“There is always a better strategy than the one you have; you just haven't thought of it yet”
-Sir Brian Pitman, former CEO of Lloyds TSB, Harvard Business Review, April 2003
Strategy means execution of integrated and synchronized set of commitments and procedures designed to make the most of core competencies and achieve a competitive advantage. This is an approach implemented by the organizations to maintain their surveillance in the future long run. There is no organization without a certain aim. Each organization has their own principles and ideas to attract the consumers. Organizations follow the strategy because they give the intended results if they are implemented correctly and by this the organization can achieve their mission easily. This is called strategy management and this can strategy management can be classified into three stages Strategy formulation ,Strategy implementation and Evaluation. Implementation of this new strategies in the organization is called strategy implementation .Strategy implementation is the action stage of strategy management. Evaluation of the strategy is called strategy evaluation. Strategy evaluation is the final stage in the strategy management. In this strategy evaluation process the organizations sees whether the implemented strategy is achieving the desired goals or not. The Strategy management process depends on many internal and external factors of the organization.
A strategy can be successfully achieved not only by the evaluation but also by the two models
Industrial organization model:
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This model focuses on the environment outside the industry.
Resource –based model
This model focuses on the internal environment of the industry.
Strategy Evaluation Implementation involves three basic activities:
Examining the underlying bases of a firms strategy
Expected results comparison to Actual result
Implementing corrective measures
Examining the underlying bases of a firm’s strategy:
The strategy is examined based on three major areas
1. General Environment
2. Industry Environment
3. Competitor Environment
“The general environment is composed of dimensions in the border society that influence an industry and the firms within it.” [Hitt, Ireland & hoskisson, 2007 pg.38]. these dimensions are classified into different segments namely demographic,economic,political,socio-cultural,technological,global. These segments can not be controlled by the organization openly , however some organizations gather the information on each segment that is required to understand . These segments are mostly considered by the organization before implementation of their ideas. For example we can consider the political factor which changes time by time and so the organization should be very updates with the political updates eventually.
In this industry environment there are few set of factors that influence the organizations potential .They are threat of new entrants, power of suppliers, power of buyers, product substitutes ,rivalry among competitors. These are also called as five force models of ‘Michael Porter’. The Industry environment can be said as “the set of factors that directly influences a firms and its competitive actions and competitive responses” Hitt, Ireland & hoskisson, 2007]
Gathering and interpreting information about their competitors is called competitor analysis. In this competitor environment the companies try to find out their current position with respect to their competitors .
As an over view we can say that general environment is focused on the future factors and industrial environment is focused on the factors influencing the organization directly and competitor environment is the analysis of the predictions of the co-competitors procedures, responses.
We can also increase the performance of the organization even by the analysis of the external environment analysis and the internal environment analysis.
The external environment analysis consists of components
Identifying the environmental changes and trends
Detecting meaning through ongoing observation of environmental changes and trends.
Developing projects based on the monitored changes and trends.
Determining the timing and importance of environment changes and trends .
The internal environment analysis consists of:
Traditional sources of advantages can be overcome by competitors international strategies and by the flow of resources throughout the global economy.
Global mind set:
Always on Time
Marked to Standard
The ability to study an internal environment in ways that are not dependent on the assumptions of a single country, culture or context.
Understanding how to leverage the firm’s bundle of heterogeneous resources and capabilities.
Expected results to Actual result:
It is the actual result obtained by the organization and the actual amount spent on the organization.
It is the forecasted target expenditure that is planned by the organization to achieve the desired result.
Implementing corrective measures:
Surveying the progress of the industry with the current result to the past result and taking necessary actions if need for achieving the target of the company.
Balanced Organizational controls:
The important part of this strategy implementation process is the balanced organization.These controls are necessary to obtain the certain expected results or outcomes of an organization.These controls helps in providing the parameters that are to be implemented and also helps in corrective measures during the adjustments.
There are two organizational controls namely strategic and financial .
This control focuses on the short term financial outcomes.
This control focuses on the content of the strategic actions rather than their outcomes.
Now let’s discuss about the firms frame structure.
The Balanced scorecard:
“The balanced scorecard is the framework that firms can use to verify that they have established both strategic and financial controls to assess their performance” Strategic Management [Hitt, Ireland & hoskisson, 2007 pg. 394].
This balanced scorecard is appropriate for use in business level strategy and corporate level strategy. There are four prospective frame work of balanced scorecard namely
Internal business process
Learning and growth
Return on Equity
Return on Asserts
Assessment of ability to anticipate customer needs
Effectiveness of customer service practices
Percentage of repeat business
Quality of communication with customers
Internal business process
Asset utilization improvements
Improvement in employee morale
Changes in turnover rates
Learning and Growth
Improvement in innovation ability
Number of new products compared to competitors
Increase in employee skills
Strategic Management [Hitt, Ireland & hoskisson, 2007 pg.393].
Pizza hut has its origination from America. It’s the subsidiary of Yum Brands Ins..It entered into Australia in 1970 and established its first restaurant in Sydney. By 1999 it established nearly 464 restaurants through out Australia and New Zealand. The pizza hut has designed its menu according to the region it has been established.
Decrease of Pizza hut Restaurants in Australia:
Though pizza hut bought many offers to customers like the delivery to the door step, money back guarantee , dine in facility only few of the established restaurants could survive .This is due to the poor selection of the placement or the area of location of the restaurants. Due to this some of the restaurants have been closed and now the organization is working on it to overcome this and planning on developing the present organizations.
SATYAM Computer Services :
The SATYAM company was founded by Ramalinga Raju and it was incorporated in 1987 and it went on to public in 1992 and ever since then it has been the growing and has become one of the global presence software company. It is serving more than 390 multinational corporations. The company operates in three segments IT services, Business Process Outsourcing, Software Products. SATYAM stretched it presence even in Australia in fields of Telecommunication, Retail, Finance, Insurance and Automobile Industries. It even made tie-ups with some of the Australian universities for recruiting fresh graduates from the university directly.
Downfall of SATYAM Company:
Most of the Satyam’s business came from the stake holders. The downfall of Satyam started when it took a decision of investing in infrastructure and property development without discussion with the share holders and as this is an unfamiliar field to Satyam the share holders are surprised and the stock markets plunged down all over the markets. After this the board of directors have resigned and later Ramalinga Raju resigned his chairman post stating the flaws in the company outcomes. The company basically did a mistake by not consulting its share holders and lost its strategy . Now the Satyam company has been taken over by Mahindra and it is renamed as Mahindra Satyam. The Mahindra company is now building again from the transformation stage and is building up the strategies again.
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Harvey is one of the largest Australian retail of electrical, computer, furniture and other household and daily needs(http://www.harveynorman.com.au/). It is basically a franchise and the main brand owned by Harvey Norman Holdings Ltd. It established its first store in Sydney in 1982 and it main aim was to provide all the goods to the customers at one place only with the competitive prices. It has it stores located at New Zealand ,Singapore, Ireland.
Harvey Norman basic idea is to not to lose the customer and so if there are everything the customer needs at one place then there is no change of losing the customer and it has also started it advertising in such a way that they are in the thoughts of customers every time they think off. It is attracting the customers by providing interest free goods for a certain period of time and many customers are fulfilling their wishes. Of not only this they also provide the customers the custom goods of its company.
Harvey Norman Annual Report 2008:
Organization without a strategy cannot prolong or be has a competetor for a longtime.Analysing the strategy of various organizations is not a waste of organizational resources. Strategy evaluation helps an organization in its development by providing its position in the market and helps in setting up good results for the organization.Thus strategy management is an important resource for the development of the organization in achieving its set up targets and goals.
[Hitt,Ireland and Hoskisson,”Strategic Management Competitiveness and Globalization” 7th Edition South-Western,2007]
Ryszard Barnat, LLM., DBA, Ph.D. (Strat. Mgmt) Strategy Evaluation And Control
Evaluating Business Strategy [Richard P.Rumelt,Note on Strategy Evolution ]
Pizza hut history