Strategy Implementation, Evaluation and Control

Answer

Strategy Implementation, Evaluation and Control

Strategy implementation refers to the process through which the long term goals of put in place by an organization are actualized. Just like the strategy formulation, the process of implementation undergoes various stages in order to ensure high level of efficiency. According to Verweire (2014), it is assumed that prior to this, the business environment has been fully scanned and that the implementers as the environmental factors affect the implementation process. This paper focuses on the strategy implementation for Pepsi Limited Company.

Strategy Implementation

As has been defined earlier, strategy implementation is the process through the long term goals set by an organization are actualized. Unlike the formulation process, the implementation process does not have a standard. It is therefore within the powers of the subject organization to decide on what will be convenient for them in actualizing the long term goals. Pepsi Limited Company has a single document that touched both on the local and international strategies. The company will use the following procedure in implementing its strategies

Evaluation of the Strategic Plan

            Before starting the implementation evaluation of the strategic plan has to be done to ascertain its conformity to the structures of the organization. Though strategic planning is usually dine by the members of the functional departments in an organization, it is possible to have certain unrealistic goals at this stage will therefore help in identifying such issues so that the necessary step can be taken on time. It is worth to note that a plan must be specific, measurable, and attainable and time bound (Verweire, 2014)  . These are some of the issues that are analyzed at this stage.

Formulating of the Vision for actualization of the Strategy

 This is a mental picture of where the leadership of the organization would like it to be in the near future (after implementation of the strategic plan). This phase requires proper coordination as all the stakeholders that are involved in implementation of the strategy should appreciate the vision.

Creation of the Implementation Committee

            The reason behind formation of this committee is to have implementation leaders. This committee must be composed of members who understand the strategic plan. Where possible, experts that were used formulation of the strategy should be in the implementation committee.

Organizing Of Meetings to Discuss Progress

            This should be done periodically in order to increase the promptness in realizing the goals set in the strategic plan. It is within the jurisdiction of the implementers to vary any goal in the strategic plan, if they feel that it would bring a better course of action. In the case of Pepsi Company Limited however, some level of strictness will be exercised so as to ensure high levels of efficiency.  It is a good practice to reward the various departments that the implementation feels are not only prompt but also effective. This will in effect encourage other departments to work towards realization if the set goals.

Consultation with the Strategic Managers (Top Management team)

            Pepsi Limited Company has subsidiaries in various parts of the world, with its top most leadership being based in the United States where the parent company is established. The strategy will therefore be implemented in consultation with the top leadership both at the subsidiaries and the parent company. This will be done in order to ensure that all the stakeholders of the organization are in pursuit of one goal.

Influence of Governance and Ethics

             Ethics are the acceptable codes of conduct that is expected of an organization as operates. In implementing their strategic plan and serving the various stakeholders, Pepsi Limited Company takes into consideration that it is expected to operate within the acceptable codes of conduct. It is essentially incumbent on the governance of the organization to ensure that ethics of business are upheld. Ethics and governance will obviously influence the implementation process of the strategy. For instance, the organization intends to increase its profit margin to over 30% while maintaining high levels of product quality. This means that the organization will have to go an extra mile in ensuring quality even if it means increasing the cost of sales and other administration costs. The willingness of the company leadership to propel the realization of the set goals will also determine efficiency in actualization of these goals as well as the time line to be taken in implementation. The company however, involved the top leadership in formulation of the strategy and consultations will also be there during implementation, in an effort to ensure full cooperation.

The Company Social Value

Pepsi limited company treasures all its stakeholders including the community from which it draws its stakeholders. The company believes in investing in community interest as the foundation for winning the customers trust. This is will be done through involvement in the various corporate social responsibilities. However, this value has a tendency of increasing the company’s expenditure hence reducing the profit margin.

Innovation, Diversification and Legal Limitations

The company intends to come up with unique packages and flavors in an effort counter the current stiff competition in the various market segments. In order to diversify the various risks associated with operations, the company intends to widen its scope of production to cover more varieties of snacks and beverages. Besides this, the company will do promotion in the potential markets that it has identified in the continents of Africa and Asia. These may however, be limited by the legal framework that govern its operations. The legal framework demands that the company confines itself within the details put in the Memorandum of Association.

Evaluation, Control and Strategic Metrics

Pepsi Limited Company does evaluation on its operations as well the strategies on a regular basis. Besides this the company has put various measures in place to ensure that production and other operations are kept on check (PepsiCo Inc SWOT Analysis, 2017). Control measures involves verification of the products, in order to assess whether or not they meet the required standards. In order to ensure that evaluation and control is properly in place, the organization uses strategic metrics. This is a tool used in assessing the quantifiable achievements of the subject organization. This is achieved through preparation of regular interim reports that are used by the company management in decision making.

Key Financial Ratios

Financial ratios are used to evaluate the contribution of the individual items of the financial reports to the overall performance of the organization (Goes, 2016). In order to assess the going concern of the organization, the profitability and liquidity ratios will be assed in the last two years.

Liquidity Ratio

This ration evaluate the ability of the company to pay its short term obligation as they fall due. Examples of liquidity ratios include;

Current Ratio

This is the comparison of assets and liabilities. The years 2015 and 2015, the company 128% and 131% respectively. Though there was a reduction, the current ratio is more than 1 indicating an efficient ability to meet the short term obligations efficiently.

Quick Ratio

            This evaluates the liquidity position by eliminating the inventory which is less liquid. In the last two years, the quick ratio for the company were 115% and 116% respectively indicating a good position to meet the short term obligations as they fall due (PepsiCo Inc SWOT Analysis,2017)

Profitability Ratios

This is a ratio that asses the ability of an organization to manage the operations and production costs. Examples of profitability ratios include;

Gross Profit Margin

This ratio evaluates the ability to control the cost of production. In the years 2015 an2016 the company had gross profit margins of 54% and 55% respectively. This is an indication of efficiency in controlling the production costs.

Net Profit Margin

            This ratio is used to assess the ability of an organization to manage the operations costs. In years 2015 and 2016, the company had a net profit margins of 9% and 10% respectively. This is an evidence that the company’s operations are very high hence should be controlled in order to maximize profit.