3. STEPS IN IMPLEMENTATION OF A STRATEGY
1.Resource allocation
2.Fixing key tasks and priorities
3.Assigning tasks
4.Authority delegation
5.Formulating methods for co ordination
6.State policies as designed for implementation
7.Clearly state the various goals for individual managers
8.Develop MIS and feed back systems for evaluation
9.Provide incentives and rewards to reinforce the behaviour of workers to new systems
10. Manager improvement programs to develop to develop the talent to implement the strategy
11. Implement the designed strategies
12. Watch the operations, evaluate results and provide feed back to management to correct the deviations.
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4. ISSUES IN STRATEGYIMPLEMENTATION
Project implementation
Procedure implementation
Resource allocation
Structural implementation
Functional implementation
Behavioral implementation
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5. 1. PROJECT
IMPLEMENTATION
It involves decision
regarding the project to
be undertaken in future
and to see that they are
properly executed.
1.Conceptual
stage
2.Analyzing
stage
3.Planning
stage
4.Implementatio
n stage
5.Launching
stage
Phases in
project
implementa
tion
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6. 2. PROCEDURE IMPLEMENTATION
Formulation of a
company
Licensing procedure
SEBI requirements
Foreign collaboration
FEMA Requirements
MRTP Requirements
Business incentives
requirements
Labour legislation
Patenting requirements
Environmental
requirements
Consumer protection
requirements
It means the regulatory framework within which the
management is supposed to implement its plans, plans,
projects and policies according to the government’s
approvals.
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7. 3. RESOURCE
ALLOCATION
Utilization of scarce resources for the
maximum benefit of the organization
Investment decision based on cost benefit
theory.
Men materials and money are the basic
resources.
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9. Mc Kinsey’s Value BasedManagement
VBM describes how one can holistically
and effectively organize a company.
Together these factors determine the way in
which a corporation operates.
These are categorized as Hard S’s and Soft
S’s.
The hard elements are feasible and easy to
identify.
The four soft S’s are hardly feasible.
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10. The Hard S’s
1. Strategy
Long term decision aimed at gaining
competitive advantage for the organization.
Strategy must give scope for modification
to suite environmental changes.
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11. 2.Structure
Shows authority and responsibility
relationship between people working at
different levels. It is a chart that explains who
reports to whom. It clearly shows how the tasks
are sub-divided and integrated. Based on the
change in the strategy, structure must also be
altered.
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12. 3. Systems
Many activities are there in the day to day
operations of a business. A proper system can
avoid confusion and duplication of work.
Effective accomplishment of objectives needs
a system for flow of activities.
a. HRIS
b. MIS
c. DSS
d. PCS
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13. 4.Style
It refers to the leadership style followed by
the management. A manager can influence the
behavior of subordinates in different ways.
How do they act is more important than what
they say.
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14. 5. Staff
procurement and development of Human
resources is very important. They must be
motivated to contribute maximum. Adequate
quantity and quality has to be maintained for
proper utilization of Human resources.
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15. 6. Skills
capabilities and competencies of an
organization to gain competitive advantage.
These should be always kept up.
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16. 7.Shared Values
Values, beliefs, mindset and assumptions
in an organization is as important as its
physical resources. Shaping the people’s
mindset to adjust to the changed environment
is very important.
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23. irst mostimportant thingto knowabout
Organizational Design
“…thereisnobeststructureavailable anywhere.Thereare nogoodor
badstructures. Thereare onlystructuresthat matchordonot match
with the requirementsof a strategy…”
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24. The purpose of the organizational design is to create the
right
structure, that fits the requirements of the strategy to be
implemented.
Organizational change is meant to modify existing
structures that have gone wrong over a period of time and no
longer fit the requirements of the strategy being implemented.
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25. OrganizationDesign
Dimensions
1. Structural Dimensions
“…describe t h e i n t e r n a l charact eris ti cs of a n o rg a n i z a t i o n … ”
2. Contextual Dimensions
“…describes t h e o r g a n i z a t i o n a l s e t t i n g t h a t i n f l u e n c e a n d shapes t h e s t r u c t u r a l
d i m e n s i o n s … ”
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26. Stepsto developmentof anorganizational design
1. Identification of key activities necessary to be performed for
the achievement of objectives and realization of mission
through the formulated strategy.
2. Grouping of activities that are similar in nature and need a
common set of skills to be performed.
3. Choice of structure that could accommodate the different
group activities.
4. Creation of departments, divisions, etc. to which the
group of activities could be assigned.
5. Establishing interrelationship between different
departments for the purpose coordination and
communication.
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27. OrganizationalChange
Organizational change is the one major area where change is effected within
organizations; the others being technology, products and services and culture.
Organizational change takes place along two broad dimensions: the structural
changes and the accompanying behavioral changes.
Structural changes are related to modifications in structural relationships or
creation or disbandment of departments or managerial positions.
The second type of change relates to the concomitant behavioral modifications,
that are essential to absorb the impact of organizational changes.
In the past, when the environment was relatively stable , managers were content
with making small, incremental, continual changes to resolve problems as they
occurred. The perspective of the past may not be suitable in current environment
that often requires big, radical and sudden changes.
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35. Behavioural implementation
Behavioural implementation deals with those aspects of
strategy implementation that have impact on behavior of
people in the organization. Since human resources form an
integral part of the organization, their activities and behavior
need to be directed in a certain way. Any departure may lead
to the failure of strategy.
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36. Leadership Implementation
Implementing corporate strategy requires a team effort
headed by your organization's leadership team. Each person
involved in change management has their responsibilities,
and it is important for the entire organization to understand
the role of leadership in strategic implementation to make
delegating responsibility more effective.
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37. Strategic leadership
Strategic leadership is the ability to lead an organisation
towards achievement of its objectives. The tasks involved in
exercising strategic leadership are typically to anticipate,
envision, maintain flexibility, and empower others to create
strategic change as necessary.
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38. Tasks of strategic leaders
Determining strategic direction
Effectively managing the organisational resources portfolio
Sustaining an effective organisational culture
Emphasising ethical practices
Establishing balanced organisational controls
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39. Roles of strategic leaders
Role of chief executive officer
Role of senior managers
Role of business-level executives
Role of functional and operational managers
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40. The Tasks of Strategic Leaders
The choice of future strategists
Career planning and development
Succession planning
Developing strategic leaders
• Determining Strategic Direction
• Effectively Managing the Organizational Resources Portfolio
• Sustaining an Effective Organizational Culture
• Emphasizing Ethical Practices
• Establishing Balanced Organizational Controls
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41. Corporate culture and strategic
management
• Composition of corporate culture
• Impact of culture on corporate life
• Strategy-culture relationship
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42. Strategy-supportive culture
Approaches to create strategy-supportive culture:
To ignore corporate culture
To adapt strategy implementation to suit corporate culture
To change the corporate culture to suit strategic requirements
To change the strategy to fit the corporate culture
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43. Corporate politics and use of power
Understanding power and politics
1. Reward Power
2. Coercive Power
3. Legitimate Power
4. Referent Power
5. Expert Power
Strategic use of power and politics- A manager cannot effectively
formulate and implement strategy without being perceptive about
company politics and being adept at political maneuvering.
Corporate politics and power in Indian context
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44. 5. FUNCTIONAL AND OPERATIONAL
IMPLEMENTATION
Functional strategies in strategic management are usually a
part of overall corporate strategy prepared for various
functional areas of its organizational structure (i.e. production,
marketing, sales). It helps managers in focusing company's
activities to its major functional areas of activity (so called: key
success factors). Most common functional strategies used in
management are: financial strategy, marketing strategy,
production strategy, human resources strategy (personnel
strategy) and research and development strategy.
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45. Functional strategies
Functional strategy deals with a relatively restricted plan
designed to achieve objectives in a specific functional
area, allocation of resources among different operations
within that functional area, and coordination among
different functional areas for optimal contribution to the
achievement of the business- and corporate-level
objectives.
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47. Functional plans and policies
Nature of functional plans and policies
Need for functional plans and policies
Development of functional plans and policies
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48. Vertical and horizontal fit
Corporate-level strategies
Business-level strategies
Functional-level strategies
Marketing
plans and
policies
HRM plans
and policies
Financial
plans and
policies
Operations
plans and
policies
Information
management
plans and
policies
Horizontal fit
Vertical fit
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49. Vertical
Fit
• A key task of strategy implementation is
to align or fit the activities and
capabilities of an organisation with its
strategies.
• Strategies operate at different levels and
there has to be congruence and
coordination among these strategies.
Such a congruence is the vertical fit.
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50. Vertical
Fit
• The consideration of vertical fit leads us to
define functional strategies in terms of their
capability to contribute to the creation of a
strategic advantage for the organisation.
• The above results in the following
types of functional strategies:
– Strategic marketing management
– Strategic financial management
– Strategic operations management
– Strategic human resource management
– Strategic information management
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51. Horizontal
Fit
• There has to be congruence and
coordination among the different
activities taking place at the same level.
• This is the horizontal fit.
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52. Horizontal
Fit
• The consideration of horizontal fit means
that there has to be an integration of the
operational activities undertaken to
provide a product or service to a
customer.
• These have to take place in the
course of operational
implementation.
• Operational implementation is the
approach adopted by an organisation to
achieve operational effectiveness.
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53. Functional Plans and
Policies
• Nature of functional plans and policies
• Need for functional plans and policies
• Development of functional plans and
policies
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54. Nature of Functional Plans and
Policies
• Functional strategies operate on a level
below the business strategies.
• There might be several sub-functional
areas within functional strategies.
• Functional strategies, defined in terms of
functional plans and policies – plans or
tactics to implement business strategies,
are made within the guidelines which
have been set at higher levels.
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55. Nature of Functional Plans and
Policies
• Plans are formulated to select a course
of action, while policies are required to
act as guidelines to those actions.
• Functional plans and policies, are
therefore, in the nature of the tactics
which make a strategy work.
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56. Nature of Functional Plans and
Policies
• Functional managers need guidance from
the corporate and business strategies in
order to make decisions.
• In simple terms, functional plans tell the
functional managers what has to be
done, while functional policies state how
the plans are to be implemented.
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57. Need for Functional Plans and
Policies
• According to Glueck functional plans and
policies are developed to ensure that:
– The strategic decisions are implemented by all the parts
of an organisation.
– There is a basis available for controlling activities in the
different
functional areas of a business.
– The time spent by functional managers on decision-
making may be reduced as the plans lay down clearly
what has to be done and the policies provide the
discretionary framework within which decisions need to be
taken.
– Similar situations occurring in different functional areas are
handled by the functional managers in a consistent
manner.
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58. Development of Functional Plans
and Policies
• The development of functional plans and
policies is aimed at making the strategies
formulated at the top management level
practically feasible at the functional level.
• The process of development of functional
plans and policies may range from the
formal to the informal.
• The process of developing functional plans
and policies – formal or informal – is similar
to that of strategy formulation.
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59. Development of Functional Plans
and Policies
• Functional areas have been
traditionally segregated into finance,
marketing, production and
personnel.
• Information management has emerged
as a significant function within
organisations.
• But not all organisations divide functional
areas traditionally – they do it on the
basis of what they actually need.
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60. Functional Plans and
Policies
• Financial plans and policies
• Marketing plans and policies
• Operations plans and policies
• Personnel plans and policies
• Information management plans and
policies
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61. Configuration of functional plans and
policies
Financial plans
and policies
Marketing plans
and policies
Operations plans
and policies
Information
management
plans and policies
Integration of
functional plans
and policies Personnel
plans and
policies
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62. Financial plans and policies
Sources of funds
Usage of funds
Management of funds
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63. Marketing plans and policies
Segmentation, targeting and positioning
Product
Pricing
Place
Promotion
Integrative and systemic factors
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64. Operations plans and policies
Production system
Operations planning and control
Research and development.
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65. Personnel plans and policies
Personnel system
Organisational and employee characteristics
Industrial relations
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66. Information management plans and
policies
Acquisition and retention of information
Processing and synthesis of information
Retrieval and usage of information
Transmission and dissemination of information
Integrative, systemic and supportive factors
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67. Integration of functional plans and policies
Information
management
plans and
policies
Financial plans
and policies
Marketing plans
and policies
Operations plans
and policies
Personnel plans
and policies Integration of
functional plans and
policies
Integration
of functional
plans and
policies
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68. OTHER IMPORTANT STRATEGIES
• Product Life Strategy
• BCG Growth Share Matrix Strategy
• GE Multi Factoral Analysis
• Five Force Model
• PEST Analysis
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70. Product Life-Cycle Strategies
• Product
development
• Introduction
• Growth
• Maturity
• Decline
• Begins when the
company develops
a new-product
idea
• Sales are zero
• Investment costs
are high
• Profits are
negative
PLC
Stages
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72. Product Life-Cycle Strategies
• Product
development
• Introduction
• Growth
• Maturity
• Decline
• Rapid sales growth – cell
phones today, internet,
LCD TV
• Market acceptance
• Price stabilization
• Features stabilization
• Profits start coming in
• Brand building starts
• Competition starts
building
PLC
Stages
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73. Product Life-Cycle Strategies
• Product
development
• Introduction
• Growth
• Maturity
• Decline
• Slow sales growth –Land
lines, 100cc
motorbikes, fountain pens
• Price
reductions, promotions
• Features changes /
reductions / new
• Profits go down
• Competitors introduce new
products
• Brand sustainability
is imperative in
communication
PLC
Stages
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74. Product Life-Cycle Strategies
• Product
development
• Introduction
• Growth
• Maturity
• Decline
• Decline in sales –
audio & video cassette
players, pagers
• New products meet
satisfaction
• Profits erode
• Communication
expenses are stopped
PLC
Stages
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75. BCG Matrix
The BCG matrix was developed by Boston Consulting group
in 1970s. It is also called as the growth share matrix. This is
the most popular and most simplest matrix to describe the
corporation’s portfolio of businesses or products.
The BCG matrix helps to determine priorities in a product
portfolio. Its basic purpose is to invest where there is growth
from which the firm can benefit, and divest those businesses
that have low market share and low growth prospects.
Each of the products or business units is plotted on a two
dimensional matrix consisting of
Relative market share – is the ratio of the market share of the concerned product or
business unit in the industry divided by the share of the market leader
Market growth rate – is the percentage of market growth, by which sales of a
particular product or business unit has increased
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78. GE Nine Cell Matrix
The GE/McKinsey Matrix is a nine-cell (3 by 3) matrix used
to perform business portfolio analysis as a step in the strategic
planning process.
The GE/McKinsey Matrix identifies the optimum business
portfolio as one that fits perfectly to the company's strengths
and helps to explore the most attractive industry sectors or
markets.
The objective of the analysis is to position each SBU on the
chart depending on the SBU's Strength and the Attractiveness
of the Industry Sector or Market on which it is focused. Each
axis is divided into Low, Medium and High, giving the nine-
cell matrix as depicted below.
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79. GE Nine Cell Matrix
Different factors can be used to define Industry Attractiveness. Like:-
Market Size, Market Growth Rate, Demand variability, Industry
Profitability, Competitive Rivalry, Global Opportunities, Entry and exit
barriers, Capital requirement, Macro environmental Factors (PEST)
Different factors can also be used to define SBU Strength. Like:-
Market Share, Distribution Channel Access, Financial Resources, R&D
Capability, Brand equity, Production Capacity, Knowledge of customer
and market, Caliber of management. Relative cost position
The factors and their relative weightings are selected. The rating values
for each factor are entered for each SBU and Industry.
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80. GE Nine Cell Matrix
Industry
Attractiveness
Business Unit Strength
Strong Average Weak
High Grow Grow Hold
Medium Grow Hold Harvest
Low Hold Harvest Harvest
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81. GE Nine Cell Matrix
Grow – Business units that fall under grow attract high
investment. Firms may go for product differentiation or Cost
leadership. Huge cash is generated in this phase. Market leaders
exist in this phase.
Hold – Business units that fall under hold phase attract moderate
investment. Market segmentation, Market penetration, imitation
strategies are adopted in this phase. Followers exist in this phase.
Harvest - Business units that fall under this phase are
unattractive. Low priority is given in these business units.
Strategies like divestment, Diversification, mergers are adopted in
this phase.
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84. PORTER’S FIVE FORCES MODEL
The Five Forces Model helps business people
understand the relative attractiveness of an
industry and the industry’s competitive
pressures in terms of
1. Buyer power
2. Supplier power
3. Threat of substitute products or services
4. Threat of new entrants
5. Rivalry among existing competitors
Competitors
Buyers
Suppliers
Substitutes
New entrants
1-84
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86. Buyer Power
Buyer power – high when buyers have
many choices and low when their
choices are few
Competitive advantages are created to get
buyers to stay with a given company
NetFlix – set up and maintain your movie list
United Airlines – frequent flyer program
Apple iTunes – buy/manage your music
Dell – customize a computer purchase
1-86
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87. Buyer Power
Competitive advantage – providing a
product or service in a way that
customers value more than what the
competition is able to do
First-mover advantage – significant
impact on gaining market share by
being the first to market with a
competitive advantage
All competitive advantages are fleeting
E.G., all airlines now have frequent flyer programs
1-87
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88. Supplier Power
Supplier power – high when buyers have
few choices and low when choices are
many
The opposite of buyer power
1-88
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89. Threat of Substitute Products and
Services
Threat of substitute products and
services – high when there are many
alternatives for buyers and low when
there are few alternatives
Switching costs can reduce this threat
Switching cost – a cost that makes
buyers reluctant to switch to another
product/service
Long-term contract with financial penalty
Great service
Personalized products based on purchase history
1-89
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90. Threat of New Entrants
Threat of new entrants – high when it is
easy for competitors to enter the
market and low when entry barriers are
significant
Entry barrier – product or service feature
that customers have come to expect
and that must be offered by an
entering organization
Banking – ATMs, online bill pay, etc
1-90
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91. Rivalry Among Existing
Competitors
Rivalry among existing competitors –
high when competition is fierce and low
when competition is more complacent
General trend is toward more competition
in almost all industries
IT has certainly intensified competition in
all sectors of business
1-91
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93. PEST Analysis
evaluation technique is the
Another common strategic
analysis, which identifies
the
political, economic, social and
technological factors that may impact the organization’s ability
to achieve its objectives.
Political factors might include such aspects as impending
legislation regarding wages and benefits, financial
regulations, etc
Economic factors include all shifts in the economy, while
social factors may include demographics and changing
attitudes. Technological pressures are also inevitable as
technology becomes more advanced each day.
These are all external factors, which are outside of the
organization’s control but which must be considered throughout
the decision making process.
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