Week 5: Developing Strategic Options
GE Goes with What It Knows: Making Stuff,
Can You Say What Your Strategy Is?, and
The Secrets to Successful Strategy Execution.
A company’s strategic options start with a good statement of strategy which is a brief statement that reflects three elements- objectives, scopes, and advantages- of the company. Such effective strategy can go a long way in terms of success of the company. Having an explicit statement of strategy also makes execution process easy due to easier communication and internalization by everyone in the organization. A statement of strategy that has clearly defined objective, scope, and advantage, has helped employees of companies such as Merrill Lynch, Wells Fargo, LPL Financial easily understand how their daily activities contribute to the overall success of the firms and how to correctly make the difficult choices they confront in their jobs. One ought to remember that mission statement is not a strategic option. Therefore, strategic option needs greater level of thoughts and creativity; and focuses on the following four fundamental building block - clarifying decision rights, designing information flows, aligning motivators, and making changes to structure.
Reflection with respect to Coles
One of the largest retail food supermarkets in Australia is Coles. With a history of almost a century, Coles had managed to survive. However, during the period since the turn of the millennium, Coles faced some serious problem. Its immediate competitor, Woolworths Inc., had started to claim Coles’ market share. There appeared to be a mismatch between what Coles was advertising, how they were developing their products and the shopping experience the consumers had. Customers were getting mixed messages about Coles that adversely affected Coles’ bottom line directly. In 2007, Coles was taken over by Wesfarmers- a conglomerate in Australia. Led by new CEO Ian McLeod, Coles developed strategic option and have since turned things around.
Unlike conventional leaders, who generally believe that in order to change things around, structural changes is the first place to start, Mr. McLeod observed that Coles’ problems were not structural, the problem resided in management challenges centered around staff service, store format, produce range and the pricing strategy (1). What was apparent for him was a lack of clarity among the brand, the primary customer and the marketing strategy. He emphasized that the ‘Coles brand’s core objectives are quality, service and value’.
Simplicity and clarity in this strategic option made execution of other plans, communication among corporate and store employees much easier and faster. While definition of quality, service, and value can is debatable, the message from Coles’ strategic direction is straight forward. While the strategic option may not be the only reason for Coles’ recent success, it did behave as a catalyst and made other managerial and execution process easier. The recent success of Coles can therefore be attributed to the strategic directions, other decisions and commitment that were made to provide quality, value, and service to its customers.
In Coles’ strategic direction, we can observe, few key points highlighted in this week’s reading. Noticeably, the information was made clear to the entire workers from corporate level to store workers that the company’s objectives were to provide quality, value and service to its consumers. In addition, because the message was clear, employees could easily internalize it and use it. Similarly, the strategy defined the company’s core objective clearly, defined ‘consumer’s preferences’ as scope, and ‘affordable quality daily food’ as advantage for Coles.
1. http://www.smh.com.au/business/simple-strategy-for-coles-to-win-the-race-20090316-8zxz.html#ixzz1Pzm5zpdH, Read more:.