The Ways in Which Strategy Implementation Can Be Achieved - Assignment Example

Business Strategy Contents Introduction 2 Alternative Strategies 2 Justification of Strategy 3 Roles and Responsibilities of Staff Members 4 Resource Requirements 5 Balanced Score Card Approach 6 Reference List 8 Introduction Strategic planning for the medium and long-term objectives of a company is a key way to achieve the overall goals of an organization. Medium term strategies aim to provide long-term solutions to the problems of an organization, while long-term strategies aim to provide permanent solutions to the problems. The purpose of this report is to explore the ways in which strategy implementation can be achieved. The roles and responsibilities of staff in Sony involved in the strategy implementation and the resource requirements to follow a particular chosen strategy will be discussed that can prove to be a basic guideline for the future growth of the Sony Mobile Corporation that is to be covered in this report. The final section of the report will also include a SMART framework that will provide a comprehensive view in the way the strategy is to be implemented. Alternative Strategies Market Entry Strategies: There are five types of market entry strategies that can be used by organizations namely organic growth, mergers or acquisitions, franchising, licensing and strategic alliances. Acquisitions are likely to occur when an organization wants to increase its market share in any new market (Price, 2011). Mergers are more likely to occur when companies have comparable financial capital and resources. Franchising is more likely to occur when a particular organization wants to create a positive brand image in the minds of the consumers by providing them with the products and services of the company. Licensing is more likely to occur when an organization wants to enter a country in a quick manner to deal with legal issues relating to trade barriers (Agarwal and Ramaswami, 1992). Organic entry is a form of entry where the profits from the existing business are used to channel growth into new activities. Substantive Growth: Substantive growth strategies are related to vertical and horizontal integration. Vertical integration is related to increasing the ownership of the value chain to take better control over marketing operations. Horizontal integration is on the other hand, related to the collaboration between two similar companies which belongs to the same stage of production (Hunger and Wheelen, 2003). This type of an arrangement helps in closing down of less efficient units by taking advantage of economies of scale. Limited growth: The limited growth strategy has four major components namely market penetration, product development, market development and innovation. Market penetration is selling to the existing customers generally by means of promotional activities. Product development is a strategy where new products are developed for the existing markets to suit the taste and preferences of the customers in a better manner. Another strategic option is to develop new markets for existing products. It is similar to expansion of products from the domestic market to a foreign market. New products for new markets develop adaptation of new expertise and capabilities to cater to a new set of customers. Retrenchment: Retrenchment is the process of reduction of expenses of a business by shutting down few activities to reallocate the existing resources of the organization. Retrenchment of business operations can occur in situations of economic recession, weak competitive position and problems within the internal management of the organization. Generally speaking, the unattractive or low profitable areas of the business are shut down to free the resources, and allocate them to more profitable activities. Justification of Strategy From the possible range of strategies that is available to Sony Mobile Corporation, it can be suggested that it will be ideal for the company to use a combination of substantive and limited growth strategies. The vertical integration strategy can be used by Sony to gain more control and ownership over its supply chain. This can help Sony mobiles to become own supplier or distributor. According to researchers like Cagliano, Caniato and Spina (2006), it has been observed that, in a supply chain that is fully integrated, the relationship between departments like marketing and logistics are much more coordinated giving rise to predictable outcomes. Successful companies like Apple and Dell manufacture their own raw materials that significantly reduce the cost of production. The limited growth strategy can be customized by Sony Mobiles Communications to suit its present business needs. Two strategies can be adopted by Sony to ensure medium-term growth. They are the product development strategy and the market development strategy. In a recent study that has been conducted it has been found that, the sales of smartphone’s have increased from 1.73 million in 2012 to 1.83 million in 2013 (CCS Insight Report, 2014). Apple and Samsung remain the largest operators in the global smartphone market and Sony needs to rapidly catch-up by introducing new products or variants of the existing products in already established market base. Researchers have pointed out that focusing on the existing technology base, to cater to new customer needs can provide a potential channel for growth of an organization (Pringle, 2008). Additionally, the rising level of disposable income of consumers in the emerging countries has made them the new centres of consumerism. The markets of India, Philippines and Nigeria can be considered as good centres for penetration (Kharas and Gertz, 2010). Sony can include aggressive expansion into these emerging economies to capture maximum market share from its competitors. Recently, the gap in the market that has been created after the reduction in the popularity of Nokia and Blackberry can be effectively used by Sony to broaden its operation in the emerging markets (CCS Insight Report, 2014). It can be expected that a fall in the operating costs of the business resulting from the closer integration of supply chain by manufacturing of intermediate products and developing new markets and products will help Sony to improve its existing position in the smartphone market. Roles and Responsibilities of Staff Members The role of the senior management and staff is extremely important for effective implementation of strategy. The traditional theory of strategic management suggests that initially, the role of the middle level managers was meagre and important strategic decisions of an organization were taken at the top-management level. Middle level managers have the responsibility of planning, budgeting, resourcing and other change related activities (Kaplan and Norton, 2005). Similarly, communication with the staff members and informing them about the strategy is equally important to align the broader organizational goals with the goals of individual staff. It is important for the leaders in the organization to articulate the strategic decision of the organization so that the employees can comprehend the change in the strategic direction. In case of Sony Mobile Communications it can be suggested that, the senior management can formulate the decision regarding the introduction of new products and finalize the countries in which the new operations are to be started. It is however, the middle and the front line managers who bear the responsibility of effectively managing the resource portfolio of the organization, maintaining a sustainable organizational culture and emphasize on ethical practices (Prakashan, 2008). The managers of the respective departments being affected by the strategy must ensure that, the staff in each of the employees must be provided with proper fixed goals so that they can work towards the realization of the same. Care should be taken so that there is no overlap of the functions that is being performed by any one department to ensure maximum productivity of the organization (Ireland and Hitt, 1999). Additionally, communication between the different departments helps in diffusion of the information and best practices. In order to develop new products and expand into emerging countries it will be important for the marketing managers to conduct an extensive market research to find the needs of the customers. This should be followed by the work of the marketing communications manager to promote the products and convey the message to the customers. Moreover, in order to vertically integrate the supply chain, the operations manager and the supply chain managers should be informed about the new procurement and manufacturing divisions. The in-house production of the intermediate products is to be communicated to the procurement department to facilitate the production process. A designated learning officer can also be appointed by the organization to guarantee that the information is freely shared among the staff members. Resource Requirements Resources and capabilities are the prime requirements of any organization before implementing any strategic decisions. The resource requirements for implementing strategic plans can range from financial and physical capital to human resource requirements. In case of Sony, the major requirements would be human resource, financial resource, resources for monitoring and physical resource (Meldrum and McDonald, 2007). Researchers like Ulrich (2013) have pointed out that, effective management of human resource is extremely important for organizational success. This is because; human resource management is not only beneficial from the point of view of the organization as well as the employees. Sony Mobile Corporation has recognized the importance of human resources and its role in the organizational excellence and strives to create an organizational culture where employees are given the opportunity to grow (Sony, 2014). Sony houses a total of 16000 employees as of 2012 and recently new employees have been added in the mobile communications sector (Sony, 2012). Sony has also established global internship programs in emerging countries like China and India which will make the staffing requirements easier. Sony is a world renowned organization that has established itself as one of the most successful electronic companies. Since 2010, the company has run into financial trouble because of lower demand of certain products including its Smartphone segment. The first quarter of 2014, has been however promising for the company as new revenues has started to stream in from the sales of the play stations. It has been reported that, there has been an increase of profits amounting to 3.1bn yen from the first quarter of 2013 (BBC News, 2014). Presently, the mobile communications centre had incurred a loss of JPY2.7 billion mainly on account of the expenditure incurred on research and development. Therefore, it can be argued that profits from one segment of the business can be funded to loss-making part of the business. Sony can make considerable investments in the physical capital to ensure that full vertical integration of the supply chain can be obtained. This may include setting up of warehouses in new locations to manufacture own line of intermediate products. The warehouses should be close to the distribution centres so that there is no time being wasted in assembling the product. Considerable investments must be made in building these centres after careful research regarding the scale of operations. It has been argued that, many strategic plans could not be implemented successfully because they have been monitored eventually. An effective monitoring strategy ensures that any deviation from the set goals is immediately catered. It is imperative for Sony to set up a separate monitoring group to check the progress of the new plans. In case, the strategies do not yield positive outcomes then it is required to scrutinize the initial plans. Balanced Score Card Approach Sony Mobile communications can improve its chances for success of the strategic plan by considering a balanced score card approach. This approach is consistent with the SMART objective which states that any plan should be specific, measurable, achievable, realistic and time bound. The components of balance score card are: Financial Component: The financial component can be measured with the help of return on initial investment, net cash flow, return on equity and debt to equity ratios to name a few. Customer Perspective: Customer satisfaction can be enhanced by focusing on the operational excellence. This can be done by providing customers with supreme quality products at affordable prices. Regular feedbacks can also be obtained from the customers to improve the experience. Internal Business Process: The internal business process will be crucial for the launch of new products and their marketing. The management should estimate the ratio of new products to the total offerings, estimating the costs of products in the inventory and proper marketing strategies of the new products. Measuring employee learning: The management should ensure that the employees and the staff members are completely engaged in the learning process. Regular training and development programs for the employees and engaging them in the decision-making process can enhance their learning process. Reference List Agarwal, S. and Ramaswami, S. N., 1992. Choice of foreign market entry mode: Impact of ownership, location and internalization factors. Journal of international business studies, 1-27. BBC News, 2014. Sony's profits jump on sales of PS4. [online] Available at: [Accessed on 27 October 2014]. Cagliano, R., Caniato, F. and Spina, G., 2006. The linkage between supply chain integration and manufacturing improvement programmes. International Journal of Operations & Production Management, 26(3), pp. 282-299. CCS Insight Report, 2014. Global smartphone market analysis and outlook: Disruption in a changing market. [pdf] CCS Insight Report. Available at: < http://www.lenovo.com/transactions/pdf/CCS-Insight-Smartphone-Market-Analysis-Full-Report-07-2014.pdf> [Accessed on 27 October 2014]. Hunger, J. D. and Wheelen, T. L., 2003. Essentials of strategic management. New Jersey: Prentice Hall. Ireland, R. D. and Hitt, M. A., 1999. Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. The Academy of Management Executive, 13(1), 43-57. Kaplan, R. S. and Norton, D. P., 2005. Creating the office of strategy management. Harvard: Harvard Business School. Kharas, H. and Gertz, G., 2010. The new global middle class: a cross-over from West to East. [pdf] Brookings Institution Press, Washington. Available at: < http://www.brookings.edu/~/media/research/files/papers/2010/3/china%20middle%20class%20kharas/03_china_middle_class_kharas.pdf> [Accessed on 27 October 2014]. Meldrum, M. and McDonald, M., 2007. Marketing in a nutshell: Key concepts for non-specialists. New Jersey: Butterworth-Heinemann. Prakashan, N., 2008. Corporate Planning and strategic human resources management. New Delhi: Pearson Education India. Price, A., 2011. Human resource management. Connecticut: Cengage Learning. Pringle, H., 2008. Brand immortality: How brands can live long and prosper. London: Kogan Page Publishers. Sony, 2012. CSR Reporting 2012. [online] Available at: < http://www.sony.net/SonyInfo/csr_report/issues/report/2012/pdf/CSR_Report2012E_PDF_07.pdf> [Accessed on 27 October 2014]. Sony,2014. Supply chain overview. [online] Available at: < http://blogs.sonymobile.com/about-us/sustainability/supply-chain/overview/> [Accessed on 27 October 2014]. Ulrich, D., 2013. Human resource champions: The next agenda for adding value and delivering results. Harvard: Harvard Business Press. Read More