Crafting and 

executing a strategy are the heart and soul of managing a business enterprise.

II. What Does the Process of Crafting and Executing Strategy Entail?
Crafting and executing a company’s strategy is a five-phase managerial process:a.
1.  Developing a strategic vision of where the company needs to head and what its future
product-consumer-market-technology focus should be 
2. Setting objectives and using them as yardsticks for measuring the company’s
performance and progressc. 
3. Crafting a strategy to achieve the objectives and move the company along the
strategic coursethat management has charted
4.  Implementing and executing the chosen strategy efficiently and effectivelye.
5.  Monitoring developments and initiating corrective adjustments in the company’s long-
termdirection, objectives, strategy, or execution in light of the company’s actual
experience,changing conditions, new ideas, and new opportunities

- Crafting an strategy
According to Thompson et al., (2010), crafting the Strategy is primarily a market driven activity. It
involves identifying the desired competencies and capabilities to build into the strategy and help
achieve competitive advantage. Crafting strategy is concerned principally with forming responses
to changes under way in the external environment, devising competitive moves and market
approaches aimed at producing sustainable competitive advantage, building competitively
valuable competencies and capabilities, and uniting the strategic actions initiated in various parts
of the company. Successful strategy making depends on the business vision, perceptive analysis of
the situation, attracting and pleasing customers, and outcompeting rivals. An effectively
formulated strategy integrates, marshals, and allocates the firm’s internal resources and makes
appropriate use of external environmental information. The idea is to formulate a mission-
consistent strategy that will lead to sustained superior performance. Poor strategy formulation can
result in costly business failures. GomezMejia and Balkin (2002) and Vallabhaneni (2009) stated
that the formulation includes the planning and decision making that lead to the establishment of
the firm’s goals and the development of a specific strategic plan. Thompson et al., (2010) says that
a firm's strategy is defined by six “How’s”: how to grow the business; how to please customers;
how to outcompete rivals; how to respond to changing market conditions; how to manage each
functional piece of the business (RandD, production, marketing, HR, finance, and so on); and how
to achieve targeted levels of performance
Crafting a Strategy
 
Strategy-making brings into play the critical managerial issue of how to achieve
the targeted results in light of the organization's situation and prospects.
Objectives are the "ends," and strategy is the "means" of achieving them. In effect,
strategy is the pattern of actions managers employ to achieve strategic and
financial performance targets. The task of crafting a strategy starts with solid
analyses of the company's internal and external situation. Only when armed
with hard analysis of the big picture are managers prepared to make a sound
strategy to achieve targeted strategic and financial results. Why?- Because
misanalysis of the situation greatly raises the risk of pursuing ill-awarded
strategic actions.
 
A company's strategy is typically a combination of (1) deliberate and purposeful
actions and (2) as-needed reactions to unanticipated developments and fresh
competitive pressures. As illustrated in Figure 1-2, strategy is more than what
managers have carefully set it out in advance and intend to do as part of some
important strategic plan. New circumstances always emerge, whether important
technological developments, rivals' successful new product introductions, newly
enacted government regulations and policies, widening consumer interest in
different kinds of performance features, or whatever. There's always enough
uncertainty about the future that managers cannot plan every strategic action in
advance and pursue their intended strategy without alteration. Company strategies
end up, therefore, being a composite of planned actions (intended strategy) and
as-needed reactions to unforeseen conditions ("unplanned" strategy responses).
Consequently, strategy is best considered as a combination of planned actions
and on-the-spot adaptive reactions to fresh developing industry and competitive
events. The strategy-making task involves developing a game plan, or intended
strategy, and then adapting it as events occur. A company's actual strategy is
something managers must craft as events arise outside and inside the company

Crafting strategy is an exercise in entrepreneurship and outside-in strategic

thinking. The challenge is for company managers to keep their strategies closely
matched to such outside drivers as changing buyer preferences, the latest actions
of rivals, market opportunities and threats, and newly appearing business
conditions. Company strategies can't be responsive to changes in the business
environment unless managers exhibit entrepreneurship in studying market trends,
listening to customers, enhancing the company's competitiveness, and leading
company activities in new directions in a timely manner. Good strategy-making
is therefore inseparable from good business entrepreneurship. One cannot
exist without the other.
After setting the vision and objective of the company the important step is to crafting a
strategy in order to achieve the set vision and objective. Crafting strategy deals with the
internal and external environment of the organization. This process is a part of the team
work while in some organization this is a job of senior executives and CEO of the company.
The strategy is a collection of the strategic actions, principles and business approach of the
organization

Crafting strategy functions is very vital for the company because it incorporates changing
competitive environment, minimizes competitive disadvantage and also provides better
understanding of the external environment. It focuses on the objectives, goal, vision and
mission of the company. It enhances the process of motivation and strength of decision
making. It provides a base so that the actions can be implemented properly and accurately.
Therefore, crafting a company’s strategy is really job for senior executive and the
company’s board of director (Chapter 2: leading the Process of Crafting and Executing
Strategy).

While it is critical to understand the nature and intensity of the competitive

forces in your industry, its is equally critical to understand that the intensity
of these forces is fluid and subject to change. All industries are affected by
new developments and ongoing trends that alter industry conditions, some
more speadily than others. Any strategies devised by your management
team will therefore play out in a dynamic industry environment, so it’s
imperative that your managers consider those factors driving change in your
industry and how they might affect the industry environment. Moreover,
with early notice, managers may be able to influence the direction or scope
of environmental change and improve the outlook.

Industry and competitive conditions change because forces are enticing and
pressuring certain industry participants such as competitors, customers and
suppliers to alter their actions in important ways. The most powerful of the
change agents are called driving forces because they have the biggest
influences in reshaping the industry landscape and altering competitive
conditions. Some driving forces originate in the macro-environment, but
most originate in your company’s more immediate industry and competitive
environment.

With this fundamental analysis that determines the survival of any business
in any industry in mind, we built StatPlan, our awesome strategic planning
software to help analyse driving forces in three steps: (1) indentify what the
driving forces are, (2) assess whether the drivers of change are, on the
whole, acting to make the industry more or less attractive, and (3) determine
what strategy changes are needed to prepare for the impact of the driving
forces. All three steps merit further discussion.

 
All industries are characterised by trends and new development that gradually or speedily produce changes
important enough to require a strategic response from participating firms.

 
Also Industries go thru a life cycle changes- its difference stages and hence the Industry change….but it is far from
complete

 
There are more causes…..that need to be identified and their impact to be understood.

 
The Concept of Driving Force:

 
Industry conditions change because important forces are driving industry participants (competitor, customer, or
suppliers) to alter their actions; the driving forces in an industry are the major underlying causes of changing
industry and competitive conditions- they have the biggest influence on how the industry landscape will be altered.
Some originate in the outer ring of macro-environment and some originate from the inner ring.

 
Driving forces Analysis:

 
1. Identifying what the driving forces are
2. Assessing whether the drivers of change are, on the whole, acting to make the industry more or less
attractive 
3. Determining what strategy changes are needed to prepare for the impact of the driving forces

 
Identifying an Industry’s Driving Forces:

 
1) Emerging new internet Capabilities and Applications 
Got into every days biz operation and social fabric of life all across the world.

Increasing internet usage & Speed->Growing internet shopping

Companies using online technology

Collaborate closely with suppliers and streamline their supply chain

Revamp internal operations and squeeze our cost saving

Manufacturer-> website-> Direct customers.

All Biz->Extend Geographical Reach

Low cost increases the no. of online rival and hence the compitition of online v/s brick and mortar sellers.

Internet gives customer-> Power to research the product offering and shop the market for the best Value.
untig Ability of Consumer to download Music from internet has reshaped traditional music retailers

 Emails has eroded fax services and first class mail delivery revenues of govt postal services world wide
 Videoconferencing has eroded the demand of biz travels
 Online cources offering have the potential of revolutionise higher education
Internet will feature faster speed, dazzling applications and over a billion connected gadgets performing an array of
functions thus driving firther industry and competitive changes

 
Internet related impacts vary from industry to industry

2) Increasing Globalisation:

 
Competition begin to shift from regional & national focus to an inernational or global focus
Industry members begin seeking out customers in foreign market
Production activities begin to migrate to countries where costs are lowest
Global competition really starts when one or more ambitious Companies precipitate a race for world wide market
leadership.

 
Globalization happens:-

 
 Blossoming of customer and demand in more and more countries
 Action of govt to reduce the trade barrier .Europe,Latin America and Asia
 Significant difference in labour cost ->locate plant e.g China, india , Singapore, Maxico and Brazil ¼ of those
in US, Germany and Japan

 
Eg.Industires :- Credit Card, CellPhone, Digital Camera, Golf and Ski Equipment, Motor Vehicles, Steel,
Petrolium, Personal Computers, Vedio Games, Public Accounting and Text Publishing….

 
3)   Changes in an Industry Long Term Growth Rate.

 
Shift in industry growth or are driving force for industry change, affecting the balance between industry supply and
buyer demand, entry and exit of the firms

 
Increase in buyers demand triggers a race among established firms and new comers to capture the new sales
opportunities, in turn will launch offensive strategies to broaden customer base and grow significantly

 
Decrease or slow down in rate at which demand is growing firms fight for their market share

 
If industry sales suddenly turns flat competition itencify, consolidation takes shapes by mergers and acquisations,

 
Stagnating sales forces both weak and strong firms to sell their biz to those who elect to stick-> forces to close
inefficient plants and retrench to small prod base…

4)     Changes in who buys the Product and how they use it:

 
Shift in buyer demographics-New ways of using product- firms broaden or narrow their product line-diff sales &
promotion…

 
Downloading Music From Internet-Storing Music Files on HD & PC, Burning CD-forced to reexamin the traditional
music stores-also have stimulated the sales of Disc burners and blank discs.

 
PC & Internet- Banks to expand their electronics bill payment services and retailers to move more of their customer
services online

 
5)    Product Innovation:

 
Rivals racing to be first to introduce the new product or product enhancement after another.

 
Competition changes->attracting more 1st time buyers ->Rejuvenating ind growth, creating wider or narrow prod
differentiation.

 
Strong market position of Successful innovators at the cost of slow innovators

 
Eg. Degital Cameras, Golf Glub, Video games, Toys and Prescription Drugs.

 
6)     Technology Change & Manufacturing Process Innovation

 
Advances in the technology can dramatically alter an industry’s landscape.

 
Gives birth to new and better products at lower costs opening up new industry frontier.

 
Identifying an Industry’s Driving Forces: Technology change contd..

 
Eg.

 
 Internet based phones are stealing large number of customers from using traditional telepone co world wide(
high cost technology, hard weird connections via overheads and underground telephone lines
 Flat screen technology are killing CRT monitors
 LCD and Plasma screen tech are driving CRT tech further
 Digital tech driving huge change in camera and film industry
 MP3 technology is transforming how people listen to music.

 7) Marketing Innovation :

Successful in introducing new ways to MARKET their products: 
 Spark a burst in buyer interest
 Widen industry demand
 Increase product differentiation
 Lower unit cost

Any or all of which can alter the competitive position of rival firm

Eg.

On line marketing of Electronics goods

Music artist mkting their own website V/s contract with recording Studios….

 
8) Entry or Exit of Major Firms

 
Entry of one or more foreign co. into a geographic market once dominated by domestic firms shakes up the
competitive scenario.

 
Pushes the competition to new direction
 
Bring in new rules of competiting

 
Exit:- Reduces the no of mkt leaders, dominance of existing players and rush to capture existing firm’s customers.

 
9) Diffusion of Technical Know how across more companies and more countries.

 
As the knowledge spreads, the competitive advantage of existing firm originally possessing it erodes.

 
It happens thru Scientific Journals, Trade Publications, On site Plant tours, Word of mouth, Employees Migration,
and internet sources

 
Tehnology knowledge license / Royaltee fees

 
Cross border technology transfer has made the once domestic industries of automobile, tires, consumer electronics,
telecommunication and computers truly global

 
10) Change in cost and efficiency

 
Widening or shrinking differences in the costs among key compititors tend to dramatically alter the state of
compitition

Low cost fax and e mail put mounting pressure on the ineffecient and high cost operation of Postal Dept.

Shrinking cost of differences in producing multifeatured mobiles is turning the mobile phone market into comodity
business and making more buyers to base Price as their Purchase decision

 
11) Growing buyer preferences for differentiated products instead of a commodity product

 
When buyers taste and preferences start to diverge, sellers can win a loyal following by providing different vairants
and taste then the compotitors.

 
Eg.

 
 Beer
 Automobile
 
12) Reduction in uncertainty and Business Risk.

 An emerging industry is typically characterised by much uncertainty and risk in terms of time and efforts required
to coverup with the investments.
Emerging industries tend to atract only risk-taking entrepreneurial companies. over time how ever, if the business
model of industry pioneers proves profitable and market demand for the product appears durable, more
conservative firms are usually enticed to enter the market. Often the later enterants are large & financially strong
looking to invest into attractive growth industry.
 
Low biz risk and less industry uncertainty also affect competition in international market.  In the early stage the co.
enters foreign mkt with a conservatie approach with less risky strategies like exporting, licensing, joint marketing
agreement and JV with local companies. 
As time goes and the co accumulates experience, it starts moving boldly and independently making acquisitions,
constructing their own plantss, puting their own sales and mkting capabilities to build strong competitive position...
 
13)    Regulatory Influence and government Poliy Changes.
Govt regulatory actions can often forces significant changes in industry practices and strategic approaches.
Deregulation has proved to be a potent pro competitive force in the airline, banking, natural gas,
telecommunications,  and electric utility industries.
Govt  efforts to reform MEDICARE and HEALT Insurance have become potent driving forces in the health care
industry.
 
14)    Changing Societal Concerns, attitudes an