Implementation tactics for generic strategies

Akan et al. (2006:54) and Miller (2008:59) discuss four generic strategies which can be adopted in an organisation, namely, differentiation strategy, cost leadership strategy, focus cost strategy, focus differentiation strategy and their respective key tactics that are applicable for their implementation. The tactics that are necessary to implement a given generic strategy according to Akan et al. (2006:54) are shown in Figure 3.3.

56 Figure 3.3: Tactics for implementing generic strategies

Adapted from: Akan et al. (2006:54); Miller (2008:59)

As can be seen in Figure 3.3, there are four different generic strategies with tactics required for implementation. For a differentiation strategy, innovation in marketing technology, methods, as well as creativity are important to build a large market share; the tactic that proved to be most critical for a cost leadership strategy is the minimisation of distribution costs. Four tactics appear to be critical for organisations attempting a focus low-cost strategy being to provide outstanding customer service;

improving operational efficiency; controlling the quality of products or services and to provide extensive training to front-line personnel; focus differentiation‟s tactics include among others: producing specialty products and services and products or services for high-price market segments.

It can therefore be concluded that tactics are measures or practices which enhance strategy implementation and that tactics are practices that are dependent on the kind of strategy that is implemented.

The next section will discuss fundamental dimensions of strategy implementation.

Generic strategy

Differentiation

Cost leadership

Focus cost

Focus differentiation

Applicable tactics

Innovation in marketing technology and methods

Fostering innovation and creativity A focus on building high market share Minimisation of distribution costs Providing outstanding customer service Improving operational efficiency

Controlling the quality of products or services

Extensive training of front-line personnel Producing specialty products and services Producing products or services for high

price market segments

57 3.6 FUNDAMENTAL DIMENSIONS OF STRATEGY IMPLEMENTATION According to Miller (2008:48), strategy implementation involves a general plan outlining decisions of resource allocation, priorities, and actions necessary to achieve strategic goals. Pearce and Robinson (2005:68) assert that strategic implementation plans have a strong fundamental dimension or orientation that covers major functional areas of an organisation. The fundamental dimensions of implementing strategies are usually set by top management and have a time horizon consistent with the scanning abilities as well as the risk level of the organisation. The specifics of the dimensions of implementing strategies should address questions of scope, resource requirements, competitive advantage, quality expectations, social responsibility issues, and synergy among others (Robbins & Coulter, 2005:220).

Several authors (Lehner, 2004:796; Miller, 2008:48; Nutt, 2006:78, Pearce &

Robinson, 2005:68; Porter, 2004:129) find:

There is a lack of a uniform, clear, detailed and general strategy implementation dimensions;

The existing strategy implementation dimensions can be separated into two distinct types, the static and the dynamic dimensions; and;

The existing and dynamic static dimensions exhibit many relevant aspects but differ strongly on the number and on the nature of the aspects included, thus revealing insufficiencies and the need for an integrative effort.

Candido and Morris (2001:825) consider several existing dimensions to propose a synthesised static dimension and a synthesised dynamic dimension (Figures 3.4 and 3.5). The synthesised static dimension (Figure 3.4) is a representation of all organisational aspects relevant for strategy implementation at a certain point in time.

58 Figure 3.4: Fundamental dimensions of strategy implementation

Adapted from: Candido & Morris (2001:831)

The figure shows the dimensions that can be changed at each stage (Candido &

Morris, 2001:831). According to Candido (2003:37), resistance to change in the dimension is avoided by a series of preparatory stages in the process, which include extensive communication; internal debate among opposing parties; behavioural and resistance diagnosis; choice of best management styles; building a strong coalition that supports the new strategy; changing the reward systems; providing adequate training to people; and involving all those that will be responsible for implementing the strategy in previously discussing and planning it.

Adjibolosoo (2011:92) asserts that no social, economic or political organisation can function or implement strategies effectively without a network of committed staff.

Such staff must strongly believe in and continually affirm the ideals of society.

59 necessarily have to implement plans, but must oversee that intended strategic plans get implemented. The synthesised dynamic dimension on the other hand (Figure 3.5) is a generic process of strategy formulation and implementation that explicitly addresses the requirements for success, including avoidance of resistance to change.

Figure 3.5: Dynamic dimensions for strategy implementation

Adapted from: Candido & Morris (2001:832)

1. Stimulus – awareness of the issue/need for change

2. Assessment of the degree of change required/impact of the issue

16. Sustaining change 6. Behavioural diagnosis

16. Refreezing

3. Assessment of the time available, time required and urgency

13. Realigning organisational dimensions to create competencies and behaviours

12. Experimentation/pilot project 4. Choice of management style(s)

11. Planning/modular planning for change 10. Building implementability into planning

5. Definition and clarification of the mission and strategy contents

14. Monitoring, controlling the process and refining 7. Building a supportive climate

8. Organisational flux (debate)

9. Information building

15. Rewarding and recognition

UNFREEZING AND PREPARATING FOR CHANGECHANGING

REFREEZING OR SUSTAINING

CHANGE

60 Candido (2003:37) indicates that the dynamic dimension (shown in Figure 3.5) involves a process for strategy implementation that avoids resistance to change. The authors argue that in order for strategy implementation process to bring out the required change in the organisation, all the above 16 steps (shown in the diagram) have to be considered.

It is however important to note that while the two kinds of dimensions – static and dynamic – address the implementation problem from different perspectives, they are not contradictory to each other but the dimensions are complementary and have to be integrated in order to provide a better understanding of strategy implementation (Candido & Morris, 2001:830). Brenes, Mena and Molina (2007:25) on the other hand outline the five key dimensions of successful implementation of business strategy as shown in Figure 3.6.

Figure 3.6: Key dimensions of successful strategy implementation

Adapted from: Brenes et al. (2007:25)

Strategy formulation process Key dimensions of successful strategy

implementation

CEO’s leadership Motivated management

Motivated employees Corporate governance

Shareholders Board

Implementation control and follow-up

Systematic execution

61 Figure 3.6 shows that corporate governance (board and shareholders) is responsible of putting in place a suitable CEO who provides the right leadership and ensures motivated management and employees. The CEO and the management team are responsible for crafting appropriate strategies as well as systematic execution. The corporate governance, CEO, management and employees are also responsible for monitoring implementation control and follow-up.

Strategy implementation must be driven by a strategy champion, someone other than the CEO (Irwin, 2011:1). Furthermore, the strategy champion does not necessarily have to implement plans, but must oversee that intended strategic plans get implemented. Sun (2005:45) is of the opinion that strategic initiatives implemented are often not integrated in the achievement of mission and vision statements and are often not measured. However, strategic initiatives implemented can be monitored and measured using a balanced scorecard, which is an integrated strategic performance tool that use metrics to measure the outcomes of key performance areas. Barnat (2005:1) urges organisations to identify action plans to achieve strategic objectives, and time lines by which progress towards achieving these objectives can be measured.

Brenes et al. (2007:26) however argue that all the five dimensions must be managed comprehensibly to align them with the organisation„s strategic choices. It can therefore be seen that if all the dimensions shown in the Figure 3.6 play their role effectively, it can lead to successful strategy implementation in an organisation.

The next section discusses the process of strategy implementation.