MGT. 406- STRATEGIC MGT.

CHAPTER 7- STRATEGY IMPLEMENTATION

7.1 Strategy implementation and its process
7.2 Basic features of strategy implementation
7.3 Avoiding the implementation pitfalls
7.4 Cascading the plan
7.5 Strategy implementation issues (macro and micro)
7.6 Role of top management
7.7 Market segmentation and product positioning as strategy implementation tools

7.1 STRATEGY IMPLEMENTATION AND ITS PROCESS

The second stage of strategic management, after strategy formulation, is “strategy implementation” or, what is more
familiar to some as “strategy execution”. This is where the real action takes place in the strategic management process,
since this is where the tactics in the strategic plan will be transformed into actions or actual performance.
Needless to say, it is the most rigorous and demanding part of the entire strategic management process, and the one
that will require the most input of the organization’s resources. However, if done right, it will ensure the achievement of
objectives, and the success of the organization.
If strategy formulation tackles the “what” and “why” of the activities of the organization, strategy implementation is all
about “how” the activities will be carried out, “who” will perform them, “when” and how often will they be performed, and
“where” will the activities be conducted.
And it does not refer only to the installation or application of new strategies. The company may have existing strategies
that have always worked well in the past years, and are still expected to yield excellent results in the coming periods.
Reinforcing these strategies is also a part of strategy implementation.
Strategy implementation process is one way by which organizational objectives, strategies, and policies are put into
action through the development of programs, budgets, and procedures. The organization is bound to fail in its goals if
proper and effective strategies are not formulated and implemented. When about to implement a strategic plan, one
inevitably confronts problems and risks such as the possibility of wasting limited resources, or the threat to self-esteem if
one fails. Planning thus prepares one to overcome unexpected difficulties and to work in the most effective ways of
reaching the set targets.
Strategy Implementation refers to the execution of the plans and strategies, so as to accomplish the long-term goals
of the organization. It converts the opted strategy into the moves and actions of the organization to achieve the objectives.
Strategic implementation is a crucial step in strategy management process that carries out all activities needed for
reaching goals. It addresses who, when, where and how of attaining targets.
Strategy Implementation is described as a process or activity that ensures the strategic planning. It is a dynamic ,
iterative and complex process which comprises a series of decisions and activities by the mangers and employees –
affected by a number of interrelated internal and external factors to turn strategic plans into reality in order to achieve
strategic objectives. Strategy implementation is a term used to describe the activities within an organization to manage the
execution of a strategic plan. Strategy implementation is the manner in which an organization should develop, utilize, and
amalgamate organizational structure, control systems, and culture to follow strategies that lead to competitive advantage
and a better performance
Ray Mckenzie, Founder and Managing Director of Red Beach Advisors, says, “Strategy implementation is a larger
umbrella, or a holistic view of what’s going to happen, and looks at products and pricing and how we function as business.
Strategic implementation is a plan for implementation of a specific objective: For example, if I have a piece of software
that I want installed in three months.” One scenario might be if you want to integrate CRM software into your organization,
you’ll need to identify the steps to take to execute the integration.
Simply put, strategy implementation is the technique through which the firm develops, utilizes and integrates its
structure, culture, resources, people and control system to follow the strategies to have the edge over other competitors in
the market.
MODEL OF STRATEGY IMPLEMENTATION

The following figure presents a model of strategy implementation thatattempts to capture the major themes in strategy
implementation and theactivities that make each theme. The forward linkage from strategic plan guides the
implementation processand connects it to the proceeding phase of strategy formulation. Thefeedback flowing in the
reverse from the following step of strategy evaluationand control moves through the implementation phase and goes back
tostrategy formulation establishing the backward linkage.

Strategy Implementation is the fourth stage of the Strategic Management process, the other three being a
determination of strategic mission, vision and objectives, environmental and organizational analysis, and formulating the
strategy. It is followed by Strategic Evaluation and Control.

Excellently formulated strategies will fail if they are not properly implemented. Also, it is essential to note that strategy
implementation is not possible unless there is stability between strategy and each organizational dimension such as
organizational structure, reward structure, resource-allocation process, etc.

The major themes in strategy formulation are:

1. Activating Strategies: It serves to prepare the ground for managerial tasks and activities of strategy implementation.
2. Managing change: Managing change is one of the core activity in the strategy implementation. It deals with managing
change in complex situation.

3. Achieving effectiveness: The last theme in strategy implementation is the outcome of the process. It covers functional
and operational implementation.

Implementation in the Strategic Management Process

A new strategy doesn’t start with the implementation. Instead, strategy implementation follows three other stages in
the process of strategic management. The first step is to identify your mission, vision, values and objectives. This is done
by performing research and organizational analysis. This analysis concerns itself with all aspects of a business.
First, a business identifies potential areas of improvement. Next, a strategy is formulated to best address changes.
Strategic implementation follows after. Afterwards, leaders continuously evaluate the implemented approaches.

Factors that support strategy implementation

Effective execution of strategies is supported by five key components or factors. All five must be present in order for
the organization to be able to carry out the strategies as planned.

People
There are two questions that must be answered: “Do you have enough people to implement the strategies?” and “Do
you have the right people in the organization to implement the strategies?”
The number of people in your workforce is an issue that is easier to address, because you can hire additional
manpower. The tougher part of this is seeing to it that you have the right people, looking into whether they have the skills,
knowledge, and competencies required in carrying out the tasks that will implement the strategy.
If it appears that the current employees lack the required skills and competencies, they should be made to undergo
the necessary training, seminars and workshops so that they will be better equipped and ready when it’s time to put the
strategic plan into action.
In addition, the commitment of the people is also something that must be secured by management. Since they are the
implementer, they have to be fully involved and committed in the achievement of the organization’s objectives.
Resources
One of the basic activities in strategy implementation is the allocation of resources. These refer to both financial and
non-financial resources that (a) are available to the organization and (b) are lacking but required for strategy
implementation.
Of course, the first thing that comes to mind is the amount of funding that will support implementation, covering the
costs and expenses that must be incurred in the execution of the strategies. Another important resource is time. Is there
more than enough time to see the strategy throughout its implementation?

Structure
The organizational structure must be clear-cut, with the lines of authority and responsibility defined and underlined in
the hierarchy or “chain of command”. Each member of the organization must know who he is accountable to, and who he
is responsible for.
Management should also define the lines of communication throughout the organization. Employees, even those on
the lowest tier of the organizational hierarchy, must be able to communicate with their supervisors and top management,
and vice versa. Ensuring an open and clear communication network will facilitate the implementation process.

Systems
What systems, tools, and capabilities are in place to facilitate the implementation of the strategies? What are the
specific functions of these systems? How will these systems aid in the succeeding steps of the strategic management
process, after implementation?

Culture
This is the organizational culture, or the overall atmosphere within the company, particularly with respect to its
members. The organization should make its employees feel important and comfortable in their respective roles by
ensuring that they are involved in the strategic management process, and that they have a very important role. A culture
of being responsible and accountable for one’s actions, with corresponding incentives and sanctions for good and poor
performance, will also create an atmosphere where everyone will feel more motivated to contribute to the implementation
of strategies.
These factors are generally in agreement with the key success factors or prerequisites for effective implementation
strategy, as identified by McKinsey.

Process of Strategy Implementation

 Building an organization, that possess the capability to put the strategies into action successfully.
Before strategic implementation can succeed, organizations need to have implemented a proper structure. This
implies that different parts of the organization are linked together. Relationships between different positions, roles, and
departments are transparent.
A part of this step also requires the formulation of a proper organizational climate. This assumes the cooperation and
development of personnel. Employees and leaders need to be committed, determined and efficient to convert purpose
into results.

 Supplying resources, in sufficient quantity, to strategy-essential activities.

Some strategies rely on software or products to effectively translate into the day-to-day. Organizations should also
allocate resources to training and development for their staff. Strategies rely on the resources being available to
implement new systems.

 Developing policies which encourage strategy.

Policies must go hand in hand with the new strategy as it is being implemented. Leaders need to provide their teams
with specific sets of rules and guidelines. Everyone knows what behaviours are expected of them in light of the new
strategy. This could be as simple as encouraging employees to ask for feedback at the end of customer service
interactions. This policy might be part of an improved customer-experience strategy.

 Such policies and programs are employed which helps in continuous improvement.
Programs and policies should be implemented as and when the need arises. This requires agile thinking from team
leaders, as well as continuous feedback and analysis. Communication is crucial to ensuring strategies can be evaluated
and improved.

 Combining the reward structure, for achieving the results.

Implementation can be significantly aided by setting up a reward system. This can encourage the right behaviours.
Rewards can be implemented in the form of recognition or benefits within the organization. The positive impact of a new
strategy should also continuously be broadcasted to all members of the organization.

 Using strategic leadership.

At regular intervals, the strategy should be reviewed. This allows leaders to identify if the implemented strategy
remains relevant to the organization. As firms operate in more dynamic environments, changes may occur at any time. It
is essential to review and change policies that no longer serve a distinct purpose. Strategies can become misaligned with
the brand’s objectives.
The process of strategy implementation has an important role to play in the company’s success. The process takes
places after environmental scanning, SWOT analyses and ascertaining the strategic issues.
The basic activities in strategy implementation involve the following:
 Establishment of annual objectives
 Formulation of policies for execution of strategies
 Allocation of resources
 Actual performance of tasks and activities
 Leading and controlling the performance of activities or tactics in various levels of the organization
Incidentally, businesses may also find that they have to perform further planning even during the implementation
stage, especially in the discovery of issues that must be addressed.
Strategy implementation is the stage that demands participation of the entire organization. Formulations of the
strategies are mostly in the hands of the strategic management team, with the aid of senior management and key
employees. When it comes to implementation, however, it is the workforce that will execute the strategic plan, with top or
senior management taking the lead.

7.2 BASIC FEATURES OF STRATEGY IMPLEMENTATION

Top 5 Features of Strategy Implementation

Features of strategy implementation are explained in the following points:
1. Action Oriented:
It implies that a strategy should be actionable. A strategy is made actionable with the help of different management
processes, such as – planning and organizing. The role of management is not just restricted to formulating the plans, but
also extends to converting these plans into actions.
2. Varied Skills:
It implies that strategy implementation involves wide-ranging skills. In an organization, vast knowledge, attitude,
and abilities are required to implement a strategy. These skills help in allocating resources, designing structures, and
formulating policies.
3. Wide Involvement:
It means that strategy implementation requires the participation of the top, middle, and lower level management.
The top management must clearly communicate the strategy, which needs to be implemented, to the middle
management. You should note that the middle management plays an active role in strategy implementation.
4. Wide Scope:
It involves a range of managerial and administrative activities. In simpler words, any managerial action can be a
part of the strategy implementation process because of its wide scope. For example, implementing a marketing strategy
may involve preparing marketing budget, conducting market research, developing advertising and promotional plan,
conducting test marketing, launching product, and collecting customers’ feedback.
5. Integrated Process:
It refers to the fact that different activities in the strategy implementation process are interdependent. Therefore
strategy implementation is an integrated and holistic process. For example, different activities of a promotional strategy of
an organization are interrelated; therefore one needs to be executed in accordance with other activities.

Avoid the 11 Strategic Implementation Pitfalls

Wondering why your strategic plan never got implemented? Every year, organizations labor at planning, yet many
never seem to turn this planning into action. Before you sit down with your team to develop or review your strategic plan,
make sure you’re aware of these potential implementation traps:
Lack of ownership: The most common reason a plan fails is lack of ownership. If people don’t have a stake and
responsibility in the plan, it’ll be business as usual for all but a frustrated few.
Lack of communication: The plan doesn’t get communicated to employees, and they don’t understand how they
contribute.
Getting mired in the day-to-day: Owners and managers, consumed by daily operating problems, lose sight of
long-term goals.
Out of the ordinary: The plan is treated as something separate and removed from the management process.
An overwhelming plan: The goals and actions generated in the strategic planning session are too numerous
because the team failed to make tough choices to eliminate non-critical actions. Employees don’t know where to begin.
A meaningless plan: The vision, mission, and value statements are viewed as fluff and not supported by actions
or don’t have employee buy-in.
Annual strategy: Strategy is only discussed at yearly weekend retreats.
Not considering implementation: Implementation isn’t discussed in the strategic planning process. The planning
document is seen as an end in itself.
No progress report: There’s no method to track progress, and the plan only measures what’s easy, not what’s
important. No one feels any forward momentum.
No accountability: Accountability and high visibility help drive change. This means that each measure, objective,
data source, and initiative must have an owner.
Lack of empowerment: Although accountability may provide strong motivation for improving performance,
employees must also have the authority, responsibility, and tools necessary to impact relevant measures. Otherwise, they
may resist involvement and ownership. It’s easier to avoid pitfalls when they’re clearly identified. Now that you know what
they are, you’re more likely to jump right over them!
 Implementation pitfalls are common in strategic planning. But why is this – and what can we do about it?   We’ve
noticed six very common issues that have hindered execution at companies we’ve worked with, and none of them is
intractable.

The most common implementation pitfalls are:

1. Over commitment
2. Poorly defined objectives
3. Poorly crafted implementation plans
4. Hidden resistance
5. Poor follow through
6. Distraction

Each of these causes a specific type of problem – and has a specific solution.

Over commitment
Over commitment is one of the most common implementation pitfalls in strategic planning.   This is because many
options look beneficial and it is easier to accept all of them than to force a realistic prioritization of resources.   The
problem is simply that no organization has the infinite resources required to pursue every good idea.   By pursuing too
many objectives, you run the risk of moving ahead far too slowly with each.   Moving too slowly means you may only get
halfway done with most of your objectives when you could complete a more realistic set of them.    In Simplified Strategic
Planning, we recommend setting no more than 10 objectives – and, with many companies, we have suggested having
even fewer.

Poorly defined objectives

Poorly defined objectives are the result of spending too little time on objective-setting – or trying to make everyone
happy with vague objectives that are difficult to implement.  With poorly defined objectives, you end up unable to identify
any but the vaguest actions needed to complete the task.  Well-defined objectives are absolutely necessary for good
implementation. 

Poorly crafted implementation plans

Poorly crafted implementation plans are similar, in that they are the result of short cuts in the process of creating
the action plans.  When writing an action plan, you are both communicating with yourself (in the future) and allocating
specific resources to the execution activities.  Failure to do these two steps with care and specificity usually results in
missed targets and confusion.  To create better action plans, use the action planning process we prescribe in Simplified
Strategic Planning.

Hidden resistance
Hidden resistance is a tough problem to spot before you encounter it.  Sometimes, members of your team will
pretend to be on board with an objective but harbor some reservations about execution.  It is easy to sabotage an
objective you don’t agree with by creating scheduling and resource conflicts.  To avoid this, use a strategic planning
process that builds buy-in and agreement at every step – even if that means spending a little more time on your planning.

Poor follow through

Poor follow through is a problem that occurs when your execution activities are not routinely reviewed.   It’s just too
easy to get off track when you don’t take time to assure you’re still following the path you carefully laid out.   We
recommend holding monthly review sessions to examine progress on each action plan to assure the whole team is aware
of what you’re doing – and what you are supposed to be doing.

Distraction
Distraction is the final common pitfall – and it’s a bad one.  Many executives (especially CEOs) are often distracted
by the “flavor of the month”, or the last article they read that suggests good ideas.  The very thing that makes many
executives successful also plays havoc with your strategic planning implementation.  To avoid this, stick to your plan.  Try
to push as many new ideas into your annual strategic planning process as possible, with an understanding that the best
ideas will certainly come out on top, given steady, persistent execution.  This doesn’t mean you should never snap up an
opportunity that presents itself, but don’t let those opportunities take over your well-planned intentions.

5 Tips to Avoid Strategic Planning Pitfalls

Tip #1 CEO commitment

The CEO needs to be a passionate advocate for the strategic planning process. He or she needs to acknowledge
the value of going through the process, and supporting the implementation of the completed strategic plan. Additionally, it
is the responsibility of the CEO to champion the organization’s vision, and provide valuable input as a strategic planning
team member. Without a strong commitment from the CEO, others simply won’t see the importance and the planning
process and the deliverable of the plan will suffer.
Tip #2 Established company vision
Ever try to get somewhere without knowing where you’re going? Seems silly doesn’t it? But, in essence that’s what
we’re doing if we do not have a solid vision statement for the organization. As  Adriana Girdler defines in her book, The
Value of Vision, “A vision statement is a long-term outlook that embodies the highest values and aspirations of an
individual or organization.” The organization’s vision statement is the foundation for the organization. All strategic planning
decisions are made based on the organization’s vision statement. If the organization does not have an established vision
statement that guides the organization and it’s planning efforts, it’s impossible to make constructive strategic decisions.

Tip #3 Assemble the right team

Increase the chances of developing a successful strategic plan by including the right mix of people on your
planning team. The planning team is not the exclusive domain of the executive team. Instead, the team should include
representation from anyone that can impact the plan or be impacted by the plan: in short all employees. So, bring in the
various departments from your organization – marketing, sales, and operations, evaluate the inclusion of vendors. These
team members can provide valuable information at various points in the strategic planning process, and their inclusion
helps ensure buy in to the plan.

Tip #4 Make sure the team has a solid understanding of the strategic planning process and terms and definitions
Is that an objective or a strategy? Why are we developing strategies before we know what we want to achieve?
These questions seem benign enough but they can derail the strategic planning process and fracture the team. It’s key to
ensure all team members understand the terminology used in the process. The process itself, why and when components
of the plan occur in the sequence they do, and the timing associated with the plan’s development. By knowing the process
and terminology there’s no confusion as to why, when, and what is happening. The uniform understanding allows the
team to focus on input, consensus and developing a plan that moves the organization closer to its vision.

Tip #5 Get outta the office

You’re trying to develop a strategic plan. The office is no place to do it. There are just too many other things going
on, too many temptations to take team members focus off the strategic planning process. Secure an off-site space and set
the expectations for the participants that while they are involved with the process, they need to be completely focused on
the task at hand. Have them determine how they will monitor their responsibilities at breaks or before or after the session.
By making sure your CEO is fully committed to the strategic planning process, your organization has a solid vision
statement, a planning team that includes representatives from all departments, the team shares a uniform understanding
of the process, and you’re off-site to focus exclusively on your strategic plan development, your chances of producing a
quality strategic plan are greatly enhanced.

7.3 AVOIDING THE IMPLEMENTATION PITFALLS

Strategic changes come in many forms for the modern company. It could be a new vertical focus, new leadership
style, or innovative product pivot. A solid corporate strategy narrows the focus of your organization and lays the
groundwork for growth and development.
Understanding the importance of a corporate strategy is a no brainer. Getting it right is the challenge.
Every company needs a strategic plan. A bird’s eye view plan – make, sell, profit – is good enough to get any
company up and running, but in order to innovate, grow, and develop, a company must narrow its vision. A strategic plan
helps companies slough off the things they aren’t good at doing so they can better focus on the things that they are. A
strategic plan also lays the groundwork for improving those things that need a little (or a lot of) work. The right vision
shows company leaders where to dedicate time, human capital, and budgetary resources.
Alarmingly, 90% of organizations fail to effectively execute their strategic plans, according to Harvard Business School.
Improperly executing a strategy leads to a lack of objectives for employees, improper resource allocation, lack of structure
and leadership, and weak lines of communication. That is why it is so important to get it right.
The reasons for failed strategies are varied, but most hinge on the fact that strategy implementation is resource
intensive and challenging. Understanding the biggest challenges to strategy implementation will help you avoid the most
common pitfalls and better set your company up for success.

Some of the pitfalls to be avoided in strategic management and strategic planning are listed below:
 The first and foremost pitfall relates to using strategic management and strategic planning only to satisfy
accreditation and regulatory requirements instead of adding value to the firm’s processes.
 Getting into solution mode without thinking through the complex problems that 21st century organizations face. It
needs to be remembered that many problems that businesses face need “slow fixes” rather than quick and easy
solutions that are attractive at first glance but fail over the longer term.
 When the top managers do not support the strategic management process because of intraorganizational politics,
any strategy however good would fail because of the lack of buy-in from key interests in the organization.
 When the planning is delegated to a “planner” instead of all the managers getting involved, there are issues to do
with lack of information and lack of execution, which results in the strategy going haywire.
 When firms are bogged down by too many internal problems that sap the energies of the managers, strategic
planning and strategic management become futile, as the managers are engrossed in firefighting and solving the
internal problems rather than focusing on the external aspects.
  One of the pitfalls of strategic planning happens when organizations become so formal and structured in their
approach that they neglect the creative and flexible aspects. The point to be noted here is that out of the box
thinking and non-linearity are important for firms to succeed in today’s business landscape.
 On the other hand, too much reliance on intuition can cost firms dear as after all strategy is a series of steps that
need to be actualized and hence, there is a need for a well thought out and detailed plan.

While these are the some of the pitfalls of strategic planning, there are other aspects like not working to a plan and being
too much bureaucratic. Since the organizations of the future need to be agile and flexible with the ability to be malleable
according to the changing market conditions and yet at the same time, have a core structure that is consistent with core
competencies, a mix of formal and informal planning is needed for effective strategic management.
Despite the best of intentions, strategic planning sessions have a tendency to end in heartache. According to Greg
Bustin at Bustin & Co. “…depending on which study you follow, the statistics range from a dismal 3 percent of companies
who say they are successful at executing their strategies to about one out of every three organizations that integrates its
plans into its daily operations with high effectiveness.”
So, why are the statistics so low when it comes to successful strategic plan implementation? Are companies clearly
missing the mark when it comes to operationalizing their strategic plans? Are leaders mismanaging resources and falling
short when it comes to setting strategic priorities? Or…does the problem run deeper?

Here are five reasons why strategic plans fail, and what you can do to avoid these common pitfalls in the future.
1. The plan is too complex
If you find you’re planning more than you’re executing, you’re probably overcomplicating the process. More often than not,
the best strategic plan is also the simplest. Why? Because it makes the operational planning and implementation process
easier.
Operational plans essentially bring your strategic plan to life and map out the where’s, how’s, why’s and when’s required
to ensure successful plan implementation.
Here’s an example: One of the municipalities we’re working with has a strategic objective to increase revenue streams for
the city, which will then be directed towards funding ongoing community development programs. This city is using the
Envisio software to build an operational plan around this strategic initiative. The CAO now has a system in place to help
him and his senior leadership team operationalize and clearly outline the actions, resources, and key performance metrics
needed to achieve this specific financial priority within his strategic plan.
Remember, the idea is to make it from Point A to Point B in the most efficient way possible. Complicate the plan
unnecessarily and you increase your odds of failure. Your goal is to streamline your strategic planning process and
develop realistic operational plans that enable your success and empower your team.

2. The plan doesn’t address and resolve current problems

Planning for the future can be exhilarating, but sometimes the present is the more pressing issue.
Encourage your team to document the trouble spots in real-time as they move through their days. Take a long, hard look
at the bottlenecks and obstacles that are bogging down your current system’s productivity and efficiency.
Monitor the status of all your initiatives and regularly review the progress commentaries provided to you by your team. By
coming to terms and working through your current problems first, you can better lay the groundwork for success with your
new strategic initiatives now and in the future.

3. The plan is actually just a budget

If your planning session is little more than a discussion of how to fund current projects based on your existing resources,
you’re not really breaking new strategic ground… You’re simply just updating the budget.
Remember, strategic planning isn’t just a matter of pushing forward with the same old same old. Changes need to be
made. New goals need to be set. Relevant priorities need to be established and communicated to the rest of your team.
Planning sessions should be the jumping-off point for new and exciting ideas and opportunities. In addition, strategic
planning involves identifying problems within the current strategic landscape.
If certain processes or programs aren’t serving the greater good and moving you toward your strategic goals, adjustments
need to be made in real-time to correct the problems. Sometimes, that means putting certain projects  on hold or
eliminating them completely.

4. The plan doesn’t emphasize accountability

Too often, strategic plans are set in motion without the full commitment of everyone involved. Sure, Bob may have gone
through the motions during the meeting and given his supposed nod of approval, but if he’s not truly committed to making
a change, the plan will fail.
Before a plan is implemented, you need to ensure that everyone is on the same page and willing to make the necessary
changes for success and align with your strategic plan. This means holding everyone accountable, no matter what junior
or senior position they hold. Everyone must pull their own weight.
Accountability also indicates a special kind of responsibility when it comes to strategic and operational planning. The
people doing the operational planning must understand from their teams what is actually required in the doing to ensure
realistic timelines are being set and adequate resources are being directed to a strategic initiative to ensure its
achievement.
5. A reliance on spreadsheets is slowing you down
Everyone knows how to use Excel, but that doesn’t mean it’s a complete reporting and business intelligence solution. In
fact, there are multiple issues with the static spreadsheet approach:
 Manual spreadsheet creation wastes time and resources.
 A lack of standardization leads to unnecessary errors.
 There’s no means of tracking strategic plan implementation.
 Unnecessary duplication can occur and document version control can get out of hand.
 Spreadsheets aren’t easily integrated with Customer Relationship Management (CRM) and Enterprise Resource
Planning (ERP) systems.
 Not everyone knows how to update the Excel templates, so you end up relying on one or two “office gurus.”
 Bad decisions are made and opportunities are missed due to a lack of real-time data.

The best way to correct these issues is to move away from spreadsheets and instead choose an automation solution
designed to enhance strategic planning, implementation and reporting.
Wondering why your strategic plan never got implemented? Every year, organizations labor at planning, yet many
never seem to turn this planning into action.
Before you sit down with your team to develop or review your strategic plan, make sure you’re aware of these potential
implementation traps:
1. Lack of ownership: The most common reason a plan fails is lack of ownership. If people don’t have a stake and
responsibility in the plan, it’ll be business as usual for all but a frustrated few.
2. Lack of communication: The plan doesn’t get communicated to employees, and they don’t understand how they
contribute.
3. Getting mired in the day-to-day: Owners and managers, consumed by daily operating problems, lose sight of
long-term goals.
4. Out of the ordinary: The plan is treated as something separate and removed from the management process.
5. An overwhelming plan: The goals and actions generated in the strategic planning session are too numerous
because the team failed to make tough choices to eliminate non-critical actions. Employees don’t know where to
begin.
6. A meaningless plan: The vision, mission, and value statements are viewed as fluff and not supported by actions
or don’t have employee buy-in.
7. Annual strategy: Strategy is only discussed at yearly weekend retreats.
8. Not considering implementation: Implementation isn’t discussed in the strategic planning process. The planning
document is seen as an end in itself.
9. No progress report: There’s no method to track progress, and the plan only measures what’s easy, not what’s
important. No one feels any forward momentum.
10. No accountability: Accountability and high visibility help drive change. This means that each measure, objective,
data source, and initiative must have an owner.
11. Lack of empowerment: Although accountability may provide strong motivation for improving performance,
employees must also have the authority, responsibility, and tools necessary to impact relevant measures.
Otherwise, they may resist involvement and ownership. It’s easier to avoid pitfalls when they’re clearly identified.
Now that you know what they are, you’re more likely to jump right over them!

Acknowledging these biggest challenges to strategy implementation and communicating them to those who are
responsible for the dissemination and execution of any new strategy is critical.
Understanding how companies can get in their own way is the key to ensure that you won’t make those same
mistakes, and know how to take corrective action if you do.

Implementation pitfalls are common in strategic planning. But why is this – and what can we do about it?   We’ve
noticed six very common issues that have hindered execution at companies we’ve worked with, and none of them is
intractable.

The most common implementation pitfalls are:

1. Over commitment
2. Poorly defined objectives
3. Poorly crafted implementation plans
4. Hidden resistance
5. Poor follow through
6. Distraction

Each of these causes a specific type of problem – and has a specific solution.
Over commitment
Over commitment is one of the most common implementation pitfalls in strategic planning.   This is because many
options look beneficial and it is easier to accept all of them than to force a realistic prioritization of resources.   The
problem is simply that no organization has the infinite resources required to pursue every good idea.   By pursuing too
many objectives, you run the risk of moving ahead far too slowly with each.   Moving too slowly means you may only get
halfway done with most of your objectives when you could complete a more realistic set of them.    In Simplified Strategic
Planning, we recommend setting no more than 10 objectives – and, with many companies, we have suggested having
even fewer.
Poorly defined objectives
Poorly defined objectives are the result of spending too little time on objective-setting – or trying to make everyone
happy with vague objectives that are difficult to implement.  With poorly defined objectives, you end up unable to identify
any but the vaguest actions needed to complete the task.  Well-defined objectives are absolutely necessary for good
implementation. 

Poorly crafted implementation plans

Poorly crafted implementation plans are similar, in that they are the result of short cuts in the process of creating
the action plans.  When writing an action plan, you are both communicating with yourself (in the future) and allocating
specific resources to the execution activities.  Failure to do these two steps with care and specificity usually results in
missed targets and confusion.  To create better action plans, use the action planning process we prescribe in Simplified
Strategic Planning.

Hidden resistance
Hidden resistance is a tough problem to spot before you encounter it.  Sometimes, members of your team will
pretend to be on board with an objective but harbor some reservations about execution.  It is easy to sabotage an
objective you don’t agree with by creating scheduling and resource conflicts.  To avoid this, use a strategic planning
process that builds buy-in and agreement at every step – even if that means spending a little more time on your planning.

Poor follow through

Poor follow through is a problem that occurs when your execution activities are not routinely reviewed.   It’s just too
easy to get off track when you don’t take time to assure you’re still following the path you carefully laid out.   We
recommend holding monthly review sessions to examine progress on each action plan to assure the whole team is aware
of what you’re doing – and what you are supposed to be doing.

Distraction
Distraction is the final common pitfall – and it’s a bad one.  Many executives (especially CEOs) are often distracted
by the “flavor of the month”, or the last article they read that suggests good ideas.  The very thing that makes many
executives successful also plays havoc with your strategic planning implementation.  To avoid this, stick to your plan.  Try
to push as many new ideas into your annual strategic planning process as possible, with an understanding that the best
ideas will certainly come out on top, given steady, persistent execution.  This doesn’t mean you should never snap up an
opportunity that presents itself, but don’t let those opportunities take over your well-planned intentions.

5 Tips to Avoid Strategic Planning Pitfalls

Tip #1 CEO commitment

The CEO needs to be a passionate advocate for the strategic planning process. He or she needs to acknowledge
the value of going through the process, and supporting the implementation of the completed strategic plan. Additionally, it
is the responsibility of the CEO to champion the organization’s vision, and provide valuable input as a strategic planning
team member. Without a strong commitment from the CEO, others simply won’t see the importance and the planning
process and the deliverable of the plan will suffer.

Tip #2 Established company vision

Ever try to get somewhere without knowing where you’re going? Seems silly doesn’t it? But, in essence that’s what
we’re doing if we do not have a solid vision statement for the organization. As  Adriana Girdler defines in her book, The
Value of Vision, “A vision statement is a long-term outlook that embodies the highest values and aspirations of an
individual or organization.” The organization’s vision statement is the foundation for the organization. All strategic planning
decisions are made based on the organization’s vision statement. If the organization does not have an established vision
statement that guides the organization and it’s planning efforts, it’s impossible to make constructive strategic decisions.

Tip #3 Assemble the right team

Increase the chances of developing a successful strategic plan by including the right mix of people on your
planning team. The planning team is not the exclusive domain of the executive team. Instead, the team should include
representation from anyone that can impact the plan or be impacted by the plan: in short all employees. So, bring in the
various departments from your organization – marketing, sales, and operations, evaluate the inclusion of vendors. These
team members can provide valuable information at various points in the strategic planning process, and their inclusion
helps ensure buy in to the plan.

Tip #4 Make sure the team has a solid understanding of the strategic planning process and terms and definitions
Is that an objective or a strategy? Why are we developing strategies before we know what we want to achieve?
These questions seem benign enough but they can derail the strategic planning process and fracture the team. It’s key to
ensure all team members understand the terminology used in the process. The process itself, why and when components
of the plan occur in the sequence they do, and the timing associated with the plan’s development. By knowing the process
and terminology there’s no confusion as to why, when, and what is happening. The uniform understanding allows the
team to focus on input, consensus and developing a plan that moves the organization closer to its vision.
Tip #5 Get outta the office
You’re trying to develop a strategic plan. The office is no place to do it. There are just too many other things going
on, too many temptations to take team members focus off the strategic planning process. Secure an off-site space and set
the expectations for the participants that while they are involved with the process, they need to be completely focused on
the task at hand. Have them determine how they will monitor their responsibilities at breaks or before or after the session.
By making sure your CEO is fully committed to the strategic planning process, your organization has a solid vision
statement, a planning team that includes representatives from all departments, the team shares a uniform understanding
of the process, and you’re off-site to focus exclusively on your strategic plan development, your chances of producing a
quality strategic plan are greatly enhanced.

7.4 CASCADING THE PLAN

How to Better Cascade Corporate Strategy

In nature, a cascade is a small, steep waterfall that flows in a descending manner from the top to the bottom, from high to
low. In business we use the verb “cascading” when we talk about communicating and embedding a corporate strategy
throughout the organization.

Effective Strategy Cascading Creates Alignment, Accountability and Meaning

This communication and implementation process occurs in a series of reactions in which one causes another — in which
every division, department, and individual are aligned around the overall strategic plan and the important part they play in
making it a success. One move flows into another — but not always in a top-down direction.

Strategic Clarity Starts at the Top

Our organizational alignment research found strategic clarity accounts for 31% of the difference between high and low
performing companies.
Once your business strategy has been fully understood and committed to as a leadership team, you should begin the hard
work of strategy cascading and execution. At a minimum, you need to be satisfied that the strategy you’ve created is both
crystal clear and aligned across six areas:
 Strategic Drivers
Mission (fundamental purpose), Vision (what you hope to become) and Values (core beliefs)
 Target Clients
The ideal target clients who you serve best and where you should consistently win 75%+ of the time
 Differentiation
The value proposition that truly sets you apart from the competition in the eyes of your target clients
 Optimizing Strategies
The top 2 to 4 priorities for gaining the most strategic leverage
 Key Goals
The critical few actions to achieve those optimizing strategies in the next twelve months
 Success Metrics
How you will measure success and failure

Cascading Your Strategy

Once your strategy is clear, believable, and implementable enough at the executive team level, you can begin the process
of cascading the strategic plan so that it can be successfully executed.

3 Steps to Better Cascade Your Corporate Strategy

Here are three tips on how to better cascade your corporate strategy from the board room to those employees whose day-
to-day work will be informed by that strategy.
1. Don’t Assume Top-down “Telling” is the Way to Go
Don’t make the mistake of creating a strategy in an ivory tower with the idea that if you “tell them what to do,” it will
get done effectively. That typically works only in highly structured, traditional, hierarchical organizations. In flatter
organizations, you need the active involvement, input, and buy-in from managers and employees for the overall
strategy to work.
Be clear on the portion of the strategy that is mandated, guided, or autonomous at the overall, department, team, and
individual levels so people know where they are empowered to make it their own.

2. Execute from the Bottom-up

Though you may build your strategy in a small group of cross-functional leaders, it is often best to execute a
strategy from the bottom up. Leaders should give managers the opportunity and authority to develop meaningful
and relevant goals as long as they align with the overall priorities of the business.  Managers should include their
team members in figuring out how to best implement the strategy.
Each department can take the strategy and decide how to align and accomplish it in their own unique ways.   As a rule of
thumb, be prepared to spend twice as much time cascading your strategy for each level away from the executive team.
For example, if you spent one month prepping and two days creating your corporate strategy with your executive team, be
prepared to spend two months prepping and four days with your direct reports to get the required level of alignment,
conviction, and commitment.
 3. Monitor and Measure Progress for Accountability
To be certain that you are moving in the right direction and that employees and their managers are implementing
the strategy as planned, establish a system of regular and transparent metrics against goals for
increased accountability.

Establish consequences for poor performance, adjust goals as necessary, celebrate progress, and reward success. Only
if you hold everyone accountable for delivery against the plan will you be able to achieve it.

The Bottom Line

Well executed strategies start with strategic clarity at the top and are supported by heavily investing in cascading
strategies, goals, metrics and accountability across the company. Your strategy must go through your people and your
culture to get fully implemented – so invest the time it takes to cascade it effectively.

Once a strategic plan is created at the highest level of an organization, there is a great need to cascade the strategic plan
throughout all areas of the business. With larger and mid-sized organizations, you have to work on bringing the plan down
to the secondary, tertiary, and all other levels of the organization.
To cascade the strategic plan from the top-down, the first step is having a strategic planning meeting to set the vision,
mission, strategic priorities and goals at an organizational level. The next step is to cascade the plan throughout different
departments, teams, and individuals. Start with the top level of the organization, and then have your departments and
teams effectively create their strategic plans that align with the larger strategic plan.
This is important because it gives everyone an opportunity to share their own visions and measures of success. In terms
where the organization is going, it's all about how the departments, teams, and individuals move the vision forward. In
terms of mission or what the purpose of the organization is, it's all about how the departments, teams, and individuals help
fulfill the mission. In terms of strategic priorities or the things the company is focused on, it's all about how the department,
teams, and individuals move those goals and priorities forward.
When you do that successfully, whether through having one strategy meeting at the top and then communicating it all the
way down, or having multiple strategic planning meetings across different departments and teams, that's when you have
the opportunity to get everybody bought into the overall organizational strategy. 
If you're on a leadership team, there might be five, ten, or fifteen of you, but if you successfully cascade your strategic
plan, you go from having a dozen or so people working on strategic initiatives to dozens or hundreds or thousands of
people all moving the needle forward in their own way. 
Cascading action items and to-dos for each short-term goal in your strategic plan is where the rubber meets the road —
literally. Moving from big ideas to action (cascading) happens when strategy is translated from the organizational level to
the individual. This point is also when the planning circle widens, and departments and individual contributors join in and
develop their short-term goals and actions to support the organizational direction.
One of the most frequent questions asked is how to create strategic objectives and the aligned annual goals that serve as
the backbone to an organization’s strategic plan. Not to over-simplify the process, we’ve created a quick breakdown on
how to develop strategic objectives and aligned goals as an introduction to the process.
Strategic objectives create the framework of your plan.  Everything will cascade from these statements – think of them as
almost mini vision statements for each area of your organization. 
Strategic objectives are long-term, broad, continuous statements with a 3- to 5-year horizon and address the core
functional areas of your organization and may include perspectives including financial, customer, operational processes,
and staff development. Strategic objectives serve as a framework supporting your organization’s strategic plan.

Here are a few guiding questions you can use to help build your strategic objectives and plan framework:
 Financial Perspective: What are our shareholders’ or stakeholders’ expectations for our financial performance or
social outcomes?
 Customer Perspective: To reach our outcomes, what value must we provide to our customers? What is our value
proposition?
 Operations Perspective: To provide value, what process must we excel at to deliver our products and services?
 People Perspective: To drive our processes, what skills, capabilities and organizational structure must we have?

Use your strategic objectives to develop your plan’s framework. It’s important to remember your plan framework should
consist of 4-6 holistic strategic objectives. Less than 4 objectives creates an incomplete plan. More than 6 objectives
creates a plan that’s un-executable.
Once you have created your strategic objectives, you’ll need to create the aligned annual goals that clearly communicate
to your organization what you need to accomplish in the next year to help achieve your long-term objective.
Once you’ve created your long-term objectives and created annual goals aligned to those objectives, you can create the
plan framework that serves as the backbone of your strategic plan. These long-term objectives supported by your annual
goals can serve as the starting point for your individual team members to begin creating short-term goals that support
your plan’s annual goals.
 To cascade plan to a departmental level:

 Begin with the end in mind. As you start a Plan Rhythm with your departments, carefully consider the best
implementation strategy.  Who should be involved?  What's the best timing?  How should you roll out the new
process company wide.
 Build a strong company plan.  The executive team's plan is the foundation for all of the departmental plans,
which are designed to align with and support the company's goals.  It is critical to have a strong, execution-ready
plan at the company level before rolling it out to departments.

 Prepare for cascade planning.  Assign a facilitator for each departmental planning session; ensure that someone
from the executive team is there to share the company's plan.   Ask all participants to prepare by completing a start
stop keep exercise.

 Have cascade planning sessions.  Determine you team's top 3-5 priorities and individual priorities for each team
member.  Ensure your team's priorities are aligned with the company's plan and individual priorities are aligned
with the company's plan and individual priorities align to team priorities.  Assign Red-Yellow-Green success criteria
to each priority.

 Share the plans.  Schedule time to share the department plans with all of the other departments so that all teams
understand how the whole company is working to achieve the plan for the quarter. Discuss any resource allocation
issues, talk about cross-departmental dependencies and ensure alignment.

When cascading strategic objectives there is a key question that must be asked it is:
“In what way can our department impact on <name the strategic objective>?”
This should lead the department down a route that forces it to examine internal processes and how they can be changed
or augmented or even replaced to support the company strategic objective. Asking the right question provides a good
start, this needs to be supported by providing a good framework/process to ensure strategic objectives are cascaded
effectively.
This is no easy task. While they all start with good intentions, up to 9 out of 10 strategic initiatives are unable to fulfill their
promise due to poor implementation and follow-through.

Top 5 Challenges to Implement and Cascade Strategies

For a strategic plan or any change initiative to make a true difference, it must be properly executed and cascaded
throughout an organization.  Our clients report five common challenges to effectively cascade their strategies:
1. Some strategic goals seem either irrelevant or out of the control of my department.
2. It is unclear which strategic objectives and components are mandated, guided or autonomous by corporate.
3. Something important to my department is not included.
4. Some goals or metrics are in conflict with my department’s goals or metrics.
5. The level of clarity, believability, or implement ability is not high enough to properly cascade across the
organization.

How to Cascade Your Strategic Plan

Once a strategic plan is created at the highest level of an organization, there is a great need to cascade the strategic
plan throughout all areas of the business. With larger and mid-sized organizations, you have to work on bringing the plan
down to the secondary, tertiary, and all other levels of the organization.

To cascade the strategic plan from the top-down, the first step is having a strategic planning meeting to set the
vision, mission, strategic priorities and goals at an organizational level. The next step is to cascade the plan throughout
different departments, teams, and individuals. Start with the top level of the organization, and then have your departments
and teams effectively create their strategic plans that align with the larger strategic plan.

This is important because it gives everyone an opportunity to share their own visions and measures of success. In
terms where the organization is going, it's all about how the departments, teams, and individuals move the vision forward.
In terms of mission or what the purpose of the organization is, it's all about how the departments, teams, and individuals
help fulfill the mission. In terms of strategic priorities or the things the company is focused on, it's all about how the
department, teams, and individuals move those goals and priorities forward.
 When you do that successfully, whether it's by holding a single strategy meeting at the top and then communicating
it all the way down, or by holding multiple strategic planning meetings across various departments and teams, you'll be
able to get everyone on board with the overall organizational strategy.

Here's what should be included in your Cascade Plan:

Cascade Your Plan to the Departmental level

1. Begin with the end in mind. As you start a Plan Rhythm with your departments, carefully consider the best
implementation strategy.  Who should be involved?  What's the best timing?  How should you roll out the new
process company wide.

2. Build a strong company plan.  The executive team's plan is the foundation for all of the departmental plans,
which are designed to align with and support the company's goals.  It is critical to have a strong, execution-ready
plan at the company level before rolling it out to departments.

3. Prepare for cascade planning.  Assign a facilitator for each departmental planning session; ensure that someone
from the executive team is there to share the company's plan.   Ask all participants to prepare by completing a start
stop keep exercise.

4. Have cascade planning sessions.  Determine you team's top 3-5 priorities and individual priorities for each team
member.  Ensure your team's priorities are aligned with the company's plan and individual priorities are aligned
with the company's plan and individual priorities align to team priorities.  Assign Red-Yellow-Green success criteria
to each priority.

5. Share the plans.  Schedule time to share the department plans with all of the other departments so that all teams
understand how the whole company is working to achieve the plan for the quarter. Discuss any resource allocation
issues, talk about cross-departmental dependencies and ensure alignment.

Think About Your Organization

If you're on a leadership team, there might be five, ten, or fifteen of

you, but if you successfully cascade your strategic plan, you go from
having a dozen or so people working on strategic initiatives to dozens
or hundreds or thousands of people all moving the needle forward in
their own way.

Cascade your strategic plan by using our Aligned Strategy

Development methodology to get everybody in your organization
working together towards the same vision, mission and goals. Once
you accomplish that, that's when you get huge dividends and huge
returns on strategic planning.

In connection with the cascading of the strategic plan, here are 8

reasons for bringing your team together for a strategic planning
session:

Vision

You’ll create a clear vision for what success looks like in the future. If you don’t
know where you’re going, how are you going to get there?

Priorities

You’ll identify priorities for the short and

medium term. You can’t do everything at the
same time - let’s focus on what needs to be done now, and then do it well.

Alignment

You’ll get alignment and buy-in around direction and strategy. Having these
conversations will move your team from implicitly being on the same page to
explicitly being on the same page; the clarity will energize the whole team.

Identify challenges
 You’ll create an opportunity to talk about key issues facing the business (competition, changing trends, etc.). You
want to ride the waves, not get smashed by them. Being reactive throws off your plans, and takes your eye off your goals.

Direction

You’ll create a clear roadmap for the rest of the organization. Your people
want to know where the organization is going and how they can contribute. An
engaged staff is 20% more productive than one that is neutral (or, worse, dis-
engaged). Your people want to win – this is how you can help them.

Open communication

You’ll create space for people to share what’s going on with them
and what they want to see as the future of the organization. It will
open lines of communication and improve teamwork. Need we say more?

Empowerment

You’ll empower others (above and below you) to take on tasks that will move
the organization forward. As a senior leader that means less firefighting and
more focusing on what you do best: leading and executing.

Strategic planning doesn’t need to take a lot of time either. Start with a one or
two day meeting offsite to set the foundation, and review your plan quarterly.
The focus and the results will speak for themselves.

Values and culture

You’ll create the culture, values, and behaviors that you want to foster within your
organization. When your values are clearly articulated, your team will understand what
you expect from them on a day-to-day basis. Culture and values are the glue that
keeps a strategic plan together.

As a business owner, it is critical to communicate and cascade your strategy plan

to your employees. This comprises senior management as well as entry-level
personnel. Because all of your employees contribute to making your business a
success, they should also be on the same page when it comes to corporate goals. 

7.5 STRATEGY IMPLEMENTATION ISSUES (MACRO AND MICRO)

STRATEGY IMPLEMENTATION
Strategy implementation almost always involves the introduction of change to an organization. Managers may spend
months, even years, evaluating alternatives and selecting a strategy. Frequently this strategy is then announced to the
organization with the expectation that organization members will automatically see why the alternative is the best one and
will begin immediate implementation. When a strategic change is poorly introduced, managers may actually spend more
time implementing changes resulting from the new strategy than was spent in selecting it. Strategy implementation
involves both macro-organizational issues (e.g., technology, reward systems, decision processes, and structure), and
micro-organizational issues (e.g., organization culture and resistance to change).

Micro-organizational issues of strategy implementation

Micro-organizational issues pertain to the behavior of individuals within the organization and how individual actors in
the larger organization will view strategy implementation. Implementation can be studied by looking at the impact
organization culture and resistance to change has on employee acceptance and motivation to implement the new
strategy.
Peters and Waterman focused attention on the role of culture in strategic management. Organizational culture is more
than emotional rhetoric; the culture of an organization develops over a period of time and is influenced by the values,
actions, and beliefs of individuals at all levels of the organization.Organizational culture includes the shared beliefs,
norms and values within an organization. It sets the foundation for strategy. For a strategy within an organization to
develop and be implemented successfully, it must fully align with the organizational culture. Thus, initiatives and goals
must be established within an organization to support and establish an organizational culture that embraces the
organization’s strategy over time.

 Flexibility and Adaptability Organizations that remain flexible are more likely to embrace change and create
an environment that remains open to production and communication. This provides a model that welcomes
cultural diversity and helps clarify strategy implementation. Culture within an organization can serve many
purposes, including to unify members within an organization and help create a set of common norms or rules
within an organization that employees follow.

 Stability.A stable culture, one that will systematically support strategy implementation, is one that fosters a
culture of partnership, unity, teamwork and cooperation among employees. This type of corporate culture will
enhance commitment among employees and focus on productivity within the organization rather than resistance
to rules and regulations or external factors that prohibit success.

 Goal Unification.Flexible, strong and unified cultures will approach strategy implementation and affect
implementation in a positive manner by aligning goals. Goals can come into alignment when the organizational
culture works to focus on productivity and getting the organization’s primary mission accomplished. This may
include getting products delivered to customers on time, shipping out more products than the organization’s chief
competitor or similar goals. This will create a domino effect in the organization that ensures that all work
performed by each individual in the company and work group focuses on performance and on the strategic
importance of the company.This allows culture to align with strategy implementation at the most basic level. For
this level of unification to work, goal setting must align with and be supported by systems, policies, procedures
and processes within the organization, thereby helping to achieve strategy implementation and continuing the
cultural integrity of the organization.

 Process Implementation.Part of cultural alignment and strategy implementation involves process

implementation. Processes include utilizing technology to facilitate goal attainment and the results a company is
looking for when working with customers to meet their needs. While most of the time the hard problems and
needs of an organization get met, the culture becomes neglected in the process. That is where processes come
into place and strategy implementation gradually comes into existence to uphold and maintain organizational
culture and strategies.

 Cultural Alignment.When culture aligns with strategy implementation, an organization is able to more efficiently
operate in the global marketplace. Culture allows organizational leaders to work both individually and as teams to
develop strategic initiatives within the organization. These may include building new partnerships and re-
establishing old ones to continue delivering the best possible products and services to a global market
Persons involved in choosing a strategy often have access to volumes of information and research reports about the
need for change in strategies. They also have time to analyze and evaluate this information. What many managers fail to
realize is that the information that may make one strategic alternative an obvious choice is not readily available to the
individual employees who will be involved in the day-to-day implementation of the chosen strategy. These employees are
often comfortable with the old way of doing things and see no need to change. The result is that management sees the
employee as resisting change.

Employees generally do not regard their response to change as either positive or negative. An employee's response
to change is simply behavior that makes sense from the employee's perspective. Managers need to look beyond what
they see as resistance and attempt to understand the employee's frame of reference and why they may see the change
as undesirable.

The company needs to take action to lessen the resistance to change

 Resistance prevention. This is the primary avenue of resistance management, which involves planning for, addressing
or eliminating resistance by effectively applying change management.Resistance prevention is in large part about
anticipating and identifying likely resistance early on. We should consider where resistance is likely to come from and
the objections or concerns that drive resistance (root causes) and then act on them before they occur.

 Resistance response .It response involves developing effective responses when resistance becomes enduring or
persistent. This requires taking adaptive actions as appropriate. People managers and sponsors have significant
employee-facing roles in this work. 

Macro-organizational issues of strategy implementation

Macro-organizational issues are large-scale, system-wide issues that affect many people within the organization.
Galbraith and Kazanjian argue that there are several major internal subsystems of the organization that must be
coordinated to successfully implement a new organization strategy. These subsystems include technology, reward
systems, decision processes, and structure. As with any system, the subsystems are interrelated, and changing one may
impact others.
Technology can be defined as the knowledge, tools, equipment, and work methods used by an organization in
providing its goods and services. The technology employed must fit the selected strategy for it to be successfully
implemented. Companies planning to differentiate their product on the basis of quality must take steps to assure that the
technology is in place to produce superior quality products or services. This may entail tighter quality control or state-of-
the-art equipment. Firms pursuing a low-cost strategy may take steps to automate as a means of reducing labor costs.
Similarly, they might use older equipment to minimize the immediate expenditure of funds for new equipment.
 Reward systems or incentive plans include bonuses and other financial incentives, recognition, and other intangible
rewards such as feelings of accomplishment and challenge. Reward systems can be effective tools for motivating
individuals to support strategy implementation efforts. Commonly used reward systems include stock options, salary
raises, promotions, praise, recognition, increased job autonomy, and awards based on successful strategy
implementation. These rewards can be made available only to managers or spread among employees throughout the
organization. Profit sharing and gain sharing are sometimes used at divisional or departmental levels to more closely link
the rewards to performance.
Questions and problems will undoubtedly occur as part of implementation. Decisions pertaining to resource
allocations, job responsibilities, and priorities are just some of the decisions that cannot be completely planned until
implementation begins. Decision processes help the organization make mid-course adjustments to keep the
implementation on target.

Organizational structure is the formal pattern of interactions and coordination developed to link individuals to their jobs
and jobs to departments. It also involves the interactions between individuals and departments within the organization.
Current research supports the idea that strategies may be more successful when supported with structure consistent with
the new strategic direction. For example, departmentalizations on the basis of customers will likely help implement the
development and marketing of new products that appeal to a specific customer segment and could be particularly useful
in implementing a strategy of differentiation or focus. A functional organizational structure tends to have lower overhead
and allows for more efficient utilization of specialists, and might be more consistent with a low-cost strategy.

Countless marketing variables affect the success or failure of strategy implementation efforts. Some strategic
marketing issues are as follows:

1. How to make advertisements more interactive to be more effective.

2. How to take advantage of social media conversations about the company and industry.

3. To use exclusive leaderships or multiple channels of distribution.

4. To use heavy, light, or no TV advertising versus online advertising.

5. To limit (or not) the share of business done with a single customer.

6. To be a price leader or a price follower.

7. To offer a complete or limited warranty.

8. To reward salespeople based on straight salary, commission, or a combination salary and commission.

Three marketing activities especially important in strategy implementation are listed below and then discussed: 

 Engage customers in social media. 

 Segment markets effectively. 

 Develop and use product-positioning/perceptual maps.

7.6 ROLE OF TOP MANAGEMENT

The top-level management is highly responsible for the success or the failure of any organisation. They are the
entity who draws the direction of the operation to the business. Hence they play majorly a strategic role in the
organisation. Few of the strategic roles of top level management include:

Strategic Framework:
The top-level management frame and design the organisation policy mission vision, goals objectives etc. They
need to frame all these things strategically aligned with the business to run a successful enterprise.

Strategic Direction:
The top-level management must give a proper direction in the operations of the business are triggered towards. It
should keep in mind all the strategies aligned with e mission and vision of the business.

Developing strategies:
All the strategies to be adopted by the business must be developed with utmost care by the top-level management.
The top-level management must consider all the dynamics of the market related to the business before developing a
strategy. Proper strategy must be developed for all functional areas of a business.

Strategic staffing:
The staffing of key positions in the organisation must be done by the top-level management. The staffing must be
done strategically by analyzing the KSA (Knowledge, Skills and Attitude) of an employee. They must also analyse whether
the KRA (Key result area) of the given position matches the KSA.
 Strategic Decision Making:
All the major decisions are taken by the top-level management. It is always advisable that the decisions must be
taken strategically to effectively utilize the available resources and bring the desired outcome.
Top management is who holds authority, resources and decision-making power regarding changes at the
company. In addition to leadership, it should also show a commitment with respect to the quality management system.
Top management is responsible for establishing policies, guidelines and strategic objectives, as well as for
providing leadership and direction for quality management within the organization. It should also establish those
responsible and hold them accountable for a wide variety of management system processes.
Below I’ve listed top management’s responsibilities:

 Take accountability for the effectiveness of the quality management system;

 Ensure that the quality policy and quality objectives are established for the quality management system and are
compatible with the context and strategic direction of the organization;

 Ensure the integration of the quality management system requirements into the organization’s business processes;

 Promote the use of the process approach and risk-based thinking;

 Ensure that the resources needed for the Quality Management System are available;

 Communicate the importance of effective quality management and of conforming to the quality management
system requirements;

 Ensure that the quality management system achieves its intended results;

 Engage, direct and support persons to contribute to the effectiveness of the quality management system;

 Promote improvement;

 Support other relevant management roles to demonstrate their leadership as it applies to their areas of
responsibility;

 Demonstrate leadership and commitment with respect to customer focus;

 Ensure that the responsibilities and authorities for relevant roles are assigned, communicated and understood
within the organization.

 Perform management review of the organization’s quality management system;

 Establish, implement and maintain a quality policy;

 Ensure that the responsibilities and authorities for relevant roles are assigned, communicated and understood
within the organization.

Each of these tasks is described in depth in the standards. This list, on the other hand, demonstrates how critical
and significant this function is inside an organization. The last point emphasizes that, in addition to preparing the
organization to face any problem, senior management also assists teams in fulfilling their responsibilities. Everyone at the
company must therefore be involved and willing to make things happen. Leaders should show employees that leadership
is something that applies to every area at all times, and that each role has a direct impact on the quality of services and/or
products produced by the organization.

According to the standard’s terms: “Top Management shall review the organization’s quality management system,
at planned intervals, to ensure its continuing suitability, adequacy, effectiveness, and alignment with the strategic direction
of the organization.”In other words, after a Management System is implemented, Top Management should monitor the
performance of results obtained, in addition to verifying whether the requirements established were fulfilled and which
improvements can add value.  This review assesses whether the indicators defined are actually showing the system’s
efficacy. In addition, it is crucial to verify compliance with the requirements of customers and other stakeholders.
Top level management consists of the Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief
Information Officer (CIO), the Managing Director and the Senior Executive as we already discuss in our previous. In a
typical commercial company top level managers rule the enterprise. They decide on the direction of an organisation and
set major milestones, which departments and teams need to achieve.
Top level managers are mainly involved in board meetings. They discuss matters such as long range planning,
policy formulation and organisation strategies. These specialists primarily deal with the stability, growth and survival of an
organisation. In other works, their main responsibility is to protect the integrity of the company. Here’re some of the
functions of top level managers.

Determine organisational objectives – organisational objectives generally relate to profit, survival, business growth,
widening sales operations and maintaining good relations with employees, customers and public
Set market policy – advertising and sales techniques, product pricing, commission, training, promotions, appraisal of
performance and channel of distribution

Set financial policy – this practice relates to the procurement of sources of finance, funds and management of profits

Operations control – control over middle and lower level management, regarding operations, through budget, quality
control and accounting services.

ROLES OF TOP LEVEL MANAGERS

Generally, the top level management in an organisation is formed by three individuals – the CEO, COO and CIO.
Here’s more information about these roles.

CHIEF EXECUTIVE OFFICER (CEO)

This is the highest ranking person in an organisation. The CEO reports only to the board of directors. This manager
is responsible for the company’s success. CEOs typically need to provide broad leadership and vision rather than deal
with the details of operations and performance.

CHIEF OPERATING OFFICER (COO)

The COO is the second-in-command in a company. The duties of this manager include reporting to the CEO,
monitoring departments’ results as well as measuring performance and efficiency. In many cases COOs ascend to the
role of CEOs.

CHIEF INFORMATION OFFICER (CIO)

This professional manages the technical needs or an organisation. CIOs determine how hardware and software is
implemented, analyse data security and computing needs of a company.
Top level management makes the key decisions in an organisation. These managers shape the goals, strategies,
objectives and projects in a company. They take decisions which affect every person working in the organisation and are
ultimately responsible for the failure or success of the enterprise.
The role of top management is more than making decisions that affect all employees. It's also to set the bar for
the way managers treat the staff and relate to each other, which also affect the success of the company. Understanding
the effects of their role helps the top management team make changes as necessary to the way they make decisions,
the way they interact with other managers and teams, and how they are perceived by the staff. When employees feel
their input is valued, they're more likely to do their jobs enthusiastically and improve the achievement of the company.
Setting Corporate Culture
The corporate policies and acceptable behaviors generally start at the top level of management. The leaders of the
company establish procedures and expectations through those policies. The way the company is run day to day, based
on those policies, helps establish the corporate culture.
A culture that encourages creativity, innovation and out-of-the-box thinking is likely to result in a company that is
successful and continually comes up with new ideas. A stifling corporate culture limits the efforts of the employees,
making it difficult for the company to advance. When employees know they have the top management team's support,
they contribute without holding back.

Communicating Company Goals

The goals and vision of the company guide the work that is completed by the employees. To reach higher
achievements for the company, top management first needs to make sure everyone in the company knows what the
company's overall goals and strategy are. It's not enough to know their own goals. They need to understand the direction
the company is headed and what management wants to achieve so they can see where their efforts fit into the overall
strategy.
Next, top management needs to direct front line managers to establish goals for each employee. These should be
achievable but challenging so they push each employee to grow. The goals must take into consideration the company's
current situation and its overall strategy and direction. Above all, each employee's goals should be measurable so it's
clear when they have been achieved.
Providing Support for Asset Management
A company's financial decisions typically come from the top level of management. This includes each department's
budget for the fiscal year. In many cases, the purchase of equipment and other assets must be approved by top
management. It's important that top management has confidence in mid-level managers to know what their employees
need, and to procure it while keeping within their departments' budgets.
If the employees don't have access to the equipment and resources necessary to complete their jobs, the
company's achievement suffers. A management team that supports the staff and has a sense of what they need is better
equipped to lead the company to success. Don't let the lack of essential tools for the job hinder the company's success.

Ensuring Management Involvement

The top management of a company leads by example and affects the motivation felt by the employees. A
management team that takes a sincere interest and connects with the staff is more likely to inspire the employees to
achieve. Transparency from the management team about the company's future aids in motivating the staff because it
gives them a better idea of the reasons for their work duties.
Top management needs to also make sure the line of communication and transparency continues throughout the
company as well. Make it a company policy that managers meet regularly with each of their employees-weekly, for
example-to discuss their progress. Weekly staff meetings are good for keeping everyone informed of coming activities, but
they're not a substitute for meeting one-on-one, where each employee has the opportunity to express problems, issues
and concerns.
Top management is essential to the effective implementation of strategic change. Top management provides a role
model for other managers to use in assessing the salient environmental variables, their relationship to the organization,
and the appropriateness of the organization's response to these variables. Top management also shapes the perceived
relationships among organization components.
Top management is largely responsible for the determination of organization structure (e.g., information flow,
decision-making processes, and job assignments). Management must also recognize the existing organization culture and
learn to work within or change its parameters. Top management is also responsible for the design and control of the
organization's reward and incentive systems.
Finally, top management are involved in the design of information systems for the organization. In this role,
managers influence the environmental variables most likely to receive attention in the organization. They must also make
certain that information concerning these key variables is available to affected managers. Top-level managers must also
provide accurate and timely feedback concerning the organization's performance and the performance of individual
business units within the organization. Organization members need information to maintain a realistic view of their
performance, the performance of the organization, and the organization's relationship to the environment.

ROLE OF TOP MANAGEMENT

Top management is essential to the effective implementation of strategic
change. Top management provides a role model for other managers to use in
assessing the salient environmental variables, their relationship to the
organization, and the appropriateness of the organization's response to these
variables. Top management also shapes the perceived relationships among
organization components.
Top management is largely responsible for the determination of
organization structure (e.g., information flow, decision-making processes, and job
assignments). Management must also recognize the existing organization culture
and learn to work within or change its parameters. Top management is also
responsible for the design and control of the organization's reward and incentive
systems.

Finally, top management are involved in the design of information systems for the
organization. In this role, managers influence the environmental variables most likely to receive attention in the
organization. They must also make certain that information concerning these key variables is available to affected
managers. Top-level managers must also provide accurate and timely feedback concerning the organization's
performance and the performance of individual business units within the organization. Organization members need
information to maintain a realistic view of their performance, the performance of the organization, and the organization's
relationship to the environment.

The top-level management is highly responsible for the success or the failure of any organization. They are the entity who
draws the direction of the operation to the business. Hence, they play majorly a strategic role in the organization. Few of
the strategic roles of top-level management include:

Strategic Direction
The top-level management must give a proper direction in the operations of the business are triggered towards. It should
keep in mind all the strategies aligned with the mission and vision of the business.

Developing strategies
All the strategies to be adopted by the business must be developed with utmost care by the top-level management. The
top-level management must consider all the dynamics of the market related to the business before developing a strategy.
Proper strategy must be developed for all functional areas of a business.

Strategic staffing
The staffing of key positions in the organization must be done by the top-level management. The staffing must be done
strategically by analyzing the KSA (Knowledge, Skills and Attitude) of an employee. They must also analyze whether the
KRA (Key result area) of the given position matches the KSA.

Strategic Decision Making

All the major decisions are taken by the top-level management. It is always advisable that the decisions must be taken
strategically to effectively utilize the available resources and bring the desired outcome.

TOP MANAGEMENT
Top management encompasses mainly two layers namely, directors and the chief
executives.
BOARD OF DIRECTORS
Directors are elected shareholders representing the equity shareholders
to manage the affairs of the business in a democratic manner. A well-balanced
board is one which has thorough representation of all interest of financial stake,
experience and expertise. In the case of reliance industries limited, it has in all
15 members consisting of board of which 12 are whole time and 3 are part time.
The whole-time directors are made up of one chairman and managing director, 1
vice chairman and director and 10 executive directors. The company has no
nominated directors.

ROLE OF BOARD OF DIRECTORS

It acts as the Trustee of Shareholders – The
director’s act as representatives of
shareholders and work with utmost faith and degree of honesty in protecting long term
aims of wealth maximization of company.

Determining the fundamental objectives and policies – The board of

directors play vital role in long range planning and set the overall goal of the
company within the framework.

Determining the organization structure and selecting the top executives – It is the prerogative of the board to select
the CEO and other top-level managers.

Approving financial matters – These financial matters relate to two things namely, approval of budgets and distribution
of the corporate earnings.

Maintaining adequate checks and controls – In the final analysis, the board of directors is held responsible for the
result of the company.

Statutory functions – Directors are to perform certain legal functions which are mandatory on their part.

CHIEF EXECUTIVE

The role of CEO is of paramount importance so far as strategic management is concerned – both in family and
professionally managed companies. A company may have either a chief executive or multiple chief executives – a team
consisting of more than one person. CEO is the person who is to shoulder the responsibility in respect to strategic
management.

ROLE OF CHIEF EXECUTIVE

Formulating long term plans – CEO is the brain behind long term planning and decision
making.

Guiding and directing – CEO provides his valuable guidance and direction to different
functionaries in the organization.

Integrating – Integration is an essential part of coordination as it deals with integration of

interests, timing the operations and balancing of efforts.

Reviewing and controlling – Review becomes very important task of CEO as he is seeing whether everything is going
according to his plans.

Public relations – CEO is responsible for maintaining good rapport with the publics of the society in which he work
7.7 MARKET SEGMENTATION AND PRODUCT POSITIONING AS STRATEGY IMPLEMENTATION TOOLS

Market Segmentation

Market segmentation and product positioning rank as marketing’s most important contributions to strategic
management. Market segmentation is widely used in implementing strategies, especially for small and specialized firms.
Market segmentation can be defined as the subdividing of a market into distinct subsets of customers according to needs
and buying habits.Market segmentation is important in strategy implementation for at least three major reasons. First,
strategies such as market development, product development, market penetration, and diversification require increased
sales through new markets and products. To implement these strategies successfully, new or improved market
segmentation approaches are required. Second, market segmentation allows a firm to operate with limited resources
because mass production, mass distribution, and mass advertising are not required. Market segmentation enables a small
firm to compete successfully with a large firm by maximizing per-unit profits and per-segment sales. And third, market
segmentation decisions directly affect marketing mix variables: product, place, promotion, and price, as indicated in
Table.1.

Table 1. The Marketing Mix Component Variables

Product Place Promotion Price

 Quality  Distribution  Advertising  Level

Channels
 Features and  Personal  Discounts and
 Distribution selling allowances
options
coverage  Sales  Payment terms
 Style promotion
 Outlet location Publicity
 Brand name
 Sales territories
 Packaging
 Inventory levels
 Product line
and locations
 Warranty
 Transportation
 Service level carriers
Other services

Market segmentation and product positioning rank as marketing’s most important contributions to strategic
management. Market segmentation is widely used in implementing strategies, especially for small and specialized firms.
Market segmentation can be defined as the subdividing of a market into distinct subsets of customers according to needs
and buying habits.

The logic of market segmentation is quite simple: it is based on the idea that a single product item does not
usually appeal to all consumers. For this reason, marketing strategies typically focus their marketing effort on specific
groups of consumer rather than on the whole population.

Marketing segmentation is the process of dividing a market into groups of similar consumer and selecting the
most appropriate groups(s) for the organization to serve. Markets are selected on the basis of their size, their profit
potential, and how well they can be defined and served by the organization.

Market segmentation is important in strategy implementation for at

least three major reasons. First, strategies such as market
development, product development, market penetration, and
diversification require increased sales through new markets and
products. To implement these strategies successfully, new or
improved marketsegmentation approaches are required. Second,
market segmentation allows a firm to operate with limited resources
because mass production, mass distribution, and mass advertising
are not required. Market segmentation enables a small firm to
compete successfully with a large firm by maximizing per-unit profits
and per-segment sales. And third, market segmentation decisions directly affect marketing mix variables: product, place,
promotion, and price, as indicated in Table 8.1.

Table 8.1 The Marketing Mix Component Variables

Product Place Promotion Price

 Quality  Distribution channels  Advertising  Level

 Features and  Distribution coverage  Personal  Discounts and

options selling allowances
 Outlet location
 Style  Sales  Payment
 Sales territories promotion terms
 Brand name
 Inventory levels and  Publicity
 Packaging locations

 Product line  Transportation carriers

 Warranty

 Service level

 Other services

Source: Own processing based on E. Jerome McCarthy, Basic Marketing: A Managerial Approach.

Evaluating potential market segments requires strategists to determine the characteristics and needs of
consumers, to analyze consumer similarities and differences, and to develop
consumer group profiles. Segmenting consumer markets is generally much
simpler and easier than segmenting industrial markets, because industrial
products, such as electronic circuits and forklifts, have multiple applications
and appeal to diverse customer groups.

Evaluating potential market segments requires strategists to determine the

characteristics and needs of consumers, to analyze consumer similarities
and differences, and to develop consumer group profiles. Segmenting
consumer markets is generally much simpler and easier than segmenting
industrial markets, because industrial products, such as electronic circuits
and forklifts, have multiple applications and appeal to diverse customer groups. Segmentation is a key to matching supply
and demand, which is one of the thorniest problems in customer service. Segmentation often reveals that large, random
fluctuations in demand actually consist of several small, predictable, and manageable patterns. Matching supply and
demand allows factories to produce desirable levels without extra shifts, overtime, and subcontracting. Matching supply
and demand also minimizes the number and severity of stock-outs. Focusing separately on specific market segments,
however, can allow firms to more effectively predict overall supply and demand. Geographic and demographic bases for
segmenting markets are the most commonly employed, as illustrated in Table 1.

Segmentation is a key to matching supply and demand, which is one of the thorniest problems in customer service.
Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and
manageable patterns. Matching supply and demand allows factories to produce desirable levels without extra shifts,
overtime, and subcontracting. Matching supply and demand also minimizes the number and severity of stock-outs.
Focusing separately on specific market segments, however, can allow firms to more effectively predict overall supply and
demand. Geographic and demographic bases for segmenting markets are the most commonly employed, as illustrated in
Table 8.2.

Table 8.2 Geographic and Demographic bases for Segmenting Markets

Geographic Demographic Psychographic Behavioral

 Region  Age  Social Class  Use Occasion

 County Size  Gender  Personality  Benefits Sought

 City Size  Family Size  User Status

 Density  Family Life Cycle  Usage Rate

 Climate  Income  Loyalty Status

  Occupation  Readiness Stage

 Education  Attitude Toward

Product
 Religion

 Race

 Nationality

Source: Adapted from Philip Kotler, Marketing Management: Analysis, Planning and Control

Determining the right marketing segmentation strategy for your business means using or combining demographic,
geographic, behavioral, and psychographic segments to reach a more targeted consumer or business base.

Marketing segmentation strategies help your business predict where your products and services are most wanted,
allowing for better customer experiences, loyalty, and niche marketing. Market segmentation is typically divided into four
groups: demographic, geographic, behavioral, and psychographic. Each segmentation strategy offers different
marketing solutions, especially when segments are combined.

People all over the world are congregating into virtual communities on the web by becoming members, customers,
and visitors of websites that focus on an endless range of topics. People essentially segment themselves by nature of the
websites that comprise their favorite places, and many of these websites sell information regarding their visitors.

Retention-Based Segmentation

Tag #1: Is this customer at high risk of canceling the company’s service?

One of the most common indicators of high-risk customers is a drop off in usage of the company’s service.For example, in
the credit card industry this could be signaled through a customer’s decline in spending on his or her card.

Tag #2: Is this customer worth retaining?

This determination boils down to whether thepost-retention profit generated from the customer is predicted to be
greater than the cost incurredto retain the customer. Customers need to be managed as investments.

Tag #3: What retention tactics should be used to retain this customer?\

For customers whoare deemed “save-worthy,” it’s essential for the company to know which save tactics are most
likely to be successful. Tactics commonly used range from providing “special” customer discountsto sending customers
communications that reinforce the value proposition of the given service

Alternative Bases for Segmentation

Does the Internet Make Market Segmentation Easier?

 The segments of people whom marketers want to reach online are much more precisely defined than the segments of
people reached through traditional forms of media, such as television, radio, and magazines

 People in essence segment themselves by nature of the websites that comprise their “favorite places,” and many of
these websites sell information regarding their “visitors”

Does the Internet Make Market Segmentation Easier?

The segments of people whom marketers want to reach online are much more precisely defined than the segments
of people reached through traditional forms of media, such as television, radio, and magazines. People in essence
segment themselves by nature of the websites that comprise their “favorite places,” and many of these websites sell
information regarding their “visitors”.

Create Your Marketing Segmentation Strategy

Identifying your marketing segmentation strategies ultimately involves answering these five important questions:‍

1. Who is your consumer or business market?

2. Where is your consumer or business market located?

3. What is your consumer or business market interested in?

4. How can you market your products and services to this market?

5. Why are certain segments interested or not interested in your products or services?

PRODUCT POSITIONING AND PERCEPTUAL MAPPING

After markets have been segmented so that the firm can target particular customer groups, the next step is to find
out what customers want and expect. This takes analysis and research. A severe mistake is to assume the firm knows
what customers want and expect. Countless research studies reveal large differences between how customers define
service and rank the importance of different service activities and how producers view services. Many firms have become
successful by filling the gap between what customers and producers see as good service. What the customer believes is
good service is paramount, not what the producer believes service should be.

Product positioning (sometimes called perceptual mapping)

entails developing schematic representations that reflect how your products
or services compare to competitors’ on dimensions most important to
success in the industry. Product positioning is widely used for deciding how to
meet the needs and wants of particular consumer groups. The
technique can be summarizes in five steps:

1. Select key criteria that effectively differentiate products or

services in the industry.
2. Diagram a two-dimensional product- positioning map with specified
criteria on each axis.
3. Plot major competitors’ products or services in the resultant four-
quadrant matrix.
4. Identify areas in the positioning map where the company’s products or services could be most competitive in the
given target market. Look for vacant areas (niches).
 5. Develop a marketing plan to position the company’s products or services appropriately.

Because just two criteria can be examined on a single product-positioning map, multiple maps are often developed
to assess various approaches to strategy implementation. Multidimensional scaling could be used to examine three or
more criteria simultaneously, but this technique is beyond the scope of this text. Some rules for using product positioning
as a strategy-implementation tool are the following:

1. Look for the hole or vacant niche, which is a segment of the market currently not being served.
2. Do not serve two segments with the same strategy. Usually, a strategy successful with one segment cannot be
directly transferred to another segment.
3. Do not position yourself in the middle of the map. The middle usually indicates a strategy that is not clearly
perceived to have any distinguishing characteristics. This rule can vary with the number of competitors.

An effective product-positioning strategy meets two criteria: (1) it uniquely distinguishes a company from the
competition, and (2) it leads customers to expect slightly less service than a company can deliver. This is a constant
challenge for marketers. Firms need to inform customers about what to expect and then exceed the promise. Under
promise and then over deliver! That is a key for excellent strategy implementation.

Fig. 8.2 A Perceptual Map for Menswear Retail Stores Source: Own processing based on Fred R. David

The product positioning map or perceptual map in Figure 8.2 shows consumer perceptions of various retail stores
on two dimensions of high/low price and fashionable and conservative menswear. Products, brands, or companies
positioned close to one another are perceived as similar on the relevant dimensions.

Perceptual maps may also display consumers´ ideal points. An area where there is a cluster of ideal points
indicates a market segment. Areas without ideal points are sometimes referred to as demand voids. A company
considering introducing a new product will look for areas with a high density of ideal points. They will also look for areas
without competitive rivals (a vacant niche), perhaps best done by placing both the ideal points and competing products on
the same map.

An effective product-positioning strategy meets two criteria:

(1) it uniquely distinguishes a company from the competition, and

(2) it leads customers to expect slightly less service than a company can deliver. This is a constant challenge for
marketers. Firms need to inform customers about what to expect and then exceed the promise. Underpromise
and then overdeliver! That is a key for excellent strategy implementation.

In the above example, customer perceptions of price versus quality for three different brands are displayed on a
graph, providing an excellent visual representation of how brands can be differentiated in the minds of consumers.

The data for perceptual maps comes from customer surveys of products or services––customers are typically
asked to rate their views on various criteria such as:

 Performance

 Ease of use

 Price

 Reliability

 Customer support

Survey results are compiled and plotted on a graph according to their scale values.
Types of Perceptual Maps

 Aside from price versus quality, perceptual maps can be made for a variety of product/service attributes. For example:

 Trucks - Towing capacity versus fuel consumption

 Landscaping services - Appearance versus effect on the environment

 Coffee - Price versus sustainability

 Food/drink - Taste versus sugar or salt content

 Hotels - Price versus location, amenities, etc

Examples of Product-Positioning Maps

Developing a Product Positioning Strategy

The first step in developing your product positioning strategy is market research. You will need to find out what
features buyers in your chosen market segment feel that your product type should have. This stage is researching product
features in general not features offered by specific brands e.g. smart phone features, television features, washing up
powder features. Once you have identified preferred product features and how consumers rank them against each other,
make a list of products on the market which offer those features. Finally draw out a positioning (perceptual) map showing
preferred product features and which competitor products offer those features. For comparison purposes, it may also be
useful to place your own product on the positioning map as well. For advice on how to draw out a positioning map read
our market positioning and perceptual maps article. Now that you can see how competitor products are positioned in your
chosen market segment and where your product is currently placed, you need to make some decisions about where you
would like to position your product.
Price Positioning
The price of your products and services will affect how customers view the product and the firm if your products are
in the same price range. In general customers believe that an expensive product is a quality product. However if low
quality product is priced as a quality product it is highly likely that customers will discover that the price does not reflect
quality. Instead a better way to position your product would be to set your price based on the strength of your brand, your
product's features/benefits and the results from your market research.
Finalizing Your Positioning Strategy

Developing a positioning strategy depends much on how firms position themselves. Do organizations want to
develop ‘a me too’ strategy and position themselves close to their competitors so consumers can make a direct
comparison when they purchase? Or does the organization want to develop a strategy which positions them away from
their competitors? For example by offering a feature not offered by competitors. This may be a feature that your market
research revealed buyers in your market segment rank as important.

Conclusion
Ultimately positioning is about how you want consumers to perceive your brand, products (and services) or pricing
and the strategies you adopt to reach this perceptual goal. This may involve finding the "gap" in the market or deliberately
positioning yourself in the same place as your competitors because you believe that "you can do it better than them". It’s
also about helping to decide the price and quality of your products and services as these affect how customers view your
product and where your product is placed in the market. For more information about how to decide where to position your
firm and how to draw a perceptual map, read our Perceptual Mapping article.