PPAMANTASAN NG LUNGSOD NG MARIKINA • College of Management and Technology •

Department of Business Administration, Entrepreneurship, and Accountancy

SEMESTER: AY 2024 - 2025

COURSE CODE & TITLE : STRATEGIC MANAGEMENT

PROFESSOR/ INSTRUCTOR : RHODORA G. PAGATPAT
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STRATEGIC FORMULATION
Strategic formulation is the process of developing strategies that enables an organization to
achieve its long-term goals and objectives.

The strategic development process begins with the analysis of the internal and external environment, setting
clear goals, and determining the actions and resources required to meet those goals. The data and information are put
in round table for discussion and brain storming. The participative system in drawing strategy makes people in the
organization aware of the probable actions and plans that will be agreed upon. Dictated strategies will develop
resentment which will not result in cooperative efforts for achievement.

Importance of Strategic Formulation

 Provides Direction: Strategic Formulation clarifies the organization’s long term-direction and focuses
efforts on achieving specific goals
 Align Resources: It ensures that resources (human, financial, technological) are allocated
effectively to support strategic initiatives.
 Enhance Adaptability: By conducting environmental analysis, organization can anticipate changes in
the market and adjust their strategies proactively.
 Foster Competitive Advantage: Proper strategy formulation allows organizations to identify
opportunities, capitalize on strengths, and mitigate risks, leading to a sustainable competitive
advantage.
 Improves Decision Making: A well-formulated strategy provides a framework for consistent
decision-making across the organization.

How Strategic formulation is conducted:

1. Defining Mission and Vision
Mission statement defines the fundamental purpose of the organization, outlining its reason for existence
and the value it offers to stakeholders
Vision statement is a long term view of what the organization wants to become in the future.
These statements serve as the foundation for all strategic decisions, ensuring that the strategies
formulated align with the company’s identity and long term aspirations.

2. Setting Long-Term Goals and Objectives

Organizational Objectives are specific, measurable goals that the organization aims to achieve in a certain
timeframe, aligned with the mission and vision. These goals should be SMART

 Strategic goals: broad, long-term objectives that the organization aims to achieve (e.g. increasing
market share in the district by 20% in the next five years)
  Tactical Objectives: More specific and short-term actions that contributes to achieving the
strategic goals (e.g. Launch two new products in the market by the end of the year )
Setting clear goals and objectives ensures that everyone in the organization understand the priorities and
what needs to be accomplished.

3. Environmental Scanning ( Internal and External Analysis )

Before formulating strategies, it is essential to understand the organization’s operating environment. This
includes gathering data and insights on the factors that impact the organization’s success.

4. Developing Strategic Alternatives

Once the internal and external analyses are complete, the organization develops multiple strategic options
to pursue its objectives. This involves determining the best course of action based on the insights from
the environmental scan.
These strategies can be broadly categorized as:

 Corporate-Level Strategy: Involves decisions related to the overall scope and

direction of the organization. Common strategies include:
Growth strategies: expanding into new markets, diversifying products, mergers
and acquisitions or increasing market share.
Stability strategies: Focusing on maintaining current operations and improving
efficiency
Retrenchment strategies: Reducing scale or scope of operations, often by
divestment or downsizing in response to challenge.

 Business-Level Strategy: Focuses on how to compete successfully within a

particular market or industry. Example includes:
Cost Leadership: Offering products or services that stand out from competitors,
allowing the company to charge premium prices.
Differentiation: Offering unique products or services that stand out from
competitors, allowing the company to charge premium prices.
Focus / Niche : Concentrating on a specific segment of the market and tailoring
products to meet the needs of that niche

 Functional-Level Strategy: Relates to the specific functional areas of the organization (e.g.
marketing operations, human resource and finance) and how they contribute to the overall
business strategy
Example: An HR strategy may involve improving employee retention through
better training and engagement programs.

5. Strategic Choice
After evaluating various strategic options, the next step is to select the most appropriate strategy based on
feasibility, alignment with organizational objectives and external environmental conditions. This steps
involves analyzing the potential costs, benefits, risks and alignment with the organization’s mission and
vision.

 Criteria for Evaluation: Strategies should be assessed based on:

Feasibility - can it be done with available resources?
Acceptability - is it acceptable to stakeholders?
Suitability – does it align with organizational goals?
  Example Decision : If a company has a strong financial position, it may choose to invest in a new
product line rather than cutting costs, as the former aligns better with its growth-oriented vision.

6. Developing Action Plans and Resource Allocation

Once the strategic choice has been made, the next step is to develop detailed action plans that will guide
the execution of the strategy. These plans define specific initiatives, set deadlines, allocate resources and
assign responsibilities to ensure successful implementation.

 Creating Action Plans: Break down the strategy into smaller, actionable steps.
Example: If the strategy is market expansion, an action plan might include
conducting market research, establishing a local presence, and hiring sales staff in
the new region.
Example: The HR department may implement new recruitment practices to
attract talent necessary for expanding the organization into new markets.

 Resource Allocation: Resources (financial, human, technological etc) must be allocated

efficiently to the departments or functions responsible for executing the strategy.
Example: An organization may allocate more budget and human resources to R&D if
its strategy is focused on innovation.

7. Monitoring and Control

Monitoring and control system are essential for tracking the progress of the strategy and ensuring that the
organization remains on course to achieve its goals. Regular reviews are necessary to ensure that the
strategy is being implemented effectively and that the organizations remains on track to meet its goals.
This system involves:
 Performance Metrics: Setting key performance indicators (KPI’s) should be defined to
measure the effectiveness and progress of the strategy.
Example: Tracking revenue growth, market share, customer satisfaction or
employee productivity against predefined targets.
 Feedback Mechanism: Implementing systems to collect data on strategy performance and
adjusting the strategy as needed based on results and market conditions.
Example: External factors such as market changes may require a shift in approach.

Strategic formulation is a critical process in an organization’s journey toward achieving long-term success.
The structured approach to formulate strategy ensures that all aspects of the organization are aligned and
focused on the same objectives from top-level corporate strategy to functional-level HR strategies.
Through continuous monitoring and adjustment, organizations can adapt to changing conditions and stay
competitive.

BUSINESS – LEVEL STRATEGY

Business-level strategy refers to the actions and approaches a company adopts to gain a
competitive advantage within a specific market or industry. The nature of business-level strategy is
making decision on how to position the business in the marketplace to deliver value to customer,
achieve profitability and secure sustainable competitive advantage.
Business-level strategy differs from corporate-level strategy, which is concerned with the overall scope and direction of
the entire organization, often focusing on decisions like diversification and acquisitions. Business-level focus on how a
single business unit will compete in its chosen market.

Key Components of Business-Level Strategy

1. Target Market Selection
2. Value Proposition
3. Creating a Sustainable Advantage

1.TARGET MARKET SELECTION

The first decision in formulating a business-level strategy is choosing the target market. A company
can decide to:
 Which customer segments will the business serve?

 Serve a broad market: catering to a wide array of customers with general needs.
Example: A company like Coca Cola targets a broad consumer market, offering beverages
that appeal to a wide variety of customer globally

 Serve a narrow market: targeting a specific segment of the market with unique needs.
Example: Niche Market: Ferrari focuses on a narrow segment, targeting luxury car buyers
who are willing to pay a premium for high-performance, exclusive vehicles.

2.VALUE PROPOSITION (How to compete)

Once the market is chosen, the company must decide how it will compete. At the business level, the key
question is :
 What unique value will the business offer to customers, and how will it deliver that value?
This is where companies choose one of the following competitive strategies:
a. Cost Leadership
b. Differentiation
c. Focus Strategy ( Cost focus or Differentiation focus)

Three Main generic type of Business-Level Strategies

According to Michael Porter’s generic strategies framework, business can pursue one of the three broad
strategies to achieve competitive advantage:

1. Cost Leadership Strategy

The cost leadership strategy focuses on the delivery of products to consumer at a lower cost and
differentiation against competitors in the market. Business pursuing this strategy aim to reduce production
and operational costs so that they can offer products or services at a lower price that their competitors, thus
attracting price-sensitive customers.
Key focus areas:
 Economies of scale: producing large quantities to spread fixed costs over a higher number of
units
 Operational efficiency: streamlining processes to reduce waste and improve productivity
 Cost Reduction: achieving lower costs through supply chain management, process
innovation or technological adoption.
 Example: Walmart: Knows for its cost leadership strategy through efficient supply chain
management and large-scale operations
Jollibee: Jollibee manages to maintain lower prices while providing fast food that
resonates with local tastes, helping it dominate the market.

2. Differentiation Strategy
A differentiation strategy involves offering products or services that are perceived as unique or superior in
some way compared to the competition. Business pursuing this strategy seek to create customer loyalty by
providing higher-quality, innovative, or more attractive products or services, allowing them to charge premium
prices.

Key Focus Areas:

 Product Innovation: offering products with unique features or advance technology.
 Customer service: providing superior customer support or enhanced buying experience
 Branding: creating a strong, appealing brand image that resonates with the target market.

Example: Apple: Known for its focus on design, innovation and premium branding that sets its
products apart from competitors.
San Miguel Corporation: A diversified conglomerate in the Phils. That differentiates itself
by offering a wide range of high-quality consumer products including its popular beer brand.

3. Focus Strategy (Niche Market)

A focus strategy involves targeting a specific, narrow segment of the market and tailoring offerings to meet the
needs of that segment. Business pursuing a focus strategy concentrate on serving a particular group of
customers or geographic area, rather than competing industry-wide.

Focus strategies can be either:

 Cost Focus : Aiming to be the lowest-cost provider within a particular market segment
 Differentiation Focus: Offering specialized products or services that cater specifically to a niche
market’s unique needs.

Key Focus Area:

 Deep understanding of the target market: Gaining insights into the specific needs,
preferences and pain points of the niche market
 Customization and specialization: Offering products or services that are highly customized
to the niche market

Examples: Chinabank Savings in the Phils: A smaller bank that focuses on providing personalized
financial solutions to small and medium enterprise (SMEs), rather than competing with larger banks.

Tesla (initially): Tesla’s focus on high-end electric vehicles catered to a niche market
of environmentally conscious luxury consumers.

3.CREATING A SUSTAINABLE COMPETITIVE ADVANTAGE

Once the company has selected a value proposition and a target market, it must ensure that its strategy is sustainable
in the long term. A sustainable competitive advantage allows the company to maintain its position in the market
despite competitive pressures.
To create and sustain this advantage companies focus on the following:
  Unique resources or capabilities (some companies posses a unique resources. (e.g. patents,
brand reputation or access to raw materials) that competitor cannot easily replicate.
Example: Google’s search algorithm and data driven capabilities give it a significant edge in
the digital adverting market.

 Cost Advantages: Achieving cost leadership may provide a sustainable advantage, especially
if the company has significant economies of scale, superior technology or access to cheaper
inputs.
Example: Amazon’s advance logistics network allows it to offer fast shipping at a lower cost,
creating a strong cost advantage.

 Customer Loyalty: Differentiation can create customer loyalty through strong branding,
product quality and exceptional customer service.
Example: Starbucks has cultivated customer loyalty through its brand experience,
atmosphere, and premium coffee offerings, allowing it to differentiate from other coffee shops.

 Barriers to entry: Companies can create barriers to entry for competitors, such as high
capital investment requirements, regulatory constraints or exclusive partnership.
Example: Pharmaceutical companies that hold patents on drugs have a temporary monopoly
that serves as a barrier to entry for competitors.

Examples of Business-Level Strategies in Action

Cost Leadership in Retail: Walmart

Walmart has successfully implemented a cost leadership strategy. The company's focus is on offering everyday low
prices by maintaining operational efficiency, leveraging its scale for bulk purchasing, and optimizing its logistics and
supply chain. Walmart's ability to keep costs low enables it to compete by offering the lowest prices in the retail industry,
targeting a broad customer base.

Differentiation in Technology: Apple

Apple focuses on differentiation by offering innovative products like the iPhone, Mac, and iPad, which are perceived as
superior due to their design, functionality, and seamless user experience. Apple differentiates itself through its proprietary
operating systems, sleek design, high-end materials, and premium pricing. Its strong brand identity also reinforces this
differentiation, giving it a unique position in the tech market.

Focus Strategy in Fashion: Zara

Zara uses a focus strategy by targeting fashion-conscious customers who seek trendy yet affordable clothing. Unlike
traditional fashion companies, Zara differentiates itself through fast fashion, quickly turning over new designs and getting
them into stores in record time. It focuses on a niche of consumers who value current fashion trends and are willing to pay
for frequent updates to their wardrobe.

“The key to an effective business-level strategy is to understand the market, offer a

compelling value proposition and build capabilities that allow the company to maintain its
competitive edge over time.”
CORPORATE - LEVEL STRATEGY
Corporate-level strategy refers to the overarching strategic plan of a company that operates
multiple businesses or units. It defines the scope and direction of the organization and determine
how value will be created for the overall enterprise through the management of various business
divisions.

Corporate-level strategy addresses broader questions about the composition of the company’s
business portfolio and how these business fit together to achieve the organization’s long term
objectives.

Corporate –level strategy helps the company decide where to compete, meaning which industries,
markets or geographies to enter and how to leverage its resources and capabilities across different
business units for competitive advantage.

Key Components of Corporate-Level Strategy

1. Defining the Corporate Scope
2. Portfolio Management
3. Creating Synergies
4. Allocating Resources
5. Growth Strategies
6. Diversification Strategies

1. Defining the Corporate Scope

The first step in corporate-level strategy is to define the corporate scope, which answers the question “ In
which businesses or markets should the company compete”. This includes decision about the company’s overall vision
and its industry focus, geographical reach and the types of products or services it offers.

Key questions include:

a. Should the company expand into new industries products, or geographic regions?
b. Should it focus on a single core business, or diversify into multiple areas?

Example: Amazon initially started as an online bookstore, but its corporate strategy has expanded its scope to
include a variety of businesses such as e-commerce, cloud computing (Amazon Web services) digital streaming and
artificial intelligence. This broad scope allow Amazon to capitalize on multiple growth opportunities across various
industries.

2. Portfolio Management
Portfolio Management is the process of managing the company’s collection of businesses or divisions to
maximize overall corporate performance. It involves analyzing the individual businesses to determine how they
contribute to the overall goals of the organization. Oftentimes businesses is evaluate in a Corporate portfolio based on
factors like market growth and market share.

Example: General Electric (GE) historically used portfolio management to manage its diversified businesses
which included aviation, healthcare, energy, and finance GE invested heavily in its high-performing businesses (aviation
and healthcare) while selling off less profitable or declining units (such as GE Capital and its appliance division)
 3. Creating Synergies
Corporate –level strategies also aims to create synergies among the various businesses in the portfolio.
Synergies occur when the combination of two or more businesses units results in greater value than if they operated
independently. These synergies can be operational, financial or managerial.

Example: Disney creates synergies across its business, such as films, theme parks, merchandise and media
networks. The success of Disney films not only generates box office revenue but also boosts merchandise sales, attracts
visitors to Disney theme parks and drives content on its media and streaming platforms

4. Allocating Resources
Resource allocation is a critical aspect of corporate-level strategy. The company must decide how to allocate its
financial, human and technological resources across various business units to maximize overall corporate performance.
This involves prioritizing investments in high-potential areas and possibly divesting from or downsizing underperforming
businesses.

Example: Procter & Gamble (P&G) a global consumer goods company, frequently reallocates resources across its
diverse product portfolio which includes brands like Tide, Pampers, and Gillete. P&G invests more in growth areas like
personal care and divests non-core businesses such as beauty products, to focus resources where they can achieve the
highest returns.

5. Growth Strategies
Corporate-level strategies often involves choosing the most appropriate growth strategy for the company. This
includes deciding how to expand the company’s operation to achieve long terms goals.

There are three (3) primary growth strategies:

A. Organic Growth: Occurs when a company grows by expanding its existing business
activities without external acquisitions. This includes market share, launching new products or
entering new geographic markets
Example: Starbucks achieved organic growth by opening new stores in international markets and
introducing new products such as cold brews and plant based beverages.

B. Merger and Acquisition (M&A): involve growing by purchasing or merging with other
companies. Acquisition can allow a company to quickly enter new markets, gain new technologies
or achieve synergies by combining operations.
Example: Facebook (now Meta) used an acquisition strategy to grow, purchasing companies like
Instagram

C. Strategic Alliances and Joint Ventures: companies may also enter into partnership or
joint venture with other organizations to achieve growth. This approach can allow companies to
access new markets or technologies without the risk of a full acquisition.
Example: Sony and Ericsson formed a joint venture in 2001 to create Sony Ericsson, a mobile
phone company that combined Sony’s consumer electronic expertise with Erickson’s
Telecommunications capabilities.

6. Diversification Strategies

A major aspect of corporate-level strategy is diversification – the decision to enter new industries or market
beyond the company’s core business. Diversification can help reduce risks by spreading exposure across different
industries or sector and it can also open up new growth opportunities.
Strategic Formulation in the Context of Human Resources

Strategic formulation in Human Resources (HR) refers to the process of developing HR strategies
that align with an organization's overall strategic objectives. In this context, HR plays a critical role
in ensuring that the organization has the right people, with the right skills and motivations, to execute
its strategy effectively. HR strategic formulation involves creating policies, programs, and initiatives
that enhance workforce capabilities, increase organizational performance, and support the long-term
goals of the business.

Steps in Strategic Formulation for HR

1. Assessing Organizational Goals and Vision

2. Analyzing Internal and External Environments (SWOT Analysis)
3. Defining HR Objectives
4. Developing HR Policies and Programs
5. Aligning HR Strategies with Business Strategy
6. Implementing, Monitoring, and Adjusting Strategies

1. Assessing Organizational Goals and Vision

The strategic formulation process in HR begins by understanding the organization’s overall goals, vision, and mission.
These elements set the direction for HR’s strategy, as HR needs to support the company’s broader objectives.

 Why it’s important: HR must understand what the organization seeks to achieve (growth, innovation, cost
leadership, etc.) to design strategies that effectively contribute to these goals.
 Example: A tech company with a mission to be a leader in innovation may need an HR strategy focused on
attracting top engineering talent, fostering a creative work environment, and supporting continuous learning.

Questions HR might ask:

 What skills, behaviors, and values are critical for achieving the organizational vision?
 How can HR support the workforce to align with the company’s strategic direction?

2. Analyzing Internal and External Environments (SWOT Analysis)

The next step involves a SWOT analysis of the internal and external HR environment to identify the strengths,
weaknesses, opportunities, and threats that may impact HR’s ability to support organizational objectives.

Internal Analysis:

 Strengths: Assess current HR strengths, such as a skilled workforce, positive company culture, and robust
talent management processes.
 Weaknesses: Identify areas for improvement within HR, such as high turnover, skill gaps, or limited HR
technology.
External Analysis:

 Opportunities: Look for external factors that could benefit HR, such as trends in remote work, technological
advancements, or an available talent pool in the market.
 Threats: Identify challenges such as industry competition, changing labor laws, or a shrinking talent pool.

Example:

 A healthcare organization may find that an increasing demand for healthcare services (opportunity) calls for
more healthcare professionals, but a talent shortage in the market (threat) makes it challenging to meet
staffing needs. This insight can drive HR to prioritize recruitment and training.

3. Defining HR Objectives
Based on the insights from the organizational goals and the SWOT analysis, HR then defines specific, measurable
objectives. These objectives represent HR’s contribution to achieving the broader business goals and should align
directly with organizational priorities.

Examples of HR objectives:

 Talent Acquisition: Hire 100 employees with digital and data science skills within six months to support a new
digital transformation initiative.
 Employee Retention: Reduce voluntary turnover by 15% within the next year to maintain workforce stability.
 Leadership Development: Establish a leadership training program to ensure a pipeline of future leaders ready
to fill key roles.

Each objective should have a clear timeline and measurable outcomes so HR can track progress and ensure alignment
with the organization’s strategic goals.

4. Developing HR Policies and Programs

With clear objectives, HR can begin to develop specific policies and programs to achieve these goals. HR policies and
programs should cover critical areas such as recruitment, training, compensation, performance management, and
employee engagement. Each program should be designed to build a workforce that is capable, motivated, and aligned
with the organization’s strategic direction.

Key HR Programs in Strategic Formulation:

A. Recruitment and Talent Acquisition

 Develop recruitment strategies to attract top talent. This may involve creating an employer brand, leveraging
social media, or participating in job fairs.
 Example: A startup looking for agile thinkers may create a recruitment campaign that appeals to innovative
candidates, using its reputation for cutting-edge projects as a draw.

B. Training and Development

  Implement training programs to close skill gaps and support continuous learning. Development programs can
also foster leadership skills and succession planning.
 Example: A retail organization launching e-commerce operations could offer digital marketing training for its
marketing team to equip them with the skills to succeed in the new market.

C. Compensation and Benefits

 Design competitive compensation packages that align with industry standards and reward high performance.
This also includes benefits that support employee well-being and satisfaction.
 Example: A manufacturing firm in a remote area might offer housing assistance or transportation allowances
to attract workers from urban areas.

D. Performance Management and Employee Engagement

 Create performance management systems to align employee goals with company objectives. Engagement
initiatives such as recognition programs can increase job satisfaction and retention.
 Example: A global consulting firm might use quarterly performance reviews, linked to organizational goals, to
keep employees focused and motivated on their contribution to company objectives.

5. Aligning HR Strategies with Business Strategy

This is a critical step in HR strategy formulation. It ensures that HR strategies are not developed in isolation but are
integrated with the company’s business strategy. The alignment may vary depending on the organization’s strategic
focus, whether it’s on cost leadership, differentiation, or focus.

Examples of Alignment:

 Cost Leadership Strategy: If the organization’s strategy is cost leadership, HR might focus on streamlining
recruitment and training processes, managing labor costs, and designing efficient workflows.
 Differentiation Strategy: For a company pursuing differentiation, HR might prioritize recruitment of highly
skilled talent, foster a culture of creativity, and offer incentives for innovation.
 Focus Strategy: In a focus strategy, HR may develop expertise in a specific industry or niche market, ensuring
the workforce has specialized skills to meet specific customer needs.

Example of HR-Business Alignment:

 If a company’s business strategy is to expand into international markets, HR’s strategy could involve creating a
global mobility program to facilitate talent relocation and training cross-cultural teams to ensure smooth
market entry.

6. Implementing, Monitoring, and Adjusting Strategies

After developing HR strategies and aligning them with the business, the next phase is implementation, where HR
policies and programs are rolled out. This requires clear communication, adequate resources, and close coordination
with managers across the organization. Monitoring and adjustment ensure that HR strategies remain relevant and
effective over time.
Monitoring and Adjustment Involves:

 Tracking Progress: Regularly measure performance against HR objectives, such as tracking turnover rates,
employee satisfaction scores, and the number of positions filled.
 Gathering Feedback: Obtain feedback from managers, employees, and stakeholders to assess the effectiveness
of HR programs.
 Making Adjustments: Modify HR strategies based on performance results and evolving business needs.

Example:

 A tech company implementing a talent development program might find that some employees prefer virtual
learning to in-person sessions. HR can adjust the program to include more virtual learning options, making the
training more accessible and convenient for employees.

Examples of Strategic HR Formulation in Action

Example 1: Talent Strategy in a Growth-Focused Company

A software company with a growth strategy may focus on rapid talent acquisition and development to support its
expansion. HR could implement a “hire and train” program where new employees are quickly onboarded and provided
with intensive training in software development and customer service, enabling them to contribute effectively to new
projects.

Example 2: Retention Strategy for a Differentiated Brand

A high-end retail brand that differentiates itself through customer service may develop HR strategies that focus on
employee retention, emphasizing training in customer service excellence and providing incentives for long-term
employees. HR might create programs that reward staff with perks, recognition, and career development opportunities to
build a loyal and skilled workforce.

Example 3: Cost-Management Strategy for a Manufacturing Company

A manufacturing firm that adopts a cost-leadership strategy might prioritize efficiency in workforce management. HR
could design workforce planning to optimize scheduling, reduce overtime costs, and automate certain HR processes (such
as payroll and benefits administration) to cut down administrative expenses, directly supporting the company’s cost-
saving goals.

Conclusion
Strategic formulation in HR is essential for aligning the workforce with an organization’s long-term objectives. It enables
HR to contribute to competitive advantage through well-crafted policies and programs tailored to the company’s strategic
direction. By defining HR objectives, developing targeted initiatives, aligning with business goals, and consistently
monitoring performance, HR can play a transformative role in driving organizational success and preparing the workforce
to meet future challenges. This strategic approach helps HR to go beyond traditional functions and establish itself as a key
player in organizational growth and performance.
 PAMANTASAN NG L
UNGSOD NG MARIKINA • College of Management and Technology
Department of Business Administration, Entrepreneurship, and Accountancy
SEMESTER: AY 2024 - 2025

COURSE CODE & TITLE : STRATEGIC MANAGEMENT

PROFESSOR/ INSTRUCTOR : RHODORA G. PAGATPAT
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STRATEGY IMPLEMENTATION

Strategy Implementation is the process of putting a chosen strategy into action to achieve
organizational goals and objectives. While the strategic formulation involves planning and setting
objectives, implementation focuses on the practical aspects of achieving those goals.

Strategy implementation is very crucial in the strategic management process because it aims
to transforms strategic plans into actionable steps that enables an organization to achieve its goals and
objectives.

This process requires coordination across all levels of the organization, as well as
commitment from leadership, effective communication, resource allocation and performance
tracking.

Reasons why Proper Implementation Strategy is important:

 Realizing goals: Transforms strategic plans into actions to achieve desired

outcomes
 Coordinated effort: Ensures alignment and cooperation across the
organization, keeping everyone focused on common objectives
 Resource allocation: Helps in effective and efficient utilization of
organizational resources.
 Monitoring and Control: Enables you to track progress, identify issues and
make necessary adjustments
 Adaptability: Allows organizations to respond to changes in the environment
swiftly
 Competitive Advantage: Provides an edge over competitors through effective
execution of strategies
 Long-term survival and growth: Sets the pathway for continuous
improvement, leading to sustainable development and success
Strategy Implementation and Strategy Formation

Strategy formulation and strategy implementation are two core phases of the
Strategic Management process. While they are interrelated, they serve different
purposes and involve distinct activities.

Strategy Implementation focuses on executing the strategic plan. It’s about

making the strategy work in place

The key activities are:

 Resource allocation ( time, money, workforce)

 Establishing organizational structures and designs that align with the
strategy
 Setting up roles and responsibilities
 Developing detailed operational plans
 Monitoring and controlling the execution of the strategy
 Change management and dealing with resilience
 Communication across the organization
 Adjusting to feedback and making necessary corrections.
Primary Stages in Strategy Implementation

1. Communicate the strategy

The first stage in implementing a strategy is communication. Clear, consistent
communication ensures that everyone within the organization understands the strategy. Why
it was chosen and how their role contributes to its success. Communication the strategy
effectively helps build commitment and alignment across the organization.

Key Activities in communicating the strategy:

 Creating a communication plan: Outlining how and when the strategy will be
communicated to stakeholders
 Leadership communication: Senior leaders and managers should communicate the
strategy to their teams, explain the reason behind it and emphasize the benefits.
 Two-way communication: Encourage feedback from employees to ensure
understanding and address concerns
Example: When a large retail company decides to implement an e-commerce strategy, it
might hold town hall meetings, send emails from the CEO, and use intranet updates to
inform employees about the strategy, its purpose and their role in achieving it.

2. Aligning Organizational Structure and Resources

Once the strategy has been communicated, the next step is to align the organizational
structure and resources with the strategic goals.
This may involve restructuring teams, departments, or reporting lines to support the strategy
more effectively, as well as allocating financial, technological and human resources where
they are needed most.
Key activities in organizational alignment:
 Organization Restructuring: Adjusting roles, responsibilities, or even merging or
creating departments to support the strategy.
 Resource Allocation: Ensuring that resources such as budget, technology and human
capital are distributed to support strategic priorities.
 Talent Placement: Placing skilled individuals in critical roles or recruiting new talent
if required.
Example: A tech company adopting an innovation-focused strategy may establish a new
R&D department, reallocate budget to fund innovation initiatives and hire specialists in
emerging technologies to drive new product development

3. Developing Operational Plans and Setting Milestones

With the structures and resources aligned, the next stage involves creating operational plans
and setting milestones. Operational plans break down the strategy into actionable steps,
specifying what needs to be done, when and by whom. Milestone provide checkpoints to
assess progress and ensure that the organization stays on track.
 Key activities in developing operational plans
 Developing Action Plans: Outlining specific tasks, timelines and responsibilities.
 Setting SMART Goals: Setting goals that are specific, Measurable, Achievable,
Relevant and Time bound to provide clarity and focus
 Establishing KPIs (Key Performance Indicators): KPIs allow the organization to
measure progress and determine if the strategy is being implemented effectively
Example: An international food company expanding into a new market may set milestone
such as “launch product line by Q2”, “ reach 1,000 retail outlets by Q3” and “achieve
$5million in sales by the end of the year”

4. Developing Supportive Policies and Systems

For a strategy to be successful, policies and systems must be in place to support its
implementation. This includes updating or creating new policies, procedures and systems that
enables the organization to operate in alignment with the new strategy.

Key activities in supporting policies and systems

 Policies Updates: Revising policies to support the strategy, such as procurement, HR,
or customer service policies
 System Development: Implementing or upgrading IT system, software or platforms
that facilitate the execution of the strategy
 Process Redesign: Adjusting workflows, processes, or standard operating procedures
to improve efficiency and effectiveness
Example: A manufacturing firm adopting a cost-leadership strategy might introduce new
procurement policies focused on sourcing raw materials at the lowest possible cost while also
implementing cost – monitoring systems to track expenses.

5. Training and Developing Skills

New strategies often require employees to acquire new skills or knowledge. This stage
involves training and skills development to ensure that employees have the capabilities to
execute the strategy

Key activities in training and developing skills

 Assessing Training Needs: Identifying any skills gaps that may hinder successful
implementation
 Providing training Programs: Offering workshops courses, or on-the-job training
tEo build necessary skill
 Encouraging Continuous Learning: Promoting a culture of learning to adapt to
any evolving requirements
Example: A bank implementing a digital transformation strategy may need to train
employees on using new digital tools, understanding cybersecurity measures and managing
customer interactions through digital channels
6. Engaging and Motivating Employees
Employee engagement and motivation are crucial for successful strategy implementation.
This stage involves creating a positive environment where employees feel valued, motivated
and aligned with the organizational vision.

Key activities in engaging and motivating

 Incentivizing Performance: Offering rewards, bonuses, or other incentives for
achieving specific milestones or contributing to the strategic goals.
 Encouraging involvement; Actively involving employees in decision-making
processes to increase their buy-in
 Building a Culture Ownership: Encouraging employees to take responsibility for their
roles in the strategy emplementation.
Example: A company pursuing a customer-focused strategy might incentivize employees by
implementing a customer satisfaction bonus program, where employees receive bonuses for
meeting or exceeding customer service goals.

7. Monitoring and Tracking Progress

Monitoring progress is essential to ensure that the implementation stays on course. This
involves regularly assessing performance against set KPIs and milestones, tracking challenges
and identifying any necessary adjustments.

Key activities in monitoring and tracking

 Regular Performance Reviews: Conducting regular reviews to assess progress and
performance against the strategic plan
 Adjusting Plans as necessary: Making adjustments to address any issues or changes in
the external environment.
 Using Technology for Monitoring: Leveraging a patient-centered care strategy may
monitor metrics such as patient satisfaction scores, wait times and treatment outcomes
to ensure they align with the strategic goals.

8. Adjusting and Refining the Strategy

Strategy implementation is rarely a straightforward process; it requires flexibility and
adaptability. Based on the insights gathered from monitoring, the organization may need to
adjust and refine its strategy to respond to unforeseen challenges, changes in the
environment, or internal constraints.

Key activities in adjusting and refining strategy

 Identifying gaps and Issues: Determining areas where the strategy isn’t achieving the
desired results
 Modifying Objectives or tracks: Adjusting objectives, tactics or even the strategy
itself to improve outcomes
 Continuous Improvement: Encouraging an iterative approach where feedback and
learning contribute to ongoing improvement
 Example: If an airline’s low cost strategy faces unexpected regulatory changes, management
might need to adjust pricing or service offerings to align with the new regulations while still
maintaining cost efficiency.

9. Reviewing and Rewarding Success

The final stage is a review of the strategy implementation process to assess overall success
and recognize the efforts of those involve. This review allows the organization to reflect on
what worked well, what could be improved, and how the experience can inform future
strategic initiatives.

Key activities in reviewing and rewarding

 Conducting a Post-Implementation Review: Evaluating the overall impact and
effectiveness of the strategy
 Celebrating Milestone and Successes: Acknowledging team efforts and individual
contributions to boost morale and motivation
 Extracting Lessons Learned: Documenting insights to refine future strategy
formulation and implementation processes.
Example: After a successful product launch, a consumer goods company might conduct a
comprehensive review to understand the factor that contributed to its success. document
lessons learned and recognized the top-performing teams with awards or bonuses.

While the strategy formulation sets the direction, strategy implementation is what actually
drives the organization toward success.

Here are the key reasons why strategy implementation is important.

1. Realizing Strategic goals
Strategy implementation is the bridge between planning and action. Without effective
implementation, no matter how good the formulated strategies are it will remain
theoretical and may not yield any results.

Example: A company’s plan to expand its market share can only be achieved if
departments like marketing, sales and production are aligned and take steps to attract
and retain new customers

A healthcare provider that sets a goal to improve patient care quality must
implement specific initiatives, like staff training and introducing new health care
monitoring systems to realize this objectives, without implementation, the goal
remains a concept.

2. Enhances Organizational Alignment and Focus

Strategy implementation ensures that all departments, teams and employees are
working towards common objectives. By clearly communicating the strategy and
 aligning individuals roles with the organization;s broader goals, employees gain a
clear sense of direction, contributing to a cohesive organizational focus

Example: A retail chain planning to expand e-commerce need alignment across

department – IT must set up the platform, Marketing should develop online
campaigns and HR may need to train staff for digital operations.

Key Components for successful Strategic Implementation

Successful strategy implementation relies on several components

 Maintain clear communication

Effective communication is crucial to ensure that everyone understand the

strategy and their role in its implementation. Leaders need to clearly and
consistently communicate expectations, goals, and implementation progress.
This will help align the organization.

 Engage the Stakeholders

Stakeholder engagement involves interacting with and getting buy-in from

individuals or groups with vested interest in the strategy. This includes
employees, investors, suppliers and customers. Their support and feedback can
provide valuable insights and foster environment for strategy implementation.

 Stay Agile

An agile approach encourage adaptability and responsiveness to changes in the

business environment. An organization can adjusts its strategy and
implementation plan as necessary by staying agile. The team can then address
emerging challenges or opportunities, ensuring the relevance and effectiveness
of the strategy.

 Celebrate Quick Wins

Celebrating success no matter how small helps build momentum and motivates
the team. Acknowledging and rewarding the achievements as they contribute
toward the overall goal is essential. This helps create a positive organizational
culture and maintains enthusiasm and engagement among the team.
 Provide Training and Development

Ongoing training and development are essential for equipping employees with
the necessary ski9lls and knowledge for strategy implementation. Well-designed
training programs ensure that the team is competent and confident in executing
their tasks, in turn, contributes to the successful implementation of the strategy

Common Challenges in Strategy Implementation

Implementing a strategy successfully in any organization can be tough. Here are

some common issues in the implementation of strategy.

 Lack of Clear Understanding

If everyone involves does not clearly understand the strategy,

misalignment can occur.

Tip: Communicate the strategy at multiple levels and in different formats.

This ensures that every member of the organization understand it
significance, objectives and their role in it.
 Inadequate Resources

Lack of necessary resources such as time, staffing, finances or technology

can severely hamper the strategic implementation process. Without
appropriate resources, strategy implementation can stall.

Tip: Conduct a thorough resource assessment before beginning

implementation and allocate resources based on priority

 Resistance to Change

Employees might resist new strategic initiatives because of fear of the

unknown, loss of job security, or concern over changes in responsibilities.

Tip. Engage with employees early and involve them in the planning
phase. Provide adequate training and address concerns openly and
honestly

 Ambiguous Accountability

If roles and responsibilities aren’t clearly defined, there can be overlaps or

gaps in task completions.
 External Factors

Make shifts, regulatory changes, or unforeseen external events can impact

strategy implementation

Tip: Regularly review the external environment. Have contingency plans

in place and be ready to pivot if necessary.
 PAMANTASAN NG L
UNGSOD NG MARIKINA • College of Management and Technology
Department of Business Administration, Entrepreneurship, and Accountancy
SEMESTER: AY 2024 - 2025

COURSE CODE & TITLE : STRATEGIC MANAGEMENT

PROFESSOR/ INSTRUCTOR : RHODORA G. PAGATPAT

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HUMAN RESOURCE MANAGEMENT

Role of Human Resources in Strategy Implementation

Human Resource (HR) Management plays a key role in Strategy Implementation

by helping organizations solve challenges through people-centric solutions. HR
can contribute to strategy implementation in several ways including:

1. Strategic Planning
HR can help identify and clarify an organizations mission, goals and tactics
to achieve those goals. They also assess workforce needs, analyze talent gaps and
develop succession plans. HR can also provide training and resources to help
others develop strategies.

2. Culture Alignment
HR helps align an organization’s culture with its mission and values. This
involves promoting values and behaviors that encourage collaboration, innovation
and commitment to the strategic goals.

3. HR Practices
HR can create a roadmap for solving challenges through people-centric
solutions
Talent acquisition and management - This strategy can include focusing
on recruitment, talent management, compensation, succession planning and
corporate culture. HR selects employees who have the knowledge, skills and
abilities (KSA) to drive the organization forward. This ensures that the workforce
is capable of executing the strategy effectively.
Training and Development - HR designs and implements training program
to develop employees skills and competencies necessary to execute the strategy.
Continuous learning opportunities help in adapting to new challenges and
technologies
 Performance Management - HR establishes performance management
systems that align individual goals with organizational objectives. This includes
setting KPIs, conducting performance reviews and providing feedback that drives
strategic initiatives.
Employee Engagement and Retention- Engaged employees are more likely
to contribute positively to strategy execution. HR develops program to boost
morale, recognize achievements, and retain top talent, which is critical for
sustained strategic success.
Succession Planning - HR identifies and develops future leaders to ensure
the organization has the necessary leadership capacity to carry out strategy over the
long term
4. Change Management
During strategy implementation, organization often undergo significant
changes. HR can help employees prepare for change by communicating with
leadership the need for change, supporting transitions, providing transparency and
addressing concerns and soliciting feedbacks.

5. Compliance and Risk Management

HR ensures that the organization adheres to legal and ethical
standards, mitigating risks that could derail strategy implementation

By aligning Human Resources practices with organizational strategy, HR helps

create a workforce that is not only skilled and motivated but also aligned with the
overall goal of the organization.
MANAGING CHANGE AND INNOVATION
Change Management and Innovation Management are two related but
distinct fields of study and practice.

Change Management is a systematic approach to dealing with the

transition or transformation of an organization’s goals, processes and
technologies.
The purpose of change management is to implement strategies for
affecting and controlling change and helping people to adapt to change.

Change Management focuses on how to plan, implement and sustain

changes in an organization, such as new processes, structures or strategies.

Innovation Management deals with how to generate, develop and

commercialize new ideas, products or services that create value for customers
and stakeholders
Innovation allows companies to differentiate themselves from competitors
and gain a competitive edge. By continuously improving products, services or
processes, organizations can offer unique value propositions to customers.
Types of Organizational Change

1. Developmental Change.
Any organizational change that improves previously established
processes and procedures.
2. Transitional Change
Changes that moves an organization away from its current state to a
new state to solve a problem, such as implementing a merger and
acquisition or automating a task or process.
3. Transformational Change
Change that radically and fundamentally alters the culture and
operation of an organization. The results of transformational change
might not be known ahead of time. For example, a company may
pursue entirely different products or markets.

Importance of Innovation and Change Management in Strategic

Management:

1. Improve Productivity - Change management can lead to increased

productivity, operational excellence and better customer success

2. Improve Communication – Effective Change management involves clear

and open communication, which can help teams address concerns and
share insights.

3. Reduce Costs – Positive change can help reduce waste and costs and
improve profitability

4. Enhance Customer Satisfaction – Innovation management can help

improve customer experiences and satisfaction by ensuring companies
meet or exceed customer expectations

5. Improve Innovation and Creativity – Change can lead to opportunities for

creativity and innovation and managing change can help employees explore
new ways to do their work.
Managing change and innovation in strategic implementation involves
a number of considerations, including:

Defining the Change

The change management process can help companies implement
significant changes to improve their bottom line, such as new technology, product
pivots, or organizational architecture changes

Planning Carefully
A poorly designed plan can quickly kill a strategy. It’s important to plan
carefully and inclusively.

Designing a change plan

Clearly defined goals and objectives provide a roadmap for the change
implementation process.

Defining goals and vision

Clearly defined goals and objectives provide a roadmap for the change
implementation

Communicating continuously
Effective communication is an ongoing process that should be used at every
stage of the change process

Building Resilience through adaptability

Adaptability is a strategic imperative that can enhance organizational
resilience

Aligning vision and goals

Leaders should align their vision and goals with the needs and expectation
of their stakeholders

Considering business sustainability and growth

When managing change and innovation, it’s important to consider
questions such as the cost of innovation. how it will be measured and what the
return on innovation will be.
Challenges of Change Management
Companies developing a change management program from the ground up
often face challenges. Besides a thorough understanding of company culture, the
change management process requires an accurate accounting of the systems,
applications and employees that changes are likely to affect.

Additional Change Management challenges include the following:

 Resource Management – Managing the physical, financial, human,

informational and intangible assets and resources that contribute to an
organization’s strategic plan becomes difficult when implementing change.

 Resistance – The executives and employees most affected by a change

might not be amenable to it, resulting in a backfire effect. In most cases,
this happens because people perceive that change will result in extra work.
Transparency, training, planning and patience can help quell resistance and
improve overall morale.

 Communication – Companies often fail to consistently communicate

change initiatives or include employee in the process. Change-related
communications plans require adequate number of messages, the
involvement of enough key stakeholders to get the message out and the
use of multiple communication channels.

 New Technology – The application of new technologies can disrupt an

employee entire workflow. Companies can improve adoption of new
technology by creating a network of early learners who champion the new
technology to colleagues.

 Multiple points of view – In any change initiative, success criteria may

differ for people based on their roles in the organization and incentives.
Managing the impact of these factors is challenging

 Scheduling Issues - Declining whether a change program will be long or

short term and clearly defining milestone deadlines is complicated. Some
 organizations believe shorter change program are most effective. Others
believe a more gradual approach to change reduces resistance and errors.

Role of Innovation in Strategic Management

Innovation plays a critical role in strategic management by helping
companies differentiate themselves from competitors, improve operational
efficiency and seize new opportunities

1. Driving Competitive Advantage – innovation allowed companies

to create uniqe value proposition for customers, which can attract
new customers and increase loyalty

2. Enhancing Operational Efficiency – Innovation can improve

operation effectiveness through process innovation

3. Fostering a Culture of Continuous Improvement (KAIZEN) -

Innovation encourage employees to think creatively and challenge
the status quo, which helps foster a culture of continuous
improvement

4. Seizing New Opportunities- Innovation helps companies identify

and capitalize on new opportunities in the market by scanning the
business environment and staying up to date on emerging trends

5. Resilience – Innovation help companies anticipate and respond to

market disruption and emerging trends

6. Value for stakeholders – Strategic innovation can create value for

the organization., its customer and other stakeholder.
Innovation can take the form of new products service
technologies, processes, or practices. It’s important to have a
strategic plan for innovation as technological advancements and
business disruptions can move too fast to drive innovation
without a structured approach.