Page 277 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 14: Strategic Evaluation and Control

strategy of ‘Back to Basics’ was introduced under the guidance of one of the members of Notes
the Ford founding family, Bill Ford. Ford was attempting to introduce basic new models,
improve quality and reduce costs across its main passenger car ranges. The company was
also part-way through introducing ‘flexible manufacturing’ systems. This meant that the
company was able to allow different models to be made simultaneously on the same
assembly line without the need for expensive tooling and robot changes. In addition, Ford
was also developing a series of production designs that would allow a variety of models
to be made using one basic vehicle template, thus saving across a range of models. However,
GM, Chrysler, Toyota were also introducing such systems – indeed, Toyota has had much
of this in place for some years.
Importantly, Ford had switched its efforts to redesigning its mid-sized cars to improve
quality and equip them with many of the features found on more luxury models – higher
driving positions, more storage space, etc. “Redefining the North American saloon is a
tall order, but that is what we set out to do,” says Phil Marten – Ford’s group vice-
president of product creation. The Ford company relaunched some of its American models
in early 2004 with such a strategy and had plans to follow this up with more products in
later years. It was undertaking a similar range of activities across its European models
over a similar time-period. More launches would follow in subsequent years as it attempted
to regain its former position.

The company also had similar ‘legacy cost’ problems like its American rival, General
Motors. Ford was also deeply engaged in a price-cutting strategy in its main North
American markets in order to protect market share. Both Ford and GM faced a major
competitive threat from rivals, including Toyota.
Thus, there is a strategic battle going on between the three market leaders. Both GM and
Ford have been trying to catch up with Toyota for some years. Considerable data is
available on the car market from the web, starting with the car companies themselves. The
web data would allow you to analyse the immediate past strategies of each of the three
companies. It would then be possible to assess their present levels of success.

Question
Evaluate the strategies of Ford, GM and Toyota.

14.6 Summary

Strategic evaluation generally operates at two levels – strategic and operational level. At
the strategic level, managers try to examine the consistency of strategy with environment.
At the operational level, the focus is on finding how a given strategy is effectively pursued
by the organisation.

Strategic control is a type of “steering control”. We have to track the strategy as it is being
implemented, detect any problems or changes in the predictions made, and make necessary
adjustments.
Operational control provides post-action evaluation and control over short periods.
They involve systematic evaluation of performance against predetermined objectives.
Organisations use many techniques or mechanisms for strategic control. Some of the
important mechanisms are management Information systems, benchchmarking, balanced
scorecard, key factor rating, responsibility centres, network technique, Management by
Objectives (MBO), Memorandum of Understanding.

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