Strategic Management, A System of Strategic Decisions Through Which Management's Intentions Are Formulated and Implemented

Strategic Management
Strategic management is a broad discipline, its scope spanning the entire strategic decision-making structure of the organization, from the management processes and resource decisions to the activities and functions performed in all its functional units. Strategic management encompasses the organization's entire scope of strategic decision-making, including strategy management. The strategic management process is more than a set of procedures and rules to follow. It is a philosophical approach to business based on a strategic foundation - mission, vision, and values - of a business organization, and the decisions made in accordance to a company's goals, vision, mission and values. Strategic management process is comprised of the following management functions:

Planning - This involves managers establishing (setting) organizational goals and creating courses of action (action plans)to achieve them. Management makes strategic decisions to set a direction for the organization. Management can develop a number of different strategic options (alternatives) to achieve the the objective before choosing the best option - courses of action. While planning, managers typically, conduct an in-depth analysis of the organization's current state of affairs, taking into consideration its vision and mission, and evaluating what resources are available to meet organizational objectives. While planning, managers usually evaluate internal and external factors that may affect the execution of the plan, such as PESTEL factors, competitors, and customers. They also establish a realistic time line for achieving the goal/goals based on the organization's available finances, personnel and resources. There are several approaches to planning, i.e., strategic planning, tactical planning and operational planning.
Organizing - This function assembles all the resources - human, physical, financial - in a way that provides the best possible use for each. It involves developing organizational structure and allocating human resources to the roles/positions in the structure to ensure the accomplishment of the tasks/work. The purpose of organizing is to distribute the resources and delegate tasks to personnel to achieve the goals to achieve the goals established in the planning stage. During the organizing stage, managers strive to create a work environment conducive to productivity. Managers typically take employees' motivation and aptitude into consideration when matching employees with roles and tasks that best fit their abilities.
Leading - Leading is about having skills, communication aptitudes, and ability to motivate those you manage. Leading focuses on managing people, such as individual employees, teams, and groups, rather than tasks. Managers usually incorporate different leadership styles and change their management style to adapt to different situations. Examples of situational leadership styles such as: Directing, Coaching, Supporting, and Delegating.
Controlling - This is the process of evaluating the execution of the plan and making adjustments to ensure that the organizational goals are achieved. During this controlling stage, managers perform tasks such as training employees as necessary and managing deadlines. Managers monitor monitor employees and evaluate the quality of their work. They can perform performance appraisals and give employees feedback. Managers may need to make adjustments such as: Budget adjustments, and Staffing adjustments.

Strategic management is a system of decisions of an ongoing process through which management intentions and ideas are formulated, implemented and executed to accomplish an organization's mission. Strategic management is about moving the organization from its current position to a future strategic position to secure a sustainable competitive advantage. In practice, most managers deal with all the strategic management process steps simultaneously; they engage in strategic analysis (environmental scanning) to update their analytical view of the organization, they are implementing and executing strategies formulated in the past, they are formulating strategies to execute in the future, and so on.

Formulation
Implementation
Execution
Evaluation & Control
Strategic Options

Strategy Formulation
Strategy formulation is the process of using available knowledge from analyzing the organization's internal and external environments, to identifying and document the intended direction of the organization and the optimum set of viable strategies at the corporate, business, and functional levels to reach the strategic goals and objectives. Strategy formulation involves reviewing the information gleaned from completing the analysis stage of the strategic management process and using the available knowledge to produce a clear set of recommendations, with supporting justifications, that revise as necessary the mission., and objectives of the organization, and supply the strategies for accomplishing the mission and achieving the objectives. A good recommendation should be: effective in solving the stated problem(s); practical (can be implemented in this situation with the resources available); feasible within a reasonable time frame; cost-effective; not overly disruptive; and acceptable to key stakeholders in the organization. Always, there is an end in sight, and that is the organizational goals of the firm and vision.

Typically, strategy is formulated at various levels in an organization where strategy exists, such as corporate, business, operations, and functional areas. The strategies at these various levels define a layered model with well specified relationships between each of the layers. The layers include: corporate, business, operations, and functional strategy levels.

Corporate Level Strategy - Corporate level strategy is a system of decisions about 'what business an organization desires to be in?"; the different types of customers the organization will serve; the basic values and belief system of the business, and the goals and profitability that are expected to be achieved. These decisions are made in accordance to the organization's mission, vision, and values statements. Corporate level strategy is a long-term plan that concerns itself with the entirety of the organization, and defines its overall goals and direction. It takes into account the environment, the position, and the competition and aims to achieve the most profitable allocation of resources and organization structure. It may have different objectives, such as sales, growth, or leadership. Formulating corporate strategy involves broad decisions about the total organization's scope - the domain in which the organization operates - and direction - end. A company can consider formulating corporate strategy by using grand strategies as the fundamental choices, and then adding various growth tactics.
Business Level Strategy - A business strategy is the system of decisions and actions that set the company's approach to how the company will be successful; it provides the company with the basis for making the right investments in; what products - goods and services - to offer, and strong capabilities that give the company competitive advantage and differentiates it from competitors, in order to successfully achieve or fulfill the mission of the corporate strategy. Business strategy decisions concern value proposition, competitive advantage and resource allocation to achieve specific strategic goals and objectives. Business level strategy formulation documents a clear set of plans, actions, and goals that outlines how a business will compete in a particular market, or markets, and win business, with a product, or a number of products and services. A Business Level Strategy provides a way for organizations to provide value to customers by exploiting an organization's core competencies in crafting strategic options, from the generic strategies.
Operations Level Strategy - Operations strategy refers to the set of decisions an organization makes regarding the production and delivery of its goods and services. An organization may consider each step they take toward producing/delivering a product an operation, and all decisions regarding these various operations are the Operations Strategy. Operations strategy is the system of decisions that a firm makes to achieve long-term competitive advantage. Operations Strategy formulation is the process - a set of procedures - that a company can adopt to establish the way it goes about making the actual decisions, taken over time, that shape the operations strategy of a company. Operations strategy decisions can be categorized into two (2) categories: structural and infrastructure decision. Operations strategy works in tandem with overall business strategy, helping organizations to achieve their long-term goals and improve competitiveness. Operations strategy acts like a plan to specify the structure and usage of resources. Each organization strategy requires a tailored operations strategy.
Functional Strategy - Functional strategies are those put in place at the operational level of an organization and will facilitate the implementation of the corporate/business strategy. The functional strategy defines the 'HOW are we going to support business objectives at the departmental level?'. Some typical examples of functional strategies may include: Human Resource Strategy, Marketing Strategy, Financial strategy, production strategy, etc.

Strategy formulation creates a structure to guide management decisions at these levels. In strategy formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful, and create sustainable competitive advantage.

Formulating Corporate Level Strategy
Corporate strategy formulation is concerned, primarily, with decisions that establish the scope, direction and goals of the organization. Formulating an effective corporate strategy requires honest self-evaluation, by asking key questions about your business, such as:

"what's the current state of the company?"
"Where do you want your company to be in the next three (3) to five (5) years?"; (Vision)
"How does the company get there?" (Mission)
"What people, resources and finances are best capable of helping the company arrive there?".

Formulating corporate strategy involves the creation of a long-term plan that defines the overall goals and direction of the entire organization. Strategic direction can be established in a number of ways including: Mission, Culture, Values, Ideology, Principles, and Growth Strategy. Corporate strategy formulation takes into consideration the environment, the position, and the competition; and aims to achieve the most profitable allocation of resources and organizational structure. The environment factors/forces include external environment factors such as: Economic factors, Social factors, Political factors, legal factors, etc., and internal factors such as: the organization's values and ethics. Corporate strategy may be formulated for different objectives such as increase in sales, organization growth, or leadership.

At the corporate level strategy management must not only consider howto gain a competitive advantage in each of the line of businesses the firm is operating in, but also which businesses they should be in, in the first place. It is about selecting an optimal set of businesses and determining how they should be integrated into a corporate whole; a portfolio.Typically, major investment and divestment decisions are made at this level by top management. It is useful to organize the corporate level strategy considerations and initiatives into a framework with the following strategy components: grand strategy, portfolio strategy and parenting strategy.

Grand Strategy - This is a road map for how to match means with ends. It is the highest level of organizational planning that establishes how to prioritize and mobilize resources to ensure perceived interests or goals. The types of grand strategies may include: growth strategy, stability strategy, retrenchment strategy, liquidation strategy, etc.
Portfolio strategy - This is concerned with making decisions about the portfolio of lines of business (LOBs) or strategic business units (SBUs), not the company's portfolio of individual products. The most important strategies developed at this level address queries on whether a business should diversify or focus on concentration. Portfolio matrix models can be useful in reexamining a company's present portfolio.
Parenting strategy - This third component of corporate level strategy is only relevant for multi-business companies; it is moot for a single business company. This strategy is concerned with how to allocate resources and manage capabilities and activities across the portfolio of businesses.

The purpose of corporate strategy is to create company value, and to motivate employees to work toward that value, or set of goals.

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broad decisions about the total organization's scope - the domain in which the organization operates - and direction - end. It involves
A company can consider formulating corporate strategy by using grand strategies as the fundamental choices, and then adding various growth tactics.

A number of factors or forces have influence on corporate strategy formulation decision-making; these forces

Formulating an effective corporate strategy involves decisions on strategic options from a set of grand strategy options by giving due consideration to the following questions:

What businesses should the company be in? What is our business portfolio strategy? This involves giving due consideration to the following: What are the lines of business in the organization's portfolio? How are these lines interconnected or do they fit together?
What should be the company's core competency that gives it comparative advantage (enterprise advantage) in adding value to its individual businesses? What should be the capabilities that distinguish the company?
What is our growth-strategy? The choice of growth strategy has to align with the life-cycle stage of the organization. Some example of growth options include: market expansion, market penetration, product development, etc.
What should be our parenting strategy? The main point of concern here is the allocation of resources and capabilities across the lines of business of the organization. How we allocate resources and manage capabilities and activities across the portfolio? Where do we put special emphasis, and how much do we integrate various lines of business? What is the manner in which management coordinates activities and transfers resources and cultivates capabilities among product lines and business units?. Answering these questions involves evaluating and making decisions on the following: Priorities in allocating resources? what are critical success factors in each business unit, and how can the company do well in them? Coordination of activities (e.g., horizontal strategies) and transfer of capabilities among business units? How much integration of business units is desirable?

These decisions and choices determine the long-term orientation of the organization, and the development and corporate activities that evaluate current positions and identifies investment priorities for the businesses.

In order to develop corporate strategy, a firm must look at how the various businesses they own, fit together, how they impact each other, and how the parent company is structured, in order to optimize human capital, processes, and governance.

Corporate Strategy
A corporate strategy is a long-term plan that outlines clear goals for a company.

Corporate strategy at its core is concerned with the entirety of a business. Corporate strategy encompasses the firm's choices with respect to scope, the direction it follows to achieve its set objectives. While the objective for each goal may differ, the ultimate purpose of a corporate strategy is to improve the company's position.

Corporate strategy is a set of goals and major policies. The goals are are an indication of what the company as a whole is trying to achieve and become.

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Corporate strategy refers to the grand strategies employed by companies that determine the firm's choices with respect to scope, the direction. Corporate strategy -grand strategy - can be classified into one of three (3) categories of strategic options/choices, such as:

Growth strategy - A growth strategy is a plan or goal for the organization to create considerable growth in different areas; such as overall growth, or specific areas such as sales, revenue, or company size. Companies can accomplish growth strategies through concentration or diversification, horizontal/vertical integration, as well as through mergers & acquisitions.
Stability strategy - A stability strategy is a plan or goal for the organization to stay within its current industry or market because it is already succeeding in its current situation. This strategy maintains the company's success by continuing practices that work for the company. To do this, the company might invest in areas in which they re doing well, such as customer satisfaction.
Retrenchment strategy - A retrenchment strategy is a plan that encourages the company to change paths to improve the business. This might mean switching business models or changing markets. A company might achieve this by either switching the business's pathway or by removing parts of the business.
Reinvention Strategy - This is a plan for a company to reinvent, or redesign aspects of its business, including significantly changing a good or service. An example could be converting a physical stores into an online store.
Portfolio strategy - This is concerned with making decisions about the portfolio of lines of business (LOBs) or strategic business units (SBUs), not the company's portfolio of individual products. The most important strategies developed at this level address queries on whether a business should diversify or focus on concentration. Portfolio matrix models can be useful in reexamining a company's present portfolio.
Parenting strategy - This third component of corporate level strategy is only relevant for multi-business companies; it is moot for a single business company. This strategy is concerned with how to allocate resources and manage capabilities and activities across the portfolio of businesses.

Corporate level strategy is the set of decisions that establishes the company's scope and direction. The purpose of corporate strategy is to create company value, and to motivate employees to work toward that value, or set of goals. Corporate strategy allows your business to be proactive, durable and efficient.

Components of Corporate Strategy
Creating sound corporate strategy involves several important components that leaders focus on, these may include:

Visioning - The overriding purpose of the visioning component is setting the high-level direction of the organization - namely establishing the vision, mission, and corporate values. In creating a corporate vision statement, the primary goal should be to respond to or establish how leadership sees the company evolving in the future.
Objectives - This is the process of setting objectives. To create and implement a corporate strategy, you typically need to set objectives. A corporate strategy is a plan, goal, or course of action to company should follow. The plan consists of tasks that describe the company's mission. Strategic objectives are the big-picture goals for the company: they describe what the company will do to try to fulfill its mission. Having strategic objectives in place allows a company to measure its progress. Clearly communicating these objectives to personnel ensures that everyone is focused on the highest-priority tasks and is operating under the same assumptions about the company's future.
Resources - This component refers to the people, materials, and capital that run the company. A key component of corporate strategy is to allocate resources to best support the company's development. To do this, a manager may assign resources to different areas of the business. Resource allocation involves planning, managing and assigning resources in a form that helps to reach a company’s strategic goals. In an effort to maximize the value of the entire firm, leaders must determine how to allocate these resources to the various businesses or business units to make the whole greater than the sum of the parts. Key factors related to allocation of resources are: people - identifying core competencies and ensuring they are well distributed across the firm, moving leaders to where they are needed, and ensuring appropriate supply of talent is available for the businesses; capital - allocating capital across businesses so it earns the highest risk adjusted return), and analyzing external opportunities and allocating capital between internal projects and external opportunities.
Portfolio Management - Portfolio management analyzes the different components of a business to see if they work well together. A corporate strategy uses portfolio management to decide which areas of the company to work on or invest in, which could include:

Deciding on a market,
Using Vertical Integration,
Investing in new opportunities,
Diversifying the company,
Analyzing competition.

Organization Design - This component refers to the decisions concerning organization design. Design ensures that the employees organize the structure of a company in a way that maximizes efficiency. Factors related to design include: centralization/decentralization - determining how much autonomy to give business units, deciding decision rights, influence on strategy of business units; organizational structure/reporting - determining how large initiatives and commitments will be divided into smaller projects, integrating business units and functions to eliminate redundancies, developing centers of excellence, determining the appropriate delegation of authority, setting governance structures, setting up reporting structures, and allowing for the balance between risk and return to exist by separating responsibilities.
Portfolio Management - Portfolio management looks at the way the business units complement each other, their correlations, and decides where the firm will :"play" (i.e., what businesses it will or will not enter). Corporate strategy related to portfolio management includes: Deciding what businesses to be in, or to be out of; Determining the extent of vertical integration the firm should have; Managing risk through diversification and reducing the correlation of results across businesses; Creating strategic options by seeding new opportunities that could be heavily invested in, if appropriate; Monitoring the competitive landscape and ensuring the portfolio is well balanced relative to trends in the market.
Strategic Trade-offs (Strategic Priorities) - This involves identifying the strategic trade-offs, and balancing risk and return on investment to ensure that the desired levels of risk management and return generation are being pursued. Since it’s not always possible to take advantage of all feasible opportunities, and because business decisions almost always entail a degree of risk, companies need to take these factors into account in arriving at the optimal strategic mix.

Leaders responsible for corporate strategy decision making have to consider a number of factors , including: allocation of resources, organization design, portfolio management, and strategic trade-offs. By optimizing all of the above factors, a leader can hopefully, create a portfolio of businesses that is worth more than just the sum of its parts.

Formulating Business Level Strategy
Business level strategies are formulated for specific strategic business units and relate to distinct product-market areas, and the business unit's competitive position. A company can consider formulating competitive strategy by using generic strategies as the fundamental choices, and then adding various competitive tactics. Competitive tactics is the set of policies and procedures that a business uses to gain competitive advantage in the market place.

Business level strategy formulation is the process of crafting a number of viable business strategy options and selecting the best (most appropriate) option that will build or improve the company's competitive advantage/position. Business level strategy formulation decisions are primarily concerned with how a company will approach the marketplace - where to play - and how to win.

Business strategy formulation on where to play involves decisions and choices regarding the following:

Which customer segments will we target?
What geographies will we cover?
What products and services will we bring to market?
What are strengths and weaknesses?

You can't be all things to all people and all customers. You need to find the right markets (target markets) and locations to compete in, and make sure your value proposition is the right one for the the right customers and right locations

Formulating competitive strategy (how to win) involves giving consideration to the following:

How will we position ourselves against our competitors?
What capabilities will we employ to differentiate us from the competition? A business needs strong and differentiated capabilities to compete successfully. For example, if you are pursuing a cost leadership strategy, you need capacity, great supply chain management, and a culture that drives cost out of the system.
What unique approaches will we apply to create new markets?

Successful competitive strategies usually involve building uniquely strong or distinctive competencies in one or several areas crucial to success and using them to maintain a competitive edge over rivals. Some examples of distinctive competencies are: Superior technology and/or product features; Better manufacturing technology and skills; Superior sales and distribution capabilities; Better customer service and Convenience.

Answers to the questions of where to play or how to win drive strategy formulation and implementation and guide deliberations ensuring management is making the right decisions to create a sound business and competitive strategy.

A company can consider formulating competitive strategy by using generic strategies as the fundamental choices, and then adding various competitive tactics. A competitive strategy is a set of policies and procedures that a business uses to gain a competitive advantage in the market. It involves the process of identifying and executing actions that allow a business to improve its competitive position. Competitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than its rivals. These factors allow an organization to generate more sales or superior margins compared to its market rivals. A company has competitive advantage whenever it can attract customers and defend against competitive forces better than its rivals. Businesses and consumers purchase one product instead of another when the products are similar, because customers believe that one of the products has a difference (value) they want/need. The difference could be a cost (a lower price), better warranty, or more status. It could be that the product is healthier, more environmentally friendly, more reliable, or some other benefit. Businesses may use various competitive strategies to raise the value of their products and services for consumers, investors, and employees.

Generic strategies are ways of gaining competitive advantage - In other words, developing the "edge" that gets you the sale, and takes it away from your competitors. Generic strategies refers to the alternative methods an organization uses to position itself, competitively, in an industry. These may include:

Cost Leadership Strategy - This strategy is for organizations that want to compete for a broad customer base, based on price. The organization is trying to be the lowest cost producer. Common mechanisms to drive down costs include: establishing rigid cost controls; building state-of-the-art facilities to produce at scale at a low cost; outsourcing to countries with lower wages. To be effective, this strategy requires your product or service to be standardized. This strategy can help defend your business against Porter's five (5) forces.
Differentiation Strategy - This strategy is for firms that want broad customer base, based on their uniqueness. With differentiation strategy an organization is attempting to establish and maintain meaningful differences between the firm and its competitors. Typically, firms with this strategy will focus on building unique features to win in the marketplace. Common mechanisms to differentiate include: Superior quality; Customer service; Design; Uniqueness.
Focused Strategy - This is a specialization strategy. The focus dimension of a competitive strategy recognizes that either a cost advantage or differentiation strategy can be applied to a more narrow (niche) market.

Focused Cost Leadership Strategy - These organizations compete on price but also stand out because they focus on serving a niche market. Common mechanisms to adopt a Focused Cost Leadership Strategy include:Focusing on serving a small group of customers; By uniquely understanding the needs of your niche market, you can cut costs to serve the needs of that market. This strategy can help defend your business against Porter's 5 Forces in the same way that broad cost leadership strategy can.
Focused Differentiation Strategy - This strategy is very similar to that of a differentiation strategy except that it is focused on a very narrow segment of the market. These firms compete by offering unique features to a small market segment. Common mechanisms to focus include: Select a profitable narrow subset of the market; Focus on areas where competition is weakest; Focus on areas where product substitution is difficult.

Integrated Cost/Differentiation Strategy - This is a hybrid strategy. This strategy involves producing low-cost products with differentiated features. This strategy is about simultaneously focusing on two drivers of competitive advantage: cost and differentiation.

Note that no one generic strategy is better than another. An organization can be successful using any one of these strategies A choice of one of these generic strategies provides the foundation for a business strategy, however there can be many variations and elaborations; among these are competitive tactics such as: Timing tactics - when to enter a market, market location/positioning tactics - where and how to enter and/or defend, and cooperative strategies. An organization needs to choose the right strategy based its external environment factors (what competitors are doing), and also where the organization's strength lie (core competencies). Business strategy by identifying clear set of plans and actions that outline how an organization will compete in particular markets with current portfolio of products and services to reach its goals, enables organization success.

Business Level Strategy
Business level strategy is the system of decisions and actions that determine an organization's competitive positioning, and competitive advantage. These decisions and actions concern value proposition, competitive advantage, product differentiation, pricing, marketing and resource allocation to achieve specific goals and objectives. Business level strategy is concerned with how the organization competes within a specific industry/market, as constrained by competitive priorities (established through the SWOT analysis). Business strategy allows you to focus on capitalizing on your strengths, using them as competitive advantage that makes your company unique in the marketplace. To build competitive advantage a company must be able to identify its value proposition that will be sought after by the target market, and cant be replicated by competitors. Competitive strategy is concerned with creating competitive advantage through creating a unique selling proposition for your business. It involves pursuing an ongoing process of brand management, pricing evaluation, distribution strategy and operational efficiencies in creating, maintaining, and improving your competitive advantage in your market place and increasing customer preference and loyalty, sales, profits and market share.

Some examples of business strategic options include:

Product differentiation - This type of differentiation strategy may be based on innovative technology, pricing, features and design. Companies can differentiate their products by highlighting the fact that they have superior technology, features, pricing, or styling. With differentiation strategy, firms target to achieve market leadership.
Improve customer experience - Customer experience refers to the sum of all interactions a customer has with a business, both pre and post sales. The customer experience strategy defines the actionable plans in place to deliver a positive, meaningful experience across those interactions.
Pricing - When it comes to pricing strategy, businesses can differentiate either by keeping their prices low to attract more customers, or give the products aspiration value by pricing them beyond what most ordinary customers could afford.
Cross-sell more products - Focus on selling additional products to the same customer.
Improve customer retention - This strategy requires you to identify key tactics and projects to retain your customers.
Grow sales from new products - This strategy involves introducing new products into the market and updated products that are able to keep up with trends. It requires the company to invest in research and development in order to constantly innovate.
Technological advantage - Obtaining a technological advantage to achieve better sales, improved productivity or even market domination.

Business strategy is a tool to help organizations define the methods and tactics (function actions) they need to take within their company to reach their business goals. Business strategies act as a foundation for developing operations and functional strategies.

A business strategy helps different functional departments work together, ensuring departmental decisions support the overall direction of the company. Business strategy can help you create better products or services, offer better pricing, make it easier to buy, or create a benefit that your customers want/need.

Formulating Operations Level Strategy
"Operations" is a term used to refer to the steps/tasks an organization performs in the process of producing and delivering value to customers. Operations strategy is the set of decisions an organization makes, regarding those various operations they take, in the production and delivery of goods and/or services. It is the collective concrete actions chosen, mandated or stipulated by corporate strategy and implemented in the operations function. Operations strategy is the logic underlying operations management decisions. Operations strategy focuses on maximizing the efficiency and effectiveness of production of services or goods while minimizing operating costs.

Operations strategy is the set of the actual (operations management) decisions that are taken over time, and shape the operations of a company. Operations strategy is the whole system of decisions that are aimed at shaping both the long-term capabilities of operations, regardless of the type of operations, and their contribution to overall strategy achievement. The realized operations strategy is the total pattern of decisions which shape the long-term capabilities of any type of operations and their contribution to the overall business strategy. Operations strategy focuses on maximizing the efficiency and effectiveness of production of services or goods while minimizing operating costs. Operations strategy drives a company's operations function, the part of the business that produces and distributes goods and services.

Operations Strategy Formulation
Operations strategy formulation is a decision making process that shapes an organization's long-term plans to achieve the objective of its mission statement. Operations strategy formulation is the practical process of articulating the various objectives and decisions that make up the operations strategy. Operations strategy formulation involves the identification of existing processes and technology in place to support the business strategy of an organization, as well as considerations around the supply chain, customers, competitors, and organization's strengths and weaknesses, and the business facilities. Operations strategy formulation involves comprehensive analysis of the operations capability from the perspective of operations. This provides a plan for the design and management of the operations function in ways that support the business strategy. When developing operations strategy management should give due consideration to the strategic positioning of the firm i.e. the requirements mandated by corporate and business strategy, market requirements, as well as competitive priorities and how you will handle them by the types of operations strategy employed.

Operations strategy is formulated by first determining the competitive priorities of the firm (market requirements view), then translating these priorities into production requirements related to the structure and infrastructure decisions of the firm.

Structural decisions are the ones that define the shape of the building blocks associated with a particular operation. They are directly related to the tangible aspects of operations, such as: process technology for manufacturing, vertical integration, facilities - location, capacity, and variety of product manufacturing. Structural decisions define the overall tangible shape and architecture of the operation. Structural elements decisions are grouped as follows:

Facilities: Size, Capacity and Location - Facilities operations decisions refer to size, capacity and plant location(s). Factory capacity refers to the level and variety of manufacturing output.
Location - Plant location may depend on a number of factors, such as: location of raw materials, location of markets, availability of transportation and communication systems, qualification of workforce, etc. Globalization can also affect location decisions as firms have to be competitive within a unique market.
Process technology - This may refer to manufacturing process technology. Firms may produce either high volumes of standardized homogeneous and undifferentiated products, or low volumes of differentiated products, specific to customers' preferences by using general equipment or manufacturing machines. Innovative information technologies let firms develop and exploit new automation manufacturing technologies that give these firms more flexible and efficient solutions to material requirements planning or operations engineering.
Vertical Integration - Managers have to decide which raw materials or components are necessary to be internally developed and which ones must be externally bought. Vertical integration can be useful choice to get economies of scale.

Infrastructural decisions or practices, comprise just operational practices or decisions that correspond to operations managers exclusively. These decisions may be considered as strategic or tactical choices because they refer to the people, systems, policies, practices, procedures and organization which support the value creation processes (i.e., goods manufacturing or service production) and enable them to perform their function. The elements of infrastructural decisions and practices may include:

Quality Management - This defines the expected quality from the consumers view point as well as established policies and procedures that the company intends to adopt towards attaining such quality levels. Quality management can be defined from two (2) points of view. A simple quality control process oriented towards reducing the number of defects in final products; It is just an inspection process. The other view is considering quality management as an operations philosophy on trying to erode any source of defects. :
Workforce/Human Resources - This relates to decisions on how to recruit, motivate and retain the staff with necessary skills and talents.
Inventory Management - This relates to decisions about inventory ordering and holding, and how to optimize the process in order to ensure consumers' satisfaction, enhanced supplier capabilities and effective production schedule.
Organizational Structure - This refers to corporate structure and business structure. Corporate structure is the business arrangement created in response to demands of corporate strategy. Corporate structure decisions result in different organizational units, each focusing on different tasks or specialties. To achieve unity of effort by combining the activities of these diverse units, the organization relies on integrative methods and mechanisms provided though structural integration.
Planning and Control Systems - Production planning and control systems contribute to the productivity of resources by ,making it possible to accurately match the supply of capacity and inventory to demand.
New Product/Service Design - Product/service design processes dictate the product or service attributes that will provide the customers the value they seek.
Process Capacity and Design - This defines how the product - good or service - is produced (i.e., the production processes utilized and the specific technology, quality, human resource, and capital investments that the management will undertake in order to determine majority of the company's basic cost structure.
Supply Chain Management - This relates to decisions on how to integrate supply chain into the company's operations and strategy It includes decisions on what will be purchased when it will be purchased, whom it will be purchased from and the conditions for such purchases. Procurement is the process of getting the goods and materials your company needs.

Structural decisions have several remarkable strategic implications, they require substantial financial investments, and have great effects on physical assets. They have long term impact, and are not easily reversible, once they have been taken. A company's structure is related to the physical attributes of operations. Infrastructural decisions relate to systems used to enhance enhance the utilization of structural resources, and the control of those resources so the business achieves a high level of productivity. Infrastructure decisions affect organizational culture control systems, workforce, quality management and leadership. Their cumulative effects can be difficult and costly to change, just like the structural ones are. A company's structure is related to the physical attributes of operations. A company's infrastructure is composed of its policies and systems governing a number of activities such as capital budgeting, equipment selection, organizational structure, etc.

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The operations strategy must then be aligned with the company's business strategy (top-down view) to enable the company to achieve its long-term plan. By developing operations strategies, a company can examine and implement effective and efficient systems for using resources, personnel and work processes. In service-oriented companies, basic operations strategies can be used to link long-term and short-term corporate decisions and create an effective management team.

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Operations strategy supports in linking operational level decisions, i.e., both long-term and short-term, to corporate and business strategy. This linking can be considered a process of making key operations decisions by maintaining consistency with the overall objectives of the organization, from a strategic point of view. An organization's operations strategy works in tandem with its overall business strategy, helping the organization achieve its long-term goals and improve competitiveness in te market place.

Operations strategy can be helpful in the planning of processes and tasks, and aligning them with the larger goals of the organization.

Operations strategy helps a company examine and implement effective and efficient systems to achieve the corporate objectives. Ensuring the system works efficiently and effectively toward the organization's overall goals is a priority for for many of these businesses.

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Components of Operations Strategy
Operations strategies revolve around the core business processes such as production, supply chain, distribution, logistics, etc. Operations strategies may also revolve around capacity of production facilities, their location, product lines procurement, etc. Operations strategy may also include strategies such as product development, market penetration, customer engagement, etc. Operations strategy consists of a series of decisions that organizations take in order to implement their competitive business strategies. Operations strategy can have many different components, including:

Product Operations - Product operations managers look to streamline processes; analyze data regarding their products and use it to prioritize tasks, and help product managers decide which elements of a product to prioritize.
Designing and Positioning the Production System - This element includes choosing the type of processing system, production design, and finished goods inventory plan, etc. for each main line of product in the business plan. Production systems are of two (2) types: Systems focused on Products; and Systems focused on Processes.
Focusing Production/Manufacturing and Service Facilities - One of the important elements of operations strategy is to plan for different production facilities to achieve some sort of specialization in each of them. This allows the production facility to gain a command over achieving specific objectives because the equipment, procedures, and supporting systems can focus on certain limited tasks for a particular set of customers.
Design and Development of Product/Service - The design and development process involve different stages and phases such as: generating ideas, making the feasibility reports, designing and testing prototypes, preparing a production model, evaluating production related economies of scale, market-based testing of the product/service, taking feedback, and developing final design and initiating production.
Inventory Management - [TBD]
Supply Chain Optimization - [TBD]
Quality of Final Product - [TBD]
Selection of Technology and Process Development - An essential aspect of operations strategy is to determine the way of producing products/services. This includes making decisions and plans on every detail of processes and facilities in production. To achieve the optimum level of production, the analysis of the selected product for production is conducted for the process and appropriate technology. Operations managers face various challenges in taking such decisions due to the availability of lots of options or alternatives.
Resource Allocation - This involves the continuous allocation of resources such as: cash, capital, workforce, machines, materials, capacity, equipment, services, etc. The allocation of these resources must be done in such a way that helps in achieving the goals of operations up to a maximum extent. Allocating these resources at the right time and place of production shows the efficiency level of production managers. Economical production can be achieved by utilizing resources in an optimal way. A sound operations strategy is required to obtain superior quality products, minimize wastage and optimum utilization of available resources.
Planning of Capacity, Facility, and Layout - These are key decision areas critical to achieve competitive advantage, are creating layout, facilities, and location for the production of products/services, .The expansion of the manufacturing unit in the future also depends on these decisions related to the land and equipment acquisition for production, and location of new manufacturing units.

Operations strategy is essentially, about the different ways of aligning plans, activities, and objectives.

Common Types of Operations Strategies
Operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces/factors by linking firm policies, programs, systems, and actions into a systematic response to the competitive priorities chosen and communicated by the corporate or business strategy. In simpler terms, the operations strategy specifies how the firm will employ its operations capabilities to support the business strategy. An effective operations strategy considers a company's long-term objectives and creates steps that cohesively bond business plans with resources, capacity, time, location, and competition.

Some common types of operations strategies an organization can use to enhance efficiency, boost capabilities and improve competitive advantage .include:

Customer-Driven Strategies - This operations strategy is customer centric, and intended to improve customer experience. Companies using this type of strategy make operations decisions based on the customer experience. Some examples include: a rental car company that eliminates long lines at the airport, or a customer support/call center that eliminates waiting times. These are market based strategies that enable the organization to meet the needs and desires of a target market. These strategies must allow a company to evaluate and adapt to changing environments, continuously enhancing core competencies, and developing new strengths on an ongoing basis. This type of operations strategy aligns with sales and marketing strategies to manage and fulfill customer expectations, and contributes to building loyalty and referral business.
Core Competencies Strategy - Core competencies are the strengths and resources within a company. This type of operations strategy revolves around the main strengths of a company's business model. By identifying the best core business processes within an organization; this type of operations strategy focuses on leveraging existing strengths to maximize profitability. By identifying its core competencies a company can develop processes such as customer satisfaction, product development, and building professional relationships with stakeholders. This type of operations strategy involves developing the company's key strengths and resources. Core competency based strategies are resource-based strategies, and may include having well-trained staff, optimal business locations, and marketing and financial strengths.
Competitive Strategies - This type of operations strategy involves a company developing its operations processes to distinguish their products or services from competitors based on identified competitive priorities and established competitive advantage. A compaany can change their operations strategy to move towards a competitive advantage based on higher quality product, faster lead time during production, etc..
Product and Service Development - Operations strategy around product development aim to develop compelling products and services that resonate with a firm's customers. Operations strategy behind the development of products - goods and service - should consider design, innovation, and added value. When developing a product - good or service - a company should consider the wants and needs of its customers, how it stands against the competition, and how its technical measures relate to its customers' needs. Companies should consider packaging services with immediately observable and psychological benefits and support services. This type of operations strategy resolves around the quality control of existing products or services as well as the development of new products and services. Businesses using this model often determine their operations strategies based on research and ideas from product managers.
Corporate Strategy - Overall company strategy, driving the company mission and interconnected departments/functions. This type of operations strategy adhere to a company's mission statement and aligns itself to a larger corporate strategy. Businesses using this type of operations strategy develop production initiatives, key performance indicators, and decision-making processes based on strategic plan determined by company's leadership and stakeholders.
Supply Chain Strategy - This strategy refers to the process of creating excellence through superior delivery capabilities. One type of supply chain operations strategy might be to reduce product costs through bulk purchases, or production line automation. Another, might look at offering product customization to deliver more customer value, while simultaneously making the delivery of goods more efficient.
Market penetration strategy - This focuses on capturing larger segments of the target customer market. This strategy has several potential focus areas: a business can decide to attract customers away from competitors; or it can attract nonusers that have no experience with your business or with a competitor. Another focus of this strategy is employing one or more geographic locations, centered around a target demographic. Businesses can also try to add more value to existing clients, thereby enticing increased spending on product or service upgrades. For example, an insurance company might define market penetration success by the number of new automobile policies sold. In this regard, it may also decide to hire additional insurance sales agents, open additional branch offices in new locations, partner with online portals, etc. to gain additional customers.
Location Strategy - This related to decisions as to how near the company and its products should be to the consumers, suppliers, and talent while taking into consideration costs, infrastructure, logistics, and government.
Layout Strategy - This relates to integrating capacity needs, personnel levels, inventory requirements, and technology in order to ensure that material, people, and information efficiently flow through the company.

The role of operations strategy is to provide a plan for the operations function so that it can make the best use of its resources. Operations strategy (as a plan) specifies the policies and plans for using the organization's resources to support its long-term competitive strategy. By developing operations strategies a company can examine and implement effective and efficient systems for using resources, personnel and the work processes. When implemented successfully, operations strategies strengthen a company's overall strategy and may help achieve market place advantage over the competition. It can also improve an organization's competencies and infrastructure allowing it to better serve customers and keep or extend its competitive advantage over others in the market. Operations strategy helps operations management optimize the use of resources, people, processes and technology. Operations strategy focuses on reducing process costs, and improving profits for the entire business.

Operations strategy is crucial for competitiveness and success. The main focus of operations strategy is on specific capabilities related to operations that facilitate an organization in gaining competitive advantage. Operations strategies connect the firms programs, policies, guidelines and workforce in a way that allows each part of the organization (functional areas) to support others in achieving a common goal. The benefits of having an operations strategy within the organization includes: employee efficiency, resource management, and department/functions cooperation.

Strategy Implementation - Planning
Strategy implementation planning is one way by which an organization's objectives, strategies, and policies are put into action through development of initiatives (programs and projects), budgets and procedures. Strategies are implemented through the use of projects, programs and portfolios. Implementation planning is the process for developing annual objectives and specific initiatives and plans that are logically linked to the goals of the chosen strategy.

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process for developing annual objectives, and specific initiative plans that are logically linked to the results of strategy formulation. Implementation planning is one way by which an organization's objectives, strategies, and policies are put into action through development of strategic initiatives. budgets and procedures. Strategic initiatives are the means through which an organization translates its goals and vision into practices. They are the specific actions an organization adopts to being its vision to life.

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Changes in strategic direction do not occur automatically; operational plans must be established to make a strategy work as intended. There are three (3) types of plans generated during the implementation phase:

Plan of action - This involves the definition of objectives, the timing of strategies, the formation of sub-strategies relating to markets, production, finance, distribution, pricing, R&D, investment, and personnel placement.
Plan of Implementation - This deals with organizational design changes and structural modifications, motivational plans, reward and punishment systems, leadership stule, controls, and information systems.
Plan of Policy - This covers changes in Values, rules, policies and procedures.

These plans must be linked to appropriate control systes within the organization, such as: budgeting, operational planning and incentive systems.

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Planning involves the following:

Set Clear Goals and Define Key Variables - Identify the goals that the new strategy should achieve. Determine what you hope to accomplish when your project is completed, like whether you hope to win over a new marketing client, or revamp your internal content strategy. Goals help establish a clear picture of what you hope to attain. Without a clear picture of what you are trying to attain, it can be difficult to establish a plan for getting there. Another important aspect of goal setting is to account for variables that might hinder your team's ability to reach the identified goals and lay out contingency plans. Usually, strategic choices selected for implementation are expressed as high-level statements that resonate with the board, and executive level management. Ensure the strategic choices are sound and described in statements that clearly communicate what top management wants and expects. The statements should be expressed in terms that middle-level and line management would understand; such as the products and services to offer and in which markets; what resources, capabilities, and competencies are needed to support these products and services; how to acquire or build these resources.

Conduct Research - Conduct interviews, surveys, focus groups, or observations to hone in on the strategic goals. The research outcomes should include a list of what your project timeline, budget, and personnel may look like.
Map Out Risks - Map out all the potential risks you may face in your project, as identified in your brainstorming risk scenarios in step 1.
Schedule Milestones - Scheduling Milestones act as checkpoints that help you tract your progress during execution. Milestones serve as metrics - how far you have come in your project, and how far you have left to go.

Determine Roles, Responsibilities and Relationships - Determine who needs to do what and when. Develop action plans to help determine "what" specific actions or activities need to be carried out by "who", and "when" in order to achieve a goal within the constraints defined by the objective statements. An action plan gives a time table for implementing a strategy. In this phase it can be helpful to document all of the resources available, including the employees, teams and departments that will be involved.Outline a clear picture of what each resource is responsible for achieving, and establish a communication process that everyone should adhere to.
Allocate Resources - This involves allocation of resources - financial, physical, human, and technological resources - to the departments and function areas responsible for executing the strategy. Resource allocation is a central management activity that allows for strategy execution.
Putting Plan into Action - Execute the plan, Monitor progress and performance, and provide continued support. One effective strategy for monitoring progress is to use daily, weekly, and monthly status reports, and check-ins to to provide updates; reestablish due dates and milestones, and ensure all teams are aligned.
Take Corrective Action - Adjust or revise as necessary. Implementation is an iterative process, so the work doesn’t stop as soon as you think you’ve reached your goal. Processes can change mid-course, and unforeseen issues or challenges can arise. Sometimes, your original goals will need to shift as the nature of the project itself changes.
Get Closure on the Project, and Agreement on the Output - Everyone on the team should agree on what the final product should look like based on the goals set at the beginning. When you’ve successfully implemented your strategy, check in with each team member and department to make sure they have everything they need to finish the job and feel like their work is complete.
Review of How the Process Went - Conduct a retrospective. Once your strategy has been fully implemented, look back on the process and evaluate how things went. Ask yourself questions like:

Did we achieve our goals?
If not, why? What steps are required to get us to those goals?
What roadblocks or challenges emerged over the course of the project that could have been anticipated? How can we avoid these challenges in the future?
In general, what lessons can we learn from the process?

These steps help you create an implementation plan that will increase the likelihood of meeting your project goals.

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A manager has to apply his/her business judgment, evaluation and intuition into defining the problem underlying the gap between the current state and future/target state, and the decide what strategy to employ.

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Implementation assumes the existence of an operations infrastructure such as; organization structure, systems (e.g., payroll system, performance management system, employee compensation and benefits system, employee on-boarding system, etc.). It involves using the organization's current structure (which establishes the roles and responsibilities) to make the formulated strategy work as intended. Everyone in the organization must be made clear of their responsibilities and duties, and how that fits in with the overall strategic goal. All required resources including funding must be secured at this point prior to execution of the plan.

Implementation Plan
The implementation plan is a complex mix of decisions and activities on managing people, strategy, and operations in creating "fits" between the ways things are done and what it takes for effective strategy execution to make the strategy work as intended. Implementation plan includes several different components that need to be coordinated and managed through the assignment and direction of personnel to carry out the plan.

Objectives - Outline project objectives; thee are goals or milestones you want to reach. Set your goals and decide what metric your team will use to measure and monitor progress.
Scope Statement - Set the scope of your project by conducting research. The project statement should outline the boundaries you've set for your project and broadly define what goals, deadlines, and project outcomes you will be working towards.
Outline of Deliverables - Deliverables are the tangible products your project delivers. The deliverables can serve as a resource when managing time frames, delegating tasks, and allocating resources.
Task Due Dates - Although the project timelines may change as your project progresses, it is important to clarify your expected due dates during implementation panning. Estimate tasks due dates, and schedule milestones around these due dates.
Risk Assessment - Define the risks identify in step 3 of the implementation planning process.
Roles and Responsibilities - Keep detail record of the assigned roles and responsibilities to team members to hold everyone accountable.

The implementation plan will be unique to the project you are working on, so it may include additional components not listed above. The implementation plan is more holistic and addresses other variables that affect the implementation process such as risks, resources, and team roles and responsibilities. Unlike implementation plans, an action plan focuses exclusively on describing work packages and tasks. The implementation plan defines the responsibility of top, middle and lower level managers focused on the creation of new strategic assets and/or enhancement and strengthening existing strategic assets needed by the entity in order to build an organization capable of carrying out the strategy and maintaining its ability to achieve future outcomes.

Action Plan
The action plans are schedules for actions to be taken, and policies and procedures that guide resource allocation and prioritization decisions. The basic elements of the action plan are a list of activities needed for implementation, and time table showing when, responsibilities for each activity, time table of activities, budgeted costs, expected flow of funds, resources needed, etc. Resources are constraints on the course of action. It also involves budgeting - identifying the sources and levels of resources that can be committed to the courses of action.

Operations Plan
The Operations Plan describes milestones, conditions for success and explains how or what portions of a strategic plan will be put into operation during a given operations period. The operations plan is a basic tool that directs the day-to-day activities of organizational staff. An operational plan addresses four basic questions: Where are we now? Where do we want to be? How do we get there? How do we measure our progress?

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Strategy implementation is an aspect of strategic management concerned with making the chosen strategy operational, by translating it into action plans so it can be executed successfully. Strategy Implementation consists of all the decisions and actions, and plans required to turn strategic choices into reality. Although a manager may talk about "implementing a differentiation strategy", the real implementation of a strategy happens at the bottom of the strategy hierarchy and the organizational hierarchy, through the actions of operational employees who carry out planned tasks that add value to the company's product. Such tasks may include: research and development to add new features, monitoring production to ensure company's products meet high quality standards, and marketing the product to add brand value in the eyes of consumers.

Strategy Execution
Strategy execution is one of the three (3) co-incident determinants of the strategic management process including strategy formulation and strategy implementation. Strategy execution takes place within the context of strategy implementation, and is a change control process involving a series of integrated decisions/actions that take place over time, and inextricably change the organization and its relationship with its environments. Strategy execution involves a disciplined and systematic approach to managing - directing, controlling and facilitating - the day-to-day decisions and activities undertaken at all levels in the organization involving top management through middle management, and front-line managers and workers that carryout the ongoing pursuit of a strategy and complete it. It is a disciplined process - a logical set of connected activities that enable an organization to make its strategy work as intended. It is concerned with managing initiatives - this is where strategy is translated into practice or remains on paper - and building adequate organization strategic capability - the organization's ability to harness all its skills, organizational capabilities, and resources - in order to gain competitive advantage, and thus survive and increase its value over time. The focus of strategic capability is on the organization's assets, resources, market position in projecting how well it will be able to employ strategies in the future.

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process for executing the strategic choices by means of budgeted resource allocations; focus on getting the work of the business done efficiently and effectively. Execution involves doing things to create "fits" between the way things are done and what it takes to make the strategy work as intended. is an action-oriented process for building a capable organization that can make the selected planned/formulated strategy work as intended, through execution of the initiatives in those plans to realize the actual strategy. It revolves around the management of people resources, and business processes. Strategy implementation is all about “how” the activities will be carried out, “who” will perform them, “when” and "how often" will they be performed, and “where” will the activities be conducted. And it does not refer only to the installation or application of new strategies but also to existing strategies that have always worked well in the past years, and are still expected to yield excellent results in the coming periods. Reinforcing these strategies is also a part of strategy implementation.

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Strategy Execution Management
Strategy execution management involves control of execution, and requires systematic planning, performance measurement standards, monitoring, evaluation of performance and corrective action of strategic initiatives. It is the constant monitoring of the progress of the strategy, its implementation and assessing whether the planned results are being achieved.

Strategy execution management tasks may include:

Visualize the Strategy - Visualization of the strategy enables shared understanding of what the strategy is. An effective way to visualize the strategy to improve understanding is an illustration that shows the important elements of the strategy and how each related to one another and to the mission goals. Frameworks such as the Strategy Map by Kaplan and Norton, etc. help in this regard.
Measure the Strategy - The key goals elements of the strategy should be assigned an easily understood performance measure. The full set of strategic performance measures can be organized into a Balanced Scorecard based dashboard to help managers determine the progress or lack there of of the strategy execution.
Report Progress, Compare and Learn - Your strategy is a hypothesis, its your best estimate of the route to success. It is essential to check your hypothesis at the end of an execution cycle (just like budgets are reviewed monthly to ensure financial commitments are being kept), to ensure the strategy is producing results, versus controlling performance. Compare your initial strategic assumptions with what you have learnt from the reality of the results from the completed execution cycle. In addition, look back at your Strategy Execution Capability as well to ensure it is supportive of your strategy.
Make Decisions and Update strategy - Strategy execution is much like sailing a boat toward a planned destination. A defined course and full complement of navigational charts will not eliminate the need to remain vigilant, to assess the environment, and to make corrections as conditions change while on the journey. As part of the regular reporting process leaders must make ongoing strategic decisions and update the strategy to keep it current and on course. A company needs to update its strategy based on changes in its competitive environment and on the strategy execution feedback from reporting on the previous cycle, as well as update and fine tune your execution capabilities if necessary..
Manage Initiatives - This is about selecting, prioritizing, and executing the right initiatives - those actions/plans - that will lead to achieving specific strategic objectives or closing objective performance gap. Strategic initiatives are new plans or actions to improve strategic asset or solve a strategic problem.
Manage Projects - Develop a capability in project management to coordinate and control - monitor and report progress - the execution of critical strategic projects focused on improving an organization's delivery on its mission. These projects statements include scope, budget, and start/end dates.
Communicate Strategy - Leaders must communicate their visualized strategy to the workforce in a way that will help them understand not only what needs to be done, but why.
Align Workforce Individual Roles - Set individual performance goals and objectives for managers and employees. Make to link all individual objectives with the strategy at the organization level. Aligning Individual Roles - Senior leadership must ensure that employees at all levels can articulate and evaluate their personal contribution towards achieving specific strategic goals.
Reward Performance - After explaining the strategy and aligning the workforce to it, senior managers must institute the incentives that drive behaviors consistent with the strategy. Monitor and coach regularly to motivate and provide feedback in the right way.
Evaluate Performance - Most organizations conduct a formal performance evaluation and review at the end of the individual performance management cycle. The evaluation should answer the basic question; "have the individual performance objectives been achieved?"

Successful strategy execution involves managing the successful transformation of the organization to better position it to deliver its mission and meet the desired outcomes. Successful strategy execution involves decisions about managing changes to appropriate elements of the Operating Model which is concerned with how resources are organized and operated to get critical work done. Changes to elements of the organization's Operating Model may include: governance, accountability, or culture, and in some cases overhauling the whole structure, when a company's strategy changes.

Strategy Execution Decisions
Strategy execution involves the decisions and activities the organization undertakes in order to turn the implemented strategy into commercial success. These decisions and activities encompass the thousands of decisions and actions taken every day by executive, middle and line managers, and employees acting according to information they may have, and their own self-interest as influenced by organizational culture, and constrained by organizational policies and procedures. These strategic decisions have to be timely - this refers to "when", in the evolution of changes in the organization, the decisions are made rather than how much time the decision maker has to make the decision.

The execution flow involves both top-down flows and bottom-up flows of decisions.

Top-Down: Top-down flows of decisions and actions from corporate strategy decisions through business strategy decisions to strategy implementation decision and actions (participation and communication down and across operating units),
Bottoms-Up: Bottom-up flows of information resulting from day-to-day decisions and actions taken in operations influencing corporate level strategic decisions,

Once the dyadic information flow is completed, further refinement of the whole process might start again, based on the outcome of this process.

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Successful execution requires the capacity to monitor and evaluate changing environment factors and take decisive corrective action.

The whole execution system/engine is synchronized by functional strategy that provide resources and capabilities to all three (3) strategy levels.

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Strategy execution makes the implemented strategy work as intended, and turn implemented strategy into commercial/social success.

These decisions about change take place within an organizational context of power, culture, leadership, and ability to manage change. This makes it more difficult for managers to control execution.

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Execution System
Strategy execution is the continuous process of closing the gap between where the company is, and what the strategy calls for. Execution involves integration of both top-down and bottoms-up flows. The top-down integration involves cascaded flows of coordinated decisions and actions (participation and communication) through the implemented layers of corporate strategy, business strategy and operations strategy in the organization. The bottom up flows of participation and communication of information up to the organization managers through feedback mechanisms.

The ideal execution process for each organization is different, but all include some basic and fundamental building blocks that enable executive management to influence the actions of employees in all areas of the organization that result in effective execution of intended and emergent strategy. These building blocks include:

Clarifying decision rights and norms - How decisions are made; How people instinctively act or take action.
Designing Information flows and Mindsets - How data and knowledge are processed; How people make sense of their work and environment.
Motivators and Commitments (Aligning motivations of employees with organization purpose) - How people are encouraged to perform; How people are inspired to contribute.
Aligning Organizational Structure and Network to Strategy - How work and responsibilities are allocated; How connections are made beyond the organizational chart.
Allocation of resources - This is a set of basic activities in implementation that refers to both financial and non-financial resources that are (a) available to the organization and (b) are lacking but required for strategy implementation. How much funding would be needed to support implementation, covering the cost and expenses that must be incurred in the execution of the strategies? Another resource is time - Is there more than enough time to see the strategy throughout its implementation?

These building blocks are inextricably linked in a coherent system.

Strategy execution system is a social-technical system that provide the framework to integrates strategic decisions and actions such as:

Strategic decisions, and actions taken resulting from those decisions.
Operations management decisions and activities performed resulting from decisions.
Observing the outputs and outcomes of strategic actions through reporting and monitoring environment changes.
Diagnosing the issues resulting from the patterns of organization behavior effected by organization outputs.
Timely adaptation to changes in environment and timely response to any identified opportunities or threats to achieving the mission objectives and strategic goals.

Strategy execution depends on each member of the organization's daily tasks and decisions, so its vital to ensure everyone understands not only the broader strategic goals, but how their individual responsibilities make achieving them possible.

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Realized strategies are a product of a firm’s intended strategy (i.e., what the firm planned to do), the firm’s deliberate strategy (i.e., the parts of the intended strategy that the firm continues to pursue over time), and its emergent strategy (i.e., what the firm did in reaction to unexpected opportunities and challenges).

The successful execution results in a company's actual/realized strategy - typically a combination of (1) planned - deliberate and purposeful actions and (2) emergent - as-needed reactions to unanticipated developments and fresh competitive pressures. A realized strategy is the strategy that an organization actually follows. Successful execution is the best possible results a strategy and its implementation will allow in the actual realized strategy.

In order to exercise control, managers have to take the following steps:

Setting performance standards - Every function in the organizations begins with plans which specify objectives or targets to be achieved. In the light of these, standards are established which are criteria against which actual results are measured.
Measuring actual performance,
Analyzing variance, and
Taking corrective actions.

After a strategy is selected, it is implemented over time so as to guide a firm within a changing environment. Managers want to know if the company is headed in the right direction and if current company trends and changes are keeping them on that right path. To answer this question requires the implementation of strategic control.

A firm’s successive strategies are greatly affected by its past history of implemented and executed strategies which determine its current state, emergent strategy, and actual/realized strategy. It is important to reexamine past assumptions, and compare actual results with earlier hypotheses.

Strategy Execution - process for executing the strategic choices by means of budgeted resource allocations; focus on getting the work of the business done efficiently and effectively;

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Execution management involves integration of the series of decisions/actions that take place over time, and inextricably changes the organization and its relationship with its environments. The change may be planned or emergent. Successful execution involves decisions about:

Strategy - This is a hypothesis (educated guess) of the intended approach/means to accomplish specified actions/tasks that contribute to desired goals and objectives. Strategy is achieved through the constant interplay between doing, planning and evaluation in closing the performance gap.
Structure -
Coordination -
Information Sharing -
Incentives and Controls - []

These decisions take place within the organizational context of power, culture, leadership and the ability to manage change. Successful execution is the best possible results a strategy and its implementation will allow in the actual realized strategy that closes the strategy-to-performance ('strategy-execution') gap. A company's actual strategy is typically a combination of (1) planned - deliberate and purposeful actions and (2) emergent - as-needed reactions to unanticipated developments and fresh competitive pressures.

Strategy execution is the process of translating strategy into the best business results possible, within the framework of its implementation.

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Execution
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Integrating Functional Strategies - Identify and give due consideration to the cross-functional implications of strategy at implementation when the critical issues of strategy are appraised. [Horizontal Integration]
Develop Tactical plans for functional areas such as marketing, production, personnel, finance, and plant facilities. Implementation requires outstanding collaboration between all members of the various groups throughout the whole organization from top management to line workers.
Developing budgets that steer resources into those internal activities critical to strategic success.
Finalizing strategic plan with input from all invested parties.
Aligning the budget to annual goals.
Producing various versions of the plan for each group.
Establishing a system for tracking and monitoring the plan.
Establishing a performance management and reward system.
Presenting the plan to the entire organization.
Building annual department plans around the corporate plan.

The role of managers is to guide the organization towards goal accomplishment. Managers are responsible for combining and utilizing organizational resources to ensure their organizations achieve their purposes.

Strategy Evaluation and Control
Strategy evaluation is the process for making necessary adjustments based on monitoring and control information and strategy performance review. Strategy evaluation involves the assessment of performance measures collected through monitoring of projects and programs to determine the effectiveness of a strategy in meeting strategic objectives. Strategy evaluation is a necessarily intertwined with strategic control. In practice, the term strategic control is used to include evaluative aspects, because unless the resuts of an action are known, corrective action cannot be taken. The evaluation and control process is concerned with defining, attaining, and presenting constructive information for reviewing alternatives to the analyzed action plan.

Strategy evaluation
This is a process for making necessary adjustments based on monitoring and control information and strategy performance review.
Performance Evaluation entails the process of evaluating the performance of a strategy, reviewing new developments and initiating corrective action to make adjustments in long-term direction, objectives, strategy, or implementation in light of actual experience, changing conditions, new ideas, and new opportunities. If the corrective actions made are not successful, then repeat the strategic management process.

Strategy evaluation occurs at different levels, formulation, implementation, and execution. The evaluation may be based on a set of selection criteria/factors that ensures the chosen strategies will be effective. An effective evaluation of the strategy begins with defining the parameters to be measured; these parameters should mirror the goals set in the direction setting stage of the strategic management function. A viable strategy is defined in terms of the degree to which the strategy meets those criteria i.e.,:

Consistency - The strategy must not represent mutually inconsistent goals and policies.
Suitability (Appropriateness) - Is the strategy consistent with the organization's mission, values, and operating principles? Does it fit with the vision and mission?
Consonance - The strategy must represent adaptive response to the external environment and to the critical changes occurring within it as defined by the SWOT Analysis information..
Advantage - The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected areas of activity.
Flexibility - Can it be adapted and changed as needed?
Cost-Benefit - Is the strategy likely to lead to sufficient benefits to justify the costs in time and other resources?
Timing - Can and should the organization implement this strategy at this time, given external factors and competing demands?

The whole point about strategy is that the critical factors determining its quality are often not directly observable or simply measured; and by the time strategic opportunities/threats do directly affect operating results, it may well be too late for an effective response.

Strategy evaluation ensures that all key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People are aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization.

Performance Evaluation
Performance Evaluation entails the process of evaluating the performance of a strategy, reviewing new developments and initiating corrective action to make adjustments in long-term direction, objectives, strategy, or implementation in light of actual experience, changing conditions, new ideas, and new opportunities. To evaluate performance, firms' need to establish a set of "desired" outcomes as well as the metrics they will use to monitor how well their organizations delivered against those outcomes. Those outcomes may include: achieving certain levels of productivity, revenues, profits, market share, market penetration, customer satisfaction, etc.

Implementation Evaluation
The implementation evaluation method assists managers in deciding whether or not the chosen strategies are steering the organization in the right direction towards achieving the strategic objectives and mission, It provides an intuitive and model-driven approach to assess the execution feasibility of the chosen strategy implementation. The evaluation method is comprised of the activities defined by the evaluation process.

The implementation evaluation method assists managers in deciding whether or not the chosen strategies are steering the organization in the right direction towards achieving the strategic objectives and mission, It provides an intuitive and model-driven approach to assess the execution feasibility of the chosen strategy implementation. The evaluation method allows an organization to take into consideration a lot of the points that can influence successful implementation before an ideal strategy can be implemented. It is important to note that for a given organization and business environment not all strategies are executable.

Strategic Control
Strategic control involves monitoring a strategy as it is being implemented, evaluating deviations, and making necessary adjustments. Strategic control is related to that aspect of strategic management through which an organization ensures whether it is achieving its objectives contemplated in the strategic action. If not, what corrective actions are required for strategic effectiveness. Strategic Control is the process for tracking a strategy as it's executed, detecting problems or changes in its underlying premises, and reporting to appropriate management levels. Strategic control is required to steer the company towards its long term strategic direction and avoid pitfalls and obstacles. Strategic control is related to that aspect of strategic management through which an organization ensures whether it is achieving its objectives contemplated in the strategic action. If not, what corrective actions are required for strategic effectiveness.

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process for tracking a strategy as it is being executed, detecting problems or changes in the underlying premises and assumptions, and reporting to appropriate management levels. Data gained at this stage provide feedback enabling the organization to learn and deal better with future strategies.

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Strategic control may involve:

The reassessment of a strategy due to an immediate, unforeseen event. For example, if a company’s main product is becoming obsolete, the company must immediately reassess its strategy.
Monitoring the progress of strategy Implementing, which often involves a series of activities that occur over a long period time, at various milestones, or intervals at . Managers can effectively monitor the progress of a strategy at various milestones, or intervals to determine whether the overall strategy is unfolding as planned.
Monitoring internal and external events. Multiple sources of information are needed to monitor events. These sources include conversations with customers, articles in trade magazines and journals, activity at trade conferences, and observations of your own or another company’s operations. For example, Toyota gives tours of its plants and shares the “Toyota Way” even with competitors.

Strategic control is concerned with tracking the strategy as it is being implemented, detecting problems or changes in the premises and making necessary adjustments.

Types of Strategy Controls
Strategic control is concerned with tracking the strategy as it is being implemented, detecting problems or changes in the premises and making necessary adjustments. The types of strategic control techniques include:

Premise Control - Every strategy is founded on certain assumptions relating to environmental and organizational forces. Premise control serves to test continuously these assumptions to determine whether they are still valid or not. This facilitates the strategists to take necessary corrective action at the right time than just pulling on with the strategy based on vitiated or invalid postulations.
Implementation Control - In order to implement a chosen strategy, there is need for preparing quite good number of plans, programs and projects. The purpose of implementation control is to evaluate as to whether these plans, programs and projects are actually guiding the organization towards its pre-determined goals or not. This type of control is a step-by-step assessment of implementation activities. It focuses on the incremental actions and phases of strategic implementation, and monitors events and results as they unfold. Is each action or project happening as planned? Are the proper resources and funds being allocated for each step? There are two (2) basic types of implementation control:

Monitoring Strategic Thrusts -This is the assessment of specific projects or thrusts that have been created to drive the larger strategy;
Reviewing Milestones - During strategic planning, you likely identified important points in the implementation process. When these milestones are reached, your organization will reassess the strategy and its relevance. Milestones could be based on timeframes, such as the end of a quarter, or on significant actions, such as large budget or resource allocations. Implementation control can also take place via operational control systems, like budgets, schedules, and key performance indicators.

Strategic Surveillance - If premise and implementation strategic controls are more specific by nature, strategic surveillance, is more generalized and overriding control which is designed to monitor a broad range of events both inside and outside the organization which are likely to threaten the very course of a firm’s strategy. They allow the organization to monitor a broad range of events and conditions inside and outside the company that are likely threaten the successful achievement of the firm's strategic objectives. This provides the opportunity to uncover important, yet unanticipated information.
Special Alert Control - When something unexpected happens, a special alert control is mobilized. This is a reactive process, designed to execute a fast and thorough strategy assessment in the wake of an extreme event that impacts an organization. The event could be anything from a natural disaster or product recall to a competitor acquisition. In some cases, a special alert control calls for the formation of a crisis team—usually comprising members of the strategic planning and leadership teams—and in others, it merely means activating a predetermined contingency plan.

Strategic control involve actions that may include performance measurements, monitoring, consistent review of internal and external issues and factors, and making corrective actions when necessary.

Strategic Control System
A control system monitors the performance of operations and adjusts the strategy to improve performance. There are five (5) parts to a control system, including:

Review the goals, objectives and constraints of the operations strategy,
Monitor conditions and changes in the operations and their environment,
Measure actual performance in key areas,
Compare actual performance with plans from the strategy and identify gaps,
Adjust the strategy to improve performance, moving or adding resources, revising plans, or in the extreme changing the whole strategy,

A control system monitors the performance of operations and adjusts the strategy to improve performance. The levels of control may include: strategic control, operational control and tactical control. Strategic control always comes first, followed by operations then tactics.

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steps below.

Define the strategy to evaluate - Managers need to specify the implemented strategy and the progress results that need to be evaluated. Such results have to be objectively measurable and consistent; and can be defined using goals modeling.
Outline Predetermined Standards - Managers need to outline standards according to the chosen implemented strategy. These standards often consist of a tolerance of range which defines adequate variations.
Obtain data to Map Out Onto Set Standards - Data to obtain consists of results from the actions taken on the chosen strategies.
Measure Performance - Assess the performance of the mapped out data.
Performance Match Standards -if the performance of the identified strategy achieves the standards within the tolerance range then the process stops here; otherwise, Take Corrective Action.
Take Corrective Action - The performance measured does not achieve the standards; managers must take necessary actions to resolve and amend the implementation Process.

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Strategic Option/Choices
Strategic option/choice refers to the result(s) of the strategic decision-making process. Strategic choices are decisions taken in accordance with the organization's mission and vision, and influenced by elements such as judgment, bargaining, and analysis. Strategic options are goal-oriented alternatives that an organization has towards the uncertain external environment. It is not only the choice but also the obligation of the management to choose the best possible alternative.

Strategic choices have influence over the years and decades, and even beyond the lifetime of the project that implements that choice. Once a strategic choice is made, it is very unlikely to be altered in the short term. Strategic choices are the result of the strategic decision-making process. Strategic decision-making is the process of charting a course based on long-term goals and a longer term vision. It involves selecting the best or most appropriate strategy from the stock of alternatives that serves the company's objectives conducting a SWOT analysis to examine the strengths and weaknesses of the organization, and determining opportunities that can be exploited. Strategic decision-making should be done in context with the organization, its mission, needs, resources, vision, and other similar considerations. Then evaluate each of the options; each will have its own advantages as well as disadvantages. This involves a lot of brainstorming and making tough decisions and choices. After evaluation, select one or multiple options based on the organization's needs and circumstances. Also, the management needs to decide how these options will place to use and practice. Some of the key techniques for the generation of strategic options include: Using the Ansoff Matrix, Using Porter' Generic Strategies, Using BCG Analysis, and Using SWOT Analysis. The decision-making process is continuous, and the management should continue looking for better options even when it has chosen one.

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Strategic Management, A System of Strategic Decisions Through Which Management's Intentions Are Formulated and Implemented