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Crafting and Executing Strategy

Crafting is an art and science of creativity. The overview of crafting has eight elements. A strategy is about competing differently from rivals. Doing what competitors don’t do or, even better, doing what they cannot do.

Elements of Crafting the Strategy

As said, crafting the strategy has eight elements. 

Firstly, the tools as in the company’s resources to achieve its vision. Second, people as the ultimate resource that contribute wealth of knowledge and skills to execute company’s strategy. Third, communication skills that encodes and decodes the right messages funneled to the right people at the right time.  Fourth, the importance of interaction in order to disseminate messages by having high involvement among employees that would induce collaboration in teams to fulfill the planning and execution of strategies. Fifth, motivation that has two sides in action, i.e. intrinsic and extrinsic. Companies that utilize both sides managed to maintain and grow employees’ performance to remain competitive in the market. Sixth, having fun at the workplace generates greater advantage of being motivated and excited. To curb boredom, managers input to practice a conducive working environment that enables employees to be self-motivated and have to have a passion for some aspects of their job, if not entirely. Moving on to the seventh aspect, output is the ultimate goal in every action executed. Hence, every single output contribution ought to be measurable to verify such effort taken in the process of executing strategies. Finally, consistency in crafting and executing strategies is the essence of sustaining business survival and growth.

 

Conceptualization of Strategy

A strategy is about competing differently from rivals. Doing what competitors don’t do or, even better, doing what they cannot do. An effective Execution of strategies has three steps to a successful attempt. First, Alignment “Why”, second, the Mindset “What”. Here, the company builds the case for change and getting people excited and engaged. Finally, Capabilities “How” in which companies identify employee’s capabilities to fulfill and execute the strategies. The basic strategic approach focuses on cost and differentiation. However, crafting an effective strategic approach looks at developing core competencies through improved financial performance, remain competitive and obtaining a more sustainable competitive advantage in looking into the sustainable environment, in which products and services do not harm the environment. If it does, then crafting a strategy to curb such practices need to be implemented to reduce, eliminate or find alternative solutions to serve the purpose.

 

Basically, there are two ways in looking at a strategy, Deliberate strategy and Emergent strategy.

Deliberate strategy

takes proactive measure to prepare for uncertainties that may occur due to current situation.

Emergent strategy

reacts as changing conditions warrant.

 

The way to plan for a strategy starts with the question “what is our present situation?”, “where do we want to go from here?” and “how we are going to get here?” Hence, the elements of strategy lead to situational analysis, objectives, strategy, tactics, actions and finally control. The three elements of crafting are by emphasizing the use of Technology as a feasible way to conduct business in terms of production, communication, logistic and marketing. The second element is Business viability that relates to the success factor in the respective market, and the third element is how the product or services leads to Human Values. The driven factor that leads to successful execution is Innovation which derives from the Design Thinking concept. 

By reflecting on J. Liedtka’s model of Design Thinking, elements of Execution can be implemented through four very basic questions stated in figure 1.

 

Figure 1

 

Strategies need to be crafted and executed in a well-designed process. Hence, by using the above model, it is evident that the strategy has a high assurance to be effective and not redundant. Another most relevant and effective model is the Standford.school of Design Thinking Process in figure 2, which describes that by Empathizing, a deeper understanding of one’s situation could lead to Defining the actual problem, hence to Ideating a solution. Thereafter creating a Prototype that channels to effective Testing on defects or the state of myopia. 

 

Figure 2

 

The company’s strategy evolves over time and is greatly affected by changing market conditions, advancing technology, fresh moves of competitors, shifting buyer needs, emerging market opportunities, and last but not least, innovation. Planning without Action is a waste of time and resources. Immediate action entails timely completion and keeps a company on the right track at the right time. Hence, Action refers to analytical tools as well as strategic tools. Four most effective analytical tools are SWOT, Five Forces (industry), Competitor and Marketing Mix analysis. As for strategic tools, Ansoff Matrix, Generic Strategy, International Venture and Collaboration.

 

Building a sustainable competitive advantage (SCA) is pivotal to every business in the current environment. Three main elements of SCA are Capabilities, Skills and Lessons Learned. Capabilities are referred to as human capital that leads to innovative ideas relating to skills of employees in their respective departments and the ability to compare past results and the current market as a result of  Lessons Learned in the context of achieving Core Competencies. In the current environment, it is important to leverage core competencies to change and redevelop the way businesses are conducted in the scope of manufacturing, operating and marketing. This change develops the need to secure the environment from further destruction by modern developments. As a result, value-driven is experienced by all stakeholders with the focus of creating awareness in securing the environment.

Socially Responsible in a state of environmental consciousness instead of drifting to the importance of branding and marketing driven activities. Being socially responsible enables the concerns of environmental friendly products and services and green practice are viable. Social responsible act is made possible with ethical approach. Hence, the scope of Business Ethics is aligned with compliance, human resource, finance, production and marketing. 

 

In today’s business context, the key word is Collaboration. An organization faces bigger challenges and threats in the midst of environmental issues. Hence, strategic collaboration with stakeholders adds value to everyone. Therefore, the Value Net model (figure 3) entails the collaboration with Customers, reduces the need to invest in market research companies by acknowledging and developing ideas from existing customer’s needs and wants. As a result, reduced market research cost. Moreover, companies are able to fulfill the precise demand. Next, collaborating with Complementors enables an organization to reduce cost and focus on improving specialization and purchase other materials, components or even services by engaging complementors as part of the production team. Collaborating with Suppliers has always been a greater advantage in terms of pricing, extended credit terms, quality, branding and contributing inputs for improvement. Lastly collaborating with Competitors has the greatest advantage to strategic alliance in reducing cost and redundancy.

 

 

Figure 3

 

In summary, creating new ideas need thorough research. Hence, design thinking leads to uniqueness that develops a competitive advantage. However, competitive advantage is not sufficient without environmental sustainability which is viable with the use of core competencies derived from good Strategy and Execution towards continuous growth. 

 

This article is a summary of the webinar on the same topic led by Dr. Catherine Muthu

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