Strategy tools and techniques performance

This chapter seeks to address this problem for senior managers by, first, analysing just how scientific, as a function, business strategy actually is. The chapter seeks to answer this question by first asking how frequently business managers use management tools, in which industries and for which activities Second, the objectives behind the use of tools and techniques and their performance are analysed. Finally, we address the question of whether or not the current strategy tools and techniques appear to be used appropriately or not. 

That said some industries appear to value the use of strategy tools and techniques more than others. The top performance scores for both firm and function combined were recorded in the Basic Chemicals (0.80), the Confectionery (0.78), the Computer Hardware (0.76), the Media Entertainment (0.75), IT Solutions (0.73), and Construction (0.71) industry sectors. The lowest combined performance scores were reported in the Publishing (0.43), Transport Equipment (0.56) and Aerospace (0.57) sectors. In the middle performance rank came Power Water (0.62), Retail Financial Services, Telecommunications and Tourism Leisure (all scoring 0.63), Retail Distribution (0.65), Oil Gas (0.66) and, finally. Healthcare (0.69). 

Table 3.10 The Use and Performance of Strategy Tools and Techniques in High, Medium and Low Risk Sectors...

The literature survey discovered 253 functional-specific tools and techniques in total, with 56 in the strategy, 59 in the marketing and sales, 73 in the operations and production and 65 in the procurement and supply functional areas (although some of these were duplicated across functions as we shall see). A summary guide to these tools and techniques is provided by function in this volume as a reference source. The book is divided into four parts (A, B, C and D), and the first chapter in each part (chapters 2, 4, 6 and 8 respectively) provides a reference guide to the tools and techniques in the literature that have been developed for use in that functional area of business. This is followed, in each part, by an analytical chapter (chapters 3, 5, 7 and 9) that describes what the survey discovered about the actual pattern of tool and technique used in general and by industry sector, with a summary of which were not being used at all. The analytical chapters also focus on the performance of particular tools and techniques within specific industrial sectors and the barriers to their successful implementation. 

The results of the research into the 16 different industry sectors are presented in the four parts 1 to IV that follow. Each part focuses on the experiences of the four major functions. Part 1 deals with strategy, Part 11 with marketing and sales, Part 111 with operations and production and Part IV with procurement and supply. Each of these parts is then divided into two chapters. In the first chapter in each part (chapters 2, 4, 6 and 8) a comprehensive list of the management tools and techniques commonly used in that function is provided. Following this there is an analytical chapter (chapters 3, 5, 7 and 9) that focuses on the use and performance of the tools and techniques used in each function. Each of these analytical chapters is arranged with the same structure to facilitate the process of comparison. 

The table has been constructed by first disaggregating the key business activities that the strategy function normally has to discharge within any company, as described in chapter 1, and then linking these seven business activities with the particular types of tools and techniques found to be in use. These key business activities were defined as market and environmental analysis, product and competence development, resource allocation, performance measurement, financial management, the make/buy decision and the use of IT and Internet solutions. 

Having seen that there is some clear duplication of effort within the strategy and the marketing and sales functions when it comes to the use of tools and techniques, and that the function does not appear to use marketing and sales specific tools and techniques as extensively as one might have expected, it is now possible to asses the performance of those that were found to be in use. In this part the objectives behind the use of tools and techniques are described and their impact on both the firm and the function. This is followed by an analysis of their impact by industry sector and by industry sector grouping. Finally there is a discussion of the major barriers to effective implementation. 

It had been expected in the strategy function that tools and techniques would be used primarily for their impact on firm rather than functional level performance. This view was shown to be invalid in chapter 3, where the overall performance score for firm impact was lower at 0.63 than that recorded for functional impact or performance at 0.69. Similar findings were reported for marketing and sales. The satisfaction scores for marketing and sales tools and techniques reported in Table 5.7 (again using a subjectively evaluated scoring system between +1, zero and -1) show that performance satisfaction levels were lower overall when compared with the... 

Confectionery (0.76) were the most positive industry sectors about performance. Once again a pattern appears to emerge that is echoed in the strategy function survey. Sometimes, and especially at the firm level, industry sectors that do not normally use tools and techniques extensively - like Media Entertainment, Publishing and Tourism Leisure - are the very ones that report the highest levels of performance satisfaction when compared with those that use the tools and techniques extensively. 

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