Why there not a perfect match up between realized and intended strategies

MINISTRY OF EDUCATION & TRAINING HOA SEN UNIVERSITY FACULTY OF ECONOMICS - BUSINESS WHY THERE NOT A PERFECT MATCH-UP BETWEEN REALIZED AND INTENDED STRATEGIES Subject: Class: Group: Lecture: Strategy Management 1108 04 Võ Thành Khởi 4/2023 MEMBERS OF GROUP Name Studen Number % Nguyễn Văn Thụ 22002593 100% Võ Trọng Tín 22011917 100% Yannick Marchand 22207801 100% Page | i INTRODUCTION After the presentations of teams before Now, my team will go to details the gap between Intended Stratergy and Realized Stratergy We will modelize them and analysis each factor, which affect to the Stratergy In the first part, we will approach the topic with a case study about FedEx and the failure of Zapmail project It took FedEx a ton of money, but didn’t make any profit It was the results of not followed the Intended Strategy and was affected by Emerging Stratergy In the seccond part, we would discuss about the Strategy model, and go to details for each factor: Intended strategy, Deliberate stratergy, Realize strategy, Emerging strategy and Unrealized stragtergy The gap between Intended Stratergy and Realized Stratergy often come from the Emerging strategy So, we will analysis the components of Emerging strategy, it may be the customer, supplier, products, internal coporation, exnternal coporation… At the end we will discuss about how to reduce this gap (Emerging strategy) by forcasing, preparing…You will understand how much important of planning and updating the information “The more planing clear, the more succcessful rate you get” Many thank, Team 04 Page | ii Table of Contents INTRODUCTION ii FEDERAL EXPRESS AND THE FAILURE OF ZAPMAIL I II MODELIZING INTENTED STRATERGY AND REALIZED STRATERGY a INTENTED STRATERGY b EMERGENT STRATERGY c REALIZED STRATERGY 12 d UNREALIZED STRATERGY 14 III REDUE DIFERENCE BETWEEN INTENTED AND REALIZED STRATERGY 15 REFFERENCE 19 Page | iii Table of Figures Figure 1: FedEx Express Vehicles (source: stratergyhub.com) Figure 2: FedEx Express Logo (source: fedex.com) Figure 3: Intend strategies and realize strategies model Figure 4: Levels of stratergies Figure 5: Stages of Intended stratergy (source: Stratergy Management, page 255) Figure 6: QSPM Matrix Figure 7: Stratergy Managent in short Figure 8: Internal Factors 11 Figure 9: New Oppotinities Factos 12 Figure 10: Amazon Logo 14 Figure 11: Deliberate, Emerging, Realized factors of the Amazon Example 14 Figure 12: Walmart logo 15 Figure 13: Forces Models 16 Page | iv STRATEGY MANAGEMENT I TOPIC TEAM 04 FEDERAL EXPRESS AND THE FAILURE OF ZAPMAIL FedEx is a US-based transportation company founded in 1965 by CEO Frederick W Smith with a mission & vison: - Mision is to produce superior financial returns for its shareholders by offering highvalue logistics, transportation, and related business services through its focused operating companies - Vision is being a dynamic and progressive courier services firm that leverages of technology and impact the lives of all people Figure 1: FedEx Express Vehicles (source: stratergyhub.com) However, in 1984, FedEx expanded beyond its original transportation business strategy by developing a service called Zapmail This service involved sending electronic documents between cities via fax machines, which could shorten the time to send Suite du document ci-dessous Découvre plus de : bussiness BUS123 133 documents Accéder au cours Văn hóa đàm phán nhật khác biệt với quốc gia khác - Tài liệu text bussiness 100% (4) Japan Vietnam Partnership To Date and From Now On vie 24 bussiness 100% (1) Market Leader Pre-Intermediate Teachers Book 157 bussiness 100% (2) Oxford - Q Skills for Success Listening and Speaking 113 Teacher’s Handbook 3rd Edition bussiness 100% (4) Recruitment methods of shopee bussiness 100% (1) 1597386037 De tot nghiep chinh thuc Thptqg 2020 mon Tieng Anh - Ma 413 Co dap an bussiness 100% (1) STRATEGY MANAGEMENT TOPIC TEAM 04 documents from 24 hours to just a few hours However, the service failed completely due to market-related factors Figure 2: FedEx Express Logo (source: fedex.com) Firstly, FedEx did not anticipate the increase in availability of cheap fax machines, which led businesses to equip themselves with their own machines In addition, Zapmail relied on satellite signal transmission technology to transfer electronic documents, which raised the cost of using the service This made the competition of fax-based mail delivery not advantageous compared to traditional mail delivery Secondly, Fax the service was complex and difficult to use, particularly for customers who were not familiar with electronic messaging and document formats So that made FedEx difficult to reach the potental market Finally, customer concerns about the security of important documents were prevalent at that time This made customers wary of using third-party services to send their documents, which in turn hindered the adoption of the Zapmail service So, it was leading to a lack of trust in the technology The result, in 1986, they decied to stop this service and shifted its focus back to its core package delivery and logistics business This case is one of the most examples about “There not a perfect match-up between realized and intended strategies”, which we will discuss more in the next part of the report STRATEGY MANAGEMENT II TOPIC TEAM 04 MODELIZING INTENTED STRATERGY AND REALIZED STRATERGY Figure 3: Intend strategies and realize strategies model Above is a brief model describing the stages and types of challenges that a business strategy will encounter from the stage of being just an idea on the business plan to its implementation in reality Starting with the “Intended Strategy”, this is the stage where the business owner researches and studies market factors, as well as the vision and mission of the company also SWOT, in order to choose a direction for the company's business strategy After that, the planner will implement (Deliberate Strategy) the functions of management: Planning, Organizing, Leading, and Controlling During the execution of the strategy, there will be external factors that were not anticipated or prepared by the manager These factors may include suppliers, customer STRATEGY MANAGEMENT TOPIC TEAM 04 preferences, competitive rivals, and substitute products These factors will fall under the Emergent Strategy part of the model above Finally, Realized Strategy is the ultimate result of the combination of the strategic factors mentioned above In addition, we have an outside factor Unrealized Stratergy This factor is the one manager abadoned or temporary fogotten However, sometimes it will become helpful and gain a lot of revenue for campany After a quick introduce about the model, we will go to details of each stratergy and analyze them by the combination of academic perspective and reality case a INTENTED STRATERGY Level of Coporation Stratergy: Depending on the level of the business strategy, the type of Intended Strategy will vary Typically, there are levels of strategy (figture 3) Firstly, corporate strategy, focuses on the long-term goals of the company Senccondly, business strategy, focuses on smaller business tactics to achieve the company's long-term goals Last onem departmental strategy focuses on the campaigns of individual departments Coporation Stratergy Functions Stratergy Operational Stratergy Figure 4: Levels of stratergies STRATEGY MANAGEMENT TOPIC TEAM 04 Stratergy Formulation: The Intended Strategy stage is equivalent to the Strategy Formulation stage in the A Comprehensive Strategy-Management Model Process Therefore, the Intended Strategy stage will be divided into practical steps: The input stages The matching stages The decision stages Each step has models for analysis Businesses may have the same tools, but they will have different perspectives on the same issue and different Deliberate Strategies These are factors that create success or failure in the market Figure 5: Stages of Intended stratergy (source: Stratergy Management, page 255) The Input Stage Identifying internal and external factors, as well as competitors, is the stage where businesses gather information and systematize the factors to be used as input for the models in step Due to the limitations of the topic, we will only introduce the names of the models The three most common models are Internal Factor Evaluation, External Factor Evaluation, and Competitive Profile Analysis STRATEGY MANAGEMENT TOPIC TEAM 04 Internal Factor Evaluation (IFE) model is used to evaluate a company's internal strengths and weaknesses This model helps the company to identify areas where it has a competitive advantage and areas where it needs improvement External Factor Evaluation (EFE) model is used to evaluate external factors that may affect a company's performance This model helps the company to identify opportunities and threats in the market and assess its ability to respond to them Competitive Profile Analysis (CPA) model is used to compare a company's strengths and weaknesses with those of its competitors This model helps the company to identify areas where it has a competitive advantage and areas where it needs improvement in order to compete effectively in the market The Matching Stage SWOT is an extremely popular model used to evaluate internal and external factors of a business, including Strengths, Weaknesses, Opportunities, and Threats Then, it creates a combination of factors, including SO (Strengths-Opportunities), ST (Strengths- Threats), WO (Weaknesses-Opportunities), and WT (Weaknesses-Threats) To have an effective SWOT matrix, the raw material from stage 1, have to be clear and right STRENGTH WEAKNESS Factor inside Coparation Factor inside Coparation OPPOTINITIES THREAD Factor outside Coparation Factor outside Coparation The Decision Stage Choosing appropriate objectives based on the strengths and weaknesses identified in the previous stages This will lead to decision making on the long-term strategy and goals of the business, and then provide guidance for the entire organization The STRATEGY MANAGEMENT TOPIC TEAM 04 departments below will be responsible for strategic management (short-term) to work towards the long-term objectives set In this stage, the manager often uses QSPM matrix to decide which stategy is suitable to apply Conduct a study on SWOT matrices and identify alternative strategies that the organization should consider implementing Record these strategies in the top row of the QSPM matrix Group the strategies into separate categories (if applicable) Determine attractiveness scores: Very unattractive = 1, Unattractive = 2, Attractive = 3, Quite attractive = 3, Very attractive = These values represent the relative attractiveness of each strategy compared to other strategies within the same group of alternative strategies Calculate the total attractiveness score for each strategy separately for each important success factor listed in column (1) by multiplying the classification number with the attractiveness score in each row Cumulate the attractiveness scores to obtain the total attractiveness score for each strategy (considering all relevant internal and external factors that may influence strategic decisions) The higher the total score, the more suitable and worthy the strategy is to be selected for implementation STRATEGY MANAGEMENT TOPIC TEAM 04 Figure 6: QSPM Matrix By the large, the intended tratergy is used for determning the long-term golas of the coparations The first step is known what is you purposes the mission and vision Seccindly, analysis the SWOT matrix or mix with the other matrix to evalutae the strength, weakness, oportinities, thread of coparation Thirdly, gather the information needed In the results, set up the long-term goals, long-term stratergies and technical stratergies Figure 7: Stratergy Managent in short STRATEGY MANAGEMENT TOPIC TEAM 04 The Problem of Stratergy Formulation The entire plan still being on paper does not ensure that the plan can be implemented or bring value to the business if it only exists on paper Therefore, to achieve the ultimate goal, the business must execute the strategies with the stated objectives, and continuously evaluate feedback from the market, customers, competitors, and internal factors to always make the most suitable changes This leads to the topic of the report "Why there not a perfect match-up between realized and intended strategies" So, the question is what factors affect the business's strategy, and how to minimize them? b EMERGENT STRATERGY An emergent strategy is one that emerges as an organization responds to changing circumstances and new opportunities It's a flexible, adaptable approach that helps organizations stay agile and respond quickly to changing circumstances A good emerging strategy is based on a solid understanding of the strengths and weaknesses of the organization and its external environment It should be flexible and adaptable to allow the organization to respond quickly to changing circumstances A key element of a good contingency strategy is constant learning and experimentation This means that organizations should be open to new ideas and willing to try new things, even if they don't always work Through trial and learning from mistakes, organizations can better understand what works and what doesn't and adjust their strategy accordingly Another crucial component of an effective emergency response strategy is cooperation and communication Organizations should facilitate open communication and collaboration between different departments and teams, this will lead to the generation of new ideas and approaches Ultimately, an effective emerging strategy is one that meets the goals of the organization while remaining malleable and adaptable Through ongoing study, STRATEGY MANAGEMENT TOPIC TEAM 04 experimentation, collaboration and communication, organizations can create innovative new strategies that will help them excel in an increasingly competitive Market evolution Market evolution is a key element of emerging strategies as it involves companies adapting to rapid and unexpected changes in the competitive environment As markets evolve, so customer needs, trends, and buying behavior, often requiring revisions to corporate strategy Companies can stay agile and adapt quickly to changes by adopting an emergent approach to market changes For example, it may develop new products or services to meet changing customer needs or change its market position to better differentiate itself from competitors Companies pursuing emerging strategies also need to pay attention to signals of changing markets This includes monitoring market trends, gathering customer feedback, observing competition, and monitoring changes in technology and industry standards Ultimately, companies that take a contingency approach can take advantage of market changes to seize new opportunities, remain competitive, and continue to grow Internal changes Internal changes are another important element of new strategies, as they may require adapting corporate strategy to new internal conditions Internal changes can include changes in the company's strategic direction, changes in organizational structure, cost reductions, supply chain disruptions, personnel changes, etc A new strategy can help organizations quickly adapt to these internal changes by identifying opportunities and developing action plans to address challenges For example, if a company needs to cut costs, it can adopt a new strategy to explore new business models, find ways to streamline existing processes, or identify new revenue streams Internal changes can also lead to new opportunities for the company Improving operational efficiency or freeing up resources 10 STRATEGY MANAGEMENT TOPIC TEAM 04 for new projects A new strategy can help companies capitalize on these opportunities by expanding into new markets or developing new products or services Figure 8: Internal Factors Ultimately, companies that adopt a contingency approach can more easily adapt to internal changes, seize opportunities, and respond to challenges while maintaining market position and meeting customer needs New opportunities New opportunities in emerging strategies may come from different areas such as: New technologies: Rapidly evolving technologies can provide companies with new opportunities to develop new products or services, improve the efficiency of internal processes, or enter new markets Economic changes: Economic fluctuations can present opportunities for companies to offer products or services at competitive prices or to position themselves in new markets Regulatory changes: Changes in regulations and laws can create opportunities for companies to enter new markets or develop new products or services 11 STRATEGY MANAGEMENT TOPIC TEAM 04 Changes in consumer behavior: Changes in consumer habits and preferences can create new opportunities for companies to address unmet needs or provide innovative products or services Partnerships and Collaboration: Partnerships with other companies or organizations can provide companies with new opportunities to develop new products or services Figure 9: New Oppotinities Factos We must constantly keep an eye on the market and the competitive environment, and constantly assess our strengths and weaknesses to allow for the discovery of new opportunities within new strategies We must be ready to adapt and change our strategy to take advantage of these opportunities and remain competitive in this market c REALIZED STRATERGY The realized strategy is the final outcome of the organization's strategic decisionmaking process, which is the result of the interplay between the intended strategy and the deliberate strategy The realized strategy is the strategy that the organization ultimately implements to achieve its goals and objectives To realize a strategy in this model, an organization should take the following steps: 12 STRATEGY MANAGEMENT TOPIC TEAM 04 Develop an intended strategy: The organization should formulate a strategy that reflects its goals and objectives, based on a thorough analysis of its internal and external environment Implement the intended strategy: The organization should implement its intended strategy as planned, making any necessary adjustments along the way to respond to changing circumstances Monitor progress and adjust the strategy: The organization should continuously monitor its progress toward achieving its goals and objectives and adjust its strategy as needed to address any obstacles or opportunities that arise Evaluate and refine the strategy: The organization should periodically evaluate the effectiveness of its strategy and refine it as necessary to ensure that it continues to support its goals and objectives By following these steps, an organization can realize its intended strategy and achieve its goals and objectives Realize stratergy is consequnce of deliberate and emerging factors The consequences of deliberate and emerging factors can vary depending on the context and the specific factors involved In general, deliberate factors are those that are intentionally planned or executed by individuals or groups, while emerging factors are those that arise unexpectedly or spontaneously Take Amazon in Covid-19 (a sudden envent) to example: 13 STRATEGY MANAGEMENT TOPIC TEAM 04 Figure 10: Amazon Logo Deliberate factors Emerging factors Realized factors Amazon expanded the The COVID-19 pandemic This has further product offerings beyond has led to an increased accelerated the growth of books and into a wide range demand for online Amazon's e-commerce of categories to reach a shopping as people have business larger customer base and been forced to stay at home increase its revenue and avoid in-person shopping Amazon has invested heavily The growth of e-commerce Amazon has invested in in its logistics and supply has led to increasing electric delivery vehicles chain capabilities to offer concerns about the and renewable energy fast and reliable shipping to environmental impact of its customers shipping and packaging Figure 11: Deliberate, Emerging, Realized factors of the Amazon Example In summary, deliberate and emerging factors can can interact to shape the realized strategy of an organization Overall, it's important for organizations to continuously monitor and adjust their strategy in response to intended, deliberate, and emerging factors to ensure that they can realize their goals and objectives d UNREALIZED STRATERGY 14 STRATEGY MANAGEMENT TOPIC TEAM 04 In 2007, Walmart announced plans to create a more upscale shopping experience through its "Project Impact" initiative The plan involved redesigning stores and offering higher-end products to appeal to more affluent customers Figure 12: Walmart logo Despite investing significant resources into the project, it did not yield the expected results Walmart's core customers were put off by the changes, and the new upscale offerings did not attract the desired demographic The company eventually abandoned the initiative and refocused on its core strategy of offering low prices to a broad customer base Overall, unrealized strategies can be costly and detrimental to an organization's success By taking a proactive approach to strategic planning and execution, companies can minimize the risk of unrealized strategies and increase their chances of achieving their objectives III REDUE DIFERENCE BETWEEN INTENTED AND REALIZED STRATERGY To reduce the gap between the desired strategy and the realized strategy, we can analyze the external environment of the company with the Porter model to manage the risks and reduce the gap between the two strategies 15 STRATEGY MANAGEMENT TOPIC TEAM 04 Using the Porter model, we will analyze the five forces to know the external environment of our company, it will help identify potential threats as well as manage risks Figure 13: Forces Models Regarding the forces, we have the threat of new entrants that can disrupt the market and the existing companies in that market • Suppliers are also very important, with bargaining power over products by increasing prices, for example, or by lowering the quality of their products and services Their bargaining power depends on the number of suppliers in the industry Customers also have bargaining power in some companies, if they are a big customer or if the company does not have many customers • The company must also always be on the lookout for substitute products that could be created because of a product they have created This product could replace the existing products and thus reduce the demand on our product The 16 STRATEGY MANAGEMENT TOPIC TEAM 04 threat of its products depends on the cost and availability of these substitute products • The last and most important point of the Porter model is direct competition Competing companies can be very fierce with each other by competing fiercely for market share This will depend on the number of competitors as well as their strength Porter's five forces analysis is essential to understand the environment of a company to have a useful strategy Following this, we need to know where our company stands using the Porter model to identify areas where improvements can take place Finally, it is time to identify potential risks to the business The first step in risk management is to recognize the risks associated with our new strategy because of the environmental changes and the changes within our company Once we have identified the possible risks, the likelihood and severity of each risk needs to be assessed to know the severity of the threats and rank them by importance Organizations need to plan for risks strategically to address the threats we identified earlier This may include identifying alternatives, developing contingency plans, or taking steps to mitigate the effects of hazards Risks should be assessed and monitored, 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