SM-Module 4

(Strategy Implementation-Corporate restructuring – Mergers & Acquisition, Joint Venture,

Strategic Alliance- Strategy & Leadership- Behavioural Aspects- Structures for Strategies)

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
organisation to achieve the objectives.

Strategy implementation is the technique through which the firm develops, utilises and integrates its
structure, culture, resources, people and control system to follow the strategies to have the edge
over other competitors in the market.

Strategy implementation refers to vari ous activities involved in executing the strategies of an
organization. In simpler words, strategy implementation puts an organization’s strategies into action
through various procedures, plans and programs. Strategy implementation involves actions and tasks
that are needed to be performed after the formulation of strategies.

Strategic implementation process requires introduction of change in the organisation that allow it to
pursue its strategy. Strategy is implemented through right combination of organisational structure
and control.

Your implementation plan is the roadmap to a successful strategy execution and should include the
following steps:

1. Define your goals

2. Conduct proper research

3. Map out any risks

4. Schedule all milestones

5. Assign tasks

6. Allocate helpful resources

Step 1: Set and communicate clear, strategic goals

The first step is where your strategic plan and your strategy implementation overlap.

To implement a new strategy, you first must identify clear and attainable goals. As with all things,
communication is key. Your goals should include your vision and mission statements, long-term
goals, and KPIs.

The clearer the picture, the easier the rest of your strategy implementation will be for your team
and organization—simply because everyone will be working towards the same goals.

Step 2: Engage your team

To implement your strategy both effectively and efficiently, you need to create focus and drive
accountability. There are a few ways in which you can keep your team engaged throughout the
implementation process:

• Determine roles and responsibilities early on. Use a RACI matrix to clarify your teammate’s
roles and ensure that there are no responsibility gaps.
 • Delegate work effectively. While it can be tempting to have your eyes on everything,
micromanagement will only hold you back. Once you’ve defined everyone’s roles and
responsibilities, trust that your team will execute their tasks according to the
implementation plan.

• Communicate with your team and ensure that everyone knows how their individual work
contributes to the project. This will keep everyone motivated and on track.

Step 3: Execute the strategic plan

Allocate necessary resources—like funding for strategic or operational budgets—so your team can
put the strategic plan into action. If you don’t have the right resources you won’t be able to achieve
your strategic plan, so this should be a top priority. Here’s how you can ensure that your team has
the resources they need:

• Start with the end in mind to effectively align your project’s objectives, key deliverables,
milestones, and timeline.

• Identify available resources like your team’s capacity, your available budget, required tools
or skills, and any other unconventional resources

• Define a clear project scope so you know exactly what your project needs when.

• Share your project plan with everyone involved in the implementation process using a work
management tool.

The better built out your strategic plan is, the easier it will be to implement it.

Step 4: Stay agile

You’ll inevitably run into issues as you begin implementing your strategy. When this happens, shift
your goals or your approach to work around them.

Create a schedule so you can frequently update the status of your goals or implementation strategy
changes. Depending on the strategy you’re implementing, you can create weekly, monthly, or
quarterly project status reports. Share these updates with your external stakeholders, as well as
your internal team, to keep everyone in the loop.

Having a central source of truth where you can update your team in real time will help you
streamline this process. Asana’s work management software allows your team to coordinate
projects, tasks, and processes in real time but also gives you the freedom to get work done
asynchronously—providing everyone with the visibility they need to understand who’s doing what.

Step 5: Get closure

Once you implement the strategy, connect with everyone involved to confirm that their work feels
complete. Implementing a strategy isn’t like a puzzle that’s finished when the last piece is set. It’s
like planting a garden that continues to grow and change even when you think you’re done with
your work.

Getting closure from your team will be the second to last milestone of your strategy implementation
and is a crucial step toward completion.
Step 6: Reflect

Conduct a post-mortem or retrospective to reflect on the implemented strategy, as well as evaluate

the success of the implementation process and the strategy itself. This step is a chance to
uncover lessons learned for upcoming projects and strategies which will allow you to avoid potential
pitfalls and embrace new opportunities in the future

Building and Restructuring Business

Various methods for the firms to enter into new business and restructure their existing business
include:

• Start-up route
• Merger
• Acquisition
• Strategic alliance
o Joint-Ventures
• Restructuring

Start-Ups:- Startups are young companies founded to develop a unique product or service, bring it
to market and make it irresistible and irreplaceable for customers.

Rooted in innovation, a startup aims to remedy deficiencies of existing products or create entirely
new categories of goods and services, disrupting entrenched ways of thinking and doing business for
entire industries.

Merger and acquisition (M&A) strategies refer to companies’ approaches and methods to combine
with or acquire other businesses. M&A strategy can be used to achieve a range of objectives,
including expanding market share, increasing profitability, diversifying product lines, entering new
markets, and acquiring new technologies or expertise.

Merger :- Mergers refers to the growth strategy which involves combining 2 or more companies
together into one company inorder to expand their business operations. It is a corporate level strategy
in which a firm combines with another firm through an exchange of stock. Mergers help to pool the
resources and improve efficiency.
Advantages:-
1. Mergers enjoy economies of scale through the larger size and integrated facilities.
2. Mergers help to maintain marketing economies and enhance competitive advantage to
the firm.
3. It helps to diminish competition.
4. Helps to achieve financial economies of scale through maintaining stability of cash flows,
raise more funds from stock markets, etc.
5. Mergers helps in the revival of sick units. Poorly managed units gets merged with healthy
units.
Acquisition:-

Acquisition is a type of merger where one company purchases another, often with a combination
of cash and stock and gains control over that company. The acquiring company becomes the
owner of its target.

Acquisition is a preferred strategy when:

1. Acquisition is a suitable entry mode.

2. When barriers to entry from brand loyalty, economies of scaleand cost advantage are very
intense and strong.
3. When a firms enters to an unrlated new business where it has no experience, expertise,
etc.
4. When companies expect to achieve market presence in a short period.
5. When acquisition reduces uncertainty

Types of Acquisition

Horizontal acquisition

Vertical acquisition

Concgeneric acquisition;- The type of acquisition where the acquiring company and the
acquired company have different products or services, but sell to the same customer. This type of
acquisition helps to increase the company’s market share and expand its product line.

Conglomerate acquisition

Advantages of Acquisition:

1. Obtain additional quality/skilled staff, knowledge and other business intelligence.

2. Better production and distribution facilities are obtained with less expense.
3. Can access a wider customer base and increase market share.
4. Reduce competition.
5. Reduce cost and overhead expenses through shared capabilities.
6. It is a best method to expand internally while underperforming in business.

Takeover:

In a takeover, apportion or a whole firm is acquired by another firm so that the acquiring
firm exercises control over the affairs of the taken over firm. Takeover is used as amethod
for instant expansion.

If the management accept the takeover, it is considered to be friendly or smooth take over.
If the management resists, it is called hostile takeover.

HLL’s takes over TOMCO- smooth takeover.

India cements takeover Raasi Cement- Hostile takeover

Strategic Alliance

A Strategic Alliance is a formal relationship between two or more independent organisations or

parties to pursue a set of agreed upon goals or to meet a critical business need while remaining
independent organizations. Partners may provide the strategic alliance with resources such as
products, distribution channels, manufacturing capability, project funding, capital equipment,
knowledge, expertise or intellectual property.

For example, in a strategic alliance, Company A and Company B combine their respective resources,
capabilities, and core competencies to generate mutual interests in designing, manufacturing, or
distributing goods or services.

Strategic Alliances • The alliance aims for a synergy where each partner hopes that the benefits from
the alliance will be greater than those from individual efforts.

(Affinity marketing strategies and co-branding new products or services are two major examples of
strategic alliances.)

Affinity marketing is a type of marketing that involves a mutually beneficial partnership between two
brands. It is sometimes also called co-marketing, co-branding, or partnership marketing.

In affinity marketing, a business teams up with another related (but non-competing) brand to offer
products, services, or other benefits to both their target audiences. This marketing carries the
branding of both businesses, and puts each one in front of a whole new market. This helps each
business increase brand awareness and grow their customer base. It’s a win-win!

The best strategic alliances are ones that offer clear benefits to the audiences of both brands. When
a partnership appeals to both audiences, then the two businesses are able to expand their reach and
generate more sales. It’s a win-win strategy!

Eg. Uber and Spotify

Uber’s partnership with Spotify lets Uber riders easily stream their Spotify playlists whenever they
take a ride.

Disney and Chevrolet

At Walt Disney World’s EPCOT, Disney and Chevrolet have partnered to create Test Track – not just a
thrilling ride, but a detailed Chevrolet brand experience. In this strategic alliance example,
innovators from both brands collaborated to create a one-of-a-kind ride experience that leveraged
the competencies of both brands.

Types of Strategic Alliances

There are three types of strategic alliances: 1.Joint Venture, 2.Equity Strategic Alliance, and 3.Non-
equity Strategic Alliance.

1 Joint Venture

A joint venture is a business agreement between two or more companies and business entities in
order to achieve a specific goal by sharing resources. It usually results in the form of new business
activity. When businesses share assets, they also divide income and expenses.

A joint venture is established when the parent companies establish a new child company. For
example, Company A and Company B (parent companies) can form a joint venture by creating
Company C (child company).
In addition, if Company A and Company B each own 50% of the child company, it is defined as a 50-
50 Joint Venture. If Company A owns 70% and Company B owns 30%, the joint venture is classified
as a Majority-owned Venture.

Eg:

GE appliances with Godrej

GE capital with HDFC

General Motors with Hindustan Motors.

Ford with Mahindra and Mahindra

Shell with BPCL

TATA with AIG

2. Strategic equity alliance:- A strategy when one company buys a significant amount of equity in
another company/ target company, and this trade will give the aquiring company significant
influence in the target company.

Eg:- Panasonic in collaboration withTesla motors in 2009 for using the batteries in the car.

Walmart invested in Indian e-commerce giant Flipcart

3. Non-equity strategic alliance:- A non-equity strategic alliance is formed when two companies
agree to share resources to result in synergy. Eg:- Maruthi-Suzuki, Starbucks-Kroger

Types of Joint Venture

There are various types of joint ventures for different types of businesses because they all want to
achieve a different goal. Some of the main types are as follows;

Project Joint Venture

As the name implies, this type of venture is limited to a specific project and completion of it. For
instance, a business enters into a new market and partners up with the local distribution network
channels. Both parties create a contract and outline the terms and conditions of the projects that
how the thing would work out.

Functional Joint Venture

It is when different categories of businesses having expertise in different fields make an alliance. It’s
to create a symbiotic environment that would beneficial for both.

For instance, a company has an extra storage space and the other business has a fleet of transport.
Both of them join hands and solve their inventory management issues. It would save the fleeting and
storage cost of both businesses.

Vertical Joint Venture

The vertical joint venture is when two companies need the same supply of raw material. They invest
in the supply chain to avoid the disruption caused by the inconsistent and unavailability of the
supplying raw material. However, businesses also keep the supply chain secret. It’s because the
demand for the finished product is high and limited availability of raw material.
For instance, Mark & Spenser launch their sweet shop and save the external cost. Or the computer
manufacturing companies invest in the development of computer chip technology,

Horizontal Joint Venture

The horizontal joint venture is when two companies are manufacturing the same finished final
product. One company enters into the new geographical region, and partners with the local
company producing the same product. However, the local company has the distribution advantage,
and the foreign has the expertise of economies of scale.

Advantages of Joint Venture

The most important joint venture advantages can help businesses to grow faster, increase their
productivity and generate profits. Benefits of joint ventures include:

• Access to new markets and enlarge their audience.

• Increased the capacity.

• Sharing of risks and costs on a wide surface basis.

• Access to new knowledge and expertise in business which includes specialized staffing
necessity.

• Access to higher resources, for example, the technology and the finance.

• Joint venture partners help in providing a huge pool of resources together.

Disadvantages of Joint Venture

Joint ventures can pose significant risks, the disadvantages are like the follows:

• The communication between partners is not great as they belong to different societal
classes.

• The partners expect different things from the joint venture, their interests may clash.

• The expertise and investment level may not match well.

• Work and Resources are not distributed equally.

• Different cultures and management styles may create barriers to the organization.

• The contractual limitations may pose risk to a partner's core business operations.

Restructuring

Corporate restructuring is the process of reorganizing a company’s management, finance and

operations or re-arranging business of a company to improve the efficiency and effectiveness of the
company.
Restructuring involves strategies for reducing the scope of the firm by exiting from unprofitable
business. Restructuring is a popular strategy where diversified rganisations divested the business to
concentrate on core business. The process of corporate restructuring is considered very
important to eliminate all the financial crisis and enhance the company’s performance.

Tata group restructured their 107 operations in 25 businesses to 30 companies in just 12 business. It
divested Lakme, TISCO’s cement division etc. while strengthening their core business.

SAIL divested their non-core business like stainless steel and alloy steel.

Reasons for restructuring;

1. Change in strategy:- Management of the distressed company attempts to improve its

performance by eliminating certain divisions and subsidiaries which do not align with its
core-business.
2. \lack of profit:- When the undertaking may not be profit-making enough to cover the cost of
capital of the company and result in economic loss.
3. Reverse Synergy:- Where the value of the individual unit is more than the value of
collective/merged units or when the company decides that divesting a division to a theird
party can fetch more value than owning it, then restricting is the option available.
4. Cash flow requirement;- Disposing of unproductive undertaking can provide a considerable
cash inflow to the company.
5. Outsourcing its operations to a more efficient third party.
6. Shifting the operations such as manufacturing to a low-cost locations.
7. Reorganising functions like marketing, sales and distribution etc.

Types of restructuring

1. Merger
2. Demerger:
3. Reverse Merger
4. Disinvestment
5. Takeover/Acquisition
6. Joint Venture
7. Strategic Alliance
8. Slump Sale:- Under the strategy Slump Sale, an entity transfers one or more undertakings for
lump sum consideration. An undertaking is sold for consideration irrespective of the
individual value of the assests or liabilities of the undertaking.
9. Organisational restructuring:- include reducing the levelof hierarchy, redesigning job
positions, downsizing the employees, changing the reporting relationship, etc.

Strategic Leadership
Strategic leaders must beable to use the strategic management process effectively by
guiding the company in ways that result in the formation of strategic intent and strategic
mission, facilitating the development and implementation of appropriate strategic
plans and providing guidance to the employees for achieving strategic goals.
 Strategic leader has several responsibilities like:
1. Making strategic decision.
2. Formulating policies and action plans to implement strategic decision.
3. Ensuring effective communication in the organisation.
4. Managing human capital.
5. Managing change in the organisation.
6. Crating and sustaining strong corporate culture.
7. Sustaining high performance.
Approaches to strategic leadership
Two basic approaches to strategic leadership are,
1. Transformational leadership:- leadership which uses charisma and enthusiasm to
inspire people to exert them for the good of the organisation. Transformational
leadership offers excitement, vision, intellectual stimulation and personal
satisfaction calling to bring about dramatic changes in organisatioal performance.
This leadership style may be appropriate in turbulent environment, in poorly
performing organisations when there is a need to inspire a company to embrace
major changes. Such leadership motivates followers to do more than their usual
capacity.
2. Transactional leadership:- this leadership focuses more on designing systems and
controlling the organisation’s activities and are more likely to be associated with
improving the current situation. Transactional leaders try to build on the existing
culture and enhance current practices. They prefer a more formalised approach to
motivation, setting clear goals and explicit rewards or penalties for achievments or
non-achievements. Transactional leadership style may be more appropriate to
static enevironment, in mature industries and in organisation’s that are performing
well.