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Implementation Do they depend on each other? Is it possible for strategy
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LaTrobe University

Faculty of Law and Management

School of Management

MGT1FOM: Foundations of Management

Tutorial Review Questions: Answer Guide

Topic 7: Strategy


Which is more important – strategy formulation or


implementation? Do they depend on each other? Is it

possible for strategy

implementation to occur first?

In the field of strategic management, as in this ch

apter, the primary emphasis is on

strategy formulation rather than implementation. Mo

st of the models and frameworks

pertain to strategy formulation. However, strategy

implementation is of equal

importance. Great conceptual strategies are of no v

alue unless they can be translated

into organisational actions. On the other hand, the

successful implementation of a poor

strategy also has little value to the company.

Strategy formulation and implementation are interde

pendent because the nature of the

formulated strategy will impact on how it can be pu

t into action. If line managers are

involved in strategy formulation, for example, they

will understand the strategy and are

more likely to support implementation. Moreover, li

ne managers may understand from

previous efforts at implementation, which strategie

s are more likely to succeed, and can

feed this information into the strategy formulation

process. Strategy implementation can

occur first in situations where management is indec

isive and does not champion a

clearly articulated strategy, or where employees re

spond to unforeseen changes in the

environment. If top managers are in a state of drif

t, department level managers will have

to make decisions and take actions on their own. Th

us, marketing managers will define

sales goals and undertake advertising campaigns, an

d the research department will have

to decide which new products to develop. The point

is that strategy implementation can

occur first because the actions taken by organisati

onal departments will add up to an

emergent strategy for the company.





Perform a situation (SWOT) analysis for the univers

ity or TAFE college

you attend. Do you think university administrators

consider these factors

when devising their strategy?

Performing a SWOT analysis enables managers to anal

yse their organisation’s

competitive situation by assessing external environ

mental opportunities and threats, and

internal organisational strengths and weaknesses. S

tudents should be aware that a

number of strategic management writers now refer to

this type of situation analysis as

TOWS rather than SWOT analysis. This name reversal

recognises that the external

analysis should be undertaken first so as to avoid

potentially tailoring the evaluation of

environmental factors to reflect the assessment of

the organisation’s internal

characteristics. Students should be careful to ensu

re that they do not confuse

organisational strengths with opportunities in the

external environment (a common

error). Students should also recognise that strengt

hs can also be weaknesses, and

opportunities can also be threats. For example, a y

ounger university with a relatively

small enrolment can see its size as both a strength

(smaller size means students feel less

intimidated and that faculty and other staff are mo

re approachable) and a weakness

(smaller size makes it harder to achieve economies

of scale, compete for certain types of

funding, etc.). In the same way, recent changes in

the government funding model for

universities can be both an opportunity and a threa


The second element of the question is designed to e

ncourage you to reflect on the role

of strategic management in what are non-profit educ

ational organisations, though it

should be noted that there has been a significant p

ush over recent years for universities

to be more business-like in their administration. S

tudents should recognise that

government policies and regulations have a signific

ant effect on many of the strategic

choices universities can make. University administr

ators do consider opportunities,

threats, strengths and weaknesses when devising the

ir strategy. Universities are required

to do strategic planning and reporting, not only wi

thin the institution but to various

government agencies.


What is meant by the core competency and synergy co

mponents of

strategy? Give examples.



Core competency refers to something the organisatio

n does especially well in

comparison to competitors. A company may develop a

core competency in the area of

research and development, marketing, manufacturing

efficiency, or customer service.

Examples are 3M and Johnson & Johnson, companies wh

ich excel in the area of

research and development, turning out successful ne

w products at a rapid pace.

Southwest Airlines has developed the core competenc

y of exceptional customer service,

with front line employees empowered to do whatever

it takes to keep customers happy.

Synergy is the condition that exists when the organ

isation’s parts interact to produce a

joint effect that is greater than the sum of the pa

rts acting alone. The organisation may

achieve a special advantage with respect to cost, m

arket power, technology, or

management skill. When properly managed, synergy ca

n create additional value with

existing resources, providing a big boost the compa

ny’s bottom line. Synergy can also

be obtained by good relations between suppliers and

customers, and by strong alliances

among organisations. Groups of companies such as Am

cal chemists, Newspower

newsagents, AUR supermarkets and Thrifty Link hardw

are stores have formed groups

and networks to achieve synergy of operations throu

gh economies of scale.


Using Porter’s competitive strategies, how would yo

u describe the strategies

of Target, Coles Supermarkets, David Jones and Kmar

t? Do any of these

companies also use cooperative strategies? Discuss.

Porter identifies three generic business-level or c

ompetitive strategies: cost leadership,

differentiation, and focus.

David Jones is pursuing a differentiation strategy.

David Jones’s strategy emphasises

differentiation because it is a high-class retail s

tore targeted at a particular market

segment. David Jones has strong brand marketing, a

creative flair, a reputation for retail

leadership, and the amenities to attract creative r

etail people.

Target and Kmart might both be potentially describe

d as ‘stuck in the middle’ because

they do not excel at overall cost leadership or dif

ferentiation. They are not differentiated

with respect to quality or reputation from each oth

er or from other retail chains such as

Big W. This ‘stuck in the middle’ strategic positio

n is arguably the cause of their recent

poor sales figures and financial results. Coles Sup

ermarkets are currently pursuing a

low-cost strategy, as reflected by their ‘save ever

yday’ slogan. On the other hand, their




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