Gate 3 – Execution: Machinery,

Methods, and Management Skills

St. Robert’s International Academy
Special Business Junior High School
 Execution in Business
Execution makes strategy come alive.
A great combination of strategy and execution can
reduce uncertainty.
Execution in Business
 Execution in Business
Good execution softens poor strategy and gives time
for the management to see and correct its strategy.
It is therefore important to think of execution during
strategy formulation and involve in execution from
the beginning.
 MACHINERY
Gate 3 – Execution: Machinery, Methods,
and Management Skills
 Machinery
Machinery is the organizational structure that can
deliver the value planned.
Machinery or organization can only be articulated
after the value proposition in the offering model has
been defined.
 TAKE NOTE!
Strategy is the key driver of structure and value is
created only if structure is in harmony with
strategy.
A change in strategy will necessitate a review of its
organizational design.
 Organizational Structure
It also identifies how people should function in an
organization so as to be aligned with its existing or
new objectives.
 Structure
Structure support growth strategy; if market
segment growth is the mandate, different market
segments must get sufficient attention.
 Mang Inasal Goes To Manila
When Edgar Sia II started geographical
expansion of Mang Inasal to Manila,
he discovered that many of the good
location he wanted were being offered
to his competitors who were leaders in
the fast food industry.
 Mang Inasal Goes To Manila
So he offered the lessors
instant payment of rent
deposit and signing of rent
contract beating corporation.
 METHODS
Gate 3 – Execution: Machinery, Methods,
and Management Skills
 Methods
These are about systems and processes that allow the entrepreneur
information and control.
Remember, entrepreneurs must make decisions, essentially, an
allocation task, which is based on having information, which is a
monitoring task.
Good monitoring leads to good allocating.
 Value Chain
It is the strategic linkage or a series of value-adding
individual activities required to create, produce,
and deliver products and services to the
customers, that fit the total business plan to create
profit for the firm.
 Value Chain
Helps employees visualize and understand the
role each department of an organization plays in
meeting the needs of other departments.
Value Chain
Importance of Value Chain
Defines the role each member plays in the
flow of materials, information, and
relationships with trust as a central issue.
 Importance of Value Chain
• Materials – suppliers delivering orders is the most fundamental
part in a value chain.
• Information – Amazon and Lalamove have live tracking
features for customers to know the status of the shipment.
• Relationships – Unilever Foundry in Singapore has a co-
working space that allows members to tap into their network as
well as to receive mentorship from within the company.
 Importance of Value Chain
It shows the profit pool of an industry by
segment in the entire value chain.
SM Group have been able to increase
total profitability by having the
negotiation power for higher margins as
well as having different types of support
funds.
 Importance of Value Chain
It identifies the potential complementors who can
help the firm create differentiation and barrier to
competitive entry.
Philips is the manufacturer of Sara Lee’s Senseo
coffee machine. Philips agreed to sell the
machine at cost while earning royalty from the
sale of Senseo’s coffee pods, creating an
innovative and collaborative business model.
 Importance of Value Chain
It identifies the complementors who can
help the firm execute strategy that no other
company can do as efficiently.
Dell has a vendor management inventory
(VMI) system where suppliers
automatically deliver parts of them based
on a pre-agreed supply formula.
 Importance of Value Chain
It shows how value chain boundaries of tasks
performed can be expanded or collapsed in case of
an innovation.
Cemex Mexico expanded the value chain by
adding the sequence of solutions like a unique
financing scheme to a buyer’s group, DIY
construction classes, and periodic site
supervision.
 Importance of Value Chain
It identifies potential competitors, as members
in the value chain may want to stretch their
activities beyond their normal territory.
Mega Sardines decided to shift and can the
sardines themselves after discovering that
the price of fish was controlled by the
canneries.
 Value Network
Value network is an expanded value chain that
shows the involvement of other stakeholders in each
value chain stage to co-create value.
Also called as ecosystem.
 Value Network
• Example:
• Creative consultants – to conceptualize the program
• Media company – to place advertisements
• Manpower agencies – to promote the new campaign
 Resources
These are about hard assets (not people related)
and soft assets (people related) that are difficult
to imitate, and provide an advantage to firms,
especially evident in an economic downturn, when
acquisition becomes possible.
 Hard Assets
These are physical (channel, infrastructure),
financial, and intangible (brand) assets.
Double Dragon Properties sourced their funds
publicly via stock market bonds, and loans, in
order to buy as many big properties in third
class provincial cities they planned to enter and
build City Malls.
 Soft Assets
Soft assets are human assets like
relationships, skills and knowledge.
Mansmith and Fielders Inc. has over
70 courses in marketing, sales,
innovation and strategy, moving bit
by bit from their core to adjacencies.
 Processes
Transform inputs into outputs.
These are critically repetitive tasks that are routinized
to foster good strategy execution.
Can be improved with productivity tools whenever
available.
 MANAGEMENT
SKILLS
Gate 3 – Execution: Machinery, Methods,
and Management Skills
 Management Skill
It is the ability to carry out a firm’s plan.
Management Skill What is Required? Knowledge in

People Share meaningfulness and • Motivating

Management Skill
pride in their work while • Planning
accomplishing required tasks • Problem-solving
• Decision making
• Inspiring
Rewards Attaining a sense of identity • Communicating
with financial blessings while • Delegating
accomplishing required tasks.

Leadership Having a sincere sense of

mission and purpose while
practicing good governance.
 3Ms of Execution Key Question

Key QuestionsHowfor
do weExecution
Machinery (Organization
value?
Structure)
organize ourselves to deliver

Infrastructure
Methods (System/Process)
Do we have the information and control
needed?

Management Skill – People Do we have the right people, right number,

the right skills and with the right
understanding?
Management Skill - Rewards Are desired behaviors understood and
rewarded?
Management Skill - How do we provide guidance and align
Leadership everyone to attain common goals?
 3Ms of Coordination Commitment Competencies
Some Problems in Poor
Execution
Machiner Diverse views Change too Plans are bad
y Execution
intimidating

Methods Not tied to Not designing Cost of

strategy for processes and implementatio
accountability rewards for n not
team to work considered.
together
Management Coordination Commitment Competencies
Skills
People Some Problems
No follow thru in Poor
No plan Not linked to
Execution
ownership capacity building

Rewards Vague deadline Incentive problem Lack of training

for new skills
required

Leadership Clear objectives Weak leadership Unclear tasks

but accountability with no job
and responsibility descriptions
not understood