry as being influenced by five forces.

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Competitive Intelligence/Environment Five Forces Framework (Michael Porter)

Threat of New Entrants

Bargaining power of Suppliers

Rivalry within an industry Threat of Substitute Products

Bargaining Power of Customers

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Entry of competitors How easy or difficult is it for new entrants to start to compete. Number and size of firms, Industry size and trends, product/service ranges, differentiation strategy. Threat of substitutes How easy can a product or service be substituted, especially cheaper. Relative price performance of substitutes, buyer switching costs, perceived level of product differentiation. Bargaining power of buyers How strong is the position of buyers Buyer volume, buyer switching costs, buyer information availability, product/service importance.
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Bargaining power of suppliers How strong is the position of sellers, are there many or only a few suppliers, is there a monopoly. Supplier switching costs, presence of substitute inputs, cost of inputs relative to price of the product. Rivalry among the existing players Do rivals compete aggressively, on what dimensions do they compete. Number of competitors, rate of industry growth, level of advertising expense, economies of scale, informational complexity Rival Firms Toys R Us Competitors: Schwarz or KB Toys. Wal-Mart & Target Stores
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Strategy Implementation
7-S Model
Structure

Strategy

Systems

Shared Values

Skills

Style

Staff
PLANNINGMcKinsey Source:

& Co.

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Strategy lays out the route that the organization will take in future. Organization structure is the framework in which activities of the organization members are coordinated. Systems and processes consist of all the formal & informal procedures that allow the organization to function, including capital budgeting, training etc. Style doesn't refer to personality, but to the pattern of substantive and symbolic actions undertaken by top managers.

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Shared values act as a guiding parameter for strategic planning. Skills and staff relate directly to the concerns of human resource management and points out the critical role of HR in strategy implementation.
Each of the factors is equally important for execution and interacts with all other factors. Circumstances may dictate which of the factors will be the driving force in the execution of any particular strategy. The model emphasizes that, in practice, the development of strategies poses less of a problem than their execution.
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Management by Objectives

Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. The concept of MBO was first given by Peter Drucker in 1954 in his book 'The Practice of Management'. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.
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It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. The heart of MBO are the objectives, which spell out the individual actions needed to fulfill the units functional strategy and annual objectives.

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SMART Goals Specific Measurable Achievable Realistic, and Time bound.

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