OBJECTIVES

Upon completion of this chapter, you will be able to:

• Identify the degree of alignment between competitive methods (CM) and core competencies (CCs).

• Understand the complexities associated with implementing strategy.

• Demonstrate how context and process variables impact the strategy implementation process.

• Describe the process used to integrate the context and process variables to achieve effective implementation.

• Understand the implementation planning process.

• Apply the concept in this chapter to find solutions to the Case Study

The Importance of Alignment

A business MUST achieve alignment among the three constructs which, in turn results in outstanding value-adding financial performance.

Read Pages 294-297 of the text.

Read Article 1 : As Barbie Sales Fall, Mattel Looks to Simplify its Iconic Line

The Importance of Alignment

The following exhibit presents a way of looking at the relationships between CMs and CCs that focuses attention on the importance of the alignment between the two.

The intersection axes representing the service product dimensions is the locus of the most important CMs and CCs for the firm.

Exhibit: The Relationships among Core Competencies, Peripheral Competencies, and Competitive Methods: Good Alignment

The Relationships among Core Competencies,Peripheral Competencies, and Competitive Methods:

Good Alignment

Product Dimension

Outer boundary of core competencies – all CMs should be contained within this boundary

Service Dimension

Outer boundary of peripheral competencies necessary to execute the delivery of the CMs

CoreCompetencies

CMCM

CMCMCM

CM

CM

CM

The Importance of Alignment continued

The following Exhibit illustrates an undesirable situation where the CMs are not concentrated within the CC circle.

In this situation product/service quality is likely to become very inconsistent when so many of the CMs fall outside of the CCs of the business.

Exhibit: The Relationships among Core Competencies, Peripheral Competencies, and Competitive Methods: Bad Alignment

The Relationships among Core Competencies,Peripheral Competencies, and Competitive Methods:

Bad Alignment

Product Dimension

Service Dimension

CoreCompetencies

CM

CM

CM

CM

CM

CM

CM

Analyzing the Match/Aligning the CMs and CCs

The essence of the construct of ‘firm structure’ is defined as how the firm is organized to permit the successful implementation of all of its CMs.

Managers need to concentrate decision making on achieving the match (between CMs and CCs). All of the CMs must in some way be matched to the CCs.

Read Pages 298-305

Read Article 2: Ugly Banks are Alluring

The Alignment of CMs and CCs

HR Leadership

Economiesof scale

RealEstate

Technologyutilization

Sales andmarketing

Qualitycontrol

Lowcost

Competitive Method

Service Training

Revenue Maximization

StrategicAlliances

S1

OutsourceRestaurant

ExpertSystemsP1

Resource

Allocation

The Implementation Model

Thinking strategically should always be the primary capability valued most in all employees if firms are to be able to compete in the contemporary business environment.

Read Pages 305-307

Exhibit: A Comparison of the Meeting Agendas of Two Firms: One a Strategically Oriented Firm, and the Other One not

A Comparison of the Meeting Agendas of Two Firms: One a Strategically Oriented Firm, and the

Other One Not

Thinking Strategically

Employees must become proactive. Strategic orientation will ensure that all employees are continuously thinking of the Coalignment Model.

The following two exhibits are two forms that help keep manager and employees focused on achieving successful implementation.

Read Pages 305-309

Exhibit: Implementation Planner: The Relationship Among Environment, Domain, and Objectives

Exhibit: Implementation Planning and Execution Form

Implementation Planner: The Relationship Among Environment, Domain, and Objectives

Implementation Planning and Execution Form

Management Information Systems

The objective of all management information systems (MIS) should be to achieve the most efficient and effective allocation of the firm’s resources.

Thus the resource allocation system should be at the heart of the management information system.

Read Pages 309-315

Read Article 3: Microsoft’s Core Challenge

Formal System

Management Information Systems

Operating Systems

Planning and Control

Value Adding Performance of

Competitive Methods

Environmental Scanning

Evaluation of Strategy and

Human Performance

Strengths and Weaknesses

Analysis

Short and Long Term Objectives

Informal System

Resource Allocation

System

True or False?

1. It can be expected that the tighter the alignment between the CMs and CCs, the greater the overall performance level of the firm.

True False

2. Resource allocation systems should be at the heart of the management information systems.

True False

3. Resources should be allocated to the competitive methods that generate the largest proportion of cash flow.

True False

4. Service personnel receiving tips for excellent customer service is an example of "pay for performance.“

True False

Multiple Choice Questions

1.The importance of strategy alignment can be shown by the relationship between

A. competitive methods

B. core competencies

C. competitive methods and core competencies

D. All of the above

2. Competitive advantage can be achieved by   A. offering the best competitive methods within the business environment

B. developing the best core competencies

C. maintaining the best core competencies

D. All of the above

Multiple Choice Continued

3. Which of the following provides the primary linking mechanisms among competitive methods, core competencies, and the implementation of a strategy?   A. Resource allocation systems

B. Management information systems

C. Operating systems

D. Reward and incentive systems

4. The sustainable competitive advantage increases along with the increase of   A. Strength of CCs

B. Strength of CMs

C. Both the strength of CCs and the strength of CCs

D. All of the above.

Case StudyBoutique Hotels and Service Apartments

Read Pages 316-321 of the text.

Case StudyBoutique Hotels and Service Apartments

1. Provide your assessment of how alignment can be achieved in boutique and service-department hotel concepts.

2. Discuss the differences in operating systems between boutique and serviced-apartment hotels.

3. How would these hotel concepts be differently organized in terms of management structure, communications systems, and other process and contextual variables?

4. Discuss the differences between the integrating mechanisms that may be utilized in each of the hotels.

5. Design a resource allocation process for each type of hotel.

6. Discuss how the rewards and incentives systems may differ between two types of hotel accommodations.

Possible Case Study Solutionas proposed by Krystal Peters

QUESTION ONEAlignment can be achieved in boutique and serviced apartment hotel concepts by using

the Coalignment model:◦ Scanning the environment. A SWOT analysis must be done before developing a strategy◦ Strategy: this is the tactics one will use between the boutique and serviced apartment

hotels◦ Structure: Evaluate products, services and competencies needed ◦ $ Evaluate what work was done. How much money can be made?

QUESTION TWOThe differences in operating systems between boutique and serviced apartment hotels

are:◦ Those systems of the serviced apartments are geared toward long term

travelers ◦ Serviced apartments are hybrid between a hotel and an apartment◦ Operating systems for the boutique hotels are typically centralized between

properties

Possible Case Study Solutionas proposed by Krystal Peters

QUESTION THREEHotel concepts would be differently organized in terms of management

structure, communications systems, and other process and contextual variables are:◦ Boutique Hotels: All typically a unique concept. Is geared toward short term

lodging◦ Serviced Apartment Hotels: Management and operating systems are typically

decentralized. Is geared toward long term stays.

QUESTION FOURThe differences between integrating mechanisms that may be utilized in each

of the hotels are:◦ Operating Systems: Systems may be decentralized with lack of terminology to

describe services and systems◦ Service Quality: While quality may differ between hotels, they should be a

recommended adequate level of service

Supplemental Readings

• Article 1: As Barbie Sales Fall, Mattel Looks to Simplify its Iconic Line

• Article 2: Ugly Banks are Alluring

• Article 3: Microsoft’s Core Challenge

• Article 4:Harrah’s (available on text’s website as a Case Study) http://wps.prenhall.com/chet_olsen_strategic_3/78/20064/5136447.cw/index.html

• Article 5: McDonald’s (available on text’s website as a Case Study)

http://wps.prenhall.com/chet_olsen_strategic_3/78/20064/5136447.cw/index.html

• Article 6: Starbucks (available on text’s website as a Case Study

http://wps.prenhall.com/chet_olsen_strategic_3/78/20064/5136447.cw/index.html

• Article 7: Wendy’s (available on text’s website as a Case Study)

http://wps.prenhall.com/chet_olsen_strategic_3/78/20064/5136447.cw/index.html

Student Objectives

Upon completion of this chapter, you should be able to:

• Successfully identify the degree of alignment between competitive methods (CM) and core competencies (CCs).

• Identify the complexities associated with implementing strategy

• Demonstrate how context and process variables impact the strategy implementation process.

• Describe the process used to integrate the context and process variables to achieve effective implementation.

• Understand the implementation planning process.

• Apply the concept in this chapter to find solutions to the Case Study