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confidence accurate short-term forecasts would generate would allocate more resources
to strategic and medium to longer-term planning and less on short–term, tactical activities
One of the Strategic Options for Company X might be finding new customers in
automobile sector. Negotiations and contracts with new customers are very challenging
processes and well-planned strategies are essential in order to reach to a profitable
agreement for the Company. Such long term strategies should also bring future
opportunities. To illustrate, Chinese automobile industry might be a strategic option for
Company X. With a long term strategy and resource allocation it might be feasible to
obtain maximum benefit from Chinese market.
Decision of whether or not to build new plant and its location is another strategic option.
Company X has only one plant in that certain location and it is very well chosen
considering logistics factors in central Europe. From existing plant it is very efficient and
less costly to distribute components to car manufacturers. With the improvements of
R&D Department, producing new products is also a strategic option. Customer
Segmentation by charging different prices to different customers is an already
implemented strategic option for Company X.
One step further Evaluation and Selection is done among the strategic options. Strategic
options can be examined in the context of strategic analysis. In deciding between options
management asks several questions; first, which of these options built upon strengths,
overcame weaknesses and took advantage of opportunities, while minimizing the threats
that the company faced? For example building plants in China was one of the strategic
options for Company X that is mentioned before. In order to evaluate this option worst
and best scenario can be analyzed by using the result of the SWOT analysis and
environmental factors in China. Scenario approach is one way to evaluate one option. But
if selection between strategic options is the case then “divide conquer” system can be
used. If the company is to choose between three options so to say:
1) Building plants in China and go into China market by doing so
2) Expanding its shares in Europe Market
3) Building plants in Turkey
These 3 options can be evaluated by pointing out some categories such as labor cost,
distribution cost , average demand and so on , evaluate each category by giving them
number ( 1 to 10) . By using sum of the numbers, comparison and decision would be
easy. It is just a simple approach to explain our point of view.
Strategic Implementation
The factors which are affected and benefited from are indicated briefly on the triangle.
STRATEGIC IMPLEMENTATION
FACTORS IN VALEO
ORGANIZATION
TECHNOLOGY PEOPLE
EXTERNAL
•Business
(marketing, sales etc.)
•Suppliers
•Competitors
INTERNAL
•Financial Management
•Project Management
•Structural Improvement
R&D
•New Products
•New Machines / Automation
•New Software System
Human Resources
•Education
•Training
•Motivation
•Understanding / Culture
Since the circles in Table-1 is all related to each other, using the triangle above is much
simpler to understand the issue. Organization structure and design is related to Culture,
Human Resource, Technology and Finance mainly. Managing strategic chance includes
internal organization factors. It requires action on the part of the managers in terms of the
way they manage change processes. So Company X should continue working with
managers who can take responsibility and continue with it until implementation is
completed. Education and motivation of people affects their reaction to change so
education or training or constructing a different kind of understanding might also be the
strategic implementation itself. All kind of implementations should be done with a
guidance of Resource allocation and it should be controlled in every step. To allocate the
resources efficiently and to establish the whole process in a well-planned way, Financial
Management and Project Management take important roles and they try to provide
structural improvement, which again refers to organisation structure and design.
Simplifying manuals migt be a simple example of strategic implementation. Considering
strategic analysis their goal is to minimize labor costs in order to be able to compete in
the market .The strategic choice is to hire low-qualified workers. Using simplified
manuals is one of the main parts of implementing process in order to be successful with
their strategic choice.
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