Key Components of the Strategy Execution Process

Read the overview below and complete the activities that follow.

In this exercise you will be asked to examine the effectiveness of Zaras strategy execution. Be sure to read Chapter 10 before completing the exercise so that you understand the key actions involved in executing strategy.

When a companys strategy fails, it is often due to poor execution. Even a brilliant strategy can fail if managers do not ensure that it is implemented well. Proficient strategy execution depends foremost on having in place an organization capable of the tasks demanded of it. Building an execution-capable organization is thus always a top priority. As shown in Figure 10.2, three types of organization-building actions are paramount: (1) Staffing the organizationputting together a strong management team, and recruiting and retaining employees with the needed experience, technical skills, and intellectual capital; (2) Acquiring, developing, and strengthening the resources and capabilities required for good strategy executionaccumulating the required resources, developing proficiencies in performing strategy-critical value chain activities, and updating the companys capabilities to match changing market conditions and customer expectations; and (3) Structuring the organization and work effortorganizing value chain activities and business processes, establishing lines of authority and reporting relationships, and deciding how much decision-making authority to delegate to lower-level managers and frontline employees.

If the strategy being implemented is a new strategy, the company may need to add to its resource and capability mix in other respects as well. But renewing, upgrading, and revising the organizations resources and capabilities is a part of the strategy execution process even if the strategy is fundamentally the same because strategic assets depreciate and conditions are always changing. Thus, augmenting and strengthening the firms core competencies and seeing that they are suited to the current strategy are also top priorities.

Case:

At the heart of Zaras strategy in the apparel industry is to outcompete rivals by putting fashionable clothes in stores quickly and maximizing the frequency of customer visits. Illustration Capsule 10.2 discusses the capabilities that the company has developed in the execution of its strategy. How do its capabilities lead to a quick production process and new apparel introductions? How do these capabilities encourage customers to visit its stores every few weeks? Does the execution of the companys site selection capability also contribute to its competitive advantage? Explain.

Does the execution of the companys site selection capability also contribute to its competitive advantage?