Strategy implementation and control

Running head: PRELIMINARY STEP FOR PREPARATION OF A BUSINESS PLAIN

Preliminary Step for Preparation of a Business Plain

Individual Project 1

MGT680-02, Professor Dr. Rich Bergstrom

Due Date: February 19, 2005

Peter H. Lloyd

In six months I will need to present a complete business plan for Able
Corporation to the Strategic Officers Steering Committee. This business
plan will provide a mission statement, operating principles, market
analysis, company strengths and weaknesses analysis, one-year, five-year
and ten-year strategic objectives, sales forecasts, financial and
operational objectives, and pro forma financials. As a preliminary step
in the preparation of the business plan the major elements of the
strategic management process must be identify which may include
insights, issues, and questions.

Strategic management is how the organizations become successful and how
they remain competitive. The strategic management will help the general
managers in Able Corporation to center on the choices, tradeoffs, and
activities to undertake for a strong competitive position. To accomplish
Able Corporation’s objectives the corporation’s strategy will
consists of decisions and actions.

The strategic management will incorporates the Able Corporation’s
budgeting, monitoring, planning, reporting, marketing, and control with
its external environment, internal organization capabilities, and its
overall purpose and direction. Able Corporation will use strategic
management to grow a constructive future and to help their entities
succeed. Able Corporation must convince their stakeholders to foresee
the future of the organization and help them work towards making the
vision a reality.

The strategic management process consists of three stages which are the
strategy formulation, strategy implementation, and strategy evaluation.
The strategy formulation contains the developing of the vision and
mission, recognizing Able Corporation’s external opportunities and
threats, decisive their internal strengths and weaknesses, the creating
of the long term objectives, generating alternative strategies, and
choosing particular strategies to pursue. The strategy formulation would
require Able Corporation to establish annual objects, devise policies,
motivate employees, and allocate resources to help execute the
formulated strategies. The strategy evaluation is the primary means for
obtaining information on particular strategies that are not working. The
three fundamental strategy evaluation activities will review the
external and internal factors that are the bases for the current
strategies, the measuring of performance, and the taking of corrective
actions.

The major factors in strategic management are:

Competitive Advantage

“Anything that a firm does especially well compared to rival firms.�

The pursuit of competitive advantage will lead to success or failure
within the organization.

You must keep in mine that you need to continually adapt to changes and
effectively formulate, implement, and evaluate strategies.

Strategists

The individuals who are the most responsible for the success or failure
of the organization.

They help the organization gather, analyze, and organize information.

Vision and Mission Statements

What do we want to become?

What is our business?

A clear mission statement describes the values and priorities.

External Opportunities and Threats

The organization need to formulate strategies to take advantage of
external opportunities and to avoid or reduce the impact of external
threats, maybe with the use of lobbying.

Internal Strengths and Weaknesses

They are controllable activities within the organization.

Can be determined by elements of being rather than performance.

Long-Term Objectives

Seeks to achieve in the pursuing of the basic mission which will take
over a year to achieve it.

Strategies

Means by which long-term objectives will be achieved.

The potential actions that require top management decisions and large
amounts of the firm’s resources.

Annual Objectives

Short-term milestones must be achieved to reach long-term objectives.

Policies

Means by which annual objectives will be achieved.

Are guides to decision making and address repetitive or recurring
situations.

References

David, Fred R. (2005). Strategic Management Tenth Edition Published by
Pearson Prentice Hall, Upper Saddle River, N.J.

Preliminary Step for PAGE 1

Unit 1 IP1: Able Corporation business plan

Daniel Cajigas

American Intercontinental University on Line

1) Able Corporation Mission Statement

The purpose of the business is to have a worldwide presence in the field
of power tools, lawn mowers, lawn furniture, microwaves, and ranges.
The business: manufacturing and marketing of power tools, lawn mowers,
lawn furniture, microwaves, and ranges. The values: manufacturing high
quality and high performance equipment backed by high quality after
sales service and sold by high profile chain shops.

2) What principle would you use in order to prioritize the
implementation steps needed to accomplish the strategic objectives?

The operating principles would include: 1) Increasing the market share.
2) Increasing the production of the products with maintaining the
highest quality of the products. 3) Incorporating the latest technology
in our products. 4) Establishing contacts with the large chain shops
like Sears, Best-Buy and Wal-Mart and appointing them for the sales of
the company’s products. 5) Developing a strong after sales service
network for the areas to be covered. 6) Providing fast and efficient
after sales service. 7) Doing ongoing research and incorporating the
latest technologies in our products. 8) Developing and retaining a
strong team of professions, including R& D personnel, production team
and marketing professionals. 9) Developing a healthy financial
structure for the company. 10) Developing and maintaining a good
synergy with the store chains so that these stores are satisfied with
the performance of the company.

3) What post implementation and feedback mechanisms would you have in
place to evaluate the effectiveness of the process? What measures would
you use?

In one year the company should consolidate its manufacturing facilities,
complete its product development, test the products, acquire the sales
rights to the targeted territories, recruit personnel for the expansion
into the global market place, recruit personnel who have experience in
dealing with global purchases, and arrange for finance for the expansion
into the global marketplace. In five years the company should have
assumed leadership in the manufacturing and export of high technology
items like microwave oven and gas ranges. The company should have
established its brand names worldwide and its contracts with the chain
stores should be such as to provide a primacy in display and position to
its products. The company should have developed a team of professionals
who would not only continue to push the technology barriers in
production but also invent new models which would establish the company
as a leader in its range of products (Denham, 2000). The finances of the
company should be such that there is an optimal leverage of funds. The
dividends paid should be the best in the industry and the P/E ratio
should equal the best in the stock market. This would be essential for
financing future expansion. In ten years the company should have
expanded into futuristic industries like robotics, and other technology
intensive industries, lawn mowers and lawn furniture should have been
phased out by then. The financial strength of the company should be such
that the company may establish banks, insurance companies and other
financial institutions to finance its cross global operations. The
market should be so expansive that every distribution channel involved
in the selling goods manufactured by Able should carry Able’s
products. The company may change its name from Able to a more global
name. The company should be known for product differentiated because of
excellent standards and quality. The company should be at the forefront
of R&D and should have excellent professional scientist dedicated to
inventing marketable products (Denham, 2000). The brand equity of the
company should be of high value and should be reflected in its balance
sheet.

4) What legal or ethical issues need to be considered?

According to David (2005) some of the legal or ethical issues that are
needed to be taken into consideration are: A) Environmental
contamination issues. B) Misleading advertising in order to gain
advantage over the competition. C) Discrimination or lack of equal
opportunities to employees, customers or investors. D) Padding expenses
accounts. E) Taking advantages of foreign markets by dumping banned
products. F) Poor product quality after achieving economical advantage
over the competition. G) Using non union labor in a union environment
and finally product overpricing.



References

David, F.R. (2005). Strategic Management Concepts and Cases (10th ed).
Upper Saddle River, NJ: Pearson Education.

Denham, Rudi, (2000). Strategic planning: Creating the future.
Feliciter 41, 12(38)



PAGE

PAGE 1

Able Corporation…

MGT 680 Unit 1 Individual Project

Able Corporation Strategic Management Model

By Donna Florom

February 17, 2005

Page 1

The development of a company’s mission statement, vision statement,
strategy plan, and implementation process may well be the most important
action a company may undertake. The process provides the mechanism to
tell the employees, the industry and the world the company’s identity,
where the company intends to go, and how it is going to get there. It
provides an identity and a road map for the employees to help work
together for their success and the success of the company. A
comprehensive strategic-management model includes three phases, the
Strategy Formation, the Strategy Implementation and the Strategy
Evaluation (David, 2005).

1) Strategy Formation

Development of the Mission and Vision Statements

The mission statement provides the identity of the company, while the
vision statement states what the company wants to become (David, 2005).
The mission and vision statements are the bases of the strategy
implementation. Since it is the guide for the strategy of the company,
the purpose, core values and philosophy of the company need to be
identified and encompassed into the statements.

To define the identity of Able Corporation some of the following actions
may be taken.

Interview employees, either in a group setting or individually inquiring
what they think is good or bad about the company, what they value about
the company, and where they would like to see the company in five years.

Ask what their personal core values are, and if these core values are
reflected in Able Company.

Identify any written or unwritten sayings or rules of the company that
may help understand the culture of the company.

Identify the values of the owners / founders of the company, and what
was the driving force that brought the company to where it is today.
Research the history of the company.

Interview in the community to find out the reputation of the company,
and if the values portrayed in the community are the same as those
identified within the company.

Since the manufacturing is based out of a single location in Tennessee,
how does the company support the local community? Does the company
give back to the community, and if so how?

Since Able Company mostly sells through larger vendors, is that their
goal and strategy, or do they also want to work with smaller vendors?

MGT 680 Unit 1 Individual Project

Able Corporation Strategic Management Model

By Donna Florom

February 17, 2005

Page 2

Where do they want to grow globally? What markets do they want to take
on? Are there specific areas / products that the company would prefer
to be known as the best?

Perform an External Audit

It is always important to know the outside factors of that can affect
the vision and strategy of a company. An external audit needs to be
performed to better understand the market and growth potential (David,
2005). Below are some of the questions that should be looked at when
performing an external audit.

Who is the competition?

What are their strengths and weaknesses?

Are the areas the competition excels the same areas Able excels?

Where are the best global growth areas?

Where are analysts suggesting are future growth areas?

Where is the industry heading?

Where is the industry declining?

Perform an Internal Audit

In order to truly succeed, an entity must truly know itself. An
internal audit should be conducted to answer some of the following
questions.

What are Able Company’s strengths?

What sets Able Company apart from the competition?

What are Able Company’s weaknesses?

What have been the successes in the firm’s history?

Was there a common thread in the successes?

What have been the failures in the firm’s history?

Was there a common thread in the failures?

Where has the greatest growth trends occurred historically and recently?

Where has the greatest declines occurred historically and recently?

Has there been an explanation for the growth or declines?

What are the strongest client relationships?

Can those client relationships be leveraged in the growth strategy of
the company?

MGT 680 Unit 1 Individual Project

Able Corporation Strategic Management Model

By Donna Florom

February 17, 2005

Page 3

Generate, Evaluate and Select Strategies

In generating, evaluating and selecting strategies for the company, some
of the following items should be asked and taken into consideration.

Are there short-term strategies that can be done that will assist with
the long term strategy? Are there any “low hanging fruit� that can
be taken as nourishment to climb to the company vision?

Having determined the strength of the company that sets it apart from
the competition, how can it best be exploited to dominate the
competition?

If the company is going global, where is the best place to start? Does
the company start in a general geographic area and grow into other areas
or does the company work with an export broker that will truly go world
wide?

What is needed in order to go world wide in the different geographical
areas?

What is considered a healthy rate of growth?

What are the major changes each area of the company will need to make in
order to reach the vision of the company?

What are the operational changes needed?

How will the company market? Does the company have the marketing
support needed to achieve the vision?

What MIS growth and support are needed to reach the vision?

Are the accounting system and staff big enough and the right strength
for the company to achieve the vision?

Is proper finance in place in order to achieve the vision? If not, how
is it going to be obtained?

What kind of R&D is needed to continue to grow the company?

With the growth of the company, do new H&R issues need to be taken into
consideration? Does the company have the right staff and resources to
do that?

2) Strategy Implementation

Once a mission statement, vision statement and strategy have been
formulated, the strategy must then be implemented. In order to do this
some of the following items need to be addressed. Most of the time
capital / cash flow abilities will limit the ability for an organization
to grow in different areas. It is important to make sure the capital /
cash is applied in the appropriate order and structural needs.

MGT 680 Unit 1 Individual Project

Able Corporation Strategic Management Model

By Donna Florom

February 17, 2005

Page 4

Based upon the priorities of the different departments, what needs to be
done first in order to achieve the visionary growth for the company?

What are the different capital / cash flow needs of the different goals?

What are the capital limitations / cash flow limitations of the
different needs?

Do different departments need to grow before others can be allowed to
grow? Example, it would not make sense to grow the accounting system and
department before the operations of the company stretched the current
systems to capacity.

Does marketing need to grow first in order to stimulate R&D, or does R&D
need to grow in order to stimulate marketing?

What are the MIT needs for each of these items, and what are the
ramifications of more outdated systems? Example, what is the effect of
an outdated accounting system on the company versus outdated equipment
for R&D?

Since part of the vision is to go world wide, are there what needs to be
put into place first in each of the different internal entities?

3) Strategy Evaluation

Some of the following items may be used to evaluate the success of the
strategy and its implementation.

Was the rate of growth that was laid out achieved?

Was the company able to penetrate the world wide markets that were
targeted?

Was the rate of return maintained, or the vision rate of return
achieved?

Are the debt / financial ratios acceptable?

Was the company still able to maintain its strength in the previously
strong market areas?

How did the employee relations fair? Was their higher voluntary turn
over due to the changes? (I.e. high burn out rate with the growth?)

Legal and Ethical Issues

Any time a company expands, especially into a world wide market, legal
and ethical issues always need to be examined. Some of the following
should be considered.

What are the different import / export laws for the different worldwide
geographical areas?

What are the different human resources / payroll laws for the different
worldwide geographical areas?

MGT 680 Unit 1 Individual Project

Able Corporation Strategic Management Model

By Donna Florom

February 17, 2005

Page 5

In the US market, are there new human resources / payroll laws that now
need to be considered with the larger size of the company?

Will the change in the organization substantially change the way of life
for the current employees? If so, is it for the better or the worse?

Will jobs be done overseas that were once performed or could be
performed in the US? How do the company ethics tie into that situation?

Are there geographical areas of the world that although it may be legal
to do trade with, that the company does not ethically want to do trade
in that area?

As stated at the beginning, the development of the mission and vision
statement will identify, define and provide the road map for Able
Company. The strategy to achieve that vision will always be a work in
process, and must be evaluated on a regular basis for legality, ethics
and success.

References:

David, F. (2005). Strategic Management Concepts and Cases (10th
edition).. Upper Saddle River, NJ: Pearson Education, Inc