Strategic Implementation

Strategic implementation is paramount in matters regarding company success. It addresses the who, when, where and how of reaching the desired objectives and goals of a company. Strategic implementation typically focuses on the entire organization and usually occurs after SWOT analyses, environmental scans, and identifying strategic goals and issues. As mentioned earlier, Heineken’s strength lies on its strong brand name, digital marketing strategy, expertise in quality beer production and a strong distribution network. Weaknesses include overdependence on the US market, high customer concentration and low-profit margin resulting from hiked prices for raw materials and petrol worldwide. Heineken’s also has opportunities that would make it better than it is today and these are; diversification into more flavors and fewer calorie beers, capitalizing on the growing Asian market and the Middle East and coming up with unique beers on the market for women. Lastly, threats arise from intense competition from other beer producing companies, constant fluctuations in the price of raw materials and a declining demand for beer in the US market. While the SWOT analysis virtually breaks down the company and tries to rebuild it by initiating a strategic plan, a strategic implementation follows suit to put the strategies and plans into action so as to achieve the organizational goals. It is the implementation that makes the company’s plans happen. A solid action plan describes the way the organization will meet its set objectives.

An excellent strategic action plan should help companies make their organization’s vision concrete. The features of a successful implementation plan include having a visible and visionary leader such as the CEO. This leader is responsible for communicating the vision, behaviors, and motive necessary for achievement (Root). Heineken’s International Chief Executive Officer, Jean-François van Boxmeer perfectly fits this role. Van Boxmeer did not hesitate to express the company’s vision to hit another 150 years of success in the beer industry during the 2014 Heineken USA National Distributors Conference. The implementation plan would turn out to be a success if everyone in the organization would be engaged in the plan. These include key leaders like Mr. Dolf van den Brink, Heineken USA CEO who had a brilliant company strategy for consistent growth that focuses on; One unique premise channel, two major channels, three customers and four brands. Mr. Dolf was able to take the company’s US market through tough times and numerous challenges and drove the beer brand to prosperity with healthy sales growth. The senior vice president commercial, Dirk De Vos is also another effective leader who outlined the areas where Heineken’s strategic plan would focus on. He pointed out that the company strategy would not change much although the company would concentrate on grocery, convenience, Walmart and on-premise (Holtz). However, the mandate to implement strategic plans should not be left to only the managerial heads in the organization. Everyone in the company should be engaged as they are all responsible for steering the organization towards realizing its objectives and goals.

Second, a good strategic implementation should include performance measurement tools. These tools are essential to an organization as they allow for follow up and provide motivation. Managers can measure the job performance of employees through various tools and processes. Since Heineken is a multinational company, they might need to use more than one tool to measure performance as opposed to smaller businesses that often choose a single tool that works best for them and use it consistently. For Heineken employees to consider these systems of measurement known as performance appraisals credible, they have to come across as fair and just for all employees. Leaders implementing these tools should choose tools that offer the highest possible level of objectivity. While removing most or all subjectivity is difficult, some tools lend themselves to objectivity better than others (Gluck). Some of these tools include;

•    Balanced scorecard

•    360 Degree Feedback

•    Self-Evaluation

•    Management by objective

360 Degree Feedback

Here, managers receive anonymous feedback from people they frequently interact with in their daily operations. These include subordinates, external and internal customers, superiors, direct reports, sales people and vendors. Managers often trust responses from 360-degree feedback appraisals due to their confidential nature. Respondents feel free to provide honest answers without fear of retribution.

Management by objective

Managers meet with direct reports, and together, they come up with both short and long-term goals for the year that align with the company’s business mission and key objectives. At the end of the year, the managers measure the achievements of their employees against organizational goals

 

 

Balanced Scorecard

The balanced scorecard approach combines quantifiable information like budgetary requirements and sales quotas with performance standards particular to the position. It utilizes the key performance indicators (KPI) to track how well an employee has reached short and long term goals.

Self-Evaluation

Self-evaluation tools allow employees to rate themselves against similar criteria used by their supervisors. This often involves quantitative and qualitative criteria. This method can raise the process’s credibility level in the view of the employee. This tool offers discussion processes whereby differences can be discussed in a safe, constructive manner when the scores tend to be somehow at odds with one another.

The implementation of a strategic plan also involves a strategic map that identifies and maps key ingredients that will direct performance. Such ingredients include market, finances, people, partners, operations and work environment. While Heineken lags behind on matters regarding its fair share of the market, it has a good strategic plan that would provide a solution if implemented through conducting few, bigger and better promotions, targeted distribution and packaging assortment including slims cans. Lately, Heineken has had an elaborate plan on taking over the Asian market as well as its growth strategy in this region. Vietnam has been identified by the company as the next key driver of its growing APAC business as it becomes even harder to gain profits from the Middle East, Africa and parts of Europe. Heineken saw an opportunity for growth across the Asian region and spent $60 million to build a brewery in Myanmar last year (2015). The company also operates in India, China, Indonesia, Malaysia and Cambodia and holds the country’s biggest share in half of them. Heineken recently signed a joint venture with Asia Brewery, a Philippine beverage producer so as to bring the Tiger and Heineken beer brands to the Philippines (Sathya).

The Heineken beer company complies with the Dutch corporate governance code and virtually applies all best practice provisions. The Heineken code of business conduct holds that

all employees should behave with integrity and fairness since these are as important as the company’s long-standing values of respect, enjoyment, and passion. Heineken’s global code of business conduct that is available in more than 30 languages ensures that every personnel employed understands what is expected of them when acting on the company’s behalf. It mainly focuses on commercial integrity, personal integrity, and company integrity ("The HEINEKEN Company - Age Gate").

Commercial integrity

Heineken demonstrates respect for all people and the society wherever it operates. As an entrepreneurial and performance driven company, Heineken strives to develop its business including business relations, while maintaining its excellent reputation. This means the company adheres to regulation and laws as well as to the spirit and letter of this code and its underlying policies.

Personal integrity

Everything Heineken does as a company, and an employee is a reflection of who Heineken are and what they stand for as well as what they aspire to do. The company strives to display personal integrity so as to ensure it preserves its ability to operate, the confidence of all its stakeholders and its reputation.

Company integrity

Heineken believes that all its resources are entrusted to them irrespective of wherever they work or whatever role they play. Heineken, therefore, has a duty to use and protect these resources as intended professionally and carefully to the best of its ability.

In matters regarding Heineken’s financial information, the company recognizes the importance of its historical performance as well as up to date financial information and future outlooks for its investors ("The HEINEKEN Company - Age Gate"). The company’s key figures and financial ratios as of the last three years are as follows;

• Revenue (in millions of Euros) 2013 was 19,203, 2014 was 19,257 and 2015 was 20,511
• Net profit for 2013 was 1,364, 2014 was 1,516 and 2015 was 1,892
• Net profit (beia) 2013 was 1,585, 2014 was 1,758 and 2015 was 2,048
• Results from operating activities in 2013 was 2,554, 2014 was 2,786 and 2015 was 3,075
• Results from operating activities (beia) in 2013 was 2,941 2014 was 3,129 and 2015 was 3,381
• Proposed dividends in 2013 was 512, 2014 was 632 and 2015 was 741
• Consolidated operating profit (beia) as a percentage of revenue in 2013 was 15.3%, 2014 was16.2% and 2015 was 16.5%

All these figures show a rising trend which is a good thing for Heineken as a company. However, a more advanced strategic plan and implementation will help the company cement its legacy as a consistent global market leader in the beer industry, reaping big profits.