Strategy implemementation & balance scorecard

Amity Global Business School, Singapore

Presented to – Ms. Astha Gupta

Presented by – Devika Goel, Ankita Verma, Vaishali Goel, Avantika Kansal, Divya Bajaj & Harshita Baranwal

• Operation-driven rather than

market-driven.

• Action-oriented, make-things-

happen tasks.

• Strategy requires few; execution

requires everyone.

Firm Strategy

Firm Performance

Task-Focus (Value)

Structure

Decision Processes and Controls

Reward Systems

People

• Build an Organization

• Marshal resources

• Institute policies

• Pursue best practices and continuous improvement

• Information and operating systems

• Tying rewards to strategy and goals

• Shape corporate culture

• Exert leadership

7

1. Identify short term objectives

2. Initiate specific functional tactics

3. Outsource non-essential functions

4. Communicate policies that empower people in the organization

5. Design effective rewards

• Time consuming

• Wide array of managerial challenges

• Many options to proceed

• Demanding people-management skills

• Perseverance to get initiatives moving

• Number of unexpected issues

• Resistance to change, misunderstandings.

• Difficulties of integrating efforts across groups.

Vision

People

Management

Resource

• Entry of low cost carriers changed the face of industry

• Jet Airways started facing stiff competition from Air Deccan, Spice Jet

& Kingfisher

• Market share went down from 57% to 32%

• Set up a new Corporate strategy:

“Regaining and expanding its market share by entering and operating in

the LOW COST and a VALUE BASED CARRIER arena as well”

•In order to give a definite shape to the corporate strategy, a business level

strategy was implemented:

•“the TAKEOVER of Air Sahara by Jet Airways and renaming it to form JETLITE”

•Jet’s management made various changes in the operation strategies of the airline

• No tickets at throw away prices

• Jetlite was to take on Tier II and Tier III cities

• New schedule for other tier II cities

• Cost cutting – by slashing employee numbers and better negotiation with suppliers

• Single cabin carriers

• Improvement in aircraft utilization hours

• Corporate Level Strategy:

Focus:

– Deliver High performance in controlled businesses

– Maximize shareholder returns in affiliates

– Leverage measurable synergy benefits from scale and scope

– Outperform acquisition business cases

• Vodafone wanted to enter the Indian market in 2006-2007

– Gartner had figured that customer base in India would double by 2010

• Business Unit Strategy

– Acquired Hutchison Essar Limited and divested

in Bharti Airtel

• Operational & Functional Strategies:

– Investing in Rural India by network sharing with other

providers

– Cutting costs through:

• Infrastructure sharing deal with Idea and Bharti

– Redefining the logo

– High level of cost and time discipline

– Customer value enhancement

– Target areas: Mobile data, Enterprise and Broadband

– Technology upgradation

– CSR

• Group Supply chain, Group Marketing,

Employment

•Entry of Honda into US motorcycle

market in 1959

•Honda executives (from Japan) focused

on selling 250-cc & 350-cc machines

•Sales were sluggish

•Honda executives themselves were using

50-cc bikes & were attracting attention

•They got a call from Sears & other stores

•Honda launched those bikes

•By 1964 one out of two motorcycles

sold in US was a Honda

• In 1992 Nokia’s strategic intent was expressed in four criteria

– Focused

– Global

– Telecommunications-oriented

– High value-added

• Its vision was the voice will go wireless

• The Nokia vision in 1992 led to the company divesting a broad range of businesses

that contributed some 90 percent of its revenues and to focus on the manufacture

of handsets and network equipment.

• The leaders set a further goal of doubling market share by the end of the decade.

This achieved by 1997 and by 1999 Nokia had overtaken Motorola as market

leader.

• In 1997 the strategic intent was articulated in terms of a mobile

information society and bring the internet to everyone’s pocket

• The 1997 vision further consolidated Nokia’s market position and led to

the development of the picture phone and the mobile internet etc.

• The company’s current mission is about ‘the awesome potential in

connecting people’- “whenever, wherever, we believe in

communicating, sharing, and in the awesome potential of

connecting the 2 billion who do, with the 4 billion who don’t”.

It is an integrated system of

managing strategies that

links long term objectives

with short term actions,

senior management with

frontline employees and

organizational vision with

organizational activities.

STRATEGY

1. Leadership From the Top

– Create the Climate for Change

– Create a Common Focus for Change Activities

– Rationalize and Align the Organization

3. Unlock and Focus Hidden Assets – Reengineer Work

Processes

– Create Knowledge Sharing Networks

2. Make Strategy Everyone’s Job

– Comprehensive Communication to Create

Awareness

– Align Goals and Incentives

– Integrate Budgeting with Strategic Planning

– Align Resources and Initiatives

4. Make Strategy a Continuous Process

– Strategic Feedback That Encourages Learning

– Executive Teams Manage Strategic Themes

– Testing Hypotheses, Adapting, and Learning

STRATEGY

Formulate

Navigate Communicate

Execute

The Balanced Scorecard identifies the factors that create long-

term economic value in an organization, for example:

Customer Focus: satisfy, retain and acquire customers in

targeted segments

Business Processes

• deliver the value proposition to targeted customers

•innovative products and services

•high-quality, flexible, and responsive operating

processes

•excellent post-sales support

Organizational Learning & Growth

•develop skilled, motivated employees;

•provide access to strategic information

•align individuals and teams to business unit

objectives

Who are our targeted customers?

What is our value proposition in serving them?

What capabilities & tools do employees require to help them execute our strategy?

What financial steps are necessary to ensure the

execution of our strategy?